VOLUME 8
UK BILATERAL AID
(ANNEX 20).
ANNEX 1 TO OP VOL IIIB -9
(paragraph 9. 01. 6)
RULES FOR THE ADMISSIBILITY OF FOREIGN CONTENT IN GOODS PURCHASED WITH AID FUNDS
INTRODUCTION
1. UK bilateral aid to developing countries is normally tied to the purchase of wholly UK-produced goods and services direct from the UK. However, many manu- factures have an unavoidable foreign content in the form of raw materials or compo- nents which are an integral and inseparable part of the finished product. It is necessary, therefore, to permit the inclusion of such foreign content in aid financed procurement.
2.
These rules define the conditions under which foreign content is permissible. In interpreting the rules it should be borne in mind that the underlying purpose is to ensure that business generated by aid benefits British industry directly and not its foreign competitors. Procurement in foreign countries of goods of UK origin which have been previously exported are considered foreign goods for the purpose of these rules.
RESPONSIBILITY
3.
The Department of Trade, Export Policy Branch CRE 2/2, is responsible for the general administration of these rules and for considering exceptional cases on their merits.
A.
a.
b.
C.
RULES
Goods may be purchased with aid funds without reference to DoT where the foreign content value of each individual item does not exceed the lesser of £15,000 or 20% of the total FOB* value.
Where the foreign content of any item exceeds 20% of its FOB value the item is automatically disqualified and may not be purchased with aid funds unless exceptionally it qualifies for exemption (see paragraphs 5 and 6).
Where the foreign content of any item exceeds £15,000 and the item is not disqualified on grounds of foreign content exceeding 20%, DoT authority should be obtained before making a purchase or giving any undertaking for making such a purchase. Applications to DoT should be accompanied by the certificate at Appendix I and allow sufficient time, normally 2 weeks, for the Department to ascertain whether wholly British equivalents or goods with lesser foreign content are available. Where such alternatives are available DoT will refuse the application and furnish details of the alternative supplier.
*Free on Board (FOB) Value This represents the cost of goods to the purchaser
abroad, including packing, inland and coastal transport in the exporting country, dock dues, loading charges and all other costs, profits, charges and expenses, accruing up to the point, where the goods are deposited on board the exporting vessel or aircraft.
September 1980
OP Vol IIIB Amendment No 503
128
November 1979
AL/2