ECB EZB EKT BCE EKP · 2003. 12. 12. · 2.7 Income 16 2.7.1 Dividends 16 2.7.2 Interest 17 2.7.3 Reinvested earnings 17 2.8 Current transfers and capital account 17 2.8.1 Distinction

BALANCE OF PAYMENTS/INTERNATIONAL

INVESTMENT POSITIONSTATISTICAL METHODS

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EZ

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ACCESSION COUNTRIES:

February 2002

ACCESSION COUNTRIES:BALANCE OF PAYMENTS/

INTERNATIONALINVESTMENT POSITIONSTATISTICAL METHODS

February 2002

© European Central Bank, February 2002

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3ECB • Access ion countr ies ba lance of payments s tat i s t i ca l methods • February 2002

Contents

List of abbreviationsand acronyms 6

1 Foreword 9

2 Scope of the presentationsby accession countries 10

2.1 Organisational andinstitutional settings 10

2.2 Statistical system 10

2.3 Methodological standardsapplied in accession countries 11

2.4 General principles of balance ofpayments and internationalinvestment position statistics 11

2.4.1 Balance of paymentsstatistics 11

2.4.2 International investmentposition statistics 12

2.4.3 Accounting principles fortransactions and stocks 12

2.4.4 Classification principles forbalance of payments andinternational investmentposition statements 14

2.5 Goods 15

2.6 Services 15

2.7 Income 16

2.7.1 Dividends 162.7.2 Interest 172.7.3 Reinvested earnings 17

2.8 Current transfers and capitalaccount 17

2.8.1 Distinction between currentand capital transfers 17

2.8.2 Acquisition/disposal ofnon-produced non-financialassets 18

2.9 Direct investment 18

2.10 Portfolio investment 19

2.11 Financial derivatives 20

2.12 Other investment 20

2.13 Reserve assets 21

3 Country-specific details 23

3.1 Bulgaria 23

3.1.1 Organisation chart(s) 243.1.2 Institutional aspects 253.1.3 Statistical system 273.1.4 Goods 303.1.5 Services 313.1.6 Income 323.1.7 Current transfers 343.1.8 Capital account 343.1.9 Direct investment 343.1.10 Portfolio investment 373.1.11 Financial derivatives 383.1.12 Other investment 383.1.13 Reserve assets 393.1.14 International investment

position 403.1.15 Contacts 43

3.2 Cyprus 45



4 ECB • Access ion countr ies ba lance of payments s tat i s t i ca l methods • February 2002

3.3 Czech Republic 61



3.4 Estonia 81



3.5 Hungary 99

3.5.1 Organisation chart(s) 1003.5.2 Institutional aspects 1033.5.3 Statistical system 1053.5.4 Goods 1093.5.5 Services 1103.5.6 Income 1113.5.7 Current transfers 1123.5.8 Capital account 1123.5.9 Direct investment 1133.5.10 Portfolio investment 1143.5.11 Financial derivatives 115

3.5.12 Other investment 1153.5.13 Reserve assets 1163.5.14 International investment


3.6 Latvia 121



3.7 Lithuania 139



3.8 Malta 159

3.8.1 Organisation chart(s) 1603.8.2 Institutional aspects 1623.8.3 Statistical system 1643.8.4 Goods 1673.8.5 Services 168


3.8.6 Income 1693.8.7 Current transfers 1703.8.8 Capital account 1703.8.9 Direct investment 1713.8.10 Portfolio investment 1723.8.11 Financial derivatives 1733.8.12 Other investment 1733.8.13 Reserve assets 1743.8.14 International investment


3.9 Poland 179



3.10 Romania 199



3.11 Slovak Republic 217



3.12 Slovenia 233



4 Annex 247

4.1 Glossary 247

4.2 Contributors 250


List of abbreviations and acronyms

DR Data collection systemplanned for Malta based ondirect reporting

DSBB Dissemination StandardsBulletin Board

EAU Estonian Authors’ SocietyEBRD European Bank for

Reconstruction andDevelopment

ECB European Central BankEDI Electronic data interchangeEEK Estonian kroonEFTA European Free Trading AreaEU European UnionEUR EuroEurostat Statistical Office of the

European Communities(Commission – DG ESTAT)

f.o.b. Free on board at theexporter’s border

FDI Foreign direct investmentGDC General Directorate for

Customs (Romania)GDDS IMF General Data

Dissemination SystemGESMES/CB A message (with a GESMES

profile) allowing the exchangeof statistical time series,related attributes andstructural metadata using astandardised format

GIRO Ltd. Company operating theinterbank clearing system(Hungary)

HCSO Hungarian Central StatisticalOffice

HUF Hungarian forintIAS International Accounting

StandardIBRD International Bank for

Reconstruction andDevelopment (World Bank)

IFS International FinancialStatistics (IMF)

i.i.p. International investmentposition

IMF International Monetary FundISIN International Securities

Identification Number

ÁPV Rt. State Holding and PrivatisationCompany (Hungary)

b.o.p. Balance of paymentsBIS Bank for International

SettlementsBGN Bulgarian levaBNB Bulgarian National BankBoE Eesti Pank, the Bank of

EstoniaBoL Lietuvos bankas, Bank of

LithuaniaBOPD Balance of Payments Statistics

Division (Estonia)BOPED Balance of Payments andDivision External Debt Division

(Bulgaria)BS Banka Slovenije, Bank of

SloveniaBPM4 IMF Balance of Payments

Manual (4th edition)BPM5 IMF Balance of Payments

Manual (5th edition)BUX Index of the Budapest Stock

Exchange (Hungary)CBC Central Bank of CyprusCBM Central Bank of Maltac.i.f. Cost, insurance and freight at

the importer’s borderCMFB Committee on Monetary,

Financial and Balance ofPayments Statistics

CNB Ceská národní banka, theCzech National Bank

CPIS Co-ordinated PortfolioInvestment Survey

CSB Central Statistical Bureau ofLatvia

CSE Cyprus Stock ExchangeCSO Central Statistical Office

(Poland)CTO Cyprus Tourism OrganisationCSSE Commission of Securities and

Stock Exchanges (Poland)CYSTAT Statistical Service of CyprusCZK Czech korunaCZSO Czech Statistical OfficeDMFAS Debt Management and

Financial Analysis System(Romania)

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OSA Official Statistics Act(Estonia)

PHARE An EC technical assistanceprogramme for the applicantcountries of central Europe intheir preparations for joiningthe European Union

repo Repurchase agreementROW Rest of the worldRPF Reserve position in the

(International Monetary)Fund

SAD Single AdministrativeDocument (Poland)

SDDS IMF Special DataDissemination Standard

SDRs Special drawing rightsSIT Slovene tolarSITC Standard International Trade

ClassificationSKK Slovak koruna (Slovakia)SNA System of National AccountsSNA 93 The revised System of

National AccountsSOSR Statistical Office of the Slovak

RepublicSPE Special-purpose entitiesSORS Statistical Office of the

Republic of SloveniaSSO State Statistical Office

(Estonia)WIG Warsaw Stock Exchange

Index (Poland)USD US dollarZUNK Government securities issued

after the Law on Settlementof Non-performing Credits,negotiated prior to31 December 1990 (Bulgaria)

ITRS International TransactionReporting System

KELER Central Clearing House andDepository (Budapest) Ltd.(Hungary)

L/C Letter of creditLCB Law on the Central Bank of

the Republic of EstoniaLVL Latvian latsMÁK Hungarian State TreasuryMFIs Monetary Financial

InstitutionsMFSC Malta Financial Services

CentreMoF Ministry of FinanceMSE Malta Stock ExchangeMTL Maltese liraNACE Nomenclature Générale des

Activités Economiques dansles CommunautésEuropéennes

NBH Magyar Nemzeti Bank,National Bank of Hungary

NBP Narodowy Bank Polski, theNational Bank of Poland

NBR Banca Nationala a României,National Bank of Romania

NBS Národná banka Slovenska,National Bank of Slovakia

NCB National Central BankNIS National Institute for

Statistics (Romania)NSI National Statistical Institute

(Bulgaria)NSO National Statistical Office

(Malta)OECD Organisation for Economic

Co-operation andDevelopment

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9ECB • Acce s s i on coun t r i e s ba l ance o f paymen t s s t a t i s t i c a l me thods • Feb rua r y 2002

1 Foreword

This manual describes balance of payments(b.o.p.) and international investment position(i.i.p.) statistical methods in the accessioncountries (the countries that have applied tojoin the European Union namely Bulgaria,Cyprus, the Czech Republic, Estonia,Hungary, Latvia, Lithuania, Malta, Poland,Romania, the Slovak Republic and Slovenia).It covers concepts and definitions and theiradherence to international standards, notablythose set by the 5th edition of the IMFBalance of Payments Manual, data collection,and compilation systems.

The manual provides a basis for monitoringharmonisation ahead of enlargement of theEuropean Union and the euro area. Theunderlying methodological standards arebriefly reviewed in Chapter 2. Chapter 3contains the individual country presentationson the compilation of b.o.p. and related

statistics and takes stock of the existing datacollection system and applied methodologies,the latter in comparison with the “benchmark”requirements set out in Chapter 2. Finally, aglossary is provided in the annexes (see list inChapter 4.1).

This manual is published on the ECB’s website(www.ecb.int). The ECB’s Balance ofPayments Statistics and External ReservesDivision Bank takes responsibility for theoverall presentation. The country chapterswere drafted by the individual accessioncountries whose contributions are gratefullyacknowledged.

Hard copies are available from the ECB’sPress Division on request. It is planned toupdate the manual regularly. Specific enquiriesrelating to individual countries should beaddressed to the countries concerned.

10 ECB • Acce s s i on coun t r i e s ba l ance o f paymen t s s t a t i s t i c a l me thods • Feb rua r y 2002

2 Scope of the presentations by accession countries

2.1 Organisational andinstitutional settings

Each presentation (“country chapter”) startswith an outline of the institutional frameworkwithin which balance of payments (b.o.p.) andrelated statistics are compiled. Organisationcharts presenting the structure of the b.o.p.compiler (usually the central bank),supplemented in some cases by the internalstructure of the unit producing b.o.p.statistics, help to provide an insight into theinstitutional environment of b.o.p.compilation.

The country’s legislation, i.e. national laws,regulations and specific provisions (legislativeprovisions) which determine the role andfunctions of the b.o.p. compiler, formsanother important aspect of the institutionalsetting. This applies, in particular, wherereporting agents are subject to sanctions inthe event of non-compliance with legalrequirements.

Internal organisation focuses on the practicalorganisation of work, including the staffinvolved and the tasks performed by the unitsresponsible for data collection, control andprocessing.

External co-operation describes the co-operation between the b.o.p. compiler andother statistical authorities/departments. Incases where the central bank is responsiblefor b.o.p. compilation, it closely liaises withthe national statistical institute (NSI), e.g. toobtain trade data or ensure consistency withnational accounts. Moreover, b.o.p. compilersare in contact with general government,national central banks (NCBs) (either in theirown country if the b.o.p. compiler is not thecentral bank and/or in partner countries),economic research institutes and European(ECB and Commission (Eurostat)) andinternational (IMF, OECD) organisations.

The sub-section on users lists the mainconsumers of b.o.p. and related statistics,

both internally (i.e. other departments of theb.o.p. compiler or the NCB) and externally(i.e. the government, internationalorganisations and research institutes).

2.2 Statistical system

The section on the statistical system aims togive a comprehensive picture of thecompilation of b.o.p. and related statistics interms of data collection, processing, controland, lastly, dissemination. It starts with adescription of the existing type of collectionsystem, for which a distinction can be madebetween two models. First, the system maybe based on the indirect reporting ofsettlements by banks on behalf of theircustomers and may be either “closed”1 or“open”2 . Second, the system may be basedon direct reporting through surveys ofenterprises and banks, which report theirown transactions only. In this case, it is usefulto learn about the exhaustiveness of suchsurveys (i.e. their coverage and frequency)and the sampling procedures applied to selectthe reporting agents. It should be noted thatmany countries have mixed systems withelements of both direct and indirectreporting.

A detailed description of the reporting agentsand their reporting obligations is given. Inmost cases, b.o.p. and related statistics arecompiled on the basis of data from thefollowing sectors: (i) the monetary authoritysector, mainly for compiling reserve assetdata; (ii) the banking sector; (iii) the generalgovernment sector; and (iv) other sectors.

1 All changes in the level of the external accounts of the bankingor non-banking sectors are explained by the full reporting oftransactions (“flows”). The balance of the external accounts atthe beginning of the period plus the transactions during theperiod equals the balance at the end of the period.

2 The changes in the level of the external positions of the bankingor non-banking sectors cannot be fully explained by the reportedcross-border transactions. The discrepancies are mainly due to(i) the presence of excemption thresholds in the reporting schemeand (ii) the use of different statistical sources for b.o.p.compiliation.


Finally, the use of additional data sourcessuch as other statistics (e.g. stock or bankingstatistics) or the media is also described.

Another important feature relates tothresholds of amounts below which reportingagents are not required to report anytransactions (exemption thresholds) or belowwhich the reporting agents may reporttransactions and positions in a simplified –e.g. aggregated – way (simplificationthresholds).

The sub-section on the availability of dataprovides information about the compilationfrequencies, the timeliness of data in days/weeks after the end of the reporting periodand the available breakdowns, i.e. byinstrument, sector, country or currency.

The data controls carried out by the b.o.p.compiler are explained both at the level ofindividual reports in the form of formal andplausibility checks and at the aggregate levelby means of time series analysis orconsistency checks with other statistics. Mostcountries have established built-in controlsand perform automated checks, which arecomplemented by “intuitive” controls callingupon staff expertise.

The section on the statistical system finisheswith an overview of the revision policy,focusing on the question of when data can beconsidered final, and the disseminationpractices of the b.o.p. compiler.

2.3 Methodological standards appliedin accession countries

The sub-sections on goods, services, income,current transfers, the capital account, directinvestment, portfolio investment, otherinvestment and reserve assets are structuredin a similar way. Data collection is mentionedbriefly, to the extent that it has not beencovered in the section on the statisticalsystem, and the availability of breakdowns,e.g. by geographical detail, sector or maturity,is described. Item-specific estimation methods

are also covered. The definition sub-sectiondescribes the methodological contents andcoverage of the individual b.o.p. items andthus forms the basis for recognising gaps anddeviations relative to the agreed internationalstandards as laid down in the 5th edition ofthe IMF Balance of Payments Manual (BPM5).In this respect, countries may also specifytheir plans for methodological improvements(intended harmonisation). The sub-section onthe i.i.p. is structured similarly and focuseson typical issues related to stocks such asvaluation criteria and reconciliation withflows.

Following on from this general description ofthe country chapter structure, the paragraphsbelow recall the main concepts of the b.o.p./i.i.p. and highlight the particularities of thecompilation of the individual sub-items asdefined by the BPM5.

2.4 General principles of balance ofpayments and internationalinvestment position statistics

2.4.1 Balance of payments statistics

The b.o.p. is a statistical statement thatsystematically summarises, for a specific timeperiod, the economic transactions of aneconomy with the rest of the world. Atransaction itself is defined as an economicflow that reflects the creation,transformation, exchange, transfer orextinction of economic value and involveschanges in ownership of goods and/orfinancial assets or liabilities, the provision ofservices or the provision of labour and capital.

Cross-border transactions are transactionsbetween residents and non-residents of aneconomy. In this respect, the terms“resident” and “residing” mean having acentre of economic interest in the economicterritory of a country. The following areexamples of borderline cases in thedetermination of residence:


(i) individuals from embassies and militarybases should be classified as residents oftheir country of origin, thereby ensuringthat a distinction is made between staffemployed from among host countryresidents and those from the countrywhich the embassy or military baserepresents;

(ii) when undertaking cross-bordertransactions in land and/or buildings(e.g. holiday homes), the owner shouldbe treated as if having transferredownership to a notional institutional unitactually resident in the country wherethe property is located. The notional unitshould be treated as being owned andcontrolled by the non-resident owner;and

(iii) where an institutional unit operates in anoffshore financial centre, it should betreated as a resident of the territory inwhich the centre is located.

Despite its name, which refers to standardsapplicable in the past followingrecommendations of the IMF Manuals up tothe fourth edition, the b.o.p. is now lessconcerned with payments, as that term isgenerally understood, than with transactions.This shift from a financial towards aneconomic approach (i) fosters a soundeconomic interpretation of the figures, and(ii) makes the b.o.p. concepts compliant withthe national accounts (the b.o.p. is also therest of the world account). Therefore, anumber of international transactions, whichare of interest in a b.o.p. context, may notinvolve the transfer of money, and some arenot paid for in any sense. The inclusion ofthese transactions, in addition to thosematched by actual payments, constitutes aprincipal difference between a b.o.p.statement and a record of foreign payments.

2.4.2 International investmentposition statistics

Closely related to the flow-oriented b.o.p.framework is the stock-oriented i.i.p.Compiled at a specified date, the i.i.p. is a

statistical statement of (i) the value andcomposition of the stock of an economy’sfinancial assets or claims on the rest of theworld, and (ii) the value and composition ofthe stock of an economy’s financial liabilitiesto the rest of the world. Cross-border positionscomprise the stocks of financial claimsand liabilities vis-à-vis non-residents. Alsoencompassed are land, other real propertyand other immovable assets, which arephysically located:

– outside the economic territory and ownedby residents (considered as assets, fromthe resident perspective); or

– inside the economic territory and ownedby non-residents (considered as liabilities,from the resident perspective).

In addition, monetary gold and specialdrawing rights (SDRs) held by residents areincluded.

In some instances, it may be of analyticalinterest to compute the difference betweenthe two sides of the balance sheet. Thecalculation would provide a measure of thenet position, which would be equivalent tothat portion of the resident area’s net worthattributable to, or derived from, itsrelationship with the rest of the world. Achange in stocks during any defined periodcan be attributable to transactions (i.e. b.o.p.flows), to revaluations reflecting changes inexchange rates, prices, etc., or to otheradjustments (e.g. reclassifications, correctionsor uncompensated seizures).

2.4.3 Accounting principles fortransactions and stocks

2.4.3.1 Double-entry system

The basic convention applied in constructinga b.o.p. statement is that every recordedtransaction is represented by two opposingentries with equal values. One of theseentries is designated a credit; the other adebit. In principle, the sum of all credit entriesis identical to the sum of all debit entries, and


the net balance of all entries in the statementis zero. In practice, however, the accountsfrequently do not balance. Data for b.o.p.estimates are often derived independentlyfrom different sources and may beincomplete. Moreover, timing and valuationeffects along with a variety of other factorstend to cause imbalances in the informationrecorded. As a result, individual b.o.p.accounts tend to aggregate to a summary netcredit or net debit. A separate entry, equalto that amount with the sign reversed andlabelled net errors and omissions, is thenincluded to balance the overall b.o.p. account.

2.4.3.2 Time of recording transactions

The BPM5 principally requires recording on atransactions basis, meaning that transactionsare recorded when economic value is created,transformed, exchanged, transferred orextinguished. Claims and liabilities arise whenthere is a change in ownership. The changemay be legal or economic. In practice, whena change in ownership is not obvious, thechange may be assessed at the time thatparties to a transaction record it in theirbooks.

2.4.3.3 Valuation of transactions and stocks

In principle, market prices should be used asthe basis of valuation for both transactionsand stocks. Thus, transactions are generallyvalued at the actual prices agreed upon bytransactors, and stocks of assets and liabilitiesare valued at the market prices prevailing atthe times to which the balance sheet relates.Market valuation provides the mostmeaningful measure of the economic value ofthe resources available to an economy. Froma methodological point of view, alternativesto valuation at market prices should only beused if absolutely necessary.

In practice, however, some deviations fromthe market principle may occur. Book valuesfrom the reporting agents’ balance sheetsmay, in some cases, be the only readily

available source for the valuation of assetsand liabilities. In this case, owing to theaccounting principles established by theappropriate authority and/or differentinvestment policies, those book values maydiffer from the market value. Moreover,equity and debt securities are not alwaysrecorded on a security-by-security basis.Suitable means (e.g. indices) must then bechosen by either the data provider or thecompiler to approximate the market value.The i.i.p. is valued at current market prices,with the exception of direct investmentstocks where book values are used to a largeextent.

2.4.3.4 Reconciliation of stocks and flows

The reconciliation of changes in stocks andb.o.p. flow data allows sets of data to bevalidated when they are collectedindependently and gives possible explanationsfor the changes in positions over a givenperiod. These factors are:

(i) the transactions that have taken placeduring the period;

(ii) price changes;(iii) exchange rate changes; and(iv) other adjustments reflecting changes in

stocks which are not due to theaforementioned factors.

The greater the level of detail of the basicinformation on both stocks and flows, themore precise the reconciliation is. Inparticular, the following information isnecessary:

(i) a currency breakdown to capture theexchange rate effect;

(ii) a breakdown of applicable market prices,especially for portfolio investmentinstruments, to isolate the market valueeffect; and

(iii) the timing of transactions to select theappropriate price and exchange rate.


2.4.4 Classification principles for balanceof payments and internationalinvestment position statements

2.4.4.1 Standard components of balanceof payments and international investmentposition statements

According to the BPM5, the two majorclassifications of transactions in the b.o.p.statement are the current account and thecapital and financial account. In brief, thecurrent account shows transactions in thereal economy and relates to goods, services,income and current transfers, while thecapital and financial account records thetransactions in the financial economy.

The major classifications within the currentaccount are:

– goods;– services;– income; and– current transfers.

The capital account records an economy’scapital transfers and its transactions in non-produced, non-financial assets (such aspatents and copyrights).

The financial account records an economy’stransactions in external financial assets andliabilities and is structured around five accounts,differentiated by the type of financial assets/liabilities involved in the transaction:

– direct investment;– portfolio investment;– financial derivatives;– other investment; and– reserve assets.

The i.i.p. is structured in the same way as thefinancial account of the b.o.p.

2.4.4.2 Institutional sectors

In addition, transactions within the portfolioinvestment, financial derivatives and other

investment accounts can be classified bysector, according to the institutional sectorto which the resident undertaking thetransaction belongs. This sectoral analysis alsoapplies to the corresponding stock data forthe i.i.p.

Four sectors are identified separately forb.o.p./i.i.p. statistics:

(i) monetary authorities;(ii) general government;(iii) banking sector; and(iv) other sectors.

2.4.4.3 Classification of financial flows by credits/change in assets and debits/change inliabilities

Economic transactions are recorded (i) ascredits or debits in the case of all items ofthe current and capital accounts, and (ii) aschanges in assets or liabilities in the case ofall items of the financial account. Credits anddebits are shown as gross figures, i.e. inflowsfrom non-residents will increase the amountof credits, while outflows to non-residentsmean an increase of debits. By contrast,changes in assets and liabilities are shown asnet figures: increases (decreases) in assetsindicate that a net outflow (inflow) hasoccurred, since the payments by residents inrespect of their acquisitions of assets issuedby non-residents are larger (smaller) than thereceipts derived from their sale orredemption. Increases (decreases) in liabilitiesindicate a net inflow (outflow), since thereceipts from non-residents in respect oftheir acquisitions of assets issued by residentsare larger (smaller) than the paymentsgenerated by their sale or redemption.

2.4.4.4 Geographical allocation principle forchanges of ownership in the case offinancial transactions and positions

For financial transactions/positions, there aretwo possible means of classificationconsidered to be in accordance with the


change-of-ownership principle: the debtor/creditor principle and the transactor principle. Inorder to achieve a more precise geographicalallocation, the BPM5 recommends, inprinciple, the application of the debtor/creditorprinciple, according to which transactions/positions in a country’s external liabilities areclassified according to the country of theowner of the claim (the creditor) andtransactions/positions in a country’s financialassets are classified according to the countrythat incurs the liability (the debtor).The transactor principle, however, meansthat transactions/positions are classifiedaccording to the country of the non-residentcounterparty to the transaction.

2.5 Goods

The goods item of b.o.p. statistics coversgeneral merchandise, goods for processing,repairs on goods, goods procured in ports bycarriers and non-monetary gold. Inaccordance with general b.o.p. principles,change of ownership is the principledetermining the coverage and time ofrecording of international transactions ingoods. Exports and imports of goods shouldbe recorded on an f.o.b./f.o.b. basis, i.e. atmarket value at the customs frontiers ofexporting economies, including charges forinsurance and transport services up to thefrontier of the exporting country. Moreover,in line with the guidelines set out in the BPM5,the geographical allocation of exports shouldbe based on the country of final destinationand that of imports should be based on thecountry of origin.

Data for the b.o.p. goods item are mostlyderived from trade data, which are collectedby the national statistical institutes on thebasis of customs reports. However, in caseswhere the trade data are not available in atimely manner, countries may use othersources, e.g. the settlements reported by thebanking sector or estimates, to compile thegoods item. Moreover, trade data are notfully in line with BPM5 requirements for thegoods item, implying that further adjustments

have to be made. The most important onerefers to imports, which are not availablefrom trade statistics on an f.o.b. basis,meaning that the amounts of cost, insuranceand freight have to be deducted from goodsand allocated to the services item. Mostcountries use estimated ratios for this typeof adjustment.

2.6 Services

The services account of the b.o.p. consists ofthe following items, which should be recordedaccording to their actual delivery:

– Transportation covers all transportationservices (sea, air and other – including land,inland waterway, rail, space and pipeline)that are performed by residents for non-residents, or vice versa, and that involvethe carriage of passengers, the movementof goods (freight), rentals (charters) ofcarriers with crew, and related supportingand auxiliary services. Excluded arepassenger services provided to non-residents by resident carriers within theresident economies, or vice versa (theseare included under travel).

– Travel includes primarily the goods andservices which resident travellers acquirefrom non-residents or which residentsprovide to non-resident travellers duringvisits of less than one year, net of anypurchases made with money earned orprovided locally. Unlike other services,travel is not a specific type of service, butan assortment of goods and servicesconsumed by travellers. Personal transport(only international transportation) inconnection with travel is not included inthis item but under transportation.

– Other services comprise those servicetransactions with non-residents which arenot covered under transportation andtravel, such as communications services,construction services, insurance servicesor financial services.


2.7 Income

Income covers two types of transactionsbetween residents and non-residents:

(i) those involving compensation of employees,which is paid to non-resident workers orreceived from non-resident employers;and

(ii) those involving investment income receiptsand payments on external financial assetsand liabilities. Income derived from theuse of tangible produced assets3 isexcluded from income and classified, asappropriate, under leasing or rentals,under other business services or undertransportation. Income from tangiblenon-produced assets is, however,classified as investment income under“other investment” income in general ordirect investment income in the case ofincome from land (rent).

Compensation of employees comprises wages,salaries and other benefits (in cash or in kind)earned by individuals in economies other thanthose in which they are resident, for workperformed for and paid for by residents ofthose economies (and conversely). Includedare the contributions paid by employers, onbehalf of employees, to social securityschemes or to private insurance or pensionfunds to secure benefits for employees.

Investment income (property income in theSNA 93 and the ESA 95) is income derivedfrom ownership of external financial assetsand payable by residents of one economy toresidents of another economy. It includesinterest, dividends, remittances of branchprofits, and direct investors’ shares of theretained earnings of direct investmententerprises. Where separately identifiable,holding (capital) gains and losses are notclassified as investment income, but aschanges in the value of the investments due

to market price developments. For practicalreasons, this requirement concerning holdinggains and losses is often very difficult to fulfil.Settlement flows in respect of interest rateswaps and forward rate agreements (FRAs)are not regarded as interest income, but arerecorded as transactions under financialderivatives in the financial account.

In line with the related financial accounts, theinvestment income account can be brokendown into direct investment, portfolioinvestment and other investment components(income on reserve assets should be includedin other investment income). Income ondirect and portfolio investment can be brokendown further into income on equity andincome on debt. In the case of portfolioinvestment, income on debt can be subdividedinto income on bonds and notes (long-termcomponent) and income on money marketinstruments (short-term component). Themost common types of investment incomeare dividends in the case of equity and interestin the case of debt.

2.7.1 Dividends

Dividends represent income that is payablewithout a binding agreement between thecreditor and the debtor. Dividends may bepaid out of normal operating profits or outof realised or unrealised capital gains. Inprinciple, redistributed capital gains shouldbe classified as other capital transfers.

The following borderline cases deserveattention: stock dividends, bonus shares andliquidating dividends. Distribution of earningsin the form of stock dividends is capitalisationof current earnings and an alternative todistributing cash dividends, and should berecorded in the same manner as reinvestedearnings (i.e. as investment income in thecurrent account and as offsetting equityinvestments in the financial account). Generalbonus shares, by contrast, represent thesubstitution of one type of equity (paid-upcapital or capital stock) for another(reinvested earnings) and should thus not be

3 Tangible assets cover produced and non-produced assets.Tangible non-produced assets consist of assets that occur innature and over which ownership may be enforced andtransferred, such as land and water resources.


recorded in the b.o.p. Bonus shares reflectthe transformation of reserves (which usuallyconsist of accumulated, unremitted earnings)into voting power. Liquidating dividends referto the distribution of assets in the form of adividend from a corporation that is going outof business. Payment of liquidating dividendsmay take place when a firm goes bankrupt orwhen management decides to sell off acompany’s assets and pass the proceeds onto shareholders. As liquidating dividendsrepresent a return of capital contributionsrather than a remittance of earnings, theyshould be recorded as withdrawals of capitalin the financial account and shouldconsequently be excluded from investmentincome.

Dividends are recorded as of the date theyare payable.

2.7.2 Interest

Interest is payable in accordance with a bindingagreement between the creditor and thedebtor. Interest is the amount that the debtorbecomes liable, under the terms of thefinancial instrument agreed between them, topay to the creditor over a given period oftime without reducing the amount of principaloutstanding. Interest income should berecorded on an accruals basis so as to ensurethat the cost of capital continually matchesthe provision of capital. At the time interestaccrues, the following entries are recorded:(i) accrued interest is recorded underinvestment income in the current account,either as a credit or as a debit, and (ii) anoffsetting entry is made in the financial accountaccording to the underlying instrument (e.g.portfolio investment – debt securities, or otherinvestment – loans/currency and deposits) toreflect an increase in the claim associated withthe non-payment of the accrued amount. Whenthe actual interest payment occurs, a debit/creditis usually recorded under other investment –loans/currency and deposits. The offsetting entryto this payment should not be recorded underinvestment income, but should instead berecorded in the financial account as a debit or

credit entry, representing a reduction in theliabilities/assets (extinguishing the financialaccount entry made at the time interestaccrued).

2.7.3 Reinvested earnings

Reinvested earnings appear in the context ofincome on equity and are defined as the directinvestor’s share of the total consolidatedprofits earned by the direct investmententerprise in the reference period covered(after allowing for tax, interest anddepreciation), less dividends due for paymentin the relevant period even if these relate toprofits earned in earlier periods. Reinvestedearnings should be recorded in the period inwhich they are earned and included in theb.o.p. statistics both (i) in the current accountas imputed flows of undistributed income tothe direct investor (credit) and (ii) in thefinancial account as additional equity capitalfor the direct investment enterprise (debit),the flows being equal and of opposite signs.

2.8 Current transfers and capitalaccount

2.8.1 Distinction between current andcapital transfers

The separation of capital and currenttransfers within the b.o.p. has beenintroduced for the purpose of achievingcompatibility with national accounts statistics.For b.o.p. statistics, the sum of the balanceson the current and capital accountscorresponds to the net lending/borrowing ofthe total economy. However, the currentaccount balance as such is viewed as animportant economic indicator and theclassification of transfers as current or capitalhas an impact on the resulting surplus ordeficit on the current account. It is thereforevital that transfers be recorded appropriatelyin the b.o.p. current or capital account.

Transfers are offsetting items required tobalance unilateral transactions in which one


economic entity provides a real resource,such as goods or services, or a financial itemto another entity without receiving any realresource or financial item in exchange.

Current transfers consist of transfers that arenot transfers of capital. Current transfersdirectly affect the level of disposable incomeof the donor or recipient. They include thoseof general government, e.g. transfers relatingto current international co-operationbetween different governments, payment ofcurrent taxes on income, wealth, etc., andother transfers, e.g. workers’ remittances,insurance premiums (less service charges) andclaims for non-life insurance.

