Only when it is Swiss, may a watch carry the indications "Swiss Made" or "Swiss", or any other expression containing the word "Swiss" or its translation, on the outside. According to Section 1a OSM, a watch is considered to be Swiss if:
- its movement is Swiss;
- its movement is cased up in Switzerland;
- and the manufacturer carries out the final inspection in Switzerland.
Wikipedia has a section on the history of Swiss Made which states the first Swiss law regulating the use of Swiss and Swiss Made was created on 23 December, 1971. They reference an exhibit in 2007 at the Watchmaking museum in La Chaux-de-Fonds devoted to the question of Swiss Made. A review of this exhibit can be found online and relates this history:The Universal Exposition in Philadelphia in 1876 and the proliferation of U.S. manufacturers raised awareness among Swiss watchmakers. To cope with the growing power of their U.S. rivals, they emphasize the quest for precision and create a label to protect it. Hence, around 1880, the birth of 'Swiss Made' in English because the competition then comes from the United States. Also the emergence of factories in Switzerland for blanks, which are movement parts that can be assembled elsewhere. As the internationalization of the advertising at the end of the 19th century, it increased the pressure on the Swiss manufacturers of watches. Meanwhile, the need to better protect the values claimed by the Swiss watch - quality, accuracy, durability - led the Swiss government to establish, in 1880, the first law on the protection of trademarks and trade. It is only later in the course of the 20th century, that Swiss Made finds its final location on both sides of the figure 6 below the dial. There is no question of adopting another language. "From a graphical point of view, the reference to English, very brief, well suited because it takes up very little space on the dial," says Jean-Michel Piguet. Finally, in 1971, the Swiss Made acquires a legal character. In summary, a watch is considered Swiss if it meets certain conditions relating to the manufacture and assembly of the movement, as well as final inspection. FWIW, I've found 1972 to be a reliable date for the introduction of SWISS MADE on V&C watches, which correlates with the introduction of new legislation as described.