ECGD ACTS ON
EXPORTERS' CONCERNS, LEVELS PLAYING FIELD FOR UK BUSINESS
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, which was
published today.
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 £10m 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 said:
"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, its policy was
outdated, complex and inflexible.
Mr McCartney added:
"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.
Notes to editors
1. The Government Response, with all the representations made
during the consultation, is available on ECGD's website (http://www.ecgd.gov.uk).
2. ECGD, the Export Credits Guarantee Department, is the
UK's official export credit agency. A Government Department
reporting to the Secretary of State for Trade and Industry, it has
nearly 90 years' experience of working closely with
exporters, project sponsors, banks and buyers to help UK exporters
of capital equipment and project-related goods and services. ECGD
does this by providing:
* insurance against non-payment risks to UK exporters;
* guarantees for bank loans to facilitate the arranging of
finance to buyers of UK goods; and
* insurance against political risks to UK investors in overseas markets.
3. 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.
4. 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.