Capital transfers may be in cash or in kind andconsist of:

(i) transfers involving transfers of ownershipof fixed assets;

(ii) transfers of funds linked to, or conditionalupon, the acquisition or disposal of fixedassets; or

(iii) the cancellation, without anycounterparts being received in return, ofliabilities by creditors.

In practice, the distinction between currentand capital transfers is to be found in the useof the transfer by the recipient country.

2.8.2 Acquisition/disposal of non-produced, non-financial assets

In addition to capital transfers, the capitalaccount also covers the acquisition/disposalof non-produced, non-financial assets whichinclude the acquisition/disposal of non-produced, tangible assets (land and sub-soilassets) and the acquisition/disposal of non-produced, intangible assets, such as patents,copyrights, trademarks, franchises, etc., andleases or other transferable contracts. Onlythe purchase/sale, and not the use, of suchassets, should be recorded in this category ofthe capital account. In the case of resident/non-resident transactions in land, anacquisition/disposal is deemed to occur

between resident units, and the non-residentacquires a financial claim on a notionalresident unit. Therefore, changes ofownership in land usually are classified asfinancial transactions under direct investment.(The only exception concerns land purchasedor sold by a foreign embassy, which isrecorded under acquisition/disposal of non-produced, non-financial assets.)

2.9 Direct investment

Direct investment reflects the objective of aresident entity in one economy to obtain alasting interest in an enterprise resident inanother economy. In line with internationalstandards (IMF/OECD), a “10% ownershipcriterion” should be applied in order to inferthe existence of a lasting interest. Based onthis criterion, a direct investment relationshipcan exist between related enterprises,regardless of whether the linkage involves asingle chain or a number of chains. It canextend to a direct investment enterprise’ssubsidiaries, sub-subsidiaries and associates.Once the direct investment has beenestablished, all subsequent financial flows4

between the related entities should berecorded as direct investment transactions,regardless of the financial instrument used,except in the case of transactions betweenaffiliated banks and other financialintermediaries where direct investmenttransactions are confined to those of apermanent capital nature.

Special-purpose entities (SPEs) are enterprisesin the form of holding companies, basecompanies, regional headquarters or othertypes of subsidiaries, which are establishedfor the purpose of managing foreign exchangerisks, facilitating the financing of investmentsor otherwise engaging in financialtransactions. They are considered to bedirect investors and/or direct investmententerprises. However, for SPEs with the solepurpose of acting as a financial intermediary(as is the case for banks and other financial

4 Including those related to securities and financial derivatives.


intermediaries, such as brokers), transactionsrecorded under direct investment are limitedto those associated with permanent debt andequity (see above).

The components of direct investmenttransactions are equity capital, reinvestedearnings and other capital associated withvarious inter-company debt transactions. Realestate investment including private, non-businessreal estate investment should be recorded aswell. Private non-business real estate investmentrelates, in particular, to holiday and otherresidences owned by non-residents, whetherfor personal use or leased to others.

Equity capital comprises equity in branches,all shares in subsidiaries and associates (withthe exception of non-participating preferenceshares which are treated as debt securities)and other capital contributions.

Reinvested earnings consist of direct investors’shares of earnings not distributed as dividendsby subsidiaries or associates and earnings ofbranches not remitted to direct investors,but recorded under investment income.

Other capital covers all inter-company financialtransactions (borrowing and lending of funds)– including debt securities and suppliers’credits (i.e. trade credits) – between directinvestors and subsidiaries, branches andassociates.

Following the recommendations of the IMF andEurostat/OECD guidelines, direct investmentrelationships should be recorded using thedirectional principle, implying that the financialtransactions between the resident directinvestors and the non-resident direct investmententerprises are classified as direct investmentabroad (negative or positive, depending on thedirection of the flow). Symmetrically, thefinancial transactions between resident directinvestment enterprises and non-resident directinvestors are classified as direct investment inthe reporting economy.

With regard to the valuation of directinvestment stocks, the internationally

recommended approach is to use marketprices. However, owing to practicaldifficulties, some compilers partly use bookvalues or extended book values, e.g. basedon the volume of own funds of the companiesinvolved.

2.10 Portfolio investment

The portfolio investment account includes(i) equity securities and (ii) debt securities inthe form of bonds and notes and moneymarket instruments, except for those fallingunder the category of either directinvestment or reserve assets. Financialderivatives should be excluded from portfolioinvestment and shown in a separate categoryof the financial account and in the i.i.p., in linewith recent IMF recommendations.

Equity securities cover all instrumentsrepresenting claims to the residual values ofincorporated enterprises after the claims ofall creditors have been met. Shares, stocks,preferred stock or shares, and participationor similar documents usually denoteownership of equity. Transactions in andholdings of shares of collective investmentinstitutions, e.g. investment funds, are alsoincluded.

Bonds and notes are, in principle, securitiesissued with an initial maturity of more thanone year which usually give the holder (i) theunconditional right to a fixed monetaryincome or contractually determined variablemonetary income (payment of interest beingindependent of the earnings of the debtor)and (ii) the unconditional right to a fixed sumin repayment of principal on a specified dateor dates. Transactions in and holdings ofsecurities issued with a maturity of more thanone year are always classified as bonds, eventhough their residual maturity at the time ofthe investment may be one year or less.

Unlike bonds and notes, money marketinstruments are securities issued with an initialmaturity of up to one year. They generallygive the holder the unconditional right to


receive a stated, fixed sum of money on aspecified date. These instruments are usuallytraded, at a discount, in organised markets;the discount is dependent upon the interestrate and the time remaining to maturity.Examples of such instruments are Treasurybills, commercial and financial paper andbankers’ acceptances.

Collateralised loans and other relevanttransactions/holdings related to repurchaseagreements involving debt securities arerecorded in the other investment account.

The recording of portfolio investmenttransactions in the b.o.p. takes place whenthe creditors or debtors enter the claim orliability in their books. Transactions shouldbe recorded, in principle, at the effective pricepaid or received, less commissions andexpenses. Thus, in the case of securities withcoupon interest, the interest accrued fromthe last payment of interest is included and,for securities issued at a discount, the interestaccumulated since issue is included. Offsettingentries for interest accrued are required inthe b.o.p. financial account and in the i.i.p., inline with the income account.

With regard to stocks, as financial instrumentswithin portfolio investment are greatlyaffected by price adjustments, compilationbased on market value is important in thei.i.p. Therefore, market values should beapplied as far as possible in the case of equityand debt securities, on both the assets andthe liabilities side, since the i.i.p. must showthe economic value of the resources and notthe redemption value. The relevant pricesare those prevailing at the end of thereference period to which the reportingrelates.

2.11 Financial derivatives

Financial derivatives are financial instrumentsthat are linked to a specific financialinstrument, indicator or commodity, andthrough which specific financial risks can betraded in financial markets in their own right.

Transactions in financial derivatives aretreated as separate transactions, rather thanas integral parts of the value of underlyingtransactions to which they may be linked.The transactions and positions recordedunder the item financial derivatives should bethose in options, futures, swaps, forward foreignexchange contracts and credit derivatives.

Net flows associated with interest ratederivatives are recorded under financialderivatives, not as interest flows, in line withrecent international agreement.

Initial margin payments are regarded as changesin deposits and should be recorded, ifidentifiable, under other investment. Thetreatment of variation margin paymentsdepends on the form of the variation margin:options-style variation margins are regarded, inprinciple, as changes in deposits and shouldbe recorded, if identifiable, under otherinvestment. Futures-style variation marginpayments are regarded, in principle, asoperations in derivatives and should berecorded under financial derivatives. In thecase of options, the full premium (i.e. thepurchase/sale price of the options and theimplied service charge) is recorded.

The recording of transactions in financialitems takes place when both creditor anddebtor enter the claim and liability,respectively, in their books.

2.12 Other investment

The other investment item is a residualcategory that includes all financial transactionsnot covered under direct investment,portfolio investment, financial derivatives orreserve assets. It can be further subdividedinto (i) trade credits, (ii) loans/currency anddeposits and (iii) other assets/other liabilities.It also encompasses the offsetting entries foraccrued income on instruments classifiedunder other investment.

Trade credits consist of claims or liabilitiesarising from the direct extension of credit


relating to transactions in goods and servicesand advance payments for work in progress(or to be undertaken) associated with suchtransactions. There are two types of tradecredit assets: (i) prepayments on imports and(ii) trade credit extended on exports. Assetsrepresented by prepayments on imports areextinguished upon delivery of the goods orservices and assets represented by tradecredit on exports are extinguished by actualpayment (postpayment). Trade creditliabilities arise from the prepayment ofexports or trade credit received on imports.Delivery of exports extinguishes the formerand actual payment (postpayment)extinguishes the latter.

Loans/currency and deposits comprisetransactions in the following financialinstruments: loans, i.e. those financial assetscreated through the direct lending of fundsby a creditor (lender) to a debtor (borrower)through an arrangement in which the lendereither receives no security evidencing thetransaction or receives a non-negotiabledocument or instrument; deposits; repo-typeoperations; and currency (notes and coinswhich are in circulation and commonly usedto make payments). Loans to finance trade,other loans and advances (includingmortgages) are included, as are financialleases.

Other assets/other liabilities cover all itemsother than trade credits, loans and currencyand deposits. Examples are: capitalsubscriptions to international non-monetaryorganisations, changes in insurance technicalreserves and offsets in respect of unsettledsecurities transactions.

In the case of the other investment holdings(stocks), the discrepancies between themarket value and the nominal or book valuecan be considered to be somewhat smallerthan for other financial instruments, exceptin cases where there have been large write-downs or valuations are based on secondarymarket quotations. For these reasons, bookvalues are accepted as the valuation criterionfor other investment stocks, except for loans

that are negotiable at a discount in whichcase market value should be applied.

2.13 Reserve assets

Reserve assets must be under the effectivecontrol of the relevant monetary authority(e.g. the NCB or the Treasury) and refer tohighly liquid, marketable and creditworthyforeign currency denominated claims on non-residents, plus monetary gold, SDRs and thereserve position in the IMF.

Reserve asset data are compiled on the basisof the information provided by the accountingor operations departments of the NCBs.

Against the background of the 1997 Asianfinancial crisis, the concept of usable reserveshas gained importance. This conceptsupplements data on gross reserves withinformation about encumbrances on reserves,i.e. the so-called “reserve-related liabilities”5 .Together with other foreign currency claims(e.g. on resident counterparts), theseliabilities might constitute an importantadditional indicator of a country’s ability tomeet its foreign exchange obligations.Nonetheless, reserve assets presented on agross basis without any netting-off of reserve-related liabilities remain the central indicatorof a country’s ability to meet its foreignexchange obligations.

Foreign currency claims on residents shouldnot be included in official reserve assets,though they may be shown separately in thecontext of IMF dissemination standards5.

The offsetting entries for accrued interest onreserve assets should be recorded under therelevant reserve asset items.

5 This concept was developed by the IMF in the context of theSpecial Data Dissemination Standard. All this relevant informationhas been integrated into a common statistical layout in the formof the “IMF/BIS Common Template on international reservesand foreign currency liquidity”.


Bulgaria

February 2002

3 Country-specific details

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Chapter 3.1 B

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Banking PolicyDirectorate

International Relationsand

European IntegrationDirectorate

Economic Researchand Projections

Directorate

StatisticsDirectorate

AccountingDirectorate

International Financial Institutions

Division

Monetary and Financial Research

Division

Monetary and Banking Statistics

Division

FinancialAccounting

Division

BNB BudgetAccounting

Division

State BudgetAccount Service

Division

Balance of Paymentsand External Debt

Division

General Economic Statistics andPublications

Division

MacroeconomicResearchDivision

European Integrationand Central Banks

Division

Payment and Settlement Systems

Division

Monetary Instruments

Division

Financial MarketsDivision

Banking Department Deputy Govenor’s Office

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Chapter 3.1 Bulgaria

2 Institutional aspects

2.1 Introduction

The Bulgarian National Bank (BNB) has beenresponsible for compiling the balance ofpayments (b.o.p.) since 1991. The legal basisfor b.o.p. compilation in Bulgaria is providedfor in Article 42 of the Law on the BulgarianNational Bank. Data for the purposes of thiscompilation are collected on the basis of thisArticle as well as on the basis of the ForeignExchange Law. These data are processed bythe Balance of Payments and External Debt(BOPED) Division within the StatisticsDirectorate of the BNB. At present, the BNBcompiles and publishes monthly analyticalpresentations as well as standardpresentations of the b.o.p. in accordance withthe fifth edition of the IMF “Balance ofPayments Manual” (IMF, 1993) (BPM5) andthe “Balance of Payments Textbook” (IMF,1996). In compiling the b.o.p., the Bankis fully independent from the generalgovernment and follows the methodologicalprinciples of the BPM5 as strictly as possible.

2.2 Legislative provisions

Since 1991 the BNB has borne responsibilityfor compiling the Bulgarian b.o.p. The role ofthe BNB was confirmed in Article 42 of theLaw on the Bulgarian National Bank. WithDecree No. 181 of 22 July 1996 of theCouncil of Ministers, a new Article was addedto the existing Decree No 15, which set outthe obligation that all information concerningthe b.o.p. should be presented to the BNBdirectly or via the commercial banks.

The Foreign Exchange Law, in force since1 January 2000, introduced the basis forsignificant improvements of the reportingsystem. It specified a number of proceduresfor the collection of data for b.o.p. statistics.Although the Law strengthened the ability ofthe BNB to collect information in somerespects, minor gaps remained in the b.o.p.compilation methodology according to theBPM5. Attempts were made to cover them in

the regulations issued in compliance with theForeign Exchange Law – Regulation No. 27on the Registration by the Bulgarian NationalBank of Transactions between Residents andNon-Residents; Regulation No. 29 on theTerms and Procedures for the Submission ofReports and Declarations on the Liabilities ofResidents vis-à-vis Non-Residents; and theRegulation on the Collection of Informationon Balance of Payments Statistics.

2.3 Internal organisation

At the BNB, b.o.p. statistics and theinternational investment position (i.i.p.) arecompiled in the BOPED Division within theStatistics Directorate. The Directorate hasthree divisions, namely the BOPED Division,the Monetary and Banking Statistics Divisionand the General Economic Statistics andPublications Division.

At present, the BOPED Division, which has atotal of eight staff, is made up of the followingthree sections:

– Methodology and Compilation – this sectionhas three staff (one expert and twoeconomists) and is mainly responsible forthe collection of data for and thecompilation of the b.o.p., the developmentand improvement of the methodology fordata collection and compilation techniques,the adaptation of the compilation systemto the various requirements of theinternational institutions, the maintenanceof metadata concerning the b.o.p., etc. Thissection is also responsible for publishingthe b.o.p. data.

– Analyses and Forecasting of Foreign Trade andthe BOP – this section has two membersof staff and its main responsibilities includethe processing of foreign trade data, monthlyanalyses of current b.o.p. and foreign tradedevelopments and short-term forecasting.The section is also responsible for publishingthe foreign trade data.



– International Investment Position – thissection has two members of staff and isresponsible for compiling the i.i.p. andprivate-sector external debt, providingmonthly gross external debt information,monthly analyses of current debtdevelopments, short-term and long-termprojections for debt service, etc. It is alsoresponsible for publishing external debt andi.i.p. data.

2.4 External co-operation

The BNB receives customs declarations’ tradedata from the Information Services Company.These data are supplemented with data fromthe National Statistical Institute (NSI) andare further processed by the BNB.

The data on travel are based on informationfrom the Ministry of Internal Affairs on thenumber of travellers crossing the borders andon estimates of “per capita” receipts andexpenditures elaborated by the BNB, togetherwith the Ministry of Economy. The BNB receivesinformation on current transfers in kind fromthe Bulgarian Red Cross, the Agency for ForeignAid and in cash from the monthly commercialbanks’ reports.

The BNB also receives data on directinvestments in the country from thePrivatisation Agency, branch ministries, theCentral Depository, commercial banks’reports, the Agency for Gambling andInsurance Supervision at the Ministry ofFinance, the Pension Insurance SupervisionAgency and from notaries public on privatereal estate investment of non-residents, aswell as from the reports on inter-companydebt transactions and the statistical surveycarried out by the NSI among non-financialsector enterprises and from the commercialbanks’ annual financial and accounting reports(balance sheets and profit and lossstatements). The BNB and the ForeignInvestment Agency share information ondirect investment in the country.

The BNB receives monthly data on directinvestment abroad from the commercialbanks’ reports and annually from the surveycarried out by the BNB among directinvestors from the country.

The BNB works in close co-operation withthe 35 existing commercial banks, whichprovide monthly aggregated reports on theirtransactions with the rest of the world, aswell as with about 3,500 entities reportingtheir external liabilities directly to the BNB.

With respect to the b.o.p. methodology, theBNB works in close co-operation with theInternational Monetary Fund (IMF), Eurostatand the European Central Bank (ECB). Since1995, technical missions from the IMF havevisited the BNB. Since 1998, experts fromthe BOPED Division have taken part in theworking parties organised by Eurostat. SinceNovember 2000, regular meetings betweenthe BNB and the ECB have been held withthe aim of harmonising the methodology andgetting the accession countries acquaintedwith the reporting requirements.

2.5 Users

B.o.p. data are supplied to various internaland external users. Within the BNB the mainusers of the b.o.p. are the Managing Board ofthe BNB, the Economic Research andProjections Directorate, the Monetary andBanking Statistics Division and the GeneralEconomic Statistics Division within theStatistics Directorate, the TreasuryDirectorate, the Accounting Directorate, theInternational Relations and EuropeanIntegration Directorate and the FiscalServices Department. Externally, the mainusers of b.o.p. data are the Council ofMinisters, the Ministry of Finance, the Ministryof the Economy, government agencies, foreignembassies and international organisations.B.o.p. data are used as input in the rest of theworld account in the System of NationalAccounts produced by the NSI. Quarterlyb.o.p. data, annual i.i.p. data and monthly



trade data are sent electronically to the IMFin the requested format. Since mid-2000, aGESMES-CB message has been used for b.o.p.data dissemination to Eurostat. A test

exercise for the transmission of b.o.p. data inGESMES-CB messages to the ECB hasrecently been carried out.

3 Statistical systems

3.1 Type of collection system

The existing open International TransactionsReporting System (ITRS) was introduced in1996 as a first step towards achieving a closedITRS. It includes (i) commercial banks’ reportsand (ii) reports by enterprises which havebank accounts abroad pertaining to residents’international transactions. These reportscover all components of the b.o.p. table.In addition, the data on certain b.o.p.components collected by the ITRS aresubstituted for data from other sources:(i) exports and imports data, based oncustoms declarations, (ii) the annual surveyof tourist agencies, (iii) the direct investmententerprise survey, (iv) administrative recordsand (v) reports by enterprises havingborrowed from abroad and others.

3.2 Reporting agents

(i) Banking sector – historically, the bankingsector has been the backbone of thereporting system. In the first quarter of2000, following the adoption of theForeign Exchange Law, the BNBdeveloped and adjusted the existingcollection system to the newrequirements of this Law. Althoughresidents are no longer obliged toconduct their transfers abroad solelythrough domestic banks (but may alsouse their accounts abroad), the majorityof operations are still channelled via thedomestic banking system. The banksshould report monthly (Form IT-1) alltransactions between residents and non-residents above a threshold of BGN 5000(approximately EUR 2,556). Inaccordance with regulations, the banksprovide the BNB with aggregated (by

economic code) information. They keepa register of all these transactions andare obliged to present the BNB withdetailed information upon request. Thereare, however, some b.o.p. items, suchas direct investment in the reporting countryand loans received from abroad,for which the BNB receives monthlyand quarterly detailed information,respectively.

(ii) Corporate sector – these are partialdirect reporting companies (PDRCs)providing the BNB with monthly orquarterly information on selected b.o.p.items:– enterprises holding bank accounts

abroad provide monthly reports on alltheir transactions with non-residentschannelled via their accounts abroad.The Foreign Exchange Law stipulatesthat as of January 2000, all enterprisesand persons opening accounts abroadare obliged to register at the BNB;

– enterprises which have receivedfinancial loans from non-residentsprovide quarterly reports on alltransactions connected with financialloans;

– enterprises which have extendedfinancial loans to non-residents providequarterly reports on all transactionsconnected with financial loans;

– enterprises that have other liabilitiesto non-residents (trade credits, etc.)provide quarterly reports on theamount of their liabilities other thanfinancial loans to non-residents. Dataare provided on the country ofcreditor and on the original currency.Flow data are derived from stocks;

– enterprises with direct investmentsabroad provide information on their



Table 1Basic reporting forms for b.o.p. and i.i.p. data collection for BULGARIA

Target respondent

Commercial banks

Commercial banks

Commercial banks

Commercial banks

Commercial banks

Commercial banks

Enterprises holdingbank accounts abroad

Enterprises which haveliabilities other thanfinancial loans to non-residents

Enterprises and indi-viduals which havereceived/extendedfinancial loans from/tonon-residents

Enterprises which havereceived financial loansfrom non-residents

Enterprises which haveextended financial loansto non-residents

Name of reportingform

Form IT-1

Form IT-1A

Form ED-1

Form ED-2

Form FI-1

Form CS

Form IT-1P

Form PRL 1

Form 1

Form PD-2

Form PC-2

Contents of reporting form

All transactions between residentsand non-residents aggregated byeconomic code. Data are reported inUSD and BGN. Conversion is madeusing the exchange rate at the date oftransaction (if not available averagemonthly exchange rates are used).

Reclassification of transactionsbetween residents and non-residentsabove a threshold of BGN 5,000,which had previously (during thereporting period) been recorded as“non-classified”, by economic code.

Information about the credit – creditorand debtor data, type of credit,currency, date of disbursement,interest rates, repayment schedule, etc.

Information about the transactionsduring the reporting period –disbursements, principal payments,interest payments, principal in arrears,interest in arrears, repaid arrears,rescheduled principals, accruedinterest, restructured debt, etc. Stockat the beginning and end of the quarteris reported. Data are reported in theoriginal currency.

Information about direct and portfolioinvestment in the bank – equitycapital and income on equity capital(dividends paid, reinvested earnings).Country breakdowns are alsoreported.

Currency breakdown both ofcommercial banks’ assets in bondsand notes and currency and depositsand of their liabilities in currency anddeposits

All transactions between residentsand non-residents channelled throughthese accounts, aggregated byeconomic code. Transactions arereported in the original currency.Opening and closing balances arereported.

Stock data on financial liabilities ofresidents to non-residents, aggregatedby economic code, by country and bycurrency.

Information about the credit – creditorand debtor data, type of credit,currency, date of disbursement,interest rates, repayment schedule,etc.

Information about the transactionsduring the reporting period –disbursements, principal payments,interest payments, principal in arrears,interest in arrears, repaid arrears,rescheduled principals, accruedinterest, restructured debt, etc. Stockat the beginning and end of thequarter is reported. Data are reportedin the original currency.

Information about the transactionsduring the reporting period –disbursements, principal payments,interest payments, principal in arrears,interest in arrears, repaid arrears,rescheduled principals, accruedinterest, restructured debt, etc. Stockat the beginning and end of thequarter is reported. Data are reportedin original currency.

Frequency ofreporting

Monthly

Quarterly

Upon registration

Monthly

Monthly

Monthly

Monthly

Quarterly

Upon registration

Quarterly

Quarterly

Timeliness (number ofdays for submissionafter the end of thereference period)

15 calendar days

15 calendar days

Upon registration

15 calendar days

15 calendar days

15 calendar days

15 calendar days

15 calendar days

Upon registration

15 calendar days

15 calendar days



foreign direct investment (FDI) abroadthrough the annual survey conductedby the BNB;

– tourist agencies provide informationon the receipts and expenditure offoreign travellers in the country andBulgarian travellers abroad throughthe annual sample survey conductedby the BNB and the Ministry ofthe Economy. The results of thesurvey are used as a basis for theestimation of “per capita” receipts andexpenditure.

(iii) Monetary authorities – the AccountingDirectorate at the BNB provides theBOPED Division with data on reserveassets as well as on its own transactionswith non-residents.

(iv) General government – the Ministry ofFinance provides the BNB with monthlyinformation on government andgovernment-guaranteed external debt.Data are reported through the System forDebt Registration, Service and Managementof the Ministry of Finance and the BNB.Data on transactions made on behalf ofthe general government and its agenciesare also obtained from the reporting formsof the BNB and the commercial banks. The

Agency for Foreign Aid provides the BNBwith quarterly data on the current transfersin kind received by the Government.Monthly reports are also received fromthe Central Depository and from anumber of branch ministries regardingtheir privatisation receipts.

3.3 Thresholds

A simplification threshold of BGN 5000(approximately EUR 2556) was introducedwith the Foreign Exchange Law. However,the amount of non-classified transactions isin fact relatively small. This is mainly due tothe good co-operation of the domestic banksand reporting companies.

3.4 Availability of data

The BNB compiles a monthly b.o.p. The BNB’sschedule is to publish the data within eightweeks after the close of the reference period.

Geographical and sectoral breakdowns areavailable on a monthly basis, but only foritems such as foreign trade, direct investmentin the reporting country, other investment/liabilities/trade credits and loans. For direct

Target respondent

Enterprises with directinvestments abroad(sample)

Tourist agencies(sample)

Tourist agencies(sample)

Name of reportingform

Form DIA

Form T-B

Form T-1 (T-2)

Contents of reporting form

Information about the direct investorand the direct investment enterprise,claims and liabilities of the directinvestor, amount of equity capital,income on equity, inter-companyloans, etc. Data are reported in theoriginal currency. Monthly data areproduced.

Information about expenditures ofBulgarian tourists abroad (hotelaccommodation, transportation, foodand beverages, etc.), the duration ofthe stay and the purpose of travel(business, personal, etc.). Data arereported by country.

Information about receipts fromforeign tourists in Bulgaria (hotelaccommodation, transportation, foodand beverages, etc.), the duration ofthe stay and the purpose of travel(business, personal, etc.). Data arereported by country.

Frequency ofreporting

Annually

Annually

Annually

Timeliness (number ofdays for submissionafter the end of thereference period)

5 calendar months

3 calendar months

3 calendar months

Table 1 (cont.)



investment abroad, geographical and sectoralbreakdowns are available on an annual basis.

The i.i.p. is compiled annually. First estimatesare available within nine months after the endof the reporting year. They are subject tofurther revisions depending on the availabilityof the FDI in the reporting country stock data.Final i.i.p. data are available within 12 monthsafter the end of the reporting year. Breakdownsby institutional sector and by instrument areavailable. For other investment liabilities andloans and for external reserves, a currencybreakdown is available.

3.5 Data controls

At present, there are no built-in computerisedcontrols of data, which is mainly due tothe software used (Microsoft Excel andpartially Access) for processing the incominginformation. However, some systematic qualitychecks are made by comparing previous periodswith current reports. Checks are also carriedout using information obtained through regularcontacts with banks and companies or evenfrom newspapers and other media. Often, datacontrols are based on staff knowledge andexpertise. For some items, reports fromcompanies are cross-checked with reports frombanks. Checks for consistency with money andbanking statistics and the i.i.p. are made.

3.6 Revision policy

Revisions of published b.o.p. estimates are acommon feature of b.o.p. compilation

systems. With the publication of revisions,the users are acquainted with the reviseddata on the relative items in a timely manner.The policy on revisions pursued by the BNBis based on the following principles:

(i) concerning the most frequent data, eachmonthly publication includes revisions ofthe data for the previous three monthsand each quarterly publication includesrevisions of the monthly data for theentire current year;

(ii) when ongoing changes are made as aresult of additional information collectedand the elimination of errors, the BNBinforms the users in a timely mannerthrough the monthly press releases, aswell as through the notes at the end ofthe b.o.p. table;

(iii) when significant revisions are made as aresult of changes in the methodology forthe reporting of certain b.o.p. componentsor other reasons, the BNB publishesinformation on the changes in advance inorder to assist the users of the data.

3.7 Dissemination

The BNB disseminates the monthly b.o.p. datato the subscribers through the Press Office and,within 24 hours after the press release, the datais published on the website of the BNB athttp://www.bnb.bg. The data are also published inthe BNB Monthly Bulletin. Data on the country’sb.o.p. are included in the official semi-annualand annual reports of the BNB.

4 Goods

4.1 Specific features of data collection

The data on imports and exports (f.o.b.) arebased on customs declarations data from theCustoms Agency and the Information ServicesCompany, as the codes used in them aretaken from the Harmonised System for theDescription and Coding of Commodities of

the World Customs Organisation. The BNBand the NSI receive the exports and importsdata, supplement them with other informationand process them. In accordance with thecommon methodology, before publishing thedata the BNB and the NSI have to agree onthem.



In accordance with the common methodologyof the BNB and the NSI, exports and importshave, since 1999, been recorded under thespecial trade system where the moment ofregistration of a transaction coincides withthe moment of the clearance of the customsdeclaration. The BNB has re-calculated andpublished imports and exports data inaccordance with the new methodology forthe period 1995-1998.

For the purposes of economic analysis, theBNB publishes the tables broken down byend-use (i.e. by commodity group, such asconsumer goods, raw materials, investmentgoods, etc.). They are based on the four-digitcodes of the harmonised system and groupedaccording to purpose and end-use of therespective commodity. The two basicprinciples for the allocation of thecommodities to the respective groups arethe purpose of their use and the degree ofprocessing. In the tables entitled “Majortrading partners and regions”, only the mostimportant countries and regions for thecountry’s exports (imports) are included. Thecriteria for describing the partner countriesare as follows: imports, by country of originof the commodities; exports, by thecommodities’ recipient country, i.e. the lastknown country to which the commoditiesare to be delivered. The table entitled“Breakdown by commodities (end-use) andby regions” represent a cross-section ofimport and export data broken down byregion and commodity. The table entitled“Structure of imports and exports by originalcurrency” represent the relative shares ofthe different currencies in the export andimport transactions. In all published tradetables, exports are reported f.o.b., whileimports are reported c.i.f.

Quarterly and annual time series for exportsand imports broken down by “end-use” andby major trading partner are published onthe BNB’s website. Quarterly tables entitled“Breakdown by commodities (end-use) andby regions” and “Structure of imports andexports by original currencies” are publishedseparately.

4.2 Definition

The goods component of the b.o.p. currentaccount covers movable goods for whichchanges of ownership between residents andnon-residents occur. The country’s exportsare reported f.o.b. and imports c.i.f. as, forthe purposes of the b.o.p., total imports arere-calculated on an f.o.b. basis.

4.3 Deviations

None.

4.4 Gaps

For the time being, there are no estimates onthe shuttle trade.

4.5 Intended harmonisation

No harmonisation is necessary.

4.6 Estimation methods

No estimations are necessary.

5 Services


The BNB derives the data on freighttransportation as a percentage of foreigntrade data and those on passenger

transportation as a percentage of travel dataon the basis of estimates. The NSI providesthe BNB with monthly data on receipt oftransit fees.



The data on travel are based on informationfrom the Ministry of Internal Affairs on thenumber of travellers crossing the bordersand on estimates of “per capita” receipts andexpenditure. In 1999, the BNB, together withthe Ministry of the Economy (formerly theMinistry of Trade and Tourism), developeda new methodology to estimate the receiptsand expenditure from travel services, entitled“Methodology for the Estimation of theReceipts and Expenditures from Travel in theBulgarian Balance of Payments” (BulgarianNational Bank, Ministry of Trade andTourism, 18 November 1999). Forconsistency, the data on the travel item forthe period 1995-1999 have been revised.Estimates are updated every year on the basisof the results from the annual survey amongtravel agencies.

The main source of information on the otherservices item is the ITRS.

5.2 Definition

Following the BPM5, the services componentcomprises transportation, travel and otherservices. Transportation services cover freightand passenger transportation as well as transitfees on the credit side. No breakdown formeans of transportation is available. Travelcovers goods and services, including thoserelated to health and education, acquired by

1 Not included elsewhere (see BPM5, paragraph 168).

travellers for business and personal purposes.The other services item covers receipts andpayments related to services other thantransportation and travel (communication,construction, financial, leasing, insurance,cultural, sport and recreational services,government services n.i.e.,1 etc.).

