Guidance

UKEF's approach to foreign content

Updated 2 September 2025

UKEF’s approach to UK content

UKEF helps UK companies of all sizes and in all sectors to export by enabling them to win business, perform contracts and get paid through a variety of guarantee, lending and insurance products.

Our policy on the required UK content in transactions (formerly described as our foreign content policy) is derived from two public consultations, held in 2007 and 2019, and takes a principles-based approach to content requirements. This means that UK content requirements can be met by three different approaches, depending on the transaction in question.

The UK content requirements only apply for contract-specific UKEF products, where there is an export contract between the UKEF-supported exporter and the buyer/borrower. For non-contract specific products, UKEF applies a different set of criteria (the ‘exporter test’).

Auditing of UK content

To provide assurance about the nature and levels of UK content on individual transactions (as we report on our impact annually), UKEF includes relevant provisions in loan documentation and may carry out audits to assess consistency with expected UK content proposed at the time of underwriting.  

1. Why UKEF includes content requirements in its cover

A transaction supported by UKEF will likely include both UK content (goods/services/intangibles) and foreign content. UKEF’s support for foreign content in transactions recognises the global nature of modern supply chains and the nature of the UK economy, which includes some of the world’s leading service (including design and engineering) companies. The UK contribution to a transaction may form a relatively small proportion of the overall contract value but still represents significant business for UK exporters that, in the absence of UKEF support, may be placed in other countries.

The flexibility of UKEF’s content policy has played a significant role in encouraging overseas buyers to source goods, services and intangible assets from the UK. It can also incentivise prime contractors to source more from the UK to streamline their financing requirements by utilising UKEF support.

UKEF will always seek to encourage higher levels of UK economic activity in transactions.

2. UK applicants

2.1 What is UK content?

UK content in a transaction is the contractual value of the qualifying goods/services/intangibles from the UK and is defined as total contract value minus foreign content.

The following (non-exhaustive) list describes valid UK content, reflecting the ‘value add’ processes which have taken place in the UK:

• Goods produced in the UK which would be/are eligible for a country-of-origin certificate listing ‘UK’ as the origin (normally issued by a Chamber of Commerce) as this indicates a level of modification has taken place in the UK (even if the goods were initially produced in another country)
• Services which are supplied from the UK or the cost of any direct employees of UK applicants to procure those services (including those seconded to the UK applicant for the purposes of carrying out the contract).
• Intangible assets originating in the UK (for example, a licence issued by a licensor in the UK for a technical or industrial process and where royalties or similar fees are paid to the UK entity).

If your potential UK content does not align with the descriptions on this non-exhaustive list, then it is likely to constitute foreign content. Ultimately, it is the responsibility of the applicant (whether UK or overseas) to meet UK content levels and, where appropriate, to set conditions for their suppliers.

Where there is no processing in the UK or additional services being provided alongside a good from overseas, UKEF is not able to support on the basis of UK profit margin alone.

For UK companies who are procuring goods from overseas and not applying additional services or processing, it may be possible to provide a declaration (agreed with UKEF) on the level of UK content which can be recognised under the contract as a result of logistical, procurement, and support services being provided around that good.

2.2 What is foreign content?

UKEF’s definition of foreign content in a contract is the cost to the applicant of purchasing from outside of the UK any goods, services and intangible assets supplied under that contract.

3. Overseas applicants

UKEF provides support to overseas applicants where they are undertaking a project or transaction which involves procuring goods, services or intangible assets from the UK. This is in the interests of UK exporters, as it supports the transaction(s) taking place and UKEF support can be important in securing the opportunity for the UK suppliers.

3.1 What is UK content?

For overseas applicants, UK content is the cost to the applicant of purchasing goods, services and intangibles to be supplied under that contract or contracts by UK exporters and sub-contractors carrying on business in the UK. For guidance purposes, (non-exhaustive) indications of valid UK content are outlined in the above list in section 2.1.

3.2 What is foreign content?

For overseas applicants, foreign content is defined as the total contract value minus the cost of UK content.

3.3 Why is there a difference between UK applicants and overseas applicants?

The response to the 2019 consultation set out the reasoning for the contrast in approach between UK and overseas applicants. This is directly linked to the differences in the process by which UK goods, services and intangible assets are likely to be supplied.

In line with our mission to ensure no viable UK export fails for lack of finance or insurance from the private sector, and as part of our usual due diligence, UKEF may seek to understand the function of the UK sub-contractors in overseas applicant supply chains to determine whether, for example, they are undertaking genuine economic activity in the UK, or whether the applicant is attempting to circumvent UKEF’s foreign content policy (for example, by channelling foreign content through UK sub-contractors with little in the way of economic activity actually taking place in the UK).

3.4 Example scenarios

Example one

A UK exporter enters into a contract with an overseas buyer. The UK exporter’s contract consists of its own economic activity in the UK (including related services and maintenance), supply from other UK sub-contractors, and supplies from third country suppliers.

As part of its usual due diligence, UKEF will seek to understand the nature of the UK exporter’s contract and the content contained within that contract.

Example two

An overseas applicant is applying to UKEF based on the UK content in its supply chain. The supply chain of the overseas applicant consists of its own economic activity carried out overseas, third country suppliers and UK sub-contractors.

