Local costs are defined as expenditure for goods and services in the buyer's country that are necessary either for executing the exporter's contract or for completing the project of which the exporter's contract forms a part. These exclude commissions payable to the exporter's agent in the buying country. 

The Arrangement allows for the support of local costs:

• up to 40% of the export contract value for projects in High Income OECD countries (Category I countries) and 
• up to 50 % for all other countries (Category II countries). 

Useful links

• Prevailing list of countries for local costs (PDF)
• Historical list of countries for local costs (Excel)

The Arrangement stipulates that the Participants shall apply minimum interest rates when providing official financing support for fixed-rate loans: these rates are known as Commercial Interest Reference Rates (CIRRs). 

The CIRR rules apply to all Arrangement transactions, as well as those covered by its sector understandings with the exception of the Aircraft and Ship Sector Understandings which have their own CIRR disciplines.  

There are no provisions relating to minimum floating interest rates. 

Useful links

• Prevailing CIRRs for standard transactions (PDF)
  
• Prevailing CIRRs for transactions supported according to the SSU (PDF)
  
• Historical CIRR rates for all transactions since July 2023 (Excel)
• Aircraft specific rules

The Arrangement requires that Participants charge credit risk premiums that are commensurate with the risk of non-repayment. To this end, the Arrangement stipulates the Minimum Premium Rates (MPRs) that must be charged when providing an officially supported export credit. MPRs depend on the level of risk, which includes the country risk, time at risk and the political and commercial risk covered. Premium should be charged in addition to the minimum interest rates (CIRRs). 

Specific rules apply for credit risk premium to be charged in High-Income OECD countries, High-Income Euro-area countries and Category 0 countries where private market financing is generally available: these are referred to as “market benchmark countries”. 

These rules also apply to the regional or multilateral institutions that Participants have agreed are generally exempt from monetary control and transfer regulations of the country in which they are located (see list). 

To convert the premium rates from a spread into an upfront, specific discount rates (premium discount rates or PDRs) must be used. 

Useful links

• Information note for guidance on premium rules for officially supported export credits in market benchmark countries
• List of Multilateral and Regional Institutions subject to Market Benchmark Premium rules (PDF)
• 2024 Calculator for Market Benchmark MPR (valid from 1st February 2024 to 31 January 2025) (Excel)
• Previous calculator: 2023 Calculator for Market Benchmark MPR (valid from 1st February 2023 to 31 January 2024)  (Excel)
  
• Prevailling PDR (PDF)
• Historical PDR (Excel)

The Arrangement requires that Participants charge credit risk premium that are commensurate with the risk of non-repayment. To this end, the Arrangement stipulates the Minimum Premium Rates (MPRs) that must be charged when providing an officially supported export credit. MPRs depend on the level of risk, which includes the country risk, time at risk and the political and commercial risk covered. Premium should be charged in addition to the minimum interest rates (CIRRs). 

The prevailing applicable MPR for non-market benchmark countries (i.e. category 1 – 7 countries) are derived using a complex formula provided in Annex VI of the Arrangement based on dedicated Country Risk Classifications. 

To convert the up-front MPRs into spreads, specific discount rates (premium discount rates or PDRs) must be used. 

Useful links

• Country Risk Classification 
  
• Prevailing PDR (PDF)
  
• Historical PDR (XLS)
  

On an exceptional basis, Participants may agree, via a common line, to apply alternative terms and conditions to those provided in the Arrangement for a specific transaction or for multiple transactions with common characteristics (see the related articles in the Arrangement for further information). 

Useful link

• Current list of accepted and valid common lines (PDF)