5.3 Deviations

None.

5.4 Gaps

Data availability in the required breakdownfor certain items is limited.


The BNB is currently working on a projectfor a new methodology to estimate receiptsand expenditure from transportation services.The plans for the near future include thedevelopment and improvement of reportingon the insurance services.


No estimations are necessary.

6 Income

6.1 Specific features of datacollection and definitions

In line with the BPM5, income consists oftwo main categories, namely (i) compensationof employees and (ii) investment income.

6.1.1 Compensation of employees

Compensation of employees covers wages,salaries and other benefits paid to non-

resident workers in the country or receivedby resident workers abroad. The main sourceof information on this component is the ITRS.

Investment income covers receipts andpayments of income associated with externalfinancial assets and liabilities. Included arereceipts and payments on direct investment,portfolio investment, other investment andreceipts on reserve assets.



6.1.2 Income on direct investment

In line with the BPM5, the direct investmentincome item in the Bulgarian b.o.p. comprisesincome on equity (dividends and reinvestedearnings) and income on debt (interest).Breakdowns by country and by sector areavailable. The main sources of information onreinvested earnings (debit side) are the quarterlysample surveys conducted by the NSI and thequarterly data on commercial banks’ net currentprofit/loss. These data are revised with theresults from the annual survey conducted bythe NSI and the data from the annualcommercial banks’ balance sheets and reports.An offsetting entry for reinvested earnings isrecorded in the financial account, as defined inthe BPM5. Reinvested earnings (credit side) arerecorded annually on the basis of the surveyconducted by the BNB. Income on inter-company loans is recorded monthly. The sourceof information on the debit side for non-financialenterprises is the Private Debt Register (inwhich inter-company loans are clearlydistinguished at the moment of registration ofthe loan with the BNB), and for the bankingsector – commercial banks’ data. The sourcesof preliminary information on the credit sideare commercial banks’ monthly reports, andthe data is later replaced by data from theannual survey on direct investment abroad. Onlyactual payments are recorded.

6.1.3 Income on portfolio investment

Income on portfolio investment coversincome on equity, income on debt and incomeon financial derivatives, as defined in theBPM5. Data on the credit side are providedby enterprises holding bank accounts abroad,commercial banks, the BNB and the Ministryof Finance.

The main source of information on the debitside is the data provided by the Ministry ofFinance, the BNB, commercial banks andenterprises holding bank accounts abroad.

For portfolio investment income, the accrualsprinciple is applied to only a few instruments

– collateral on the Bulgarian Brady Bonds onthe assets side and Bulgarian governmentsecurities on the liabilities side. For thesecases, an offsetting entry is recorded withrespect to the underlying financial instrument.

6.1.4 Income on other investment

Income on other investment includes incomeon loans and income on deposits. Data on thecredit side (flows) are received mainly throughthe ITRS and through direct reporting fromlocal companies which have extended loans toborrowers abroad. Data on the debit side ofthe loans item is received by the Ministry ofFinance, the BNB, the commercial banks anddirectly by the enterprises that have borrowedfrom abroad. The accruals principle is notapplied. Income on trade credits is not included.Income on reserve assets is recorded monthlyon an actual basis.

6.2 Deviations from agreed definitions

The accruals principle is not applied to all items.Income on trade credits is not included. Incomeon financial derivatives is included under incomeand not recorded under financial derivatives.

6.3 Gaps

As the information on the actual number ofresidents’ accounts abroad is incomplete, dataon the income on these accounts could beconsidered incomplete.


Further refinement of the compilationtechniques is necessary, particularly withregard to the application of the accrualsprinciple where possible.


None.



7 Current transfers

The BNB receives information on currenttransfers from the monthly reports ofcommercial banks for transfers in cash. Forcurrent transfers in kind, quarterly data are

obtained from the Bulgarian Red Cross, theAgency for Foreign Aid, the Notary Officesand other occasional sources.

8 Capital account


There are no specific features for datacollection for this item: it is a part of thegeneral reporting system (see Sub-section 3).Newspapers and other media are also usedto identify capital account transactions.

8.2 Definition

In line with the definition of the BPM5, thecapital account consists of two categories:(i) capital transfers and (ii) the acquisition ordisposal of non-produced, non-financialassets. If in kind, a capital transfer consists of(i) a transfer of ownership of fixed assets or(ii) forgiveness of a liability by a creditorwhen no counterpart is received in return. Ifin cash, a transfer is a capital transfer when itis linked to, or conditional upon, theacquisition or disposal of fixed assets (e.g. aninvestment grant).

The main sources of information on privatetransfers are the banks’ and companies’reports. For government transfers, data areobtained directly from the Ministry of Financeor any other ministry concerned.


None.

8.4 Gaps

None.


No harmonisation is necessary.


None.

9 Direct investment


For the compilation of direct investment inthe country, the BNB uses data from thefollowing sources:

– privatisation authorities – Agency forPrivatisation and branch ministries;

– the Agency for Gambling and InsuranceSupervision at the Ministry of Finance;

– the Pension Insurance Supervision Agency;– notaries public;

– the Central Depository;– financial sector enterprises;– foreign investment enterprises from the

non-financial sector; and– the NSI;– The Notary Offices.

The privatisation authorities provide monthlydata on sales of the state’s shares in thecapital of Bulgarian enterprises to non-residents, and – for that reason – they areincluded in item 1 – equity capital. The BNB



only reports on what has actually beenaccomplished and not on contracted receiptson privatisation deals. This is necessitatedboth by the double-entry principle of b.o.p.compilation and by the presence ofrescheduled or cancelled deals at which thecontracted receipts have not been receivedat all or have been received only partially.The receipts are reported for the month inwhich they were actually paid to residents.When reporting the receipts, the market andnot the nominal value of the financialinstruments used (ZUNK, compensatorybonds, etc.) is considered. Any disregard ofthese principles would inevitably result in anincrease in the b.o.p. errors and omissions item.

The Agency for Gambling and InsuranceSupervision provides quarterly data on non-residents’ participations in the capital ofBulgarian insurance companies. Flows arederived from the stock data and are includedunder item I – equity capital.

The Pension Insurance Supervision Agencyprovides quarterly data on non-residents’participations in the capital of Bulgarianpension insurance companies. Flows arederived from the stock data and are includedunder item I – equity capital.

Notaries public provide monthly data on non-residents’ purchases of real estate in thecountry. Data are included under equitycapital.

The Central Depository provides monthlydata on the shares purchased and sold bynon-residents, whose participation in thefirm’s capital is at least 10%, as well as on theaverage monthly market prices of the sharesof the separate issues. The processed dataare included in item 1 – equity capital.

Data from the financial sector enterprisesare collected through the following forms,developed by the BNB: FI-1, ED-1, ED-2 andIT-1, as well as through the commercial banks’annual financial and accounting reports(balance sheets and profit and lossstatements). The BNB receives data on non-

resident investment/disinvestment in thecapital of commercial banks and their clients,on transactions connected with the inter-company indebtedness of commercial banksand their clients and on commercial banks’reinvested earnings.

Data from the non-financial sectorenterprises are collected through thefollowing forms, developed by the BNB:PD-1 and PD-2. Through these forms, theBNB receives data on transactions connectedwith inter-company indebtedness.

Since June 2000, the NSI has regularlyprovided data on non-privatisationtransactions to the BNB from its quarterlyand annual statistical surveys on FDIconducted among non-financial sectorenterprises. Only the data that have not beenreported by the other sources are includedin the b.o.p.

The BNB receives monthly data on directinvestments abroad from the ITRS and annualdata from the survey conducted by the BNBamong the country’s direct investors. Since2000, the BNB has conducted an annualsurvey of Bulgarian enterprises regarding theirFDI abroad. The survey produces monthlydata that are used for revisions both of theITRS data and of the stock data.

At present, breakdowns by sector and bycountry are available for both directinvestment transactions in the country andabroad as they are classified according to theeconomic activity of the resident enterprise.

9.2 Definition

When compiling the direct investment in thecountry, the BNB adheres to the internationalconventions and requirements set out in theBPM5 and in the OECD’s “BenchmarkDefinition of Foreign Direct Investment”, thirdedition, 1996. In accordance with theserequirements, a direct investment in the countryis an international investment, in which thedirect investor, a resident of a foreign economy,



acquires a lasting interest in an enterprise thatis resident in the Bulgarian economy (directinvestment enterprise). The direct investmentincludes both the initial transaction throughwhich the relationship between the directinvestor and the direct investment enterprise isestablished and all subsequent transactionsbetween them. The transactions can involveboth an increase/decrease in the liabilities ofthe direct investment enterprise vis-à-vis thedirect investor and an increase/decrease in theclaims of the direct investment enterprise onthe direct investor. The BNB therefore reportsboth accomplished investment anddisinvestment. The basic principles of thereporting of direct investment in the countryare: first, only actually received and notcontracted amounts are recorded and, second,when financial instruments are used forsettlements, they must be recorded at theirmarket price and not at their nominal value.

The presence of a lasting interestpresupposes a long-term relationshipbetween the direct investor and the directinvestment enterprise as well as aconsiderable degree of influence on the partof the investor in the management of thedirect investment enterprise. Owing to theneed for international compatibility of thedata from the different countries, the BPM5has adopted the principle that the acquisitionof 10% or more of the voting power in themanagement of the investment enterprise isconsidered an establishment of a directinvestment relationship. The Bulgariancompilation methodology adheres strictly tothese rules. In accordance with the standardpresentation of the b.o.p., direct investmentin the country and abroad items of theBulgarian b.o.p. comprise:

(i) Equity capital – the acquisition/disposalof shares and equities (in cash and inkind) by direct investors in the share orequity capital of direct investmententerprises. The acquisition of equitiesand shares in the capital is reported asan increase and the disposal as adecrease in direct investment.

(ii) Other capital – the principal received andpaid on loans (both short and long-termloans) between the direct investor andthe direct investment enterprise. Thereceipt of a loan from the direct investoris treated as an increase of the directinvestment and the repayment of theprincipal as a decrease. The extensionof a loan by the direct investmententerprise to the direct investor istreated as a decrease in the directinvestment and the repayment of theprincipal as an increase.

(iii) Reinvested earnings – the share of thedirect investors in the undistributedearnings/losses of the enterprise for thereporting period. The share in theundistributed earnings is reported as anincrease of the direct investment in thecountry and the share in the loss as adecrease. In line with requirements, anoffsetting entry is recorded in the caseof reinvested earnings.


The reinvested earnings are derived as thenet profit/loss for the reporting period isdecreased with the amount of dividends tobe paid to shareholders.

9.4 Gaps

None.


No harmonisation is needed.


The reinvested earnings are derived as thenet profit/loss for the reporting period lessthe amount of dividends to be paid toshareholders. However, the actual amount ofdividends to be paid is not available until the



next year, when the decision to distributedividends is made. For this purpose, the netprofit/loss of non-residents for the currentyear is diminished by the amount of projecteddividends (based on the net profit/dividendratio in the previous year, which is used as an

estimation). That estimation of the netreinvested earnings for the current period isincluded as preliminary data in the balance ofpayments, and is replaced by final data whenthe actual amount of dividends to be paid isavailable.

10 Portfolio investment


Data on the assets side of portfolioinvestment are provided by the enterprisesholding bank accounts abroad, commercialbanks, the BNB and the Ministry of Finance.The main source of information on theliabilities side of portfolio investment is thedata provided by the Ministry of Finance, theBNB, commercial banks, enterprises holdingbank accounts abroad and the CentralDepository. For both the assets and theliabilities’ sides, data are collected on anaggregated basis. Only for equity securities/liabilities are the ISIN codes available fromthe Central Depository database and, forTreasury securities, from the Fiscal ServicesDepartment of the BNB. For these items, abreakdown by country is available. For bothassets and liabilities, currency breakdownscould be made on request.

10.2 Definition

In line with the BPM5, the portfolio investmentitem in the Bulgarian b.o.p. covers transactionsin shares and equity if the investor’s share inthe capital is less than 10%, transactions inbonds, notes, money market and other tradablesecurities and transactions in financialderivatives. At present, transactions in financialderivatives are also included in the portfolioinvestment item.

The accruals principle for portfolioinvestment income is applied to only a few

instruments – collateral on Bulgarian BradyBonds on the assets side and Bulgarian statesecurities on the liabilities side. For thesecases, an offsetting entry is recorded withregard to the underlying financial instrument.

Due to the existing methodology forcompiling the portfolio investment item,service charges and commissions areexcluded and are recorded as services whereidentifiable.


At present, transactions in financialderivatives are also included in the portfolioinvestment item. The accruals principle is notfollowed for all items.

10.4 Gaps

None.


None.


Accruals (where applied) are estimated onthe basis of the discount and interest rates ofeach separate issue.



11 Financial Derivatives


There are no specific features for datacollection for this item – it is a part of thegeneral reporting system. The sources ofinformation are the commercial banks’monthly reports.

11.2 Definition

See 11.1.


At present, transactions in financialderivatives are not recorded as a separate

item, but are included in the portfolioinvestment item.

11.4 Gaps

See 11.1.


The BNB plans to design and implement aspecial survey on financial derivatives.


See 11.1.

12 Other investment


Data on trade credits on the assets side areobtained from the monthly reports ofcompanies having accounts abroad. The mainsource of information on the liabilities side isthe quarterly report (PRL1) from all companieswith such liabilities. Since the first quarter of2000, the BNB has received this form fromabout 3,500 companies reporting their stocksof external liabilities by country and by currency.The flow data are derived from these stocks.

Regarding loans, data on the asset side (flows)are received mainly through the ITRS andthrough direct reporting from localcompanies, which extended loans to countriesabroad (according to Article 4 of the ForeignExchange Law, these loans have to beregistered and reported to the BNB). Dataon the liabilities side of the loans item arereceived by the Ministry of Finance, the BNB,the commercial banks and directly by theenterprises that have borrowed fromcountries abroad. The banks report all

transactions concerning their financial creditsreceived from abroad monthly via a specialform (ED). According to Article 4 of theForeign Exchange Law, all loans received bythe local enterprises and households fromabroad have to be registered and reportedquarterly to the BNB. The BOPED Divisionkeeps a register of non-guaranteed externaldebt, which contains detailed information onflows and stocks. This register allows adifferentiation between intra-company andother debt, as well as sector, instrument,maturity, country and currency breakdowns.The same is true of sources of informationon government and government-guaranteedloans. The main source of information isthe System for Debt Registration, Serviceand Management of the Ministry of Financeand the BNB, to which the Balance ofPayments and External Debt Division hasdirect access.

Data on flows from both registers areobtained in the original currencies and are



converted into US dollars using the averagemonthly exchange rates.

12.2 Definitions

In line with the definitions in the BPM5, otherinvestment covers trade credits, loans,currency and deposits and other assets andliabilities. According to the b.o.p. conventions,trade credits arise from the direct extensionof credit from a supplier to a buyer, i.e. thisis a credit extended by a trade partnerwithout a tradable security being issued.

The loans item includes received and paidprincipal on short and long-term loans betweenresidents and non-residents if a tradable securityis not issued with these loans.

The currency and deposits component onthe assets side lists the changes in theresidents’ currency and deposits held abroad.Article 10 of the Foreign Exchange Lawrequires quarterly reporting on liabilities vis-à-vis non-residents, but the Law does notcover reporting of claims on non-residents,which opens a gap on the assets side of theb.o.p. and the i.i.p. For the time being, thedata of the Bank for International Settlements(BIS) in Basel are used as a source ofinformation for this item. On the liabilitiesside – the changes in the liabilities of residentcommercial banks to non-residents indomestic and foreign currency – data areobtained directly from the banks’ balancesheets. Following the basic accountingprinciple and conventions laid down in theBPM5, the BNB excludes any fluctuations inthe exchange rate when compiling this item.

The other assets and other liabilities itemsinclude all transactions receivable and payable

on miscellaneous accounts not includedelsewhere, as well as transactions in arrears.


The other foreign exchange depositscomponent (a sub-item of other investment,assets) is a specific feature of the Bulgarianb.o.p. presentation. It presents changes in theforeign exchange deposits held by householdswith domestic commercial banks. Increasesin these deposits are denoted with a positivesign and decreases with a negative sign. Theitem was introduced in 1996 in order tocapture the withdrawal of foreign currencydeposits by the general public and privatecompanies from the commercial banks. Themethodology is subject to revision.

12.4 Gaps

Article 10 of the Foreign Exchange Lawrequires quarterly reporting on liabilities tonon-residents – the Law does not coverreporting on claims on non-residents whichopens a gap on the asset side of the BOP andthe i.i.p.


Revision of the methodology for includingthe foreign exchange deposits held byhouseholds with domestic commercial banksas b.o.p. transactions.


None.

13 Reserve assets


The entries under this category pertain totransactions in the BNB’s external holdings

that are administered by the IssueDepartment. The data on reserve assetsexclude exchange rate fluctuations.



13.2 Definition

Reserve assets include those external assetsthat are readily available to and controlled bythe central bank (government) for the directfinancing of b.o.p. imbalances. The reserve assetscomprise monetary gold, special drawing rights(SDRs), reserve positions in the IMF, foreignexchange assets (consisting of currency anddeposits and securities) and other claims.Transactions with residents are excluded.


None.

13.4 Gaps

None.


None.

14 International Investment Position

14.1 Specific features of datacollection and definitions

14.1.1 General

The i.i.p. statement is compiled in generalconformity with the international standardsprescribed by the BPM5 and the “Balance ofPayments Textbook” (IMF, 1996). The i.i.p.statement is compiled and published annually.The BNB has prepared and published annuali.i.p. statements representing Bulgaria’s stocksof external financial assets and liabilities as ofthe end of 1998 and 1999.

The i.i.p. is the balance sheet of the country’sstocks of external financial assets andliabilities at the end of a specific period. Theexternal financial assets consist of directinvestment, portfolio investment, financialderivatives, other investment and reserveassets. The external financial liabilities consistof direct investment, portfolio investment,financial derivatives and other investment and,therefore, they are a broader concept thanthe liabilities that constitute the country’sgross external debt. The primary type ofclassification in the i.i.p. statement is thedistinction between assets and liabilities. Thesecond level of classification, fully consistentwith the b.o.p. financial account, is byfunction. The functional types of assetsand liabilities are (i) direct investment,(ii) portfolio investment, (iii) financial

derivatives and (iv) other investment.Included in assets are also the reserve assetsheld by the monetary authorities. The thirdlevel of classification is by investmentinstrument; instruments recorded as portfolioinvestment and other investment are furthersub-divided by domestic sector, while thecomponents of other investment are alsocross-classified by original maturity.

14.1.2 Direct investment

Direct investment is a category of internationalinvestment in which a resident of oneeconomy – a direct investor – holds a lastinginterest (at least 10% of the ordinary sharesor voting power) in an enterprise resident inanother economy – a direct investmententerprise. It is recorded on a directionalbasis: direct investment abroad as an assetand direct investment in the reportingcountry as a liability. The direct investmentstocks covers claims and liabilities in equitycapital and reinvested earnings, as well asother capital (inter-company debt).

The stocks of the Bulgarian direct investmentabroad are estimated on the basis of a specialannual survey implemented for the first timeby the BNB in March 2000. The stocks of thedirect investment in Bulgaria are compiled onthe basis of information provided by the NSIon direct investment in the non-banking



sector and information provided by thecommercial banks on direct investment inthe banking sector. Breakdowns by sectorand by country for both FDI in Bulgaria andabroad are available. For FDI abroad, abreakdown by currency is also available.

14.1.3 Portfolio investment

Portfolio investment stocks comprise holdingsof and liabilities on equity securities and debtsecurities; the latter are subdivided intobonds and notes (with an original maturity ofone year or more) and money marketinstruments (with an original maturity of lessthan one year). The portfolio investmentassets of the monetary authorities and thegeneral government are compiled on the basisof information provided by the Fiscal ServicesDepartment of the BNB. These holdings ofsecurities do not constitute a part of thereserve assets. The commercial banks’holdings of securities are compiled on thebasis of balance sheet data, while the othersectors’ portfolio investment assets areestimated as the cumulative sum of the flowsrecorded in the b.o.p. statement.

The stocks of portfolio investment liabilitiescover securities issued by residents and heldby non-residents. The main sources ofinformation on the portfolio investmentliabilities in equity securities are (i) thecommercial banks’ balance sheets on portfolioinvestment in the banking sector and (ii) theCentral Depository which provides flowinformation on the portfolio investment inthe non-banking sector. The stocks relatingto the non-banking sector are estimated asthe cumulative sum of the balance ofpayments flows. The System for DebtRegistration, Service and Management of theMinistry of Finance and the Bulgarian NationalBank and the commercial banks are the mainsources of information on the portfolioinvestment liabilities in debt securities of themonetary authorities and the generalgovernment. The portfolio investmentliabilities in debt securities of the commercial

banks and the other sectors are estimated asthe cumulative sum of the b.o.p. flows.

14.1.4 Financial derivatives

Assets and liabilities in financial derivativescover financial derivative instruments such asforwards, futures, swaps, options, etc. TheBNB does not currently obtain stockinformation on this i.i.p. component.

14.1.5 Other investment

Other investment covers the stocks of assetsand liabilities relating to short and long-termtrade credits and loans, currency and depositsand other accounts receivable and payable.

According to the BPM5, trade credits consist ofclaims and liabilities arising from the directextension of credit by suppliers and buyers fortransactions in goods and services and advancepayments for work in progress (or to beundertaken) that is associated with suchtransactions. Loans to finance trade are notconsidered trade credits. The BNB does notcurrently obtain information on the trade creditassets, but plans to implement a special survey.On the liabilities side, for the 2000 i.i.p. andonward, information obtained under RegulationNo. 29 of the BNB are used for compiling thestock data of the trade credits received.

The BNB compiles stock data on loansextended by resident entities to non-residents, i.e. assets, on the basis ofinformation in the BNB’s and commercialbanks’ balance sheets. These data cover themonetary authorities, general governmentand commercial banks; data for the othersectors for the 2000 i.i.p. and onward areavailable from Form PC-2. On the liabilitiesside, the BNB compiles data on loans receivedby the monetary authorities and the generalgovernment on the basis of information fromthe System for Debt Registration, Service andManagement of the Ministry of Finance andthe Bulgarian National Bank. In accordance



with the BPM5, the credit and loans from theIMF are recorded as liabilities of the BNB inboth the b.o.p. statement and in the i.i.p.statement, regardless of wether they areextended to the BNB or to the Ministryof Finance. The commercial banks, theenterprises and the individuals provide dataon the banks and other sectors. Theenterprises and individuals report the loansreceived under the provisions of RegulationNo. 29 of the BNB.

On the assets side, the currency and depositscomponent represents the stock of foreigncurrency and deposits held by residents. Forthe banking sector, data are obtained fromthe commercial banks’ balance sheets; for theother sectors, information provided by theBIS is used. On the liabilities side, the depositsof non-residents held with domestic banks inboth national and foreign currency arerecorded on the basis of information fromthe commercial banks’ balance sheets.

The other assets and other liabilitiescomponents cover miscellaneous claims andliabilities vis-à-vis non-residents not included inthe other items. Included in these componentsare also arrears on both (i) loans provided byresidents to non-residents, which are recordedunder assets, and (ii) loans received by residentsfrom abroad, which are recorded as liabilities.

14.1.6 Reserve assets

According to BPM5, Reserve assets consist ofthose external assets that are readily availableto and controlled by monetary authorities fordirect financing of payments imbalances, forindirectly regulating the magnitude of suchimbalances through intervention in exchangemarkets to affect the currency exchange rateand/or for other purposes. The reserve assetscomprise monetary gold, SDRs, the reserveposition in the Fund, foreign exchange assets(consisting of currency and deposits andsecurities) and other claims. Claims on residentsare excluded. Under the provisions of thecurrency board, the reserve assetsof the BNB are equal to the assets of the Issue

Department as presented in its balance sheet.The valuation of the reserve assets is made inaccordance with the National AccountingStandards and the Law on the BNB. Accordingto Article 28 (3), item 6, of the Law on theBNB, the stock of monetary gold shall be valuedat DEM 500 per troy ounce, or at the marketvalue, whichever is lower.


For consistency between the b.o.p. statementand the i.i.p. statement, the foreign exchangedeposits of resident households held withdomestic banks are also included as a specificcomponent of other investment; these areincluded under assets, other investment, otherassets, other sectors, short-term. Therespective changes in these deposits are shownin the b.o.p. statement under the other foreignexchange deposits component on the assetsside. The recording of both the stocks and theflows associated with resident households’deposits with domestic banks is a specific featureof the Bulgarian b.o.p. and i.i.p. statements, andrepresents a departure from internationalmethodology. However, since no otherinformation is available on the foreign currencyheld by households, these stocks and flows areused as an approximation.

14.3 Gaps

None.


The BNB plans to elaborate and implement aspecial survey on financial derivatives and torevise of the methodology for including theforeign exchange deposits held by householdswith domestic commercial banks as b.o.p.transactions.


None.



15 Contacts

This country information was drafted byBulgaria in agreement with the ECB’s Balanceof Payments and External Reserves Division.Enquiries of a general nature should beaddressed to the Press Division of the ECB.Enquiries specific to Bulgaria should beaddressed to:

Mr. Emil Dimitrov,HeadBalance of Payments and External DebtDivisionBulgarian National Bank1, Alexander Battenberg Square1000 Sofia, Bulgaria

Phone: (+359 2) 9145 1243Fax: (+359 2) 980 2425 or 980 6493e-mail: [email protected]

Ms Liliana El HaddadExpertBalance of Payments and External DebtDivision, Rm. 314Bulgarian National Bank1, Alexander Battenberg Square1000 Sofia, Bulgaria

Phone: (+359 2) 9145 1965, 981 2534Fax: (+359 2) 980 2425 or 980 6493e-mail: [email protected]



Cyprus

February 2002


Chapter 3.2 Cyprus

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Chapter 3.2 Cyprus


2.1 Introduction

The Central Bank of Cyprus (CBC) isresponsible for compiling the balance ofpayments (b.o.p.) statistics and theinternational investment position (i.i.p.) ofCyprus. The CBC was established in 1963 asa corporate body and, in practice, it has beenvirtually independent from the Government.The legal framework for the operations ofthe CBC will be strengthened with theexpected enactment in 2002 of a new CentralBank of Cyprus Law, which will ensure thestatutory independence of the CBC. The mainpurpose of the CBC, in accordance with itsstatute, is to foster monetary stability andsuch credit and balance of paymentsconditions as are conducive to the orderlydevelopment of the economy of Cyprus. TheCBC is vested with the power andresponsibility to regulate and supervise banks.It also administers exchange controls, whichhave traditionally formed the basis for thecollection of b.o.p data. As exchange controlsare gradually being abolished, the CBC isdeveloping a new statistical reportingsystem to counter the loss of data andto produce statistics in accordance withEurostat and International Monetary Fund(IMF) requirements. More specifically, asettlements-based system has been set up,which will be complemented by directreporting and surveys.


The legal basis for the collection andcompilation of b.o.p. statistics is the CentralBank of Cyprus Law of 1963, as subsequentlyamended. In particular, the CBC(Amendment) Law of 1999 (Law 92(I)/1999)empowers the CBC to require any financialinstitution or other person to report to theCBC any data in their possession deemednecessary for the compilation of the b.o.p.and the i.i.p. of Cyprus. By virtue of this law,the CBC issues instructions concerning thedata to be reported.

The same law provides for penalties in thecase of non-compliance with the obligationto provide data. The Governor of the CBCis vested with the power to imposeadministrative fines. Moreover, any violationof the law is an offence punishable, onconviction, with substantial fines. The CBC’spolicy is to inform the banks and the publicand persuade them of the necessity ofreporting data for the compilation of theb.o.p. of Cyprus.

In December 2001, the ECB issued a directiveto banks under the aforementioned law,concerning the implementation of the newb.o.p. reporting system as from 1 January2002. A series of meetings and discussionsbetween the CBC and the banks precededthe issue of the directive.


B.o.p. statistics are compiled by the Balanceof Payments Section in the EconomicResearch Department of the CBC, which isalso responsible for data collection and dataanalysis. The Balance of Payments Sectionconsists of five officers and five administrative/clerical staff, and is supported by one analystand one programmer from the InformationTechnology Department. Statistical work is alsocarried out by the following other divisions/departments/sections of the CBC:

The Exchange Control and Foreign InvestmentsDepartment collects data on the initiation ofinward and outward foreign direct investment(FDI) relationships. Until the end of 2001 thisdepartment was also collecting data on otheroutward flows. With the amendment of theCBC Law and the subsequent issue of therelevant directive, the Balance of PaymentsSection of the Economic ResearchDepartment has started to collect these data.


Chapter 3.2 Cyprus

The Banking Supervision and Regulation Divisioncollects monthly balance sheet returns, profitand loss accounts and other returns for bothstatistical and prudential supervisorypurposes from all deposit money banks, otherfinancial institutions and international bankingunits.

The Accounting Services Department producesa number of reports relating to the CBC’sgeneral ledger. These include the monthlybalance sheet, the quarterly managementaccounts and the annual financial statementsof the CBC.

The International Business Department monitors,regulates and supervises the activities ofinternational business companies, which arerequired to submit to the CBC audited annualfinancial statements and other information,which are used for the preparation of an annualreport on developments in the internationalbusiness sector.

The External Debt Section keeps detailedstatistics on the composition of governmentexternal debt by currency, creditor, interestrate type and maturity profile.

The Management of Reserves Section keepsstatistics on the spot and forward exchangerates of the Cyprus pound and on the foreigncurrency deposits from local banks. It alsoproduces various statistics for reservemanagement purposes.

Data collected from other departments ordivisions of the CBC are forwarded to theBalance of Payments Section for processing.


The following institutions provide the CBCwith data on b.o.p. transactions:

(i) The Statistical Service of Cyprus (CYSTAT):this service provides foreign tradestatistics and the number of touristarrivals on a monthly basis.

(ii) The Cyprus Tourism Organisation (CTO):this organisation is responsible forgathering monthly data on touristexpenditure and combining it with thenumber of tourist arrivals to calculatethe revenue from tourists on a monthlybasis.

(iii) The Cyprus Stock Exchange (CSE): thisexchange provides data on purchases andsales of quoted securities by non-residents.

(iv) Various government departments: thesedepartments provide data related todifferent types of outward and inwardflows.

The CBC also collects data directly frommajor companies on their internationaltransactions.

2.5 Users

Internally, the b.o.p. statistics produced bythe Balance of Payments Section are used byother sections/departments of the CBC(e.g. the Monetary Policy Section, theExternal Debt Section, the Management ofReserves Section and the InternationalBusiness Department), as well as by theMonetary Policy Committee and the Boardof Directors for policy formulation.

Externally, these statistics are used byCYSTAT in the production of nationalaccounts and by the Ministry of Finance(particularly the Planning Bureau) foreconomic planning. The CBC maintainsregular contact with these users and meetingsare often held to discuss specific issues.

B.o.p. statistics are also supplied to Europeanand international organisations such asEurostat, the European Central Bank (ECB)and the IMF.


Chapter 3.2 Cyprus

3 Statistical system


With the planned abolition of the remainingcontrols on the flow of capital, a newreporting system has been introduced (asmentioned in Section 2) to counter the lossof data associated with the abolitionof controls and to produce statistics inaccordance with Eurostat and IMFrequirements. The new system is an opensettlements-based system, which will becomplemented by direct reporting andsurveys. Under the new system, as from1 January 2002 reporting agents (banks) arerequired to record both credit and debittransactions broken down by country,currency and type of operation.

Furthermore, annual surveys of enterprisesand banks will be conducted as of 2002 withregard to their own FDI and portfolio stocks.

As far as the definition of residency isconcerned, the new system is based on thedefinition given in the 5th edition of the IMFBalance of Payments Manual (BPM5).


Data are obtained from the following sources/agents:

(i) Commercial banks: under the exchangecontrol rules commercial banks used toreport to the CBC cross-border debitson behalf of residents on a quarterly basis.Under the new system, as of 1 January2002, commercial banks are required toreport individual transactions, both debitand credit, between residents and non-residents, which are carried out on behalfof their resident customers or on theirown behalf. Aggregate reporting ispossible for banks’ own transactions withnon-residents. Data are transmitted tothe CBC electronically at least twice amonth.

(ii) Semi-governmental organisations: thiscategory includes large organisationswhich provide services (e.g. CyprusTelecommunications Authority,Electricity Authority of Cyprus, etc.) andquite often borrow large amounts ofmoney from abroad.

(iii) Government: various governmentdepartments (including municipalities andsewage boards) report their transactionsinvolving non-residents on a quarterlybasis to the CBC.

(iv) Private sector: this sector includes privatecompanies, companies quoted on the CSEand colleges.

(v) Cyprus Stock Exchange: data are obtainedfrom the CSE on portfolio transactionsof non-residents in companies quoted onthe CSE, as well as on portfolioinvestments abroad by quoted investmentcompanies.

Foreign currency operations may only becarried out by those credit institutions thathave been designated as authorised foreigncurrency dealers under the Exchange ControlLaw. Hence, b.o.p. statistics are currentlybeing and will continue to be collected fromdomestic commercial banks and internationalbanking units.

3.3 Thresholds

Currently there are no exemption orsimplification thresholds. However, oncesufficient data have been gathered under thenew system, thresholds will be introduced toreduce the reporting burden on banks,enterprises and individuals.


Chapter 3.2 Cyprus


Compilation of annual data is now takingplace on the basis of BPM5 methodology andback data for the years 1995-1999 have alsobeen compiled and communicated to the IMFand Eurostat. These data have been preparedaccording to the full BPM5 presentation.Quarterly and annual data are also beingcompiled on the basis of an older version ofthe IMF Balance of Payments Manual until theconversion to the new methodology iscompleted. Since the first quarter of 2001,quarterly data have been compiled on thebasis of the BPM5 as well.

Quarterly data are being compiled within fourmonths of the end of the reference period,while annual data are being compiled withinsix months of the end of the referenceperiod.

With respect to i.i.p. data, Cyprus does notyet produce a full i.i.p. statement.Nevertheless, a partial i.i.p. statement hasbeen produced for the period 1995-1999 andcommunicated to the IMF.

As far as the breakdowns are concerned, thefollowing are or will be available:

– goods: full geographical breakdown;

– services: partial breakdown by type ofservice up to 2001; full breakdown by typeof service, country and currency as of2002;

– FDI (income and flows): full breakdown byeconomic activity, type of operation andcountry (as of 1997); and

– capital and financial account: partialbreakdown by type of operation, sectorand currency up to 2001, full breakdownas of 2002.

Details concerning data on external reservescan be found in Section 13.

3.5 Data controls

Concerning the construction of the newcollection system and in relation to therecently completed FDI Pilot Project, a seriesof data content checks have been and arebeing introduced. Consistency checks havebeen built into the recently constructed b.o.p.database, while plausibility and data qualitychecks are carried out through otherprocedures.

3.6 Revision policy

Data used to be revised on an ad hoc basis. Anew revision policy was adopted at thebeginning of 2001, according to which annualdata are revised annually and quarterly dataare revised quarterly. Specifically, concerningquarterly data, each time data for a newquarter are compiled, the data for thecorresponding quarter of the previous yearare revised.

3.7 Dissemination

B.o.p. and external reserves data arepublished in the CBC’s Annual Report andare also available on the internet at thefollowing address: http://www.centralbank.gov.cy. These data used tobe published in the CBC’s QuarterlyEconomic Review, which was discontinued inDecember 2000 and was replaced by theMonetary Policy Report, as from September2001.

Data are disseminated on an annual basis toEurostat (using the Vademecum tables), theIMF (using the standard components includedin the BPM5) and other internationalorganisations.


Chapter 3.2 Cyprus

4 Goods


B.o.p. data concerning goods are compiled bythe CBC on the basis of import and exportstatistics produced by CYSTAT. These figuresrecord the physical movement of goodsacross the national frontier as declared byimporters and exporters on the completedcustoms documents. Importers and exportersare usually required to present theirdocuments before they can obtain customsclearance for the goods. Therefore, theimport and export figures correspond fairlyclosely to goods actually imported andexported.

4.2 Definition

The import and export statistics are recordedon both a “general trade” and a “specialtrade” basis. Imports under the “generaltrade” recording system comprise goodsentering directly for home consumption,together with goods imported and placed inbonded warehouses. Under the “specialtrade” system, the import statistics arerestricted to those goods cleared directly forhome consumption together with thosewithdrawn from bonded warehouses anddestined for the local market. Total exportsinclude both domestic exports and re-exports, whether or not from bondedwarehouses. Domestic exports are definedas goods which have been produced,manufactured or partly manufactured inCyprus, excluding goods originally importedand having undergone only repair or minoroperations. Re-exports are defined as goodsoriginally imported and re-exported in thesame condition in which they were importedor after undergoing repair or minoroperations.

Goods exported and imported are valued onan f.o.b. and a c.i.f. basis, respectively. Forb.o.p. purposes, the customs data areadjusted for coverage (e.g. to excludereturned goods) and for reclassification (e.g.of freight and insurance on imports). In thecase of imports where an amount in foreigncurrency is converted to its Cyprus poundequivalent, the rate of exchange used is thatapplicable at the time of lodgement of thecustoms entry.

As far as the geographical breakdown isconcerned, data are available on a country-by-country basis. Country data are thengrouped into various geographical areas.

4.3 Deviations

Before 2002, data on repairs on goods wereincluded in the services category, not in thegoods category.

4.4 Gaps

Goods for processing are not separatelyidentifiable.


Data on repairs are to be included in thegoods item. CYSTAT will be contacted inorder to explore the possibility of separatelyidentifying goods for processing and allinstances of repairs.


Normally, trade data are available within thetime frame for b.o.p. compilation.


Chapter 3.2 Cyprus

5 Services


(i) TransportationThis category covers freight andpassenger services provided by sea andair transport operators. Freight servicesare derived from the estimates made toconvert imports c.i.f. to imports f.o.b.Passenger fare data are obtained from alimited survey of major residentpassenger transport operators.

(ii) TravelTravel credits for tourism are obtained fromthe CTO, which conducts a monthly surveyon tourist expenditure in Cyprus. Perperson expenditure derived from the surveyis combined with the number of touristarrivals as given by the frontier surveyconducted by CYSTAT. With regard toeducation-related revenue, an annual surveyis conducted among colleges, which provideeducational services to non-residents. Thevalue of travel debits is based on monthlyreturns submitted quarterly by thecommercial banks under the ExchangeControl Law. Submitted data includespending on organised tours, travelallowances issued, foreign exchange issuedfor education, private medical spendingabroad, and foreign exchange outflowsthrough credit cards.

(iii) Other servicesCommunications: data are obtained froma survey of the major semi-governmentalorganisations in this field (i.e. the CyprusTelecommunications Authority, theCyprus Broadcasting Corporation andthe Cyprus Postal Service), privatebroadcasting companies, couriers, etc.The survey is conducted on an annualbasis, but quarterly data are obtained.

Insurance: merchandise insurance isestimated on the basis of the totalc.i.f. value of imports. Data on non-merchandise insurance are obtained fromdata submitted by the commercial banks.

Royalties and licence fees: debit entries areavailable from data reported by thecommercial banks. No data are as yetavailable on credits for this item, but thesetransactions are thought to be insignificant.

Other business services: data come froma variety of sources, the main one beingthe reports of the commercial banks.Revenue from all international businesscompanies (offshore companies) wasincluded under services not allocated untilend-2001. As from 2002 thoseinternational business companies thathave a physical presence in Cyprus aretreated as residents and hence theirtransactions with non-residents arerecorded in the appropriate servicecategory.

Government services (not includedelsewhere): entries for this categoryinclude foreign military expenditure inCyprus, foreign embassy expenditure inCyprus, the Cyprus Government’s foreignservice expenditure abroad, and othergovernment expenditure abroad. Dataare obtained from the Government’saccounts (budget abstracts), commercialbank records and annual questionnairessent to the entities involved.

5.2 Definition

The definitions applied in the compilation ofservices are generally in line with those ofthe BPM5 (see also Sub-section 5.1.).

5.3 Deviations

Before 2002 data on repairs on goods wereincluded in the services category, not in thegoods category.


Chapter 3.2 Cyprus

5.4 Gaps

Data are not yet available on credits for anumber of services, particularly for businessservices. No data have as yet been compiledon financial services (credit as well as debit).


The new b.o.p. reporting system has beendesigned to solve the problems mentionedabove.


Both freight and merchandise insurance dataare estimated on the basis of c.i.f. importdata.

6 Income

6.1 Specific features of data collection and definitions


Currently, the debit figures for compensationof employees are obtained on a quarterlybasis from the exchange control returns ofthe commercial banks. Credit figures areestimated on the basis of a limited survey.


As a result of the CBC’s participation inEurostat’s FDI Pilot Project with CandidateCountries, Cyprus is now producing all Y5and Y6 questionnaires of the BOPVademecum, including Y5-3 and Y6-3.Breakdowns are available by instrument,country and economic activity. The definitionsset out in the BPM5 are followed.

In particular, reinvested earnings arerecorded annually on the basis of informationcontained in audited accounts of FDIcompanies. An offsetting entry in the financialaccount item direct investment is recorded.Income on inter-company loans is recordedas income on direct investment and isseparately identified from other investmentincome, since the entities involved in eachcase are easily distinguished. The 10% rule isapplied to separate FDI from portfolioinvestment income.


The available data on debits consist of interestpayments on the Euro-commercial paper andEuro-medium-term notes issued by theGovernment and sold to non-residents, andon bonds issued by commercial banks andsold abroad. Interest paid is recorded on anaccruals basis. Data on credits include interestreceived by commercial banks on foreigntradable securities.


Credit entries include interest received bythe CBC on international reserves, andinterest received by commercial banks onbalances with foreign banks and on loans tonon-residents in foreign currency. Debitentries include interest paid on long-termforeign debt of the Government, semi-governmental institutions and the privatesector, and interest paid by the CBC onforeign currency deposits of foreign banks.They also include interest paid by banks onforeign currency deposits of non-residents,on non-residents’ deposits in local currencyand on foreign currency deposits of foreignbanks. Finally, interest paid on SDRallocations and IMF charges are also included.


Chapter 3.2 Cyprus


Compensation of employees: the length ofstay of Cypriots working abroad is difficult todetermine, hence the one-year residency rulecannot be strictly followed and, as a result,a misclassification may arise betweencompensation of employees and transfers.

Income on other investment: in the b.o.p.statistics for the period 1995-2000, incomeon other investment included certain flowsrelating to portfolio investment income,namely interest received by commercial bankson foreign tradable securities. As from 2001,this item is included as income on portfolioinvestment, in accordance with agreeddefinitions.

6.3 Gaps

Compensation of employees: contributionspaid by employers on behalf of employees forsocial security, medical treatment and otherbenefits are not taken into account.

Income on portfolio investment: coverage islimited and no breakdowns are available (seealso Sub-section 6.1.3).


With the implementation of the new b.o.p.collection system, coverage will be expandedand the required breakdowns will becomeavailable.


None.

7 Current transfers

8 Capital account


Data on general government transfers arecollected from the Ministry of Finance andinclude transfers from the United Nations, theEuropean Union, the United States, etc. Dataon outward and inward transfers of othersectors, including migrants’ transfers andcurrent transfers (workers’ remittances, cashgifts, inheritances, lottery winnings, etc.) arecollected from banks.

8.2 Definition

In principle, the new b.o.p. compilationsystem will follow the definition of the capitalaccount set out in the BPM5. With the data

available now, it is difficult to distinguishbetween current and capital transfers.


In the b.o.p. statisticals up to 2001, outwardmigrants’ transfers, which were insignificantin Cyprus, were recorded under currenttransfers (or services: other personal travel).Concerning current transfers, workers’remittances were recorded under income ascompensation of employees, since foreignworkers staying in Cyprus for more than oneyear were still considered as non-residentsaccording to exchange control regulations.As of 2002 these deviations have beeneliminated.

Covered by Section 8 on the capital account.


Chapter 3.2 Cyprus

8.4 Gaps

Data on inward migrants’ transfers, debtforgiveness by companies, investment grants,and acquisitions or disposals of non-producednon-financial assets are difficult to obtain.Government debt forgiveness is considerednegligible.


With the implementation of the new b.o.p.reporting system, deviations from agreeddefinitions will be minimised and moredetailed data on the various items of thecapital account should become available.

9 Direct investment


The CBC is participating in Eurostat’s FDIPilot Project with Candidate Countries forthe establishment of a regular reportingsystem on FDI statistics, in accordance withEurostat’s requirements. The CBC’sparticipation in the first part of this project(concerning FDI flows) has already beencompleted successfully, as Cyprus has set upa regular FDI reporting system and is nowproducing all Y5 and Y6 questionnaires at therequired geographical and economic activitylevels of analysis. To this end, the NACEclassification of economic activity has beenadopted for resident and non-residentcompanies. This data set was successfullytransmitted to Eurostat according to specifiedinstructions, in GESMES/CB format.Information on the initiation of an FDIrelationship is obtained directly fromcompanies or from exchange control records.Data on flows are collected from banks on amonthly basis.

9.2 Definition

The CBC applies the 10% OECD benchmarkdefinition of FDI (in line with the BPM5).

As already mentioned, the CBC isparticipating in Eurostat’s FDI Pilot Projectwith Candidate Countries and, within thisproject, which covers the period 1997 to

present, it has adopted the BPM5 residencydefinition upon the recommendation ofEurostat. More specifically, for the purposeof the project, companies in the internationalbusiness sector (offshore companies) as wellas international banking units (offshore banks)with a physical presence in Cyprus areconsidered as residents and their FDI flowsare now included in the data. Nevertheless,the FDI data included in the b.o.p. for theperiod 1997-2001 were adjusted to bringthem into line with the older definition ofresidency. As from 2002 the new definition isfully applied, for both FDI and other b.o.p.transactions.


None.

9.4 Gaps

None.


None.


None.


Chapter 3.2 Cyprus



At present, inward portfolio investmentfigures include estimates of flows intoresident public companies, to the extent thatthe individual non-resident participationremains below 10%. They also include theissue abroad of convertible bonds by theresident private sector and of short andmedium-term securities by the Governmentof Cyprus. Since October 2000, transaction-by-transaction data on non-residentpurchases and sales of securities listed on theCSE have been transmitted to the CBC bythe CSE. Data are broken down by sector,instrument and country.

Outward figures include purchases of foreigntradable securities by resident banks andpurchases of foreign bonds and stocks byresident insurance companies and investmentcompanies listed on the CSE. Outwardportfolio investment by other companies andhouseholds is still subject to exchange controlrestrictions.

10.2 Definition

See Sub-section 10.1.



10.4 Gaps



With the introduction of the new b.o.p.reporting system, outward flows related tosecurities issued by non-residents are to becollected through the banking system andthrough direct reporting. As far as theproduction of data on portfolio stocks isconcerned, Cyprus is participating in the 2001Co-ordinated Portfolio Investment Survey(CPIS). Within the framework of this project,Cyprus intends to produce portfolio positionson the assets side following – at least initially– the aggregate approach.



11 Financial derivatives


Transactions in financial derivatives areincluded under portfolio investment (debtsecurities) and not under a separate category.Raw data collected by the CBC’s BankingSupervision Department include breakdownsby instrument, maturity, country and currencyfor the investments made by the bankingsector. However, no such b.o.p. breakdownsare as yet compiled.

11.2 Definitions





Chapter 3.2 Cyprus

11.4 Gaps

Financial derivatives are not recorded as aseparate category of the financial account.


Data on financial derivatives will be presentedin a separate category and breakdowns byinstrument, sector, maturity, country andcurrency will be compiled.

12 Other investment


The entries for long-term trade credits onthe assets side include prepayments made inrespect of imports of military equipment andin respect of imports of aircraft by CyprusAirways. On the liabilities side, trade creditscomprise estimates of suppliers’ creditscalculated using a formula based on thepattern of imports. The loans item includesdrawings on and principal repayments of loansmade by the Government, banks and othersectors. Main sources of data are: (a) CBCrecords and government accounts for loansof the general government; (b) surveys, CBCrecords, Treasury and World Bank recordsfor loans of public corporations andgovernment agencies; and (c) statisticalreports from domestic commercial banks andinternational banking units for the loans ofthe private sector. Finally, data on balanceswith foreign banks held by domesticcommercial banks are obtained from thedomestic commercial banks’ balance sheets.Liabilities include deposits of foreign banks

(including international banking units) withthe CBC and domestic commercial banks,plus non-resident deposits with domesticcommercial banks.

12.2 Definition


12.4 Gaps



None.


None.

13 Reserve assets


The source of data on reserve assets is theAccounting Services Department of the CBC.Data are compiled monthly and are availableone to two weeks after the end of thereference month. Breakdowns by instrumentand by currency are available. A geographicalbreakdown is prepared quarterly andcommunicated to the IMF on a strictlyconfidential basis.

13.2 Definition

The definition used for reserve assets is inline with the recommendations of the BPM5and with International Accounting Standards.Reserve assets are under the effective controlof the monetary authority. Positions of thecentral government are separately identified,but are included in reserve assets. Positionsvis-à-vis residents are excluded. Gold, SDRsand the reserve position in the IMF areincluded in the total figure.


Chapter 3.2 Cyprus

Reserve assets are compiled in accordancewith the gross concept. Official reservesinclude accrued (receivable) interest, but nooffsetting between assets and liabilities isundertaken. The CBC’s gold is not used ascollateral for loans. Gold exchangeagreements are used in reserve assetmanagement and, in such cases, the goldremains part of the official reserves. Aseparate category for financial derivatives(gold swaps) is included.


There are no deviations in reserve assetdefinitions from the BPM5.

14 International investment position

14.1 Specific features of data collectionand definitions

13.4 Gaps

Breakdowns by maturity are not yetproduced.


Gaps in the compilation of reserve assetstatistics will be eliminated with theimplementation of the new b.o.p. compilationsystem.

14.1.1 General

A comprehensive set of data on the i.i.p. willbecome available when a series of surveys onstock positions is initiated and completed.With regard to this, Cyprus is participating inthe second CPIS, as a result of which data oncross-border holdings of portfolio investmentassets are going to be produced withreference to the end of 2001. In parallel tothe CPIS, Cyprus is also planning to conducta survey on FDI positions, which comprisesthe second leg of its participation in Eurostat’sFDI Pilot Project with Candidate Countries.In the meantime, however, the CBC hasalready produced and communicated to theIMF a table including selected items of thei.i.p. statement (a partial i.i.p. statement) forwhich data on Cyprus are available.


See Sub-section 14.1.1.








See Section 13.



14.3 Gaps



Chapter 3.2 Cyprus





15 Contacts

This country information was drafted byCyprus in agreement with the ECB’s Balanceof Payments and External Reserves Division.Enquiries of a general nature should beaddressed to the Press Division of the ECB.Enquiries specific to Cyprus should beaddressed to:

Ms. Stalo HailiOfficer ABalance of Payments and European UnionIssues SectionEconomic Research DepartmentCentral Bank of CyprusP.O. Box 25529CY-1395 NicosiaCyprus

Tel.: +357 22 714416Fax: +357 22 378155E-mail: [email protected]

Mr. Chrysostomos TsoundasOfficer BBalance of Payments and European UnionIssues SectionEconomic Research DepartmentCentral Bank of CyprusP.O. Box 25529CY-1395 NicosiaCyprus

Tel.:+357 22 714426Fax: +357 22 378155E-mail: [email protected]

Ms. Eleni NicolaouOfficer BBalance of Payments and European UnionIssues SectionEconomic Research DepartmentCentral Bank of CyprusP.O. Box 25529CY-1395 NicosiaCyprus



Chapter 3.2 Cyprus

Czech Republic

February 2002

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Chapter 3.3 C

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Bank BoardGovenor

Group 1Govenor

Group IIVice-Govenor

Group IIIVice-Govenor

Group IVChief Executive

Director

Group VChief Executive

Director

Group VIChief Executive

Director

Group VIIChief Executive

Director

110-Office of the CNB

Executive Director

410-MonetaryDepartment

Executive Director

120-Human ResourcesDepartment

Executive Director

130-Internal AuditDepartment

Executive Director

610-Financial MarketsDepartment

Executive Director

310-Legal ServicesDepartment

Executive Director

520-Banking SupervisionDepartment

Executive Director

320-CurrencyDepartment

Executive Director

Regional BranchOffices

Executive Director

210-EU and InternationalOrganisationsDepartment

Executive Director

620-Risk Managementand TransactionsSupport Department

Executive Director

220-Internal FinanceManagementDepartment

Executive Director

720-Information SystemDevelopmentDepartment

Executive Director

510-Banking SupervisionPolicy Department

Executive Director

710-StatisticsDepartment

Executive Director

730-Payment SystemsDepartment

Executive Director

420-AdministrationDepartment

Executive Director

Prague

Ceské Budejovice

Pilzen

Ústí nad Labem

Hradec Králové

Brno

Ostrava

ˇ

ˇˇ150 00-Crisis Managementand ClassifiedInformation ProtectionUnit Head of UnitCNB Secretary for Security

140 00-Economic ResearchUnit Head of Unit

CZECH NATIONALBANK


Chapter 3.3 Czech Republic

StatisticsDepartment

Banking StatisticsDivision

Balance of PaymentsDivision

Economic DevelopmentStatisticsDivision

Statistical DataProcessingDivision

Organisation chart of the CNB Statistics Department




1 Collection of Laws.2 According to the Foreign Exchange Act, a foreign exchange entity

refers to a bank with a seat in the Czech Republic or a branchoffice of a foreign bank which is authorised, within the scope ofits banking licence, to trade in foreign exchange or effectpayments and transfers abroad as well as a person granted aforeign exchange licence to trade in foreign exchange values orprovide money services; or a person granted a licence to carryout bureaux de change activities.

3 These authorities are the Ministry of Finance and the CNB.

2.1 Introduction

Following the division of the formerCzechoslovakia into the Czech and SlovakRepublics on 1 January 1993, Ceská národníbanka, the Czech National Bank (CNB),continued in its responsibility – as the centralbank of the Czech Republic – for compilingbalance of payments (b.o.p.) and internationalinvestment position (i.i.p.) statistics. TheBalance of Payments Division of the CNB’sStatistics Department collects data from avariety of sources, including foreign tradestatistics, the banking sector, the CzechStatistical Office, government ministries(Ministry of Finance, Ministry for RegionalDevelopment, Ministry of Labour and SocialAffairs, etc.), government agencies (e.g. theNational Property Fund), securities traders/brokers and a large number of corporatesector units, including specialised units(services, etc.).

The b.o.p. and the i.i.p. are compiled quarterlyand are published on the CNB website, inprinted publications and also annually in theyearbooks of the Czech Statistical Office(CZSO). The data are compiled in Czechkoruna (CZK) but are also published in euro(EUR) and US dollars (USD). The collectionand compilation methods are being adjustedto comply with the recommendations of the5th edition of the IMF Balance of PaymentsManual (BPM5).

When compiling and publishing the b.o.p., i.i.p.and reserve assets, the CNB actsindependently from the general government.


Under Act No. 6/1993 Coll.1 on the CzechNational Bank, as last revised by Act No.442/2000 Coll., all banks – including branchesof foreign banks and other entities holdinginformation necessary for the compilation ofthe b.o.p. – are obliged to report thisinformation to the CNB (Article 41). The

CNB defines the population of entitiescovered by this obligation as well as thecontent, form, dates and manner of submittingthe information and documents required fromthem. Pursuant to Article 46, non-compliancewith the rules laid down in the Act can resultin a fine of up to CZK 1 million.

Article 5 of Act No. 219/1995 Coll., theForeign Exchange Act, lays down the reportingobligations for non-residents who are foreignexchange entities2 and for residents regardingfinancial claims and liabilities vis-à-vis non-residents and residents abroad, foreign directinvestment (FDI) and other investment,financial credits, securities and associatedcollections, payments and transfers vis-à-visnon-residents and residents abroad, financialmarket operations, including operationsperformed through non-residents, and theestablishment of and balances on theiraccounts abroad. The terms and manner ofthe reporting obligation are stipulated byorder of the CNB and MoF, or when requiredby a foreign exchange authority.3


A new organisational structure of the CNBcame into effect on 1 June 1998. The headoffice, which is managed by the CNBGovernor, consists of seven groups, whichare divided into departments and divisions.

– The Statistics Department was restructuredinto four divisions (see Chart 2). It isresponsible for methodological management,the collection of and accurate andcomprehensive processing of monetary andbanking statistics, statistical data on economic

ˆ



development, b.o.p. compilation andadministration, and for the development ofstatistical data systems.

– The Banking Statistics Division is responsiblefor the concept, methodology andprocessing of Money and Banking Statistics(MBS) statements submitted by commercialbanks and other monetary institutions. ThisDivision provides banking statisticalinformation to the Monetary Department,the Banking Supervision Department andother users in the CNB and to the generalpublic.

– The Balance of Payments (BoP) Division isresponsible for the concept, methodologyand compilation of b.o.p. statistics, foreigndirect investment (FDI) and portfolioinvestment statistics and the i.i.p. It is alsoresponsible for providing data tointernational institutions and for co-ordinating the IMF’s Special DataDissemination Standard (SDDS) system. Inorder to compile the b.o.p. and i.i.p.,statistical information from the bankingsector, corporate sector and governmentinstitutions is used.

– The Statistics of Economic DevelopmentDivision is responsible for collecting selectedinformation on the economy, e.g. businesssurveys and inflation expectations. It alsomanages the database of macroeconomic dataand the exchange of information betweenthe CNB and the CZSO.

– The Statistical Data Processing Division isresponsible for collecting and processingstatistical data for CNB purposes. It alsomanages the development of the bankinginformation system, including the meta-information system.

The BoP Division is responsible for the b.o.p.,FDI, the i.i.p. and related statistical datacompilation. Data collection, control andprocessing are carried out in close co-operation with the other divisions in the

department. BoP Division staff (around 17 innumber) are responsible for data analysesand publications and for providing data tointernational institutions and domestic users.

Economic analyses of b.o.p. data are alsocompiled by the Monetary Department ofthe CNB.


The Czech Statistical Office (CZSO) is themost important external partner of the BoPDivision, both as a provider and as a user ofthe data. The monthly foreign trade statistics,based on customs data provided by theCZSO, are a keystone for compilation of theb.o.p. goods item. The CZSO also providessome other complementary data for the b.o.p.and, reciprocally, CNB data are used by theCZSO for the compilation of the nationalaccounts.

The CNB uses its own information ongovernment assets and liabilities and alsoobtains information from other governmentalinstitutions, e.g. the Directorate General ofCustoms (foreign trade statistics), theMinistry of Labour and Social Affairs(foreigners employed in the Czech Republic),the National Property Fund (non-residentinvestment in the Czech Republic) and theSecurities Centre of the Czech Republic(ownership of securities by non-residents).

Outside the Czech Republic, the BoP Divisionmaintains contacts with several central banks(e.g. Austria and Germany), mostly to consulton methodological, collection and compilationissues.

The BoP Division takes part in several b.o.p.working groups and has close contacts withEUROSTAT, the ECB and the Organisationfor Economic Co-operation and Development(OECD). The International Monetary Fund(IMF) is also consulted regarding BPM5 andthe SDDS.



2.5 Users

B.o.p. data are published for the generalpublic on a quarterly basis by issuing a pressrelease. The data are also disseminated onthe CNB’s website. For all interested parties,the data are published in the followingspecialist publications: the quarterly “Inflationreport”, the annual “Balance of PaymentsReport”, the “CNB Annual Report” and the“Statistical Yearbook of the Czech Republic”.The data are used and analysed in theMonetary Department in particular.

Externally, all interested institutions in theCzech Republic are able to receive CNBpublications.

As for international institutions, b.o.p., i.i.p.and FDI data are dispatched to:

– the IMF, to be published in the“International Financial Statistics”, in theSDDS system, the reserves database, the“BoP Yearbook”, etc.

– EUROSTAT, to be published according tovade-mecum requirements;

– the OECD;– other institutions and research institutes

on request or via the internet.

3 Statistical systems


B.o.p. compilation is based on a mixed system,i.e. a combination of settlements and surveys.The greatest proportion comprisessettlements by the banking sector that can beconsidered semi-open, based on transactionsbetween residents and non-residents, anddoes not include a full explanation of thechanges in the level of external positions ofeither the banking sector or the non-bankingsector. The settlements are complementedwith surveys from government, banks andthe corporate sector. Only some reportsinclude the recording of all credit and debittransactions and a country and currencybreakdown. In some cases, flows are derivedfrom stock statistics and vice versa.

This reporting system is furthermorecomplemented by other statistics providedby the CZSO (the trade balance and otherinformation necessary for the compilation ofthe current account), the MoF (governmentcurrent transfers), other ministries and bydirect reporting institutions. Other sourcesare also used, e.g. newspapers and officialinformation (FDI and portfolio investment).On the basis of this information, businessregisters are also kept).


(i) The monetary authority sector: the CNBprovides data on reserve assets,liabilities and other transactions ofmonetary authorities (stock and flowdata).

(ii) The banking sector: this does not fullycoincide with the ESCB definition ofMonetary Financial Institutions – thesectoral breakdown of the ESA 79 isapplied. A new sector classification inaccordance with the ESA 95 is beingprepared. Banks are required to reportexternal transactions on behalf ofresidents and non-residents and on theirown account (stock and flow data). TheCNB is the sole agent in the CzechRepublic that collects data from thebanking sector. It is also authorised torequest more detailed information oran explanation if the informationsubmitted by a bank does not complywith the required methodology. For thepurposes of b.o.p. compilation, thebanks submit statements on their foreigncurrency and CZK positions, surveys offoreign currency payments andcollections, securities statistics, etc.

(iii) The general government sector: dataare provided on assets (including



subscriptions to international non-monetary organisations) and liabilitiesand on the value of technical assistanceprovided to the Czech Republic.

(iv) The corporate sector – direct reportinginstitutions: data on assets and liabilitiesof enterprises and transactions resultingfrom the export and import of goods,data on FDI abroad and in the CzechRepublic, data on stocks and transactionsin securities realised between residentsand non-residents.

The response rates to surveys are 100% inthe banking and government sector andapproximately 85% in the corporate sector.

3.3 Thresholds

For transactions made by banks and otherinstitutions, a threshold has generally notbeen set.


B.o.p. – the data are compiled quarterlywithin 65 days of the end of the quarter forthe first three quarters, and within 85 days ofthe end of the quarter for the fourth quarter.

I.i.p. – data are compiled quarterly and arepublished within one quarter of the end ofthe reference quarter for the first threequarters, and within one quarter and ten daysfor the fourth quarter.

External reserves are compiled monthly andare published approximately one week afterthe reference month.

Only some categories of the b.o.p. and i.i.p.(e.g. FDI) have breakdowns by sector and bycountry.

3.5 Data controls

A validation procedure is incorporated intothe electronic data collection system – the

report is not accepted unless it is both validand consistent.

For other types of collection, checks forcompleteness and plausibility are carried outby the BoP Division. Unusual fluctuations inthe data reported are monitored and thereporting agents are asked for an explanation.

Checks at the aggregate level are aimed atensuring data quality and consistency with otherstatistics and time series. Any discrepancies areanalysed and the source of the data is thoroughlychecked again to uncover possible errors at alower level of aggregation.

3.6 Revision policy

B.o.p. and i.i.p. data are revised and correctedevery time new information becomes available.The revisions are usually made on an ongoingbasis and are published in the subsequentquarterly issues. Most of the revisions andcorrections to the b.o.p. result from tradebalance data – when these data are final, allb.o.p. data can also be considered final.

3.7 Dissemination

The CNB publishes monthly data on externalreserve assets and quarterly data on the b.o.p.and i.i.p.

