New OECD rules on support for local costs

The Organisation for Economic Co-operation and Development (OECD) has announced a change to the restrictions on support for local costs, such as goods and services sourced within the buyer’s country.

The current cap on support for local costs to 30% of the export contract value has been increased to:

  • 40% of the export contract value in Category I countries (high income OECD countries)
  • 50% of the export contract value in Category II countries (the rest of the world)

The export contract value is the sum of the goods and services exported from the UK and third countries within the overall supply contract to an overseas buyer.

The new rules are effective from 20 April 2021 and will be incorporated into a new version of the Arrangement, which is due to be released on 1 July.

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