ECGD, the UK’s official export credit agency, has announced simplified and more flexible rules for UK exporters looking for support for contracts involving non-UK firms.


Changes to ECGD’s rules are set out in the government’s response to a public consultation on foreign content, just published.


The main points of the new rules are:



    • For all contracts (credit or cash) the maximum level of support for foreign content will be 80% of the contract value, where ECGD risk capacity is available.


    • The distinction between contracts valued at £10mn and below will be removed.


    • The distinction between goods originating from the EU, Japan and other countries will be removed.


  • Software and related services originating in the UK and exported electronically will be treated as UK content.


Trade minister Ian McCartney says: “These new rules will bring ECGD’s policy on support for foreign content into line with the direction most ECAs are now taking. They are a positive response to the needs of ECGD’s customers and recognise the changes in the complexion of UK manufacturing and the globalisation of the world economy since ECGD’s foreign content rules were first devised.”


ECGD’s foreign content rules were set over 20 years ago and a number of respondents to the consultation made the point that, compared to ECGD’s international counterparts, our policy was outdated, complex and inflexible.


McCartney adds: “Business told us the rules needed change, and ECGD has listened and acted. These changes are consistent with the role the government has set for itself of doing all it can to enable UK business to achieve all the benefits of international opportunities, and to attract and retain high value-added, internationally active businesses for the UK.


“The new rules are also in line with the government’s commitment to make regulation simpler to operate and more effective.”


The new foreign content rules will apply to applications submitted to ECGD from today.


The changes to ECGD’s rules relate to support for foreign content but not to local costs incurred in the project country. Support for local costs is subject to OECD rules.


Where risk capacity is constrained, priority will be given to UK content, followed by EU-sourced foreign content (in accordance with ECGD’s obligations under an EU reciprocal agreement) and then by other third-country goods and local content.