B.o.p. and i.i.p. data appear in the followingregular publications:

– the “Inflation Report” – available in Czechand English, free of charge;

– the “Balance of Payments Report” – inCzech, by subscription, free of charge;

– the “CNB Annual Report” – in Czech andEnglish, free of charge; and

– the “Statistical Yearbook of the CzechRepublic” – in Czech and English, for a fee(published by the CZSO – InformationService Division).

All the data on the b.o.p., i.i.p. and externalreserves, including time series, are posted



under “Statistics” on the CNB’s website:http://www.cnb.cz.

As a SDDS subscriber, the Czech Republicdisseminates metadata on the IMF’s Data

Dissemination Bulletin Board with a directhyperlink to the real data in the nationalstatistics (internet address: http://dsbb.imf.org/country/czecats.htm).

4 Goods


The source of data relating to exports andimports of goods is the customs statistics data.The relevant document is the Uniform CustomsDeclaration completed by exporters(importers). The data from customs declarationsare processed by the General Directorate ofCustoms. The CZSO publishes monthly dataon exports and imports approximately 16working days after the end of the month underreview, which is also when the CNB receivesthe data. The definitive data for the year underreview are usually published by the CZSOaround August of the following year. In someyears, the trade data on imports in the b.o.p.deviate from those officially reported by theCZSO, owing to the application of market pricesto imports of natural gas.

4.2 Definition

Goods in the customs statistics aremonitored in a way that allows them to bebroken down into:

– general merchandise (including goodsprocured in ports by carriers);

– goods for processing and repairs of goods(repairs of goods have not as yet beenseparately recorded by the CZSO); and

– non-monetary gold.

Data on the export and import of goods (inaccordance with the BPM5) cover thefollowing:

– any change of ownership;– the market value of goods;

– mostly f.o.b. prices; and– a geographical breakdown.

4.3 Deviations

The b.o.p. of the Czech Republic deviatesfrom the BPM5 in that it is not able to reportseparately on repairs of goods and goodsprocured in ports by carriers.

4.4 Gaps

Goods procured in ports by carriers areincluded under general goods and are notmonitored separately in the customsstatistics; from the point of view of the CzechRepublic’s trade, however, the volumes inthis item are insignificant.


The breakdown of goods data in the b.o.p.for 2001 will be extended to include thereporting of repairs of goods.


For the non-market prices of a proportion ofnatural gas imports, estimates are based onmarket prices of natural gas. For b.o.p.purposes, the difference between the non-market and the market price of natural gas isadded to the value of imports reported bythe CZSO.



5 Services


(i) TransportationThe data are taken from the bankingforeign exchange statistics (the MonthlyStatement of Foreign Exchange and CZKCollections and Payments, which recordscollections and payments effected to andfrom abroad through domestic banks inforeign currencies and in CZK as well aspayments effected between residents andnon-residents in foreign currencies in theCzech Republic) and directly from majorcarriers and pipeline operators. They aresupplemented by an estimate in the areaof the transportation of goods on export.

(ii) TravelCredits and debits are measured bymeans of the instruments used to maketravel-related payments. The data aretaken from the banking foreign exchangestatistics (bureau de change operations,settlements of entities operating in thetravel area, settlements of paymentcards) and are supplemented withinformation from non-bank bureaux dechange and issuers of payment cards.When determining the travel item, weassume that all transactions by bureauxde change and executed using paymentcards are related exclusively to travel.

(iii) Other servicesThe data are taken from the bankingforeign exchange statistics. Services arerecorded in the b.o.p. at the time whenpayment for the services provided iscredited or payment for the servicesreceived is made (no potentialreceivables and payables from servicesare assumed).

5.2 Definition

Payment items (transaction codes) areassigned to the collections and paymentseffected to and from abroad through

domestic banks; these items are set in such away as to cover all types of services accordingto the BPM5 (including financial services) andto correspond with it as regards content.

5.3 Deviations

Where transport costs form part of the priceof imported goods (the c.i.f. value of imports),these costs are reported in the b.o.p. underthe import item within the balance of trade.

5.4 Gaps

The difference between the transaction codesused in domestic and foreign payment systemscomplicates the recording of payments inCZK effected between residents and non-residents in the Czech Republic. Transactionseffected through residents’ accounts atforeign banks are not recorded. In the caseof travel, only the credits and debits whichcan be registered statistically are recorded.


It is envisaged that for the collection of dataon the compilation of transport servicesconnected with the export and import ofgoods, the conclusions and recommendationsof the Eurostat Balance of Payments WorkingParty will be used.


The costs connected with the transportationof goods on export (including insurance,storage, etc.), which form part of the exportprice, are estimated using surveys carried outamong selected exporters. The share of thesecosts in overall exports is estimated on thebasis of the final data of previous years.

No estimates are carried out for foreigntravel and other services.



6 Income



The compensation of employees item isestimated.

Credits from the work of Czech citizensabroad are estimated using information onthe number of Czech citizens who workabroad in the short term and their averageincome.

To determine labour costs of foreigners inthe Czech Republic, administrative data onthe number of foreigners employed are used(work permits issued, registered foreignersfor whom no work permit is required); theseare supplemented with an estimate of thenumber of foreigners employed illegally andwith information on the average wage.

In the case of both credits and debits, theaverage wage is adjusted for the costs of theperson’s stay in the host country (includingdeductions for social insurance, etc.).


Income on direct investment is recorded inthe b.o.p., broken down into income onequity and income on debt (interest oncredits between direct investors and directinvestment enterprises).

As regards income on equity, the banking foreignexchange statistics recording the transfer ofshares of earnings of direct investmententerprises (dividends, etc.) are used for thepreliminary version of the b.o.p. Reinvestedearnings are estimated according to their levelin the preceding period and are also recordedas an offsetting entry in the financial account.

For the revised version of the b.o.p., in thecase of dividends and reinvested earnings,data taken from a statistical survey carried

out once a year in companies with ownershipholdings abroad and companies ownedcompletely or partly by a non-resident areused. Reinvested earnings are available with aterritorial breakdown.

Interest (on inter-company loans, tradecredits and debt securities) is estimated bothin the preliminary and in the final version ofthe b.o.p.


Income on portfolio investment is recordedin the b.o.p., broken down into income onequity and income on debt securities (bonds,banknotes and money market instruments).

In the case of income on equity, the bankingforeign exchange statistics recording realtransfers of dividends are used. The dataobtained in this way are compared with thestatements compiled by securities traders (forthe debit side only). A breakdown by basicsector (central bank, government, commercialbanks and other sectors) is available.

On the credit side, income on debt securitiesis estimated. On the debit side, in the case ofdomestic securities denominated in CZK, thisis obtained from statements compiled bysecurities traders, and in the case of domesticsecurities denominated in foreign currenciesit is calculated according to the interest rateand maturity of the interest (broken down bycurrency and sector).

The income on debt securities taken fromthe brokers’ statements consists partly of realtransfers of interest and partly of calculatedinterest (on an accruals basis).

In the case of the data obtained via thestatements of securities traders, a breakdownby the sector of the domestic issuer and by thecountry of the registered office of the non-resident is available. Income on investment fundsis included.




Interest on central bank reserves (on depositswith foreign banks and income and expensesconnected with repo operations) is takenfrom the accounting records, where it isrecorded on an accruals basis.

Information on interest on government loansgranted and received is taken from the foreignexchange statistics and reflects real transfersof funds.

Interest on deposits and loans of commercialbanks is estimated. In the b.o.p., it is recordedon an accruals basis, with the assumptionthat interest will be paid at maturity.

In the case of other sectors, interest on tradecredits and loans is estimated.


In the case of wages and salaries it is notpossible to differentiate consistently betweenincome resulting from a short-term stay in ahost country and income connected with along-term stay (potential transfers of whichare to be recorded under current transfersaccording to the BPM5). Interest on swaps isrecorded under income on investment. Theaccruals principle is not fully applied forinterest. Part of the income on reserve assets(i.e. on securities) is classified under portfolioinvestment.

6.3 Gaps

Insufficient coverage of the household sector.


Interest on swaps has until now beenrecorded under income on investment; themanner of reporting will be adjusted to ECBrequirements.

Income on other investments will include allincome on the reserves of the central bank;until now income on securities has beenclassified as portfolio investment, whileinterest received on deposits abroad formedpart of income on other investment. Theadjustment will also be carried outretroactively for the preceding period.

The accruals principle will be used for allitems of the income balance where it ispossible to create the prerequisites for it.


Interest on credits between investors andtheir holdings (including interest on debtsecurities) is estimated according to theaverage level of the loans and credits receivedand granted in the reporting period and theaverage interest rates.

The estimate of interest on deposits andcredits of commercial banks is based on theaverage level of the deposits and creditsgranted (or received) in the reporting periodand the average interest rates (broken downby maturity of the deposits and credits).

When estimating interest on trade credits,information gathered from selected exporters(importers) of machinery is used.

7 Current transfers

See Sub-section 8 on the capital account.



8 Capital account


The data for current transfers and the capitalaccount are taken from the banking foreignexchange statistics. When compiling theforeign assistance item within currenttransfers, administrative sources are used.

Transfers are broken down into government(public) and private domains according to theinstitutional sector of the resident. Alltechnical assistance from the European Union(provided under the Phare Programme) isincluded in government transfers.

8.2 Definition

The capital transfers item includes transfersof funds connected with the migration of thepopulation and transfers (purchases and sales)of non-produced, non-financial assets(licences, etc.). In accordance with the BPM5,any acquisitions and disposals of land byrepresentative offices of foreign governmentsare recorded under capital transfers.


The banking foreign exchange statistics donot allow consistent differentiation betweencurrent and capital transfers – for example,gifts and grants of a capital nature areincluded in current transfers together withother gifts.

8.4 Gaps

Non-financial transfers such as transfers ofmigrants’ movable assets and gifts and grantsin kind (an offsetting entry to goods) are notrecorded.


Any debt forgiveness (by contractualagreement) will be recorded under the capitaltransfers item.

9 Direct investment


Information on direct investment is obtainedprimarily from the reports submitted by non-banks pursuant to the reporting obligationensuing from the Foreign Exchange Act. Thereports on FDI are effected through branchesof commercial banks upon each transaction.These data are further revised on the basis ofannual direct investment reports from non-banks.

Supplementary sources of information are:

– statements from banks;– National Property Fund reports on foreign

payments;– information from the stock exchange;

– the commercial bulletin; and– information from the press.

Information on inter-company loans and tradecredits is obtained from the reportssubmitted by non-banks under the reportingobligation.

Preliminary data on direct investment stocksand flows are published quarterly. The flowsof direct investment are availableapproximately 10–11 weeks after the end ofthe quarter, and the stocks and positions inthe b.o.p. are available after 12–14 weeks.The data are revised with a 16-month delayon the basis of annual reports on the stocksof assets and liabilities of companies. Thedata are published on the CNB’s website.



Direct investments are reported brokendown as follows:

(i) by instrument into equity capital, othercapital and reinvested earnings;

(ii) by territory and by sector; and(iii) by foreign direct investment in the

Czech Republic and Czech directinvestment abroad.

9.2 Definition

The definition of foreign direct investment isin line with the recommendations of the IMF(BPM5) and with the directives of bothEurostat and the OECD. This means that thefollowing points are observed:

– 10% ownership criterion;– directional principle for FDI;– the data include inter-company financial

transactions (borrowings and loans andtrade credits);

– special-purpose entities are not monitoredseparately; and

– reinvested earnings form part of FDI.

When recording direct investment transactions,the actual operation concept is applied.


Transactions in securities and financialderivatives between direct investors and theirsubsidiaries and branches are not included indirect investment.

9.4 Gaps

None.


None.


Estimates are carried out only in the case ofreinvested earnings – quarterly, with a viewto one year. These are based on the data onreinvested earnings in individual sectors andin a territorial breakdown for the last period.The data are revised on the basis of surveysof annual statements after the closing of theannual accounts.



The data on the inflows and outflows ofportfolio investment are published quarterly,broken down by instrument (equity securitiesand debt securities). In the case of liabilities(domestic CZK securities owned by non-residents), breakdowns by the issuer’s sectorand by the country of the investor’sregistered office are also available. In the caseof transactions in domestic securities issuedabroad, breakdowns by sector and bycurrency are monitored. Assets (foreignsecurities owned by residents) have until nowbeen broken down only by the creditor’ssector; for 2001, however, the data onresidents’ portfolio investment abroad will

be available broken down by the country ofthe registered office of the issuer of theforeign security.

Securities operations between residents andnon-residents are reported on an aggregatedbasis.

The CNB obtains data on the transactions ofnon-residents in domestic CZK securities andon their stocks in the form of quarterlystatistical statements from domesticsecurities traders (banks and non-banks) thatprovide custody services to non-residents andfrom the Short-Term Bond MarketRegistration Centre maintained at the CNB.When elaborating the statistical statements,



these respondents work with ISIN securitiescodes, which allow them to identify the issuerby sector and by type of security. Residentswho issue securities abroad are obliged toreport the necessary data on these issues tothe CNB.

The CNB obtains data on foreign securitiestransactions from the banks’ monthlystatements on payments and collections, inwhich the operations executed on the bank’sown account and the operations executed onthe account of clients, broken down bysector, are recorded separately. The data onpurchases and sales are reported at thepurchasing and selling prices realised.Operations effected in foreign currencies areconverted, using the average exchange rate(mid rate) for the reporting period.

10.2 Definition

The CNB defines portfolio investment in linewith the BPM5. Portfolio investment includesequity securities (shares, participationcertificates, interim certificates) and debtsecurities (bonds, bills of exchange, moneymarket instruments), except for thoseincluded under direct investment or reserveassets. Neither financial derivatives nor repooperations (transactions in repurchaseagreements) are included in portfolioinvestment. Service charges and brokeragefees are recorded as services. The breakdownof portfolio investment by country is based,

in the case of assets, on the principle of thecountry of the registered office of the issuer(debtor) and, in the case of liabilities, on thecountry of the registered office of the owner(creditor) of the domestic security.


None.

10.4 Gaps

Certain problems in data collection mayoccur if residents’ assets are administereddirectly by a foreign securities trader (non-resident custodian).


It is envisaged that in 2002 the SecuritiesCentre will provide the CNB with data onthe stocks of domestic securities held by non-residents broken down by ISIN. Domesticinvestors who use the services of foreignsecurities traders (non-resident custodians)will have to report data on operations in andstocks of foreign securities directly to theCNB.


None.



The CNB began to report data on financialderivatives’ transactions on a net basis as aseparate financial account item at quarterlyintervals from 2000. These data are derivedfrom the differences in the stocks of financialderivatives in banks’ positions between thebeginning and the end of the period underreview. Breakdowns of these transactions bysector and by country are not yet available.

Financial derivatives are recorded off thebalance sheet in nominal values and in realvalues in the balance sheets of domesticbanks.

Real values, either positive or negative, aremonitored in the case of forward operationsbroken down by interest, currency, share,commodity and credit instrument. Positive ornegative real values are also monitored in thecase of options, the breakdown of which is



identical to that used for forward operations;options are broken down further intoreceivables from the margins on stock exchangederivatives.

For the time being, these values are projectedinto the financial derivatives’ transactions forpositive real value and negative real value asa whole.

11.2 Definitions

The CNB defines financial derivatives in linewith the BPM5, i.e. it records transactionsrelating to options, futures, swaps, forwardforeign exchange contracts and creditderivatives in the b.o.p. Accounting for theseoperations within the banking sector is fullyharmonised with the IAS 32 and IAS 39. Theidentification of residents is fully in keepingwith the ESA 95 methodology.


None.

11.4 Gaps

The system of data collection used until nowdoes not cover transactions in financialderivatives that residents execute withentities other than domestic banks. Thepresent system of accounting for transactionsin financial derivatives in the corporate sectordoes not fully comply with the requiredaccounting standards.


It is planned to break down financialderivatives’ transactions by instrument. TheMoF is preparing a new methodology forcalculating and accounting for transactions infinancial derivatives in the corporate sector.


None.

12 Other investment


Other investment is broken down into assetsand liabilities, into long-term and short-terminvestment, and by basic sector into centralbank, government, commercial banks andother sectors. A breakdown by instrument(trade credits, foreign currency and othercash, deposits, loans, other assets andliabilities) is available. Data allowing for abreakdown by territory and currency arereported only for the government sector.

Data sources:

(i) Central bank – statement on foreignexchange and CZK positions;information from relevant units withinthe CNB on draw-downs andrepayments of credits received.

(ii) Commercial banks – statement onforeign exchange and CZK positions;monthly statement on foreign exchangeand CZK collections and payments(draw-downs and repayments of long-term credits received).

(iii) Government – monthly specification ofgovernment credits and quarterlyspecification of credit agreements;survey of receivables and payables takenover by the Czech MoF; informationfrom the MoF on capital subscriptionsto international non-monetaryorganisations.

(iv) Other sectors – statement on theforeign assets and liabilities ofcompanies (buyer and supplier credits,financial leasing, movements on accountsabroad); information taken from thereports submitted under the reporting



obligation pursuant to the ForeignExchange Act (collections and paymentsrelating to financial credits).

The b.o.p. includes records of flows for long-term central bank liabilities, for governmentand corporate sector assets and liabilities,and for long-term credits received bycommercial banks. In the case of short-termcentral bank liabilities and assets and liabilitiesof commercial banks (except for long-termcredits), the flows are derived from thechanges between the opening and closingstocks (from the statement on foreignexchange and CZK positions).

12.2 Definition

The other investment item is basically in linewith the BPM5. Both repo operations andtrade credits are included.


During the most recent revision of the b.o.p.(March 2001), credits (loans and suppliercredits) between direct investors and directinvestment enterprises were transferred from

other investment to direct investment (othercapital) for the years 1998 to 2000. A similaradjustment will be carried out for the periodprior to 1998.

12.4 Gaps

The statement from which the data on creditslinked with exports and imports of goods aredrawn covers a select circle of respondentsonly (450–500 enterprises). Data are notcollected from the household sector, whichmeans that information on changes intechnical life insurance reserves is notavailable. Transactions implemented throughprivate accounts abroad are not adequatelyrecorded.


Within the framework of co-operation withthe CZSO, available information will beacquired for the household sector.


None.

13 Reserve assets


The sole source for compiling CNB reserveasset transactions is the monthly data of theCNB Accounting Division. The analyticalaccounts comprise all breakdowns – byinstrument, maturity, country and currency.

13.2 Definition

The definition of reserve assets is fully in linewith the BPM5 and the OperationalGuidelines of the IMF Data Template onInternational Reserves and Foreign CurrencyLiquidity within SDDS. All of these assets are

under the effective control of the CNB. Theaccounts of central government are notincluded in the reserve assets position.

The reserve assets refer to the CNB’shighly liquid, market-valued claims onnon-residents denominated in convertibleforeign currencies (deposits, securities, cash).Claims on residents and domestic currencydeposits are not included in the CNB’sreserve assets.

In addition to foreign exchange, the financialinstruments in the reserve assets include gold,special drawing rights (SDRs) and the reserveposition in the IMF.



The reserve assets are compiled inaccordance with the gross concept, i.e. thereis no netting with CNB assets and liabilities.

Data on asset yields are included on anaccruals basis.


None.

13.4 Gaps

None.


None.



14.1.1 General

The i.i.p. includes the stocks of financial assetsand liabilities vis-à-vis non-residentscorresponding to all financial account items.Stocks on the assets and liabilities sides ofthe position are recorded separately. The i.i.p.is compiled and disseminated with quarterlyperiodicity within three months of the end ofthe relevant reporting period (three monthsand ten days in the case of the fourthquarter). The already published quarterly andannual data are updated at the end of theyear (within 18 months of the end of thereporting period) on the basis of theprocessing of definitive data on the i.i.p.


The stocks of active and passive directinvestments are compiled and disseminatedquarterly. Direct investment data are brokendown by instrument, sector of the economyand country of origin or of the recipient. Abreakdown by currency is not available.

The data sources for the quarterly and annualdata are different. In the case of the quarterlydata, the direct investment stocks are derivedusing the accumulated flows method. Thebasis for this is the data reported under thereporting obligation for companies, the

banking statistics and the periodical reportsof the National Property Fund. The quarterlydata on direct investment stocks arepublished within three months of the end ofthe reporting period.

The data source used for the compilation ofthe i.i.p. at the end of the reporting year, andfor the verification of the quarterly data, isthe reports on the stocks of assets andliabilities of companies submitted at the endof the year, which are included in the directinvestment database established andadministered by the CNB. The directinvestment database is updated on an ongoingbasis through the addition of verifiedinformation obtained from the data subjectto a reporting obligation, banking statisticsdata, commercial registers, stock exchangedata, etc. Together with data on the extentand nature of the direct investment, thesereports contain data on economic activity(for example, exports and imports of goodsand services, the number of employees). Thedata on annual direct investment stocks areavailable within 18 months of the end of thereporting period.

The methodological deviations between thequarterly and annual stocks compiled on thebasis of surveys consist in the valuationmethod employed. For the quarterly stocks,the valuation is based on a summation of themarket-valued transactions in the relevantperiod. In the case of the annual data obtainedfrom company surveys, the basis is the



valuation in book or nominal values – onlysome of the companies are valued at theirmarket value.

The material definition of the stocks ofindividual direct investment items is in linewith the definition of the correspondingindividual categories of direct investmenttransactions within the financial account.

With regard to the method for deriving thestocks from the flow data, the link between thereported flows and stocks in the area of directinvestment with determination of the influenceof price changes and other adjustments is notspecified in great detail. The annual dataobtained from surveys in companies are thestarting point for retroactive adjustment of thequarterly data on stocks and flows in the areaof direct investment.


The data on portfolio investment stocks arecompiled and disseminated quarterly.

Portfolio investment is broken down byinstrument, sector and maturity. Reportingof portfolio investment stocks broken downby country will start in due course. Abreakdown by currency is not yet available.

The basic data source is data acquiredquarterly directly from securities traders andmajor investors in the form of statements.The data are based on real stocks. Anothersource is data on short-term bond stocksfrom the database of the Short-term BondsRegister held at the CNB.

The data on portfolio investment stocks arepublished in the i.i.p. within three months ofthe end of the reporting period. Themethodological definition of portfolioinvestment stocks is identical to that appliedto the relevant financial account transactions.

Portfolio investments are valued using themarket prices valid on the date to which thestatement relates.

When reconciling b.o.p. flows and i.i.p. stocksin the field of portfolio investment, exchangerates and price changes are taken intoconsideration.


As in the financial account, the stocks ofreceivables and payables from financialderivatives in the i.i.p. are recorded onlywhen a resident commercial bank participatesin the transaction. In the other cases, financialderivatives are not monitored.

The daily and monthly positions ofcommercial banks vis-à-vis non-residentsshow the real stocks of financial derivativeswhich are recorded quarterly in the i.i.p. Amore detailed breakdown by instrument isavailable and a breakdown by sector is inpreparation. Data on the territorial andcurrency structure of these levels are not yetavailable. The levels of financial derivativesare available within 20 days of the last day ofthe reporting period.

Market price valuation is provided for in thebanks’ balance sheets.


The stocks of financial assets and liabilities inthe other capital item are compiled anddisseminated monthly for commercial banksand quarterly for other sectors. The financialassets and liabilities of commercial banks andother monetary institutions and the positionsof the government and corporate sector,including households, are reported quarterlywithin the i.i.p.

The stocks of other investments are brokendown by instrument, sector and maturity.Breakdowns by country and by currency arenot being recorded for the time, but areavailable for selected sectors (commercialbanks and the government sector).



The following data sources are used:

– for the position of banks including thecentral bank: monthly statements on theposition vis-à-vis non-residents;

– for the government sector position:surveys of the stocks of assets andliabilities of the government sectorprepared for the needs of the Czech MoFby the CNB and by the commercial bankdesignated for the administration ofgovernment foreign assets and liabilities;

– for the position of other sectors: outputsfrom the fulfilment of the residents’ reportingobligations prepared by the CNB on draw-downs and repayments of financial creditsgranted to residents from abroad and onturnovers of funds on residents’ accountsmaintained abroad, and the quarterly foreignassets and liabilities statements submitted bycompanies to the CNB.

In the case of the banking and governmentposition, and partly also the position of othersectors, real stocks of receivables andpayables are collected; in the case of selecteditems (for example, financial credits drawndown by companies from abroad), theaccumulated flows method is used.


Data on reserve assets stocks are compiledand disseminated monthly in accordance withthe SDDS system within seven days of thereference month in preliminary form, basedon data sources from the Accounting andDealing Divisions of the CNB. The databecome final approximately one month laterin accordance with the CNB accounting data.The CNB reserve assets are broken down bytype of instrument.

The coverage and concept of the reserveassets is in line with the BPM5 and the

Operational Guidelines of the IMF DataTemplate on International Reserves andForeign Currency Liquidity, and allcomponents, including gold, are valued inmarket prices monthly.


None.

14.3 Gaps

At present, there is incomplete statisticalcoverage of the financial derivatives item.Stocks held by sectors other than commercialbanks and other monetary institutions arenot reported. In the area of other investment,the household sector is not sufficientlycovered statistically.


In the area of securities trading, a security-by-security database will be established atthe CNB. This database will improve themonitoring of portfolio investment in therequired cross-sections. A preliminary phaseis currently running which involves thereporting of the i.i.p. broken down bycountry. An improvement to the statisticalcoverage of the economic activities of thehousehold sector is being prepared in co-operation with the CZSO.


Estimates are currently used for the intra-year stocks of reinvested earnings for thedirect investment item.



15 Contacts

This country information was drafted by theCzech Republic and agreed with the ECB’sBalance of Payments and External ReservesDivision. Enquiries of a general nature shouldbe addressed to the Press Division of theECB. Enquiries specific to the Czech Republicshould be addressed to:

Mr. Rudolf OlšovskýDirector, Balance of Payments DivisionStatistics DepartmentCzech National BankNa Príkope 2811503 Praha 1Czech Republic

Telephone: ++420 2 2441 4433Fax: ++420 2 2441 2136E-mail: [email protected]

ˆˆ

Estonia

February 2002


Chapter 3.4 Estonia

1 Organisation chart(s)

Board of the Bank of Estonia

Governor

Internal Control Department

Deputy Governor Deputy Governor Deputy Governor

Statistics Department

Balance of Payments StatisticsDivision

General Economic StatisticsDivision

Banking Statistics and AnalysisDepartment

Head of the StatisticsDepartment

Head of the Balance ofPayments Statistics Division

Survey Group ITRS Group Analysts IT Manager

Bank of Estonia

Balance of Payments Statistics Division


Chapter 3.4 Estonia


2.1 Introduction

According to the Law on the Central Bank ofthe Republic of Estonia, Eesti Pank, the Bank ofEstonia (BoE) is the only agency responsible –as a fully independent institution – for thecompilation of the balance of payments (b.o.p.)and the international investment position (i.i.p.).The first comprehensive statement of theEstonian b.o.p. was published by the BoE inNovember 1992 and contained data for ninemonths. The first i.i.p. was compiled on aquarterly basis in 1996. The compilation systemcombines banking settlement reports, directsurveys of economic agents and administrativedata. Data is collected for statistical purposesonly; no foreign exchange control is practised inEstonia. The b.o.p. accounts are compiledaccording to the principles outlined in the 5thedition of the IMF Balance of Payments Manual(BPM5).


The external sector statistics are based ontwo main legal acts: the Law on the CentralBank of the Republic of Estonia (LCB) of18 June 1993 and the Official Statistics Act(OSA) of 17 July 1997.

According to the LCB (Sections 2 and 34),the central bank shall be entitled to obtain,free of charge, all data necessary for compilingthe b.o.p. from any state or municipal entityor from any other legal entity engaged inforeign economic operations and locatedwithin the Republic of Estonia.

The OSA defines the Bank of Estonia as anagency conducting official statistical surveysin the field of b.o.p. statistics (Section 4). Itstipulates the duties (Section 5), theobligation to submit data collected throughofficial statistical surveys (Section 7), the dataprotection and confidentiality requirements(Section 8), and the liability of respondentsto comply with the requirements laid down(penalty for non-compliance) (Section 10).

Based on the above-mentioned legalmandates, the Governor of the BoE has issuedregulations on the balance of paymentsreporting procedure for credit institutions(Decree No. 35 of 28 December 1995) andhas also issued decrees by which varioussurvey forms have been established.

In addition, the Law on Credit Institutions of20 January 1995 sets the overall statisticalobligation for resident commercial banks(Section 52). The collection of foreign tradedata is based on the Estonian Customs Lawof 19 January 1998.


At the BoE, statistical data are compiled bythe Balance of Payments Statistics Division(BOPD) in the Statistics Department. TheBOPD is also responsible for compiling thei.i.p. and other statistical statements relatingto the external sector (direct investmentreports, external debt statements, thetemplate of external reserves and foreigncurrency liquidity, etc.).

The BOPD itself collects most of the datadirectly from data providers using surveys,the International Transactions ReportingSystem (ITRS) and administrative data. Itsmain inter-agency partners are the BankingStatistics and Analysis Department and theCentral Accounting Department, whichprovide initial data for external sectorstatistics on the banking and monetaryauthority sector, as well as the GeneralEconomic Statistics Division of the StatisticsDepartment, which is responsible for theavailability of foreign trade statistics.

In the BOPD there are ten people directlyinvolved in the collection, control andprocessing of data as well as in outputcompilation. According to the nature of theworking process, the BOPD is divided intofour sections (as shown in the organisationalchart of the BOPD):


Chapter 3.4 Estonia

– the Survey Systems Group (two people) –responsible for data collection andprocessing via questionnaires and forcreating and updating the enterprisesample;

– the Settlement Systems Group (fourpeople) – dealing with data collection andprocessing with banking settlements;

– analysts (three people) – two economistsare responsible for methodological issuesrelating to the data collection systemdesign and data management, while aneconometrician is responsible formethodological issues relating to statisticsand to the modelling of monthly b.o.p. keyitems; and

– the IT manager – one person.

There is close co-operation between theabove-mentioned sections. Final BOPDproducts are the result of teamwork.

Regular descriptive data analysis is carriedout by the BOPD. The Economic PolicyDivision of the Central Bank PolicyDepartment examines external sectoraccounts in the context of overallmacroeconomic performance.


For the purposes of b.o.p. statistics, the BoEco-operates with other authorities in Estonia.An important partner is the State StatisticalOffice (SSO), both as a provider and as auser of data on the external sector. On onehand, foreign trade statistics provided by theSSO are used as the basis for the goodsaccounts; on the other hand, the b.o.p. ispart of the national accounts compiled by theSSO in line with the System of NationalAccounts of 1993 (SNA 93).

The BoE maintains regular contacts withother institutions: the State Tourism Board,the Customs Board, the Ministry of Finance,the Ministry of Foreign Affairs, the Central

Business Register and the Central Depositoryfor Securities as well as to credit institutionsand major companies as the main dataproviders.

In order to provide adequate travel statistics,a regular border sampling survey has beenvital. For this purpose, market research andpolling institutes have been involved.

Close and regular co-operation is maintainedwith other providers of statistics: the Bank ofFinland, Bank of Latvia, Bank of Lithuania,National Bank of Russia and Statistics NewZealand (data comparison, joint seminars,etc.).

Besides the International Monetary Fund(IMF), essential collaboration has beenestablished with other European andinternational organisations such as theEuropean Central Bank (ECB) and Eurostat(the Statistical Office of the European Union).

2.5 Users

The BoE is responsible both for disseminatingall related statistics to the public and forinforming international organisations.

The main internal users are the Central BankPolicy Department and the ResearchDepartment. The SSO uses b.o.p. data forthe rest of the world account in the nationalaccount statistics. Other important externalusers are the Estonian Government,government ministries, research institutes anduniversities, credit institutions, internationalrating and auditing agencies, the World Bank,the European Bank for Reconstruction andDevelopment (EBRD), etc.

B.o.p. and i.i.p. data, broken down intostandard components, are supplied tointernational organisations such as the IMFand the European Commission (Eurostat).


Chapter 3.4 Estonia



The BOPD collects most of the data directlyfrom data providers, using mixed (dual) b.o.p.compilation systems, namely surveys andthe ITRS. Data are supplemented withinformation from various sources and withestimates.

The survey system has been the main sourceof information for the compilation of thequarterly b.o.p. and i.i.p. since the ExternalSector Statistics Balance of Payments Divisionwas established in 1992. The BOPD isresponsible for all procedures related to theconduct of surveys, for keeping direct contactwith respondents and for having input dataon an individual company level. The maincornerstones of survey design are thefollowing: to keep surveys close to accountingstandards and as simple as possible so as tofacilitate and ensure a high rate of response.At present, there are ten different surveyforms, which have been specifically designedfor enterprises engaged in various economicactivities and which are sent to 3,000respondents every quarter. Statisticalsampling techniques are not in use becauseof the small size of the economy and the lackof statistical regularity. The enterprise sampleis currently being updated, with the processbased mainly on various other sources ofinformation as mentioned below. The mainobstacle to the use of monthly surveys is ahigh reporting burden and a non-concentrated economy (a large number of“small players”, while the “big players” varyfrom period to period).

The ITRS was introduced in 1994 as a “partlyopen reporting system” with transaction-by-transaction reporting covering banks’settlements according to the debit and creditturnover of nostro, vostro and non-residents’accounts. Transactions made by companiesvia an account abroad are not reported.Given the limits of settlement data (no accrualflows, etc.), the ITRS is used mainly as asupplementary data source for the quarterly

b.o.p. Thanks to the speed of the ITRS datacollection system, settlements are essentialinput for estimating and modelling monthlykey b.o.p. items.

Other main inter-agency data sources, inaddition to the two statistical systemsmentioned above, are the internal databasesmaintained by the Banking Statistics andAnalysis Department and the CentralAccounting Department which provide initialdata relating to external sector statistics onbanking and the monetary authority sector.

Important data sources outside the BoE areas follows:

– the SSO – provides monthly external tradestatistics;

– the Central Business Register – providesmonthly updates on the register of legalentities, their owners and main auditedannual economic indicators;

– the Central Depository for Securities –provides access to the official securitiesregister, which comprises of relevantinformation on portfolio investments;

– other institutions: the State TourismBoard, the Ministry of Finance, the Ministryof Foreign Affairs, the Estonian Authors’Society (EAU), the State PrivatisationAgency; and

– the media: press, internet, etc.

Breakdowns by country and currency are onlyprovided by the ITRS and the bankingstatistics database; the survey system offers apartial country breakdown.


– Monetary authorities: the BoE’s CentralAccounting Department provides theBOPD with data on the official reserveassets as well as the other transactionsand stocks related to the activity of thecentral bank. Data are supplied accordingto the framework jointly developed by the


Chapter 3.4 Estonia

BOPD, the Central AccountingDepartment and the Foreign ExchangeDepartment;

– Banking Sector: the BoE’s Banking Statisticsand Analysis Department supplies theBOPD with data on the credit institutions’external activities through multi-user datawarehouses. Banks report data to thisDepartment for statistical and supervisorypurposes, taking into account the interestin compiling external sector statistics.In addition to reporting, credit institutionsare responsible for ITRS data collectionand reporting to the BOPD on transactionsof banks and clients. Banks are obliged toenable resident clients to declare theirincoming and outgoing internationalpayments.A credit institution is defined as a privatelegal entity that has the right to receivedeposits of money or other repayablefunds from the general public and to grantcredits on its own account. Creditinstitutions can carry out the followingtransactions: accept deposits and otherrepayable funds from the general public,grant loans, conduct credit transactions,

carry out financial leasing, execute paymenttransfers, issue and administer non-cashmeans of payment, guarantee transactions,trade in securities both for their ownaccount and for customers’ accounts, beinvolved in organising securities’ issuesand provide related services as well asadvise customers on economic issues,financial mediation activities, depositorytransactions and other similar transactions.Preparations for adopting the definition ofMonetary Financial Institutions (MFIs) arecurrently in progress.

– General government sector: the variousministries and government departmentssupply information on their externaltransactions and positions. The mostimportant are the Ministry of Finance, theMinistry of Foreign Affairs, the StateMigration Fund, the EAU, the StatePrivatisation Agency, etc.

– Other sectors: besides the ITRS, the type ofsurvey form issued to a company dependson the type of company being surveyed.Currently, nine different survey forms areused:

Name of the survey Target group

BOP 2 Manufacturing or non-financial service companies with foreign ownership

BOP 3 Transportation companies without foreign ownership

BOP 4 Transportation companies with foreign ownership

BOP 5 Investment fund managers acting on behalf of investment funds

BOP 6 Manufacturing or non-financial service companies without foreign ownership

BOP 7 Established new companies with foreign ownership

BOP 8 Investment fund managers acting on behalf of legal entities or private individuals

BOP 9 Insurance companies

BOP 10 Other financial intermediaries (excluding insurance companies and creditinstitutions)

Table 1


Chapter 3.4 Estonia

Accounting principles are taken into accountwhen developing all the surveys used. Themain information provided by the reportingforms are data on foreign assets and liabilitiesas well as income statements related totransactions with non-residents. Surveys arecarried out quarterly and submitted to theBoE within 20 days after the end of thereference period. The rate of response hasbeen high at around 90%.

3.3 Thresholds

With respect to the b.o.p., a general statisticalreporting threshold of EEK 100,000 iscurrently applied to transactions involving alleconomic agents (i.e. exemption threshold).

The information is collected through theturnovers of banks’ nostro and vostroaccounts and non-resistens’ accounts inEstonia. In the case of nostro and vostroaccounts the reporting threshold is adeclaration threshold which means that alltransactions above the threshold must bereported with detail.

The declaration obligation does not cover thedomestic transactions between residents andnon-residents made via non-residents accounts.


The b.o.p. and i.i.p. are compiled on aquarterly basis. Data are disseminated, inaccordance with the advanced releasedcalendar and the guidelines of the SpecialData Dissemination Standard (SDDS) of theIMF, no later than three months after the endof the reference period.

Data are published according to the standardstructure (including instruments) of the b.o.p.and i.i.p., as recommended in the BPM5. Notdoing so would give rise to the problem ofconfidentiality. Quarterly data sets for theb.o.p. have been available since 1992; thosefor the i.i.p. and external debt have beenavailable since 1996.

Geographical breakdowns are available onlyfor trade data and foreign direct investment.Statistics broken down by currency are notpublished.

Since 1999, monthly key b.o.p. items havebeen compiled as a pilot project for internaluse only.

3.5 Data controls

Control procedures are aimed at obtainingthe highest reliability ratio. With theexception of built-in computerised controls(data processing errors, inconsistencies, etc.),systematic quality controls are carried out.Surveys, ITRS items and other informationsources (securities register, business register,other statistics, media) enable complementaryinformation to be derived for cross-checks,logical controls and in-depth analyses to pickout possible inaccuracies and inconsistenciesin reported initial data as well as checks at anaggregated level.

Quality controls at a lower level start withchecks of each individual report (surveys,ITRS items) for completeness and plausibilityas well as checks whether surveys and ITRStransactions correspond. Supplementaryinformation for comparison is received fromthe business register, the securities registerand the media. If necessary, the staff contactsthe reporting agents in order to clarify anydoubtful details. All relevant changes ortransactions are confirmed.

Quality controls at an aggregated levelincludes controls of the general consistencyof the whole b.o.p. and i.i.p. as well asconsistency checks at a macroeconomic level.Particular attention is paid to the monitoringof errors and omissions.

3.6 Revision policy

– Regular revisions: revisions of the provisionalquarterly figures for the current year arepublished together with the provisional data


Chapter 3.4 Estonia

for the following quarter. Revised annual dataare published together with the provisionaldata for the first quarter. In this case datacan be considered final.

– Extraordinary revisions: in some cases, if theneed arises, extraordinary revisions aremade although data have been consideredfinal. Revisions of a more historical naturemay also be made if there is an importantmethodological change to be incorporated.

A revision policy for the monthly key items isnot in place.

3.7 Dissemination

Data are published according to theframework of the IMF’s SDDS.

The data are released simultaneously to allinterested parties by issuing an appropriatepress release, namely “Eesti Pank Newsletter:Estonia’s Balance of Payments” and “EestiPank Newsletter: International InvestmentPosition and External Debt”, which is alsoposted on the bank’s website. Both pressreleases, which contain expanded analyses andtables, are regularly published in the BoE’sMonthly Bulletin. The data template ofForeign Currency Reserves/Foreign CurrencyLiquidity is available on the BoE’s website.

All data, as well as a one-year calendarcontaining the dates on which press releasesare to be issued, are published on the BoE’swebsite (http://www.ee/epbe/). The content andlocation of disseminated external sectorstatistics is as follows:

Balance of Payments http://www.ee/epbe/en/balance.html

– B.o.p. (long and short versions in EEK and USD)

– Newsletters (press releases)

– Analyses (bulletin articles)

– Current account by year

– Current account by quarter

– Foreign direct investment by year

– Foreign direct investment by quarter

– Direct investment flows by country

– Direct investment flows by field of activity

International Investment Position and External Debt http://www.ee/epbe/en/rip.html

– I.i.p. (long and short versions in EEK and USD)

– Newsletters (press releases)

– Gross external debt

– Direct investment stock by country

– Direct investment stocks by field of activity

Data Template on International Reserves/Foreign Currency Liquidity http://www.ee/epbe/fca/index.html.en

Advance Release Calendar http://www.ee/epbe/sdds/cal.html.en

Table 2


Chapter 3.4 Estonia

4 Goods


The main source for data on trade in goodsis customs statistics collected by the customsauthorities, processed by the SSO and passedon to the BoE on a monthly basis. The specialtrade method is used.

4.2 Definition

Data on trade in goods are compliant with BPM5standards. Data are not available on atransactions basis. They are broken down bycommodity (up to ten-digit commodity codes)and by country. The imports are broken downby country of consignment (data by country oforigin are also available but not published).

Exports and imports are valued on an f.o.b.basis. Imports are adjusted to an f.o.b. basis,using an average adjustment factor of currently5% of the c.i.f. value. The information for thisadjustment is derived from questionnairesdrawn up by the BOPD.

4.3 Deviations

There are no deviations from BPM5standards. Detailed information (bycommodity and country) is available fromcustoms’ statistics on goods for processing,repairs and leasing.

4.4 Gaps

None.


None.


The estimation method is used for quarterlyforeign assistance (data on foreign assistanceare available only on an annual basis). Afterthe end of the reporting year, these data areadjusted to obtain the sum total.

The BoE also makes other adjustments tothe foreign trade data issued by the SSO toreflect b.o.p. concepts. Information on thesetransactions is obtained from thequestionnaires sent out to transportationcompanies. Often adjustments are also madefor goods purchased abroad (e.g. fuel,lubricants, etc. for transportation vehicles)and for repairs of capital goods. Informationon these items is also obtained from thetransportation company surveys, and therelevant amounts are added to the SSOimport total. In addition, an estimate is madefor unidentified imports, which are becomingincreasingly less significant. This adjustmentis based on information provided by thecustoms authorities and other sources. Atthe end of 1997, the BoE concluded an in-depth study of foreign trade data in order toestablish any possible under and/or over-declaration of exports and imports. Importsand exports of goods also include foreignassistance and gifts given to and by Estonia inthe form of goods.

5 Services


Coverage of services corresponds to therequirements set out in the BPM5. Datacollection for services is part of the generalreporting system. There are also some

additional sources in the case of travel andgovernment services. For travel services, theregular sample survey of different groups ofvisitors is carried out on a regular basis as ajoint project of the BoE, the SSO, the StateTourism Board and market researchers.


Chapter 3.4 Estonia

5.2 Definition

Definitions and concepts used for servicesare in line with the BPM5.

5.3 Deviations

No major deviations.

5.4 Gaps

None.


It is intended to improve the quality ofstatistical data on business travel expenditure.


Expenses of visitors in the country ofdestination are calculated by a simplifiedmodel using the border crossing statistics andthe sample survey.

6 Income



Compensation of employees compriseswages, salaries and other benefits earned inless than one year by individuals in economiesother than those in which they are resident.Included are border workers who havecentres of economic interest in their owneconomies, irrespective of their length of stay,and earnings of local staff employed by foreigndiplomatic missions. Income is recorded on agross basis, before the deduction of incometax.

The main data sources are enterprise surveys,the ITRS and other administrative statistics.


Income on direct investment is income onequity and income on debt related to directinvestors or affiliated or associatedsubsidiaries. The direct investment creditentry represents income earned from directinvestment enterprises abroad. The directinvestment debit entry represents incomeearned by non-resident direct investors fromtheir Estonian direct investment enterprises.

Separate data are provided for income onequity and income on debt. Income on equityis further divided into “dividends anddistributed branch profit” and “reinvestedearnings and undistributed branch profit”.

A country breakdown is only available in thearea of reinvested earnings on a quarterlybasis. The main source of data on reinvestedearnings is the quarterly enterprise surveyon the direct investment activities performedabroad by residents and in Estonia by non-residents. The offsetting entry for reinvestedearnings is recorded under direct investmentin the financial account.

Income on inter-company loans is recorded asincome on direct investment and is derivedfrom the quarterly enterprise survey on inter-company loans. Until now Estonia has not hadincome on debt securities between affiliates. Ifsuch a need arises, transactions will be recordedas income on direct investment debt and will bereported in the questionnaire. If income iscalculated on an accruals basis, the offsettingentry will appear under direct investment andreinvested earnings in the financial account.


Separate data are provided for income onequity (dividends) and income on debt. In


Chapter 3.4 Estonia

portfolio investment income, dividends areattributed to the period in which they aredeclared payable. Interest income is accruedin the period in which it is earned.

A sectoral breakdown by main economicsector is available by instrument, but not bycountry or by currency.

Coverage of dividends is satisfactory. Themain data source is the enterprise survey andthe supplementary source is the ITRS.Statistics on income for collective investmentinstitution funds are covered by specialquestionnaires.

In the case of bonds and notes, as well asmoney market instruments, income isrecorded on an accruals basis and the dataare available quarterly. Income on discountedsecurities is also recorded on an accrualsbasis. The accrued interest is equal to thedifference between the acquisition price andthe nominal value of the instrument, which isdistributed to the reporting period on a prorata basis.


Income on other investment covers interestreceipts and payments on all other residentassets and liabilities vis-à-vis non-residents. It

includes households’ imputed income fromnet equity in life insurance reserves andpension funds.

Income on loans, deposits and reserve assetsis recorded on an accruals basis. Income ontrade credits is covered by enterprise surveysand the ITRS. The data source for income onreserve assets is an income statement fromthe BoE, which is available on a monthly basis.


None.

6.3 Gaps

Data availability on income on households’foreign assets is poor.


The intention is to create assessmentmethods for households’ income credits.


Up to now there have been no estimationmethods in this field.

7 Current transfers

See Sub-section 8 on the capital account.

8 Capital account


Data collection is part of the generalreporting system (see Sub-section 3.2). Dataare mainly covered by the ITRS. Data onfunds paid out to emigrants leaving Estoniaare also reported by the State Migration Fund.The Ministry of Finance supplies data onpublic sector transfers.

8.2 Definition

In principle, definition of the capital accountis in line with the definitions set out in theBPM5. The distinction between capital andcurrent transfers is made taking into accountthe transaction code and all other details ofpayments. Current transfers directly affectthe level of disposable income and


Chapter 3.4 Estonia

consumption; the capital account coverstransfers of fixed assets or debt forgiveness.


No deviations.

8.4 Gaps

Capital transfers are considered insignificant.Data on capital transfers are covered to theextent reflected in the current reporting system.


None.

9 Direct investment


Direct investment is understood as anyinvestment undertaken by a resident of oneeconomy in a resident enterprise of anothereconomy, with the objective of obtaining orsustaining a lasting interest in the enterpriseand exercising a significant degree of influencein its management. A direct investmentrelationship is deemed to exist between twoenterprises or individuals and enterprises aswell as international organisations andenterprises when one has an equity interestof at least 10% in the other. All transactionsbetween direct investors and enterprises andamong affiliated enterprises are recorded asdirect investment flows. In the case of banksand other financial intermediaries in a directinvestment relationship, only equitytransactions and permanent debt are includedunder direct investment. Reverse equityinvestment is not allowed in Estonia.

A distinction is made between equity capital,reinvested earnings, other capital and financialderivatives. The directional principle has beenimplemented for all transactions involvingdirect investment.

The collection of direct investment data ispart of the general reporting system.Information on direct investment is obtainedfrom the following sources:

– the Estonian Business Register providesdata on the registered owner’s equity

holdings in established companies as wellas changes in registered ownership;

– the Estonian Privatisation Agency suppliesinformation on non-resident participationin the privatisation of state-ownedenterprises;

– the BoE enterprise survey provides dataon direct investment stocks and flows tooperating enterprises;

– the BoE Banking Statistics and AnalysisDepartment supplies statistics on foreigndirect investment by commercial banks;and

– the Central Depository for Securitiesprovides data on transactions and stocksof listed or registered companies.

The sectoral breakdown is geared to theresident economic sector, i.e. the investingsector for outward flows and the receivingsector for inward flows. All direct investmentflows are broken down by the followinginstruments:

– equity capital;– acquisition or disposal of real estate;– reinvested earnings;– trade credit;– short-term and long-term loan capital; and– other capital.

9.2 Definition

Estonia complies with the recommendations fordirect investment items set out in the BPM5.The 10% rule is applied as well as the directional


Chapter 3.4 Estonia

principle. Inter-company loans are includedunder direct investment. Special-purposeentities are not significant in Estonia, and suchtransactions are not treated differently.Reinvested earnings are recorded in both theincome account and the financial account.

Investment transactions are recorded when thetransactions are entered in a transactor’s booksand a change of ownership has taken place. Thedebtor/creditor principle is used to govern thegeographical allocation of investment.


None.

9.4 Gaps

None.


None.


No estimation methods are used in the fieldof direct investment.



The collection of portfolio investment data ispart of the general reporting system.Additional information on listed companies isobtained from the Central Depository.Information on banking sector transactions isobtained from banking statistics data. Dataon portfolio investment transactions arecollected on an aggregated basis. There is nouniversal securities database available at thenational level.

Portfolio investment can be broken down bytype of instrument, into equity securities,bonds and money market instruments. Noadditional breakdowns are available, exceptfor the banking sector.

10.2 Definition

Definitions for portfolio investmenttransactions are in line with the BPM5.Financial derivatives are excluded fromportfolio investment and are treated as anindependent category in the financial account.Transactions under repurchase agreementsand related operations are not included underportfolio investment. Service charges, fees

and commissions are excluded from theunderlying financial instrument and arerecorded as services. The debtor/creditorprinciple is used for portfolio investmenttransactions as the data are mainly obtainedfrom surveys.


In some cases, when the market price is notavailable, the balance sheet value is used forportfolio investment assets. As thetransactions are generally recorded as achange between an opening and closingposition, it is sometimes difficult to eliminatethe valuation changes from banking statisticsdata.

10.4 Gaps

No country breakdown for portfolioinvestment is currently available.


It is intended to make country breakdownsfor portfolio investment available in the near


Chapter 3.4 Estonia

future. Banking sector data are also beingimproved.


No estimations are used in the area ofportfolio investment on a quarterly basis.



The collection of data on financial derivativesis part of the general reporting system.Information on banking sector transactions isobtained from banking statistics data. Ingeneral, data are available on a gross basis. Inthe banking statistics data forwards, futures,swaps and options are identified separately.In the enterprise surveys the data are highlyaggregated and the types of instruments arenot identified. All transactions involvingfinancial derivatives are recorded in thefinancial account. There is no breakdown byinstrument or by country.

11.2 Definitions

Definitions for financial derivativetransactions are in line with the BPM5.Financial derivatives are recorded as aseparate category in the financial account.


Interest payments related to financialderivatives are recorded under income in thecurrent account.

11.4 Gaps

As the data on financial derivatives receivedfrom surveys are in a highly aggregated form,the quality is difficult to assess.


Improving the data on financial derivatives isan important issue. It is planned to makegreater use of the ITRS to identifytransactions involving financial derivatives,especially where the banking sectoris concerned. Furthermore, someimprovements in banking statistics are alreadybeing made, such as indicating the marketvalue of the instruments and implementingthe country breakdown. Changes in surveyforms are also being considered in order toobtain a better quality of data.


None.

12 Other investment


The collection of other investment data is partof the general reporting system. For the bankingsector, the balance sheet data from money andbanking statistics are used. B.o.p. data arederived from changes between banks’ openingand closing balances. Valuation changes are

excluded whenever possible. Trade credits arecollected through enterprise surveys and arerecorded at the time the goods are bought orsold or the service is provided. Advancepayments are recorded as they are made.Transactions involving the household sector arecovered by the ITRS.


Chapter 3.4 Estonia

Breakdowns of other investment are in linewith the BPM5. No additional breakdown isavailable.

12.2 Definition

Definitions of other investment transactionsimplemented by the BoE are in line with theBPM5.


No country breakdown is available at themoment.

12.4 Gaps

Information regarding trade credits of thegovernment sector is currently not available.


It is also intended to make a countrybreakdown available for other investment.


Some estimations, based on exports andimports, are made for the trade credits ofenterprises not covered by the survey system.

13 Reserve assets


Data collection on reserve assets is part ofthe general reporting system. The source ofthe data is the BoE’s Central AccountingDepartment. Reserve assets are calculatedmonthly on a gross basis, taking into accountrealised and unrealised changes in stocks.

13.2 Definition

Definitions of reserve assets are in line withthe BPM5. Under the conditions of theCurrency Board Arrangement, the BoE is theonly institution to hold official internationalreserves in Estonia. Reserve assets refer onlyto highly liquid, marketable and creditworthy

foreign currency-denominated claims(consisting of foreign exchange, deposits andsecurities) on non-residents.


None.

13.4 Gaps

None.


None.



14.1.1 General

Estonian i.i.p. is a statistical statementsummarising the stocks of Estonia’s external

assets and liabilities at the end of eachquarter. Data are compiled according to theIMF guidelines set out in the BPM5. The datainclude the following categories:

– direct investment: equity capital, reinvestedearnings, other capital;


Chapter 3.4 Estonia

– portfolio investment: equity securities,bonds and notes, money marketinstruments;

– financial derivatives;– other investments: trade credits, loans,

foreign exchange and deposits, other items;and

– reserve assets.

Data collection for the i.i.p. is part of thegeneral reporting system, based mostly onsurveys. Real stocks are used for itscompilation. I.i.p. data are published on aquarterly basis. The data are available no laterthan the last working day of the quarterfollowing the end of the reference quarter.Reconciliation exercises between i.i.p. stocksand b.o.p. flows are carried out regularly;adjustments relating to changes in exchangerates, prices and other factors are generallytaken into account. There has been nointention to harmonise historical data on thebasis of a reconciliation of b.o.p. flows andi.i.p. stocks because it is impossible to updatestock data retroactively if flow data arerevised.


The definition of direct investment inEstonia’s b.o.p. corresponds with that of theBPM5. From the beginning of 2000, thebenchmark for direct investment has been10% of total equity capital, instead of 20% aspreviously used. Stock data and transactionsare recorded at market prices and on anaccruals basis. For listed or registeredcompanies, the information obtained fromsurveys is supplemented with data from theCentral Depository for Securities.

Direct investment is broken down into equitycapital, reinvested earnings and other capital.A country breakdown is also available fordirect investment positions.

Stocks are given at market value if listed onthe stock exchange.


The major items of data on stocks of portfolioinvestments are obtained both fromquestionnaires designed especially forenterprises, investment funds and otherfinancial intermediaries and from the CentralDepository for Securities. The BoE’s BankingStatistics and Analysis Department providesinformation on portfolio investment relatedto Estonian commercial banks. For listed orregistered companies and securities, theinformation obtained from surveys issupplemented with data from the CentralDepository for Securities.

The definition of portfolio investment inEstonia’s b.o.p. corresponds with that of theBPM5. Stock data and transactions arerecorded in market prices and on an accrualsbasis. Portfolio investments are broken downinto equity securities, bonds and banknotesand money market instruments. No additionalbreakdown is available at the moment. Themarket value is used if the instrument islisted.


The collection of data on financial derivativesis part of the general reporting system.Information on the banking sector is obtainedfrom banking statistics data. Definitions andconcepts for financial derivatives are in linewith the BPM5. Financial derivatives arerecorded as a separate category in the i.i.p.


The main sources of data are the Ministry ofFinance, the BoE’s Central AccountingDepartment and Banking Statistics andAnalysis Department, and the enterprisesurvey. Data are controlled by theinformation published by enterprises in theirpress releases and annual reports.

The definition of other investment in Estonia’sb.o.p. is in line with that of the BPM5. Other


Chapter 3.4 Estonia

investment is classified as trade credits, loans,currency and deposits and other items.


Data collection on reserve assets is part ofthe general reporting system. The source ofthe data is the BoE’s Central AccountingDepartment. Reserve assets are calculatedmonthly on a gross basis. Foreign currencyassets and gold, included in reserves, arerevalued monthly at the market price validon the last business day of each month.

Definitions for reserve assets are in line withthe BPM5. Under the conditions of theCurrency Board Arrangement, the BoE is theonly institution to hold official internationalreserves in Estonia. Reserve assets only referto highly liquid, marketable and creditworthyforeign currency-denominated claims(consisting of foreign exchange, deposits andsecurities) on non-residents.


None.

14.3 Gaps

None.


None.


Some estimations are made for the tradecredit of enterprises not covered by thesurvey system and also for accounts heldabroad.

15 Contacts

This country information was drafted byEstonia in agreement with the ECB’s Balanceof Payments and External Reserves Division.Enquiries of a general nature should beaddressed to the Press Division of the ECB.Enquiries specific to Estonia should beaddressed to:

Mr. Jaanus KroonHead of Balance of Payments DivisionStatistics DepartmentBank of Estonia

Tel.: +372 6 680 901Fax: +372 6 680 899E-mail: [email protected]


Chapter 3.4 Estonia

Hungary

February 2002

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Monetary Council

Managing Director

Communication Department

Internal Audit Department

Managing Director

PRESIDENT

Board of Directors

Department for Bank Security

Department for Codification and

Legal Approximation

Legal DepartmentHuman Resources Management Department

Managing Director

Deputy President

Managing Director

Department for European

Integration and International Organizations

Monetary Policy Department


Exchange Control Department

Regulations Department

Department for Banking

Supervision

Banking Department

Managing Director

Payment Systems Department

Risk Management Department

Regional Directorates

Department of Issue

Deputy President Deputy PresidentDeputy President

Managing Director

Accounting and Finance

Department

Department of Management

Accounting and Financial Reporting

Department for General Services and Procurement

Information Technology Department

Account Services Department

Economics Department

Money Market & Foreign Exchange

Department

Managing Director

Secretariat

Managing Director Managing Director

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OFF-SHORE ENTERPRISES+EUTRANSFERS+REPORTING

INSTRUCTIONS FOR BANKS

DIRECT INVESTMENT

PORTFOLIO INVESTMENT

SECTION OF DATA COLLECTIONMETHODOLOGY

DIRECT REPORTING ENTERPRISES

COMPANY REGISTERS,DEVELOPMENT OF QUESTIONNAIRES

SECTION OF BANK AND EXCHANGEOFFICE REPORTS AND COMPILATION

BANK REPORTS AND EXCHANGEOFFICE REPORTS

BALANCE SHEETS ANDCOMPILATION

SECTION OF METHODOLOGYAND ANALYSIS

COMPUTER AIDED CHECKS,CONTROLS, VALIDATION

BALANCE OF PAYMENTS DIVISION


Chapter 3.5 Hungary


2.1 Introduction

In Hungary, the central bank is responsiblefor the compilation and official publication ofbalance of payments (b.o.p.) statistics and theinternational investment position (i.i.p.). Datacollection is based on the InternationalTransaction Reporting System (ITRS)combined with statistical surveys. A majorrestructuring of the compilation system tookplace in the mid-1990s in order to meet theinternational methodological standards setout in the 5th edition of the IMF Balance ofPayments Manual (BPM5), the data needs ofeconomic policy formulation, the businesscommunity, academic circles and other users,as well as the reporting requirements set byinternational organisations, such as Eurostat,the International Monetary Fund (IMF) andthe Organisation for Economic Co-operationand Development (OECD). The main stagesof this process were the setting-up of theStatistics Department within Magyar NemzetiBank, the National Bank of Hungary (NBH),as an independent organisational unit in 1994and the launch of a new mainframecomputerised system in 1997, forming thecore of a five-year b.o.p. project designed tointegrate the functions of the statisticalprocess (data collection and processing withb.o.p. compilation and dissemination).

The following sections reflect the status ofthe compilation of b.o.p. and i.i.p. statistics inHungary as at end-October 2001.


The general legal background of b.o.p. and i.i.p.compilation consists of the Act on the NationalBank of Hungary (Act LVIII of 2001), the Acton Foreign Exchange (Act XCV of 1995)(amended in mid-June 2001 by the GovernmentDecree 88/2001 (VI. 15.) on the execution ofthis Act, which resulted in full foreign exchangeliberalisation), the Act on Statistics (Act XLVIof 1993) and related government decrees andorders of the President of the NBH.

The reporting obligations of creditinstitutions, exchange offices and securitycustodians are specified in orders by thePresident of the NBH. The reportingobligation on accounts held at non-residentbanks, on direct corporate loans, on foreigndirect investment (FDI) of residents abroadand on FDI of non-residents in Hungaryis prescribed in the annually revisedGovernment Decree on the NationalStatistical Data Collection Programme.

In the case of non-compliance withcompulsory reporting requirements, legalsanctions are imposed on reporting agents.


The Balance of Payments (BOP) Division ofthe Statistics Department has 29 staff, 19 ofwhom are professionals (holding universitydegrees or high-school diplomas) and 10are support staff (with less advancedqualifications). As a result of computerisation,the ratio of professional to support staff hasimproved in recent years. Seven of the 19professional staff have attended b.o.p. trainingcourses offered by the IMF. Three staffmembers hold doctorates (two of which arein economics and one – in addition to theuniversity degree in economics – is in law)and one staff member takes part in a PhDprogramme in economics. Members of thedivision are regularly invited to give lecturesat different universities on topics such as thenational accounts, the b.o.p. and the i.i.p.

There are three sections within the division(see annexed Chart 3): (i) the Data CollectionMethodology Section; (ii) the Bank andExchange Office Reports and CompilationSection; and (iii) the Methodology andAnalysis Section.

(i) The Data Collection Methodology Sectionreceives and compiles data from directlyreporting enterprises on: (a) their cross-border accounts at non-resident banks and

104 ECB • Ac ce s s i on coun t r i e s ba l ance o f paymen t s s t a t i s t i c a l me thods • F eb rua r y 2002

Chapter 3.5 Hungary

transactions affecting these accounts; (b)direct borrowing and lending; and (c) inwardand outward direct investment.In addition, this section is responsiblefor updating the guide for bank reports,which contains a detailed descriptionof data needs, statistical tables thatbanks are required to report andinstructions for each reportable data entry.The section has eight staff members (sevenprofessionals and one support staff).

(ii) The main activity of the Bank and ExchangeOffice Reports and Compilation Sectioninvolves receiving and processing bankand exchange office reports. This sectionis responsible for the compilation of datafrom different sources within anintegrated statistical framework for thepreparation of monthly b.o.p. and i.i.p.statistics for publication. There are built-in computerised logical and formal testsin both sections’ data processing. Thissection has 14 staff members (sixprofessionals and eight support staff).

(iii) The Methodology and Analysis Section iscomposed of five staff members all withuniversity degrees. It is responsible formethodological issues covering statisticaland analytical (e.g. seasonal adjustment)fields of interest. B.o.p. statistical pressreleases and the related parts of the NBH’sMonthly Report are also drafted by thissection. Statistical time series analysisto check the feasibility of data is appliedon a regular basis and integrated intothe compilation process. The EconomicsDepartment carries out economic analysisand prepares projections for externalaccounts. It is mainly the staff of this sectionthat maintain contacts with the differentusers of BOP Division statistics.

For administrative duties, one staff memberdirectly supports the Head of Division.


