Rocco Femia was quoted regarding the application of the arm's-length principle in the OECD's latest discussion draft on transfer pricing in the context of its work on BEPS. Aspects of the discussion draft, such as the positions on the contractual allocation of risk, "come perilously close to suggesting that the arm's-length principle be replaced with a different standard that looks to whether the related-party arrangement would make sense" between third parties, Femia stated. Given that the draft isn't a consensus document, it is critical for businesses to provide input regarding the conceptual and practical implications of the proposals.