In this scenario, UKEF will make enquiries to understand the nature of the UK sub-contractors (which would likely be valid UK content), as part of the usual due diligence to ensure that they are carrying out genuine economic activity in the UK and are not merely a vehicle to circumvent UKEF foreign content policy. If there are any doubts as to the validity of the UK content, we will usually investigate down to the level of suppliers to the UK exporter.

For instance, establishing a brass plate company to transit goods produced outside the UK to an overseas buyer without otherwise processing or modifying the goods in the UK would not be treated as UK content in line with the guidelines set out in 2.1.

3.5 What about second-hand (or re-exported) goods?

To avoid giving support for sales of foreign produced second-hand equipment by intermediaries (including brass plate companies established in the UK merely to access UKEF support), we do not normally provide support for exports of second-hand goods which were manufactured outside the UK, unless those goods have been:

• imported into the UK (and cleared inwards through UK Customs) at least one year previously
• owned by a person, or a series of persons, carrying on business in the UK, for the whole of the immediately preceding 12 months
• processed, refined or amended in such a way that the UK business has undertaken ‘value add’ activity

Where these conditions are satisfied, the cost to the UK exporter of purchasing the goods may be deemed to be UK content. Where these conditions are not satisfied, the goods will be treated as foreign content. The policy on second hand goods is structured this way to ensure that UKEF is supporting economic activity in the UK.

4. The principles

4.1 How are the principles applied to applications?

Each of the principles is assessed individually and in turn to determine whether a transaction meets UKEF’s foreign content policy criteria, alongside other factors for consideration (such as credit risk, environmental social and human rights impacts and anti-bribery and corruption matters).

Applications are assessed initially against Principle One. If a transaction cannot be supported under Principle One, UKEF may provide support on the basis of Principle Two. If not meeting the requirements of Principle Two, UKEF may consider providing support under Principle Three.

4.2 Principle One

The maximum level of support for all foreign content is 80% of the contract value,  requiring a minimum 20% UK content.

4.3 Principle Two

The proportions of foreign content to UK content set out in Principle One (the current 80:20 rule) will apply to the value of UKEF’s support for a contract or a project, which may consist of multiple contracts.

Principle 2A

UKEF can base the amount of support provided on the level of UK content in that contract if it is under 20% (Example A):

Example A

A UK exporter has a contract with an overseas buyer worth £100 million, containing £10 million UK content.

UKEF could consider providing support for up to 85% of 5x of the UK content i.e. £42.5 million. This has been calculated as 5x £10 million (the level of UK goods and services in the contract)  x 85%  85% (as UKEF would normally support no more than 85%, aligned to international obligations requiring a 15% downpayment).

The outstanding proportion of the contract could be financed in a variety of ways, for example, by equity investment, by the support of another Export Credit Agency or by uncovered commercial lending or similar.

Principle 2B

UKEF can take account of UK content contained in a related project or related current, past or prospective contracts (Example B):

Example B

There are two contracts that are supporting an overall project, but which are not contractually linked.

The first contract, consisting of design, project management, engineering etc, has £19 million of UK content and a contract value of £20 million. This contract is being funded by commercial financing. The second contract has UK content of £1 million but a larger contract value of £100 million. This contract is experiencing greater difficulties in obtaining commercial financing due to its complexity and size. Without financing for the second contract the project would not go ahead putting the total £20 million of UK content at risk.

UKEF would consider providing support for all or a proportion of the second contract on the basis that it would be conducive to UK supply in the first contract and proportional to the total level of UK goods and services within the overall project.

4.4 Principle Three

UKEF may provide support if it can be demonstrated that the proposal is conducive to supporting or developing UK exports (Example C).

When providing support under this Principle, UKEF may impose additional measures, such as incentivisation mechanisms, whereby the level of support available from UKEF will be directly linked to current or future supply chain spend or commitments made by the applicant, which are conducive to UK exports.

Examples of this could include increasing future production in the UK, increasing the value or proportion of spend in the UK supply chain in the future, or increasing the number of jobs created in the UK in the future.

A decision under this principle will involve a statement by the applicant justifying the application of this Principle, which in UKEF’s determination justifies UKEF’s provision of support.

It is unlikely that one single aspect is a decisive factor in determining the provision of UKEF support under Principle Three. It is more likely that there is combination of factors which when viewed holistically provide conclusive reasons for UKEF to provide support linked to UK exports.

Therefore, UKEF is unable to provide a single set of objective criteria in advance.

However, the justification is likely to centre upon the beneficial impact to UK exports and the development of UK suppliers in global supply chains.

Example C – Principle Three

A company operating in multiple sectors, has a significant UK supply chain, with research facilities, manufacturing facilities and employees based in the UK.

Due to modern and complex manufacturing methods, the UK involvement in the company’s export contracts is spread throughout the supply chain. This means under Principle One and Principle Two, UKEF would be unable to recognise the full extent of the UK value added.

In order to access UKEF support, the company is willing to increase the level of spend with the UK supply chain. Under Principle Three, UKEF may be able to provide an amount of support for the company’s export contracts (that do not in themselves meet Principle One or Principle Two) in proportion to the UK supply chain spend, supporting the development of future exports.

5. Enquiries

Contact customer.service@ukexportfinance.gov.uk to discuss any queries with UKEF’s customer service, business origination or underwriting teams.