The Act on Statistics (XLVI/1993) designatesthe NBH as a body of the official statisticalservice, thereby providing the legal basis forinter-agency co-ordination. The NBH has theoverall responsibility for the compilation andpublication of b.o.p. and i.i.p. statistics. At anoperational level, all the source data arereceived and compiled by the NBH, based onthe reporting of (i) credit institutions, (ii)other financial and non-financial enterprisesand (iii) the Hungarian State Treasury (MÁK).

The NBH has undertaken joint initiatives withthe Hungarian Central Statistical Office(HCSO). In 1999, they launched annual andquarterly surveys on inward and outwarddirect investment and they are also co-operating to establish a new data collectionsystem for international trade in services(paying special attention within this area tothe travel item).

With regard to international relations, theNBH’s Statistics Department is representedat meetings of Eurostat’s Balance of PaymentsWorking Party, and the Committee onMonetary, Financial and Balance of PaymentsStatistics (CMFB), as well as those of theOECD’s Working Party on Financial Statisticsand of the Joint OECD-Eurostat “Trade-in-services statistics” experts. NBH staffparticipate regularly in ad hoc internationalstatistical meetings and seminars, includingthose organised by the IMF and the EuropeanCentral Bank (ECB). Hungary is a subscriberto the IMF’s Special Data DisseminationStandard (SDDS).

Between 1995 and 1998, the BOP Divisionreceived bilateral technical assistance fromthe Finnish, Austrian and Belgian central banksin its main fields of interests concerning thedata collection system and the compilationprocess.


Chapter 3.5 Hungary

2.5 Users

The NBH disseminates b.o.p. and i.i.p.statistics through its website (www.mnb.hu)and updates them on a monthly basis.International investors, government bodies,academic circles and the general public areamong the users of the BOP Division’sstatistics. In addition, this division reports

directly to international organisations suchas Eurostat, the IMF, the OECD, the WorldBank and the Bank for InternationalSettlements (BIS). Other departmentswithin the NBH (e.g. the EconomicsDepartment, the Monetary PolicyDepartment, etc.) use BOP Division data,notably in macroeconomic analysis andmonetary policy formulation.



The primary data sources for Hungary’s b.o.p.statistics are the monthly reports of (i) theNBH, (ii) credit institutions, (iii) enterprises ontheir direct borrowing from/lending to non-residents, (iv) enterprises on their stocks ofoverall assets and liabilities vis-à-vis non-residents held outside the resident bankingsector and on accumulated transactions andother changes affecting these positions,(v) exchange offices on their accumulatedturnover and cash holdings and (vi) the MÁK onthe government sector’s foreign currency-denominated liabilities (vis-à-vis non-residents).

Since 1998, credit institutions have separatelyreported all settlement transactions above asimplification threshold, set at USD 100,000 in1998 and lowered to USD 50,000 in 1999.Below this threshold, credit institutions reportall their own and their clients’ transactionsaffecting their claims and liabilities vis-à-vis non-residents in aggregated form, broken down bycurrency, country and b.o.p. transaction type(under a closed system).

Since 2000, enterprises have been reportingtheir direct borrowing/lending activities forloans of USD 500,000 or more from/to non-residents on a monthly basis; annual reportingis required for loans below this threshold.(Before 2000, each loan transaction andposition had to be reported on a monthly basisregardless of any threshold.) Enterprises alsoreport on a monthly basis their stock of overallassets and liabilities held outside the residentbanking sector vis-à-vis non-residents, as well

as their accumulated transactions and otherchanges affecting these positions.

The NBH, together with the HCSO, launched ajoint set of four questionnaires in 1999, aimedat the statistical monitoring of the corporatesector’s direct investment transactions andpositions. The quarterly questionnaires fortransactions are used mainly to check thesettlement data from the banking sector, toobtain more detailed figures for transactions(geographic and economic activity breakdowns)and to supplement settlement data with non-cash transactions (for the time being, however,contributions in kind are excluded from theb.o.p.). These quarterly questionnaires enablethe NBH to compile a breakdown by countryand economic activity of equity capitalinvestments for the period under review. Theannual questionnaires are designed to obtaininformation on reinvested earnings and stockdata. The first annual FDI survey was completedat the beginning of 2001. The results should becarefully analysed and checked against otheravailable sources (i.e. tax records) and somepending methodological issues should be settledbefore the data are published.

As a supplementary source, reports by securitytraders and the Central Clearing House andDepository (Budapest) Ltd. (KELER) are alsoused for compilation purposes.


(i) The NBH provides data on reserve assets,other claims and liabilities vis-à-vis non-


Chapter 3.5 Hungary

residents and all its own transactionsaffecting its claims and liabilities vis-à-visnon-residents in aggregated form, brokendown by currency, country and b.o.p.transaction type (under a closed system). Inaddition, the NBH’s report coversgovernment transactions with nonresidents, which are channelled through theNBH.

(ii) The other monetary institutions sector iscomposed of commercial banks, specialcredit institutions, co-operative creditinstitutions and building societies. Theysubmit monthly reports on their assets andliabilities vis-à-vis non-residents and on alltheir own and their clients’ transactionsaffecting their claims and liabilities vis-à-visnon-residents in aggregated form, brokendown by currency, country and b.o.p.transaction type (under a closed system).Above a simplification threshold of USD50,000, each transaction is reportedseparately (transaction-by-transactionreporting). All credit institutions conductingforeign exchange transactions or holdingaccounts in HUF for non-residents areobliged to meet the reporting requirements.

(iii) The general government sector comprisesthe central and local governments, extra-budgetary funds and social security funds.The State Holding and PrivatisationCompany (ÁPV Rt.) also belongs to thissector. The sector’s b.o.p. transactionsare reported either indirectly by the NBHor directly by the MÁK for thetransactions managed by institutionsother than the NBH.

(iv) Other sectors include non-financialcorporations (corporations subject to theAct on Corporate Tax, except those withfinancial intermediation as their principaleconomic activity), other financialcorporations (GIRO Ltd., KELER, insurancecorporations and pension funds, and otherfinancial intermediaries and auxiliaries),households and non-profit institutionsserving households. Enterprises holdingaccounts at non-resident banks fill out a

structured b.o.p. and i.i.p. questionnaire,which is used for compilation of the monthlystatistics. They submit the data in aggregatedform, broken down by currency. Below athreshold of HUF 200 million of total annualcurrent account (either credit or debit)transactions, details of current accounttransactions other than total credits anddebits are not reported. For certain financialaccount items, the following supplementarysources are used: reports by enterprisesdirectly borrowing from/lending to non-residents (other investment), reports by FDIcompanies and resident direct investors(direct investment), and reports by securitytraders and KELER (equity capital, equitysecurities, HUF-denominated governmentbonds).

3.3 Thresholds

Since 1998, credit institutions have separatelyreported all settlement transactions above asimplification threshold, set at USD 100,000in 1998 and lowered to USD 50,000 in 1999.Below this threshold, credit institutionsreport all their own and their clients’transactions affecting their claims andliabilities vis-à-vis non-residents in aggregatedform, broken down by currency, country andb.o.p. transaction type.

In 2000, enterprises started reporting theirdirect borrowing/lending activities for loansof USD 500,000 or more from/to non-residents on a monthly basis; annual reportingis required for loans below this threshold.(Before 2000, each loan transaction andposition had to be reported on a monthlybasis, regardless of any threshold.)

Enterprises holding accounts at non-residentbanks submit their reports in an aggregatedb.o.p.-structured form, broken down bycurrency. Below a threshold of HUF 200million of total annual current account (eithercredit or debit) transactions, details ofcurrent account transactions other than totalcredits and debits are not reported.


Chapter 3.5 Hungary


Data category Frequency Timeliness Comments

B.o.p. Monthly 7 weeks Standard BPM5 components, in HUFand EUR; preliminary data on thecurrent account and selectedcomponents of the financial account arepublished no later than 35 days afterthe end of the reference month; dataare available but not published bycurrency; a geographic breakdown isavailable, but not published regularly,except for FDI equity flows; uponrequest, both the currency and countrybreakdowns may be obtained.

I.i.p. Monthly 7 weeks Standard BPM5 components, in HUFand EUR; currency composition isavailable.

International Monthly 1 week Standard BPM5 components and IMFreserves Data Template on International

Reserves and Foreign CurrencyLiquidity; the currency composition isavailable, but is highly confidential andrestricted to authorised persons only.

3.5 Data controls

The b.o.p. project launched in 1997 soughtto improve data management proceduresthrough the development of computerisededit checks to identify coding and othererrors in source data and to minimiseprocessing errors in editing and coding.Formal computerised checks of individualreports are built into the compilation process.

The reporting formats, where feasible,allow for the verification of classification.Internal data processing checks are builtinto the ITRS to minimise classificationerrors. All the consistency requirementswithin one report and between differentreports of a single reporting entity areclearly identified in the instructionsattached to each reporting form. High-value transactions are routinely checkedwith respondents.

If possible, there are formal cross-checksbetween different reports of differentreporting agents. For example: (i) a creditinstitution’s report on a cross-border transferbetween its customer’s domestic and non-resident accounts is checked against thecustomer’s report on its bank account heldoutside the resident banking sector; (ii)monthly reports of security traders, KELERand other custodians are also used for b.o.p.validation purposes: the changes in monthlyclosing-day positions for each security areused to check the credit institutions’ transactionreports, (in the b.o.p., liabilities in equity andHUF denominated government and central banksecurities are computed according to themonthly changes in security holdings); (iii)results of the quarterly FDI enterprise surveysare used to control settlement data from thebanking sector and to obtain a detailedclassification of transactions (e.g. geographicand economic activity breakdowns); (iv) loan


Chapter 3.5 Hungary

transactions reported directly by enterprisesare checked against the relevant transactionsreported by the credit institutions; and (v)foreign currency cash transactions reported byexchange offices are checked against the datareported by banks.

Plausibility checks are also carried out onboth individual reports and aggregate levels.At both these levels, time series analysis is anessential tool for this purpose. Consistencychecks with other statistics are also carriedout at an aggregate level. Should there be anyinconsistency at this level, there is a feedbackto the individual report level and thereporting entity is asked to clarify the reasonfor the inconsistency.

Staff closely monitor the scale of errors andomissions and seek to minimise them bycarrying out cross-checks between current,capital and financial accounts. The behaviourof the b.o.p. statistical time series is routinelyassessed against related series, e.g. financialflow data are validated with thecorresponding stock of external debt data,and reported data on investment income areassessed in relation to the correspondingstock in the i.i.p. statistics. Informationreported in the financial press is used to verifyhigh-value FDI and other transactions.

3.6 Revision policy

Preliminary monthly data are available with alag of 35 days, and final data are disseminated15 days later or within seven weeks of theend of the reference month. For the timebeing, these monthly statistics are generallyconsidered to be the final data.

A regular annual revision of late-reporteddirect borrowing and lending of enterpriseshas been announced. Up to the end of 1999,the statistical treatment of loan transactionsreported late by enterprises depended onwhether the transaction took place in thesame calendar year or even before. In theformer case, the transaction reported latewas recorded in the financial account of the

month of the report. In the latter case, othervolume changes in the i.i.p., but no financialaccount transaction, were recorded for thisitem. At the end of 1999, the time series forthese late-reported transactions according tothe original (or, failing this, the estimated)timing were revised retrospectively, back to1996. From 2000, this correction has becomeregular, revising the flow and stock data atyear-end, retrospectively. This revisionnormally affects only the monthly pattern ofcompanies’ other investment flows andstocks, but sometimes – in cases ofmisclassification due to misreporting – itmight lead to the revision of other b.o.p.items as well. Apart from this revision,monthly statistics published within sevenweeks of the end of reference period mightnormally be considered as final data.

In the event of any ad hoc revisions to finaldata (mainly as a result of changes inmethodology), the changed status is notifiedin the monthly press release, and the actualtime series and the methodological notes areposted on the NBH’s website. The changedstatus is also clearly identified in the followingissue of the Monthly Report of the NBH.

3.7 Dissemination

An advance release calendar giving the preciserelease dates for the next 12 months isdisseminated through the NBH’s website andpublished in the Monthly Report of the NBH.The calendar is updated twice a year, in Juneand December.

Statistics are released simultaneously to allinterested parties via the press releases“Hungary’s preliminary balance of payments”and “Hungary’s final balance of payments” inHungarian and English; detailed tables are postedat the same time on the NBH’s website, and thecomponents prescribed in the SDDS aredisseminated on Hungary’s National SummaryData page on the day of release. Unpublished,non-confidential, sub-aggregated data are madeavailable upon request.


Chapter 3.5 Hungary

Detailed documentation on the concepts,scope, classifications, basis of recording, datasources and deviations from internationallyaccepted standards are disseminated, inHungarian and English, through the NBH’swebsite. Publications such as the IMF’sBalance of Payments Statistics Yearbook andthe HCSO’s Annual Statistical Yearbook also

contain metadata identifying deviations frominternationally accepted standards.

Detailed information on all components of theb.o.p. (current, capital and financial accounts) isavailable on the NBH’s website in time seriesformat and is published in the Monthly Reportof the NBH (English and Hungarian versions).

4 Goods


Goods are at invoice value and are recordedwhen settlement transactions appear in thereporting system of credit institutions orenterprises.

4.2 Definition

There is no adjustment of the invoice value forf.o.b. parity on either the credit or the debitside. In the current account, there is nobreakdown of goods by category. Geographicand currency breakdowns of goods are available.

4.3 Deviations

Financial leasing is recorded according to thelease payments instead of the imputed marketvalue of the given goods. As a consequence,no credit linked to the lease arrangement orincome on such is recorded in the b.o.p.

Goods for processing and repairs on goodsare not included in the goods category inaccordance with the BPM5. Transactions forthese items are recorded on a value-addedbasis under services.

4.4 Gaps

Data derived from the ITRS are based on therecording of transactions at the time ofsettlement instead of at the time of change inownership. In general, transactions in goods thathave no payment counterpart are excluded.However, in the event that any information(not necessarily an actual payment) on a timinginconsistency between change of ownership andsettlement emerges in the reporting system(e.g. from a letter of credit (L/C) or a directenterprise report), a timing adjustment is madeto the figures by, for example, recording a tradecredit as an offsetting item.


The intention is to have b.o.p. statistics compiledon an accruals basis. With regard to goods, thiswould mean incorporating foreign trade data(customs statistics) into b.o.p. statistics. Thetypes of issues to be resolved are mainlytechnical, e.g. the harmonisation of release datesfor customs data and b.o.p. statistics, c.i.f./f.o.b.coefficients by country, commodity group andmode of transport, and incorporation ofrevisions anticipated at the time of first releaseinto the first release of the customs data.


None.


Chapter 3.5 Hungary

5 Services


Services are recorded when the settlementtransactions appear in the reporting system ofcredit institutions or enterprises. In addition,monthly reports by exchange offices are alsoused for the compilation of the travel item.

5.2 Definition

Seven separate sub-items are published underthe services heading:

(i) construction services (including repairand construction services);

(ii) merchanting services (merchanting andother trade-related services, goods forprocessing (at value added));

(iii) transportation services;

(iv) travel (business and personal travel);

(v) business services (insurance services,financial intermediary and auxiliaryservices);

(vi) technical and cultural services(communication services, computer andinformation services, royalties andlicence fees, rental fees, audio-visual andrelated services, miscellaneous business,professional and technical services (legalservices, PR services, translation andinterpretation services, security services,etc.), cultural and recreational services);and

(vii) government services.

Rental fees for real estate paid by legal persontenants are recorded as technical and cultural

services, while such fees paid by naturalperson tenants are recorded as travel.

Rental fees paid by resident tenants to non-resident owners of real estate in Hungaryand the rental fees paid by non-residenttenants to resident owners of real estateabroad are recorded under direct investmentincome.

5.3 Deviations

Goods for processing and repairs on goodsare recorded under services at net value(value added).

5.4 Gaps

Transactions in services that either have nopayment counterpart or are not reportedare excluded.


A joint project has been launched by theNBH and HCSO with the aim of establishinga new data collection system in the field oftrade in services, with special attention totravel, in order to meet the methodologicalstandards of the national accounts and theb.o.p.


The balance of cash transactions affectinghouseholds’ foreign exchange accounts heldat resident banks is used as a proxy to capturecross-border cash transactions withoutbanking intermediation and is thereforeincluded as a credit in the travel item.


Chapter 3.5 Hungary

6 Income


Part of the general reporting system. It isrecorded on a cash rather than an accrualsbasis. As a result, direct investment incomein the form of reinvested earnings is excludedfrom the b.o.p.

Since 1999, in line with the 1997 change inb.o.p. methodology, interest payments relatedto interest rate swaps and currency swapshave been recorded as financial derivatives inthe financial account, instead of as income inthe current account.

A sector, currency and country breakdown isavailable for each type of investment income.Income on international reserves is reportedby the NBH and recorded under theunderlying type of instrument.


Part of the general reporting system. Nospecial source of information is used.


Part of the general reporting system. Nospecial source of information is used. In linewith the BPM5, any participation greater thanor equal to 10% in a corporation’s equitycapital is classified as a direct investment.Contributions in kind and reinvested earningsare excluded from the b.o.p.

Since 1996, direct investment includes notonly equity investment, but also other non-equity capital transactions (such as inter-company loans). There is a single item foreach type of recorded direct investmentincome (i.e. income on equity and income oninter-company loans). Reporting agents useseparate transaction codes for each incomecategory.


Part of the general reporting system. Nospecial source of information is used. Eachrecorded income transaction has a specificcode in the bank reports and a separateheading in the direct company reports.Income on equity, income on bonds and notesand income on money market instrumentsare recorded separately. Since 1999, in linewith the change in b.o.p. methodology,interest payments related to interest rateswaps and currency swaps have beenrecorded as financial derivatives in thefinancial account, instead of as income in thecurrent account. Income actually paid is takeninto account instead of accrued interest.


Income on other investment is captured bythe general reporting system and issupplemented by the direct enterprisereports on direct borrowing from/lending tonon-residents. Each recorded incometransaction has a specific code in the bankreports and a separate heading in the directcompany reports. Income on short-term andlong-term other investment is broken downby type of instrument (e.g. deposits, loans,etc.). Income actually paid is taken intoaccount instead of accrued interest.


Income is recorded on a cash basis. Noaccount is taken of accruals.

6.3 Gaps

Contributions in kind and reinvested earningsare excluded from the b.o.p.


Chapter 3.5 Hungary


The annual questionnaires (see Sub-section3.1, paragraph 4) are designed to obtaininformation on reinvested earnings.

Accrual accounting for portfolio and otherinvestment income is intended to beintroduced from 2002.


None.

7 Current transfers

Data for current transfers are compiled onthe basis of the general reporting systemoutlined in the previous sections. As asupplementary source, MÁK reports cashtransfers received on a monthly basis.

In principle, the definition of current transfersis in line with the BPM5. The use of differenttransaction codes in the bank reports and aseparate line in the direct enterprise reportsenables a distinction to be made betweencurrent and capital transfers.

Transactions without banking mediation andnot directly reported by enterprises areexcluded.

Since a significant amount of transfers arereceived from European Union (EU)institutions, the use of the Eurostat figuresmight be considered as an importantsupplementary source of information forvalidating the split between current andcapital transfers.

8 Capital account


As part of the standard classification of theb.o.p. harmonised with the revised System ofNational Accounts (SNA 93), the capital accountin its recent form has been published since 1996.

Data for capital transfers and non-producednon-financial assets are compiled on the basisof the general reporting system outlined inthe previous sections. As a supplementarysource, MÁK reports cash transfers receivedon a monthly basis.

8.2 Definition

In principle, the definition of capital transfersis in line with the BPM5. The use of differenttransaction codes in the bank reports and aseparate line in the direct enterprise reportsenables a distinction to be made betweencurrent and capital transfers. Net capital

transfers are published separately for thegovernment sector and for other sectors.

The category acquisition/disposal of non-produced non-financial assets emerged as aresult of the split of property income in theBPM4 current account into the use and saleof intangible assets. Transactions related tothe sale of intangible assets are recorded inthe capital account. This item is published innet terms with no sector breakdown.


None.

8.4 Gaps

Transactions without banking mediation andnot directly reported by reporting agents areexcluded.


Chapter 3.5 Hungary


Since a significant amount of transfers arereceived from the EU institutions, the use of

Eurostat figures might be considered asan important supplementary source ofinformation for validating the split betweencurrent and capital transfers.

9 Direct investment


As direct investment is covered by thegeneral reporting system, no special sourceof information is used. Direct investment datamainly reflect cash contributions. Data forinter-company loans are checked andsupplemented by the information from directenterprise reports.

Subordinated loans of credit institutionsreceived from their own direct investor havebeen classified as inter-company loans since1999. Before 1999, this item was recordedunder equity capital.

Breakdowns by sector (according to the debtorprinciple), instrument, country (according to thetransactor principle) and industry are availablefor each component. The last two are based onthe quarterly survey launched in 1999 (see Sub-section 3.1, paragraph 4).

9.2 Definition

In accordance with the BPM5, anyparticipation greater than or equal to 10% ina corporation’s equity capital is classified as adirect investment. Since 1996, directinvestment not only includes equityinvestment, but also other non-equity capitaltransactions, such as inter-company loans.Real estate investments by natural personsare also classified under this heading.

As opposed to other types of investmentrecorded in the financial account, directinvestment is primarily recorded on a directionalbasis, instead of under an asset/liabilityarrangement. Thus, direct investment in

Hungary and direct investment abroad arethe two major sub-groups within the mainheading.

Cross-participation in equity, as such, is notrecorded under direct investment. If anaffiliated company acquires a claim on equityin its direct investor, the transaction isrecorded either under portfolio investment(if less than 10% of the equity capital) or as aseparate direct investment transaction (ifgreater than or equal to 10%). Nevertheless,as far as inter-company loans are concerned,regardless of the direction of the equityinvestment, both the direct investor and thedirect investment company may acquireclaims on each other.


Instead of a fully consolidated system, onlydirect ownership relationships are classifiedas direct investment.

9.4 Gaps

Contributions in kind and reinvested earningsare excluded from the b.o.p.


For the plans and the steps already taken, seeSub-section 3.1 (paragraph 4).


None.


Chapter 3.5 Hungary



Portfolio investment is covered by the generalreporting system and is supplemented bymonthly reports from security traders,KELER and other custodians, which are usedfor b.o.p. validation and compilation purposes.In the b.o.p liabilities in equity and HUF-denominated government and central banksecurities are computed according to themonthly changes in security holdings.However, the changes in monthly closing-daypositions for each security are used to checkthe credit institutions’ security transactionreports. Transactions in financial assetstraded or tradable in organised or otherfinancial markets (e.g. equity and debtsecurities, and financial derivatives) arerecorded under this heading. Portfolioinvestment has been published as a separateitem since 1996.

Except for HUF-denominated governmentsecurities, central bank securities and equitysecurities, data for other categories arecompiled as credit institutions and enterprisesreport them. As for HUF-denominatedgovernment and central bank securities,transaction data are derived from changes instocks at nominal value, net of other volumechanges. Since January 2000, transactions inequity securities recorded in the financialaccount as liabilities have also been derivedfrom changes in stocks – security-by-securityat market prices – net of valuation and othervolume changes.

A debit is recorded on the liability side ofdebt securities for transactions involving apurchase by residents on the secondarymarkets of foreign exchange-denominatedbonds issued by residents abroad.

A transaction is recorded as a change inassets under financial derivatives in thefollowing cases: premiums paid on purchasedoptions (put or call), trading in derivative

positions, transactions related to derivativepositions having a positive net present valueat the time of transaction, and closingderivative positions with net gains.

A transaction is recorded as a change in liabilitiesunder financial derivatives in the following cases:premiums received on written options (put orcall), transactions related to derivative positionshaving a negative net present value at the timeof transaction, and closing derivative positionswith a net loss.

Since 1999, in line with the change in b.o.p.methodology, interest payments related tointerest rate swaps and currency swaps havebeen recorded under financial derivatives inthe financial account , instead of as income inthe current account.

Breakdowns by sector (according to thedebtor principle), instrument, country(according to the transactor principle) andcurrency are available for each data category,except for those where transaction iscalculated from a change in position (HUF-denominated government securities, centralbank securities and equities).

10.2 Definition

The following portfolio investment sub-itemsare published separately according to theasset/liability principle:

(i) equity securities (<10%);

(ii) bonds and notes;

(iii) money market instruments; and

(iv) financial derivatives.

Since 2000, repurchase agreements (repos)have been treated as collateralised loans inaccordance with the BPM5.


Chapter 3.5 Hungary


Financial derivatives are classified under theheading of portfolio investment. Financialderivatives of the NBH are intentionallyclassified under portfolio investment insteadof reserve assets.

10.4 Gaps

Accruals on underlying instruments are notrecorded.


The use of a security-by-security database isplanned. Furthermore, the recording of

accruals on underlying instruments isforeseen, as is an instrument breakdown ofderivatives.


As for HUF-denominated government andcentral bank securities, transaction data arederived from changes in stocks at nominalvalue, net of other volume changes. SinceJanuary 2000, transactions in equity securitiesrecorded in the financial account as liabilitieshave also been derived from changes in stocks– security-by-security at market price – netof valuation and other volume changes.



Financial derivatives are classified underportfolio investment (see Section 10).

11.2 Definitions




11.4 Gaps






12 Other investment


Other investment is covered by the generalreporting system and is supplemented by thedirect enterprise reports on direct borrowingfrom/lending to non-residents. Transactionsin financial instruments not included underdirect investment and portfolio investment,such as syndicated loans, interbank loans andtrade credits, are recorded under this

heading, broken down by original maturity(short-term is classified as up to one yearand long-term as over one year).

As far as assets and liabilities of non-financialenterprises are concerned, since 2000 thefrequency of monthly (stock and flow) report-ing obligations has remained unchanged onlyfor commitments greater than or equal to USD500,000. A report need only be submitted once


Chapter 3.5 Hungary

annually on loans below this threshold, at theend of the year. There has been no change inthe frequency of the reporting obligation forloans guaranteed by the Government, for whicha monthly report is prescribed. Unlike in thepast, since 2000 settlement data checked againstdirect reports and supplemented by non-cashtransactions have been published in thestatistics.

Up to the end of 1999, the statisticaltreatment of loan transactions reported lateby enterprises depended on whether thetransaction took place in the same calendaryear or even before. In the former case, thetransaction reported late was recorded inthe financial account of the month of thereport. In the latter case, other volumechanges in the i.i.p., but no financial accounttransaction, were recorded for this item. Atthe end of 1999, the time series for theselate-reported transactions according to theoriginal (or, failing this, the estimated) timingwere revised retrospectively, back to 1996.Since 2000, this correction has becomeregular, revising the flow and stock data atyear-end, retrospectively.

Transactions affecting cash in foreignexchange, sight deposits and current accountsof banks are derived as changes in stocks, netof valuation and other volume changes. Thesame applies for such transactions by theenterprise sector.

Breakdowns by sector (according to theresident counterparty), instrument, maturity,country and currency are available for each

data category, except for transactions ofnon-financial enterprises channelled outsideof the resident banking sector.

12.2 Definition

In principle, the definitions for other investmenttransactions are in line with the BPM5.

Up to the end of 1999, repos were recordedas transactions in underlying securities underportfolio investment (or change ininternational reserves). Since 2000, reposhave been treated as collateralised loans andrecorded under other investment (or changein international reserves).


None.

12.4 Gaps

Trade credits might not be captured if theyare not reported by reporting agents.


A survey of trade credits is planned.


None.

13 Reserve assets


Gross international reserves are externalassets of the monetary authority that arereadily available for directly financingpayments imbalances, for indirectly regulatingthe magnitude of payments imbalancesthrough intervention in foreign exchangemarkets to affect the HUF exchange rate,

and/or for other purposes. The change ininternational reserves is computed as thechange in the stock of comprisinginstruments, net of valuation and othervolume changes.

Instrument and currency breakdowns ofreserve assets are available, although thelatter breakdown is confidential.


Chapter 3.5 Hungary

13.2 Definition

The definition of international reserves is inline with the BPM5. These reserve assets areunder the effective control of the monetaryauthority. They refer only to:

– highly liquid, marketable and creditworthyforeign currency-denominated claims(consisting of currency, deposits andsecurities) on non-residents; positions vis-à-vis residents and positions in localcurrency are excluded;

– monetary gold;

– special drawing rights (SDRs); and

– the reserve position in the Fund (RPF).

Reserve assets are compiled in accordancewith the gross concept (i.e. no netting withmonetary authorities’ liabilities).


Financial derivatives are intentionallyexcluded from international reserves.

13.4 Gaps

None.


Accounting for accruals on reserve assets isplanned.



14.1.1 General

The i.i.p. is compiled and published on amonthly basis. The full sequence of data onopening positions, transactions, exchange ratechanges, price changes, other volume changesand closing positions is compiled andpublished in HUF in hard copy for all standardcomponents of the BPM5:

(i) international reserves;

(ii) direct investment (equity capital, inter-company loans);

(iii) portfolio investment (equity securities,bonds and notes, money marketinstruments, financial derivatives); and

(iv) other investment, broken down byoriginal maturity.

Assets and liabilities are compiled separately.

Stocks of external assets and liabilities aredisseminated in time series format in HUF andEUR through the NBH’s website. External debtdata are integrated into the i.i.p. framework(total liabilities less liabilities in equity).

Breakdowns by sector (according to theresident counterparty) and currency areavailable for all types of investment. Coverageand concepts are in line with the definitionsused in the financial account.

A maturity breakdown of long-term debtinstruments by sector (according to thedebtor principle), which does not includethe non-guaranteed debt component ofenterprises and other sectors, is compiledand published quarterly.


The stock of resident direct investmentabroad has been published since 1993. Dataare derived from the aggregated flows bycurrency and are aggregated at month-end


Chapter 3.5 Hungary

exchange rates into HUF. Owing to a lack ofinformation, contributions in kind andreinvested earnings are excluded. The stockof assets in the form of inter-company loansis derived from accumulated flows. Since1999, the subordinated loans of creditinstitutions extended to their own affiliateshave been classified as inter-company loans.Before 1999, this item was recorded underequity capital.

The stock of non-resident direct investmentin Hungary has been published since 1990.Since 1998, figures have been computed asaccumulated flows, aggregated in HUF and –until May 2001 – adjusted monthly to therate of crawl. Before 1998, as with assets,data were derived from the aggregated flowsbroken down by currency and convertedat month-end exchange rates into HUF.On account of a lack of information,contributions in kind and reinvested earningsare excluded. Since 1996, the stock ofliabilities in the form of inter-company loanshas been directly reported by enterprises. Ason the asset side, since 1999 subordinatedloans of credit institutions received from theirown direct investor are classified as inter-company loans. Before 1999, this item wasrecorded under equity capital.

An annual survey of inward and outwarddirect investment will provide information onthe stock of equity capital at book value(quoted enterprise equity will be revalued atmarket prices), reinvested earnings and ageographic breakdown (see Sub-section 3.1,paragraph 4).

At present, stock data for inward and outwarddirect investment, broken down into equitycapital and inter-company loans, are compiledon a sectoral basis and published at a monthlyfrequency with a timeliness of seven weeks.


With regard to portfolio assets, the NBHand credit institutions submit reports on their

portfolio transactions and stocks. Concerningthe other sectors, given the lack of reportson stock data, positions are derived fromaccumulated flows. In these reports, thecurrency in which the transaction is reportedis linked to the denomination of thesettlement, rather than to the actualdenomination of the securities. Stockscomputed from flows in euro area legacycurrencies have been recorded in EUR sinceJanuary 1999.

The assets of the NBH and credit institutionsin the form of debt securities are valued athistoric cost. For the other sectors, stocksare recorded as accumulated flows at theactual transaction price.

The NBH and credit institutions have beenreporting stock data for financial derivativepositions at market (replacement) value since1999. By contrast with transactions, there isno information on the derivative positions ofenterprises and other sectors. Derivativepositions are published in aggregated formwith no breakdown.

As regards portfolio liabilities, the NBH andcredit institutions submit reports not only ontransactions, but also on their own and thegovernment sector’s portfolio stocks, exceptfor equity securities.

As for the other sectors, owing to a lack ofreported portfolio equity stock data,positions are derived from accumulated flows,aggregated and recorded in HUF. The figureis revalued on the basis of the change in theindex of the Budapest Stock Exchange (BUX)at the end of each month.

Liabilities of the NBH, credit institutions andthe government sector in the form of debtsecurities are recorded at face value. For theother sectors, stocks are recorded asaccumulated flows at actual transaction price.The outstanding stock of foreign exchange-denominated bonds held by residents issubtracted from the stock issued by residentsabroad.


Chapter 3.5 Hungary

The NBH and credit institutions have beenreporting the stock of financial derivativepositions at market (replacement) value since1999. In contrast to transactions, there isno information on derivative positions ofenterprises and other sectors. Derivativepositions are published in aggregated formwith no breakdown.

Stock data for assets and liabilities underportfolio investment, broken down byinstrument, sector and currency, arecompiled and published at a monthlyfrequency with a timeliness of seven weeks.


Financial derivatives are classified underportfolio investment (see Sub-section 14.1.3).


The stock of claims of residents on non-residents is broken down by original maturity.All sectors, except households, report stockdata for the statistics.

The stock of claims of non-residents onresidents is broken down by original maturity.All sectors, except households, report stockdata for the statistics.

The stock data for assets and liabilities underother investment, broken down by originalmaturity, sector and currency, are compiledand published at a monthly frequency with atimeliness of seven weeks.


In accordance with international standards,reserve assets comprise:

(i) monetary gold;

(ii) liquid foreign exchange assets (cash,current accounts, sight deposits,securities, etc.);

(iii) SDRs; and

(iv) the RPF.

Data are obtained from the NBH’s balancesheet.

Gold is valued at London fixing prices. Since2000, securities have been valued at marketprices, net of accrued interest. Up to 1999,securities were valued at historic cost.

The stock of reserve assets is published on amonthly basis with a one-week lag for thepreliminary data and a seven-week lag forthe final data. Instrument and currencybreakdowns of reserve assets are available,although the latter breakdown is confidential.


Financial derivatives are intentionallyexcluded from international reserves.

14.3 Gaps

Liabilities are valued at nominal value andassets (other than reserves) are at historiccost.


Plans include accounting for accruals onreserve assets and market valuation for allrelevant instruments.


None.


Chapter 3.5 Hungary

15 Contacts

This country information was drafted byHungary and agreed with the ECB’s Balanceof Payments and External Reserves Division.Enquiries of a general nature should beaddressed to the Press Division of the ECB.Enquiries specific to Hungary should beaddressed to:

Mr. Mihály DurucskóAdvisorNational Bank of HungaryStatistics DepartmentSzabadsag ter 8-9H-1850 BudapestHungary

Tel.: +36 1 302 3000/2305Fax: +36 1 269 0762E-mail: [email protected]

Latvia

February 2002


Chapter 3.6 Latvia


Board of Govenors

Chairman of theBoard of Governors

Govenor

Deputy Govenor

Executive Board

Chairman of theExecutive Board

Deputy Chairpersonof the Executive Board

Internal AuditingDepartment

Monetary PolicyDepartment

Public RelationsDepartment

Information SystemsDepartment

Credit InstitutionsSupervision Department

Foreign ExchangeDepartment

Accounting Department

Construction Department

Cashier’s and MoneyOperations Department

Riga Branch

Legal Department

Foreign RelationsDepartment

Security Department

Personnel Department

Daugavpils Branch

Liepaja Branch

Valmiera Branch

Payment SystemsDepartment


Publications Department

General Office

General ServiceDepartment

Study and RecreationCentre

Rezekne Branch-

-

The Bank of Latvia’s Structure


Chapter 3.6 Latvia


Head of the Statistics Department

Deputy Head of the Statistics Department

Banking and Monetary statistics Division

Statistics Analysis DivisionBalance of PaymentsStatistics Division

1. Collects and compilesbanking and monetarystatistics as well asreporting forms forprudential supervision.2. Collects, compiles andsubmits data for publishingin the IMF monthlyInternational FinancialStatistics, the BIS monthlyEconomic Indicators ofEastern Europe and theEurostat informationsystem.3. In collaboration withother departments of theBank of Latvia ensures theavailability of banking andmonetary statistics at theBank’s website, maintainsmethodologicaldescriptions for datacategories at the IMF’swebsite in accordance withSDDS requirements.4. Develops and reviewsreporting forms withrespect to banking andmonetary statistics tofollow methodologicalchanges.

Upon request by themanagement of the Bankof Latvia, performsgraphical analysis of databy using the SAS(Statistical AnalysisSystem).

1. Collects and compiles balanceof payments and internationalinvestment position statistics (as of Q1, 2000).2. Ensures the dissemination ofthe balance of payments andinternational investment positionstatistics through the Bank ofLatvia’s website and publication.Submits data for the IMFBalance of Payments StatisticsYearbook and the Eurostatpublications.3. Maintains methodologicaldescription of Latvia’s balance ofpayments data categories at theIMF’s website in accordancewith SDDS requirements.4. Carries out the methodologicalwork to ensure compliance withinternational standards for thebalance of payments compilation.Reviews and develops thedescription of methodology.Develops and reviews datacollection.

Structure of the Statistics Department of the Bank of Latvia


Chapter 3.6 Latvia


2.1 Introduction

Latvia’s balance of payments (b.o.p.) has beencompiled and published every quarter since1992. In the period from 1992 until 2000,this was done by the Central StatisticalBureau of Latvia (CSB). Starting with the datafor 2000, Latvia’s b.o.p. has since beencompiled and published by Latvijas Banka (theBank of Latvia). Since 2001, the Bank of Latviahas also been publishing the key items of themonthly b.o.p.

The Bank of Latvia, Latvia’s central bank, is apublic law entity established by Parliament(the Saeima, the former Supreme Council)and operates under the Law on the Bank ofLatvia (adopted on 19 May 1992 andsubsequently amended in 1997, 1998 and1999). Pursuant to Article 13 of this Law, theBank of Latvia is independent in the adoptionof its decisions and their practicalimplementation. More detailed informationon the objectives of the Bank of Latvia isavailable on its website at www.bank.lv in thesection “About the Bank of Latvia”.

Under the Law on the Bank of Latvia, theBank:

– implements monetary policy by controllingthe amount of money in circulation withthe aim of maintaining price stability in theState;

– is the sole bearer of the right to issue thenational currency (banknotes and coins);

– sets the official exchange rate of thenational monetary unit against foreigncurrencies;

– collects, registers and compiles financialand b.o.p. statistics, as well as publishesthe compiled statistics;

– organises and ensures the operation of thesettlement and payment systems in Latvia;and

– upon receipt of specific authorisation fromthe Government, is entitled to act as theGovernment’s financial agent in bankingtransactions.


The Law on State Statistics (adopted on6 November 1997) defines the organisationalstructure of state statistics in the Republic ofLatvia and authorises the Bank of Latvia toorganise and carry out the work related tonational statistics in the Republic of Latvia(Articles 4 and 7). In accordance with Article39 of the Law on the Bank of Latvia, the Bankapproves statistical reporting forms and theprocedure for submitting such reports.Article 40 of the Law requires the Bank ofLatvia to collect, register and compile financialand b.o.p. statistics, as well as to publish thecompiled statistics.

Article 61.2 of the Law on Credit Institutions(adopted on 5 October 1995 andsubsequently amended in 1996, 1997 and1998) stipulates that, for the purposes ofmacroeconomic analysis, credit institutionsmust submit to the Bank of Latvia statisticalinformation on payments between residentsand non-residents. Pursuant to the agreementsigned between the Bank of Latvia and theCSB on 10 August 1999, the Bank of Latviahas been responsible for the compilation ofthe b.o.p. since the first quarter of 2000. Toensure compliance with the requirement toreport statistical information, Article 166.6of the Republic of Latvia’s AdministrativeOffences Code (adopted on 7 December1984) prescribes penalties for avoiding toprovide statistical information, failing to doso in due time or reporting inaccurate data.


The Statistics Department of the Bank ofLatvia consists of three divisions: the Bankingand Monetary Statistics Division, the Balanceof Payments Statistics Division and theStatistics Analysis Division (see Chart 2). Theb.o.p. is compiled by the Balance of PaymentsStatistics Division, which:


Chapter 3.6 Latvia

(i) collects and compiles b.o.p. andinternational investment position (i.i.p.)statistics (as of Q1 2000);

(ii) ensures the dissemination of b.o.p. andi.i.p. statistics through the Bank ofLatvia’s website and publications, andsubmits data for the Balance ofPayments Statistics Yearbook of theInternational Monetary Fund (IMF) andEurostat publications;

(iii) maintains methodological descriptionsof Latvia’s b.o.p. data categories on theIMF’s website in accordance with theSpecial Data Dissemination Standard(SDDS) requirements;

(iv) carries out the methodological work toensure compliance with internationalstandards for b.o.p. compilation, andreviews and develops methodologydescriptions; and

(v) develops and reviews data collectiontechniques.

The Balance of Payments Statistics Divisionhas a staff of 23 people, who are involved indeveloping data sources and estimationtechniques, collecting, controlling andprocessing data for the monthly and quarterlystatistics, and compiling and analysing themonthly and quarterly series. The staff of theMonetary Policy Department perform thedata analysis.


For b.o.p. compilation purposes, the Bank ofLatvia co-operates closely with other Latvianauthorities. The Bank of Latvia has anagreement with the CSB on co-operation inthe areas of statistics and statisticalinformation exchange. The official foreigntrade statistics compiled by the CSB havealways been used in the b.o.p., while the CSB

uses b.o.p. and i.i.p. data for the nationalaccounts. The two organisations discussmethodological issues and developments inthe statistical field in joint task force meetings.Close contacts are also maintained with otherinstitutions, such as the ministries of theRepublic of Latvia, the Financial and CapitalMarket Commission (the financial supervisoryauthority), the State Revenue Service and theState Social Security Agency.

The Bank of Latvia also maintains contactswith other central banks in Europe, inparticular those of the Baltic states.

The Bank of Latvia’s b.o.p. experts regularlyparticipate in the working groups organisedby the European Central Bank (ECB) andEurostat addressing b.o.p. statistical issues.Collaboration with the IMF aimed atimproving b.o.p. statistics takes the form ofconsultations and co-operation related to theSDDS. Within the framework of the foreigndirect investment (FDI) statistics project, theBank of Latvia co-operates with Eurostat andthe Organisation for Economic Co-operationand Development (OECD).

2.5 Users

B.o.p. and i.i.p. data are used by the Bank ofLatvia (its Monetary Policy and ForeignExchange Departments) and otherinstitutions. The following are external usersof b.o.p. and i.i.p. data: the CSB, the ministriesof the Republic of Latvia, scientific researchinstitutes (such as the Economics Institute ofthe Latvian Academy of Sciences and theStatistics Institute) and companies. B.o.p. dataare also sent to Eurostat and the IMF. Anyperson wishing to can subscribe to the b.o.p.bulletins.


Chapter 3.6 Latvia



Latvia’s b.o.p. collection system is a mixedsystem, with surveys supplemented by theInternational Transaction Reporting System(ITRS), which has direct reporting elements,and administrative sources.

For the quarterly b.o.p. compilation, surveysare the main source of information for othersectors. There are two main quarterlysurveys: one on foreign investment (coveringdata on direct investment stocks in Latviaand abroad and related income flows brokendown by country, and data on portfolioinvestment and other investment stocks andrelated income flows), and the other ontransportation and intermediary services(covering transportation services rendered/received by mode of transport).

The survey on foreign investment uses asampling method. Enterprises are sorted indescending order by the total amount of theircross-border settlements and are sub-dividedinto three size groups. All enterprises in thefirst (largest) size group are included in thesample. Stratified simple random sampling isapplied to select enterprises from the secondand third size groups. The list of enterprisesfor the survey on transportation andintermediary services is drawn up using theregister of enterprises involved in foreignsettlements maintained by the ITRS.

Data from surveys are supplemented by monthlyinformation from the ITRS, which is the maindata source for the compilation of the monthlyb.o.p. (key items). The ITRS is an open,settlement-based system, supplemented bydirect reporting system elements. Informationon non-bank residents’ debit and creditsettlements with non-residents via domesticbanks is reported to the Bank of Latvia bydomestic banks, unless the amount of thesettlement is below the threshold of LVL 1,000.Information received from domestic banks isreconciled with the information from non-bankresidents, which report directly to the Bank of

Latvia on credit settlements. In 2001, the directreporting element was broadened byintroducing a new reporting form under theITRS, which non-bank residents use to reportdebit and credit settlements via foreign banks.When submitting information, non-bankresidents have to specify the code of theexternal settlement in accordance with the Listof External Payment Codes, as well as thecountry and currency codes. During theconsolidation of data received from domesticbanks and non-bank residents, the statistics onnon-banks’ external payments are compiled.

Information on the monetary authoritiessector and reserve assets is provided by theBank of Latvia. These data are broken downby country and currency. Information on thebanking sector is derived from the bankingstatistics compiled by the Banking andMonetary Statistics Division (see Chart 2),which provides the residency split and thecountry and currency breakdowns for themain items of the balance sheet of creditinstitutions.

The household sector is covered by:aggregated data from the CSB on personsentering and leaving the country; data fromthe State Social Security Agency on thepensions received/paid in accordance withinter-governmental agreements; data from theState Revenue Service on the social tax paidby foreign embassies in Latvia for their localstaff; and the monthly Bank of Latvia surveyon the enterprises rendering intermediationservices related to job contracts for workingabroad. Data on natural persons’ debitsettlements with non-residents via domesticbanks are included in the ITRS.

The Bank of Latvia also uses the datacollected by the Ministry of Foreign Affairs,the Ministry of Finance, the Financial andCapital Market Commission, etc. Foreigntrade statistics and labour statistics (wagesand salaries paid to non-residents) arereceived from the CSB. Information fromnewspapers is also used.


Chapter 3.6 Latvia


Information on the monetary authoritiessector is derived from the Bank of Latvia’sbalance sheet and profit and loss account.Information on the banking sector is derivedfrom banking statistics (the Monthly FinancialPosition Report). Reporting institutions areall credit institutions licensed in the Republicof Latvia. According to the Law on CreditInstitutions, a credit institution is a businessventure that has been established to acceptdeposits and other repayable funds, and togrant loans on its own behalf. A creditinstitution operates as a bank or credit union,or a branch of a foreign bank.

The general government sector includes allstate and local government bodies (includingembassies) and the state social security fund.Information is provided by variousgovernment departments, i.e. the StateTreasury (on the Government’s foreign debt,funds received under technical assistanceprogrammes, contributions to internationalorganisations, etc.), the Ministry of Finance,the Ministry of Foreign Affairs, the StateRevenue Service, the State Social SecurityAgency, etc. Most of the government servicesand transfers are obtained as a by-product ofthe compilation of the government accountsand from official records.

Enterprises return two main reportingforms: the “Quarterly Report on ForeignInvestment” and the “Quarterly Report onTransportation and Intermediary Services”.Enterprises also provide two monthly reportsunder ITRS requirements on incomingpayments received from non-residents viadomestic banks and payments from/to non-residents through their accounts at foreignbanks (see Sub-section 3.1).

3.3 Thresholds

An exemption threshold of LVL 1,000 isapplied only to ITRS data collection.


(i) B.o.p. data:– monthly data are available on the

30th business day following thereporting month;

– quarterly data are available on the lastbusiness day of the quarter followingthe reporting quarter; and

– annual data are available on the lastbusiness day of the quarter followingthe last quarter of the reporting year.

(ii) I.i.p. data:– quarterly data are available on the last

business day of the quarter followingthe reporting quarter; and

– annual data are available on the lastbusiness day of the quarter followingthe last quarter of the reporting year.

(iii) Official reserve assets and reservestemplate data:– monthly data are available one week

after the end of the referencemonth for official reserve assets and15 business days after the end of thereference month for the reservestemplate data. The reserves templateused is the new IMF Data Templateon International Reserves and ForeignCurrency Liquidity.

Quarterly b.o.p. and i.i.p. data are brokendown by sector and instrument in line withthe 5th edition of the IMF Balance ofPayments Manual (BPM5). A quarterly countrybreakdown is available for current accountand FDI data.

3.5 Data controls

Formal data controls are carried out oncedata have been received from reportingagents. Individual reports are checked toverify their completeness, consistency andplausibility. Errors in individual reports aredetected by computer programs and/ormanual checking. This is immediately followedup with a phone conference with the


Chapter 3.6 Latvia

reporting entity or, in the event that theproblems persist, a visit to the entity to assistit in identifying data problems. All relevanttransactions are checked individually forplausibility. The quality of individual data isalso checked by comparing previous andcurrent reports.

Checks at the aggregated level are carriedout for each b.o.p. component. At the firstaggregation level, data are broken down foreach reporting agent, as well as by the typeof report. Significant fluctuations are analysedto identify the underlying reasons and maylead to the uncovering of errors at a lowerlevel of aggregation. Press information is usedto detect possible reporting gaps.

In the context of the national accountstatistics, b.o.p. data are subject to furtherplausibility checks, as the results of b.o.p.statistics should be compatible with otherdata on the general economic situation.

3.6 Revision policy

Monthly data are subject to revision everyquarter when quarterly data are published.Quarterly data are revised when the data forthe following quarter are published, togetherwith the data for the related months.

3.7 Dissemination

A monthly bulletin entitled “Latvia’s Balanceof Payments (Key Items)” is used to publishthe monthly key items. A quarterly bulletinentitled “Latvia’s Balance of Payments” servesto publish quarterly and annual figuresfor Latvia’s b.o.p., i.i.p. and FDI in Latviabroken down by kind of activity andinvesting country. These publications arefirst made available on the Bank of Latvia’swebsite at www.bank.lv/izdevumi/English/index_BalanceofPayments.html. Hard copiesare available on a free subscriptionbasis (by sending a request by e-mail [email protected]).

Official reserve assets and reserves templatedata are first published on the Bank of Latvia’swebsite at www.bank.lv/FinancialData/English/sdds/index.htm.

B.o.p., i.i.p. and international reserves dataare also disseminated on the Bank of Latvia’swebsite at www.bank.lv/FinancialData/English/index_LB.html, in accordance with the IMF’sSDDS. Since 1996, Latvia has been asubscriber to the IMF’s SDDS.

4 Goods


The data source for general merchandise isforeign trade statistics compiled by the CSB.Exports include goods listed in customs cargodeclarations for export and re-export, i.e.exports of goods previously imported fordomestic consumption, and humanitarian andsimilar aid. Imports include goods declaredfor domestic consumption, goods importedfrom customs warehouses, and humanitarianand similar aid. Apart from data from customscargo declarations, foreign trade statistics

include data on exports and imports ofelectricity and natural gas and extraterritorialtrade by shipping vessels compiled by theCSB. Foreign trade statistics also serve as thedata source on goods for processing andrepairs on goods.

The data source for goods procured in portsby carriers is the quarterly survey ontransportation and intermediary services. Thedata source for exports and imports of non-monetary gold is the statistics on non-banks’external payments.


Chapter 3.6 Latvia

4.2 Definition

The definition is in line with the BPM5. Goodscover exports and imports of generalmerchandise, goods for processing, repairson goods, goods procured in ports bycarriers, and non-monetary gold.

Foreign trade data are compiled inaccordance with the Special Trade System.This means that where goods producedabroad are imported to and exported fromcustoms warehouses, such imports andexports are excluded from the total. Somegoods entering and leaving customswarehouses are, however, included instatistics on foreign trade with respect togeneral merchandise. These are goodsproduced in Latvia and exported fromcustoms warehouses. Such goods are statedat their prices upon entering the customswarehouses. For this reason, export datadiffer from foreign trade statistics data. Dataare available on a transactions basis. Importsare available on an f.o.b. basis. A geographicalbreakdown is also available.

4.3 Deviations

None.

4.4 Gaps

None.


None.


In customs cargo declarations, exportedgoods are valued f.o.b., whereas importedgoods have been valued on a c.i.f. basis since2000 (up to 2000, the latter were given onboth an f.o.b. and a c.i.f. basis). To ensurecompliance with international standards,which require that exports and imports bepresented on an f.o.b. basis in the b.o.p., datafor imports of goods have been adjustedevery month by the CSB since January 2000.Adjustments are made using ratios giving theaverage relationship between f.o.b. and c.i.f.values in 1998 and 1999. To ensure thatimports of goods can be broken down bycountry and to obtain correct informationon freight, adjustments are made for eachmode of transport and for each country oforigin of the goods, separately stating residentand non-resident carriers.

Where the price of goods in a customs cargodeclaration is stated in a foreign currency, itis translated into LVL, applying the Bank ofLatvia’s exchange rate on the day that thecustoms cargo declaration was filled out.

5 Services


The data sources for transportation servicesare the quarterly survey on transportationand intermediary services and the statisticson non-banks’ external payments. Foreigntrade statistics are also used to obtain, inaccordance with the calculation methodologydescribed in Sub-section 4.6, the differencebetween c.i.f. and f.o.b. values of importedgoods. The share of transportation is set

apart from the obtained figure and includedunder transportation in the b.o.p.

Data on travel are derived from the CSBaggregated data on persons entering andleaving the country. Travellers are polled atborder control points four times a year toobtain information about non-residents’spending in Latvia and residents’ spending


Chapter 3.6 Latvia

abroad. The average spending of a traveller iscalculated using mathematical methods and,thereafter, total spending of travellers isobtained. The number of travellers is availablefrom the State Border Guard of the Republicof Latvia, which registers all persons enteringand leaving the country.

Data on other services are mainly derivedfrom statistics on non-banks’ externalpayments. In addition, a number of othersources are used: banking statistics;aggregated data on the revenue andexpenditure of the Republic of Latvia’sembassies, representative offices andconsulates, submitted by the Ministry ofForeign Affairs; data on funds received undertechnical assistance programmes from foreigngovernments and international organisations,submitted by the State Treasury and theDirectorate of Foreign Assistance ProgrammeCo-ordination; and data on reinsurancepremiums and claims paid, submitted by theFinancial and Capital Market Commission.Data on expenditure by foreign embassies,representative offices and consulates in Latviaare derived from the State Revenue Service’sinformation on the value added tax repaid toforeign embassies, representative offices andconsulates. Another source is the CSB foreigntrade statistics.

5.2 Definition

The definition is in line with the BPM5.

5.3 Deviations

None.

5.4 Gaps

None.


None.


Data on passenger transportation by air arecomputed from data submitted by Rigainternational airport on the number ofpassengers departing by air, the CSB data onthe monthly number of residents and non-residents crossing the state border by air andinformation on the average prices of airlinetickets.

6 Income



Data sources for compensation of employeesare the monthly survey on job contractsconcluded by natural persons for workingabroad, statistics on non-banks’ externalpayments, labour statistics (wages and salariespaid to non-residents) and data on therevenue and expenditure of the Republic ofLatvia’s embassies, representative offices andconsulates reported by the Ministry ofForeign Affairs.

Estimates are made using data obtained fromthe State Revenue Service on the social taxpaid by foreign embassies in Latvia for theirlocal staff, from foreign embassies on workpermits issued to Latvian residents, and fromaggregated data on persons entering andleaving the country. Information fromnewspapers is also used.


Data sources for income on direct investmentare the quarterly survey on foreigninvestment, statistics on non-banks’ externalpayments and banking statistics. Data sources


Chapter 3.6 Latvia

provide breakdowns by country andinstrument, distinguishing between income ondebt and income on equity. The definitionsset out for income on direct investment arein line with the BPM5.

Reinvested earnings are recorded when theyare reinvested. Non-banks thus provide dataon the retained profit or loss for thereporting quarter, which allows thecalculation of the b.o.p. reinvested earningsitem for each enterprise separately. For thebanking sector, the calculation is made foreach bank separately on a monthly basis usingbanking statistics (the retained profit or lossfor the reporting month is given in theMonthly Financial Position Report) andinformation from the Financial and CapitalMarket Commission on the distribution ofequity capital among shareholders. Inaddition, data on the distribution of theaudited profit for the preceding year is usedwhen estimating dividends. Adjustments toreinvested earnings are made upon receivinginformation on the audited profit and itsdistribution. An offsetting entry for reinvestedearnings is made in the direct investmentaccount.

Data sources provide a split between incomeon inter-company loans and other investmentincome, as well as between income on debtsecurities between affiliates and portfolioinvestment income.


Data sources for portfolio investment incomeare the quarterly survey on foreigninvestment, statistics on non-banks’ externalpayments, banking statistics, the Bank ofLatvia’s profit and loss account and datasubmitted by the State Treasury. Thedefinition is in line with the BPM5 and data

on portfolio investment income are brokendown by instrument, also in accordance withthe BPM5. Data sources provide a splitbetween income on equity, bonds and notes,and money market instruments. Interest ondebt securities is recorded on an accrualsbasis.


Data sources for income on other investmentare the quarterly survey on foreigninvestment, statistics on non-banks’ externalpayments, banking statistics and datasubmitted by the State Treasury. Thedefinition of income on other investment isin line with the BPM5. Data on income ontrade credits are incorporated in reports asincome on other investment. Income isrecorded on an accruals basis. Data onincome on reserve assets are derived fromthe Bank of Latvia’s profit and loss accountand are recorded on an accruals basis.


None.

6.3 Gaps

None.


None.


Estimation methods are used for calculatingreinvested earnings (see Sub-section 6.1.2).


Chapter 3.6 Latvia

7 Current transfers

See Section 8 on the capital account.

8 Capital account


The data source for the capital account isdata on funds received under technicalassistance programmes from foreigngovernments and international organisationsprovided by the State Treasury and theDirectorate of Foreign Assistance ProgrammeCo-ordination. These data are supplementedwith statistics on non-banks’ externalpayments. Information on acquisition/disposalof non-produced non-financial assets isderived from statistics on non-banks’ externalpayments.

8.2 Definition

The definition of the capital account is in linewith the BPM5. The split between currentand capital transfers is provided by theinformation suppliers described in Sub-section

8.1. There are two separate codes for currentand capital transfers in the List of ExternalPayments Codes.


None.

8.4 Gaps

Certain capital transfers, such as migrants’transfers (excluding workers’ remittances),investment grants in kind and debt forgivenessby companies, are not fully covered.


None.

9 Direct investment


Data sources for direct investment are thequarterly survey on foreign investment (forsampling methods, see Sub-section 3.1),banking statistics and statistics on non-banks’external payments. Information on inter-company loans (including short-term loansand trade credits) between affiliates isincluded. Data on direct investment arebroken down by instrument and country.Data sources also provide a breakdown bysector.

9.2 Definition

Definitions are in line with the BPM5. Directinvestment data cover transactions in equity,reinvested earnings (with an offsetting entryunder reinvested earnings for income ondirect investment), other capital (includingshort and long-term loans, debt securitiesbetween affiliates and trade credits) andfinancial derivatives between affiliates. The10% ownership criterion is applied. Thedirectional principle for direct participationsis applied to data on other sectors. Data ontransactions are derived from stock data andrefer to the time of the actual operation. Thegeographical allocation is based on the debtorprinciple. Special-purpose entities are not


Chapter 3.6 Latvia

subject to different treatment, since they arenot significant in Latvia.


Deviations concern the valuation of liabilitieswhere data sources mostly provide bookvalues rather than market values.

9.4 Gaps

None.


Intended harmonisation will involve thereplacement of book values by market valuesfrom the Riga Stock Exchange’s official pricelistings for publicly traded companies (seeSub-section 9.3).


Estimation methods are used for calculatingreinvested earnings (see Sub-section 7.1.2).



Data sources for portfolio investment arethe quarterly survey on foreign investment,banking statistics, statistics on non-banks’external payments, the State Treasury andthe Bank of Latvia’s balance sheet. Data ontransactions are derived from stock data (seeSub-section 10.6 on estimation methods) onan aggregated basis.

The Bank of Latvia also uses data from themonthly survey on securities traded in thesecondary market conducted by the Financialand Capital Market Commission, whichincludes aggregated transaction data andbreakdowns by sector and instrument usingmarket values.

Data on portfolio investment are brokendown by sector and instrument in accordancewith the BPM5.

10.2 Definition

The definitions used for portfolio investmentare in line with the BPM5 (financial derivativesare excluded). Portfolio investment includestradable securities, excluding those used inrepurchase agreements. Service charges, feesand commissions are excluded and recordedas services.


Deviations concern the valuation of liabilitieswhere data sources mostly provide bookvalues rather than market values.

10.4 Gaps

None.


Intended harmonisation will involve thereplacement of book values by market valuesfrom the Riga Stock Exchange’s official pricelistings for publicly traded companies (seeSub-section 10.3).


For the reconciliation with portfolio stocks,exchange rate changes are excluded on thebasis of the data available on foreigncurrencies when transactions are compiledfor the monetary authorities, the generalgovernment and the banking sector.


Chapter 3.6 Latvia



Financial derivatives cover futures, forwards,options and similar instruments, where thecounterparty to the transaction is a non-resident that is not a direct investor or directinvestment enterprise. Financial derivativesare excluded from portfolio investment,however, since this sector is still somewhatunderdeveloped. Most transactions areexecuted on a local basis between residents.

The main data source for financial derivativesis the monthly survey on securities traded inthe secondary market conducted by theFinancial and Capital Market Commission (seeSub-section 10.1). Transactions are recordedon a gross basis. Statistics on non-banks’external payments are also used. The datasource for monetary authorities is the Bankof Latvia’s balance sheet.

11.2 Definitions

All definitions are in line with the BPM5 andtransactions related to income on interest

rate swaps and foreign exchange forwardcontracts are included under this item.


None.

11.4 Gaps

None.


None.


None.

12 Other investment


Data sources for other investment arebanking statistics, the State Treasury, thequarterly survey on foreign investment(including trade credits) and the Bank ofLatvia’s balance sheet. Transaction data arederived from stock data (see Sub-section 12.6on estimation methods). An additional datasource is the statistics on non-banks’ externalpayments, which include debits for thehousehold sector.

Data on other investment are broken downby sector, instrument and maturity inaccordance with the BPM5.

12.2 Definition

Definitions are in line with the BPM5.


None.

12.4 Gaps

None.


None.


Chapter 3.6 Latvia


For the reconciliation with other investmentstocks, exchange rate changes are excludedon the basis of the data available on foreign

currencies, when transactions are compiledfor the monetary authorities, the generalgovernment and the banking sector.

13 Reserve assets


The data source for reserve assets is theBank of Latvia’s balance sheet submitted byits Accounting Department. The ForeignExchange Department provides breakdownsby instrument, maturity, country andcurrency. Data on reserve assets arecompiled on a monthly basis and are brokendown by instrument. Transaction data arederived from stock data. Exchange rate andprice changes are excluded on the basis ofthe data available on foreign currencies whentransactions are compiled.

13.2 Definition

The definition is in line with the BPM5 andreserve assets refer only to highly liquid,marketable and creditworthy foreigncurrency-denominated claims on non-residents, gold, special drawing rights and thereserve position in the IMF. The Bank of

Latvia controls the reserve assets andpositions of the central government and/orthe State Treasury are not included. Reserveassets are compiled in accordance with thegross concept. Reversible gold transactionsare not excluded from loans and deposits. Aseparate category for financial derivatives hasbeen introduced.


None.

13.4 Gaps

None.


None.



14.1.1 General

Latvia’s i.i.p. is compiled and publishedquarterly in the quarter following thereference period. Data are compiled andpublished for: direct investment (Latvia’sdirect investment abroad and directinvestment in Latvia); portfolio investmentassets and liabilities; financial derivative assetsand liabilities; other investment assets andliabilities; and reserve assets. Data on assets

and liabilities are presented separately for allitems.

The data sources for the i.i.p. are the same asthose for the b.o.p.


The coverage and concepts of direct investmentare in line with the definitions used in thefinancial account of the b.o.p. and the datasources are the same as those of b.o.p. data(see Sub-section 9.1). Information on direct


Chapter 3.6 Latvia

investment is collected in the form of real stockdata and refers to book values for liabilities. Areconciliation