Switzerland's government is proposing to ban all mercenary firms in a bid to protect the Swiss tradition of neutrality and show the country's respect for international law.

A draft bill submitted to parliament Wednesday would ban all Swiss-based companies from direct participation in armed conflicts abroad, and from recruiting or training mercenaries in Switzerland. It would also tighten the rules for private security companies, requiring them to report their activities to to Swiss authorities and to adhere to an international code of conduct agreed to last year.

The new rules would apply to security services which operate either inside Switzerland or overseas. The government says there are around 20 private security

companies currently operating in Switzerland.

Switzerland's government said the bill was prompted by the decision of the British company Aegis, one of the world's largest private security contractors, to set up a Swiss holding company last year.

Lawmakers have until the end of January to consider the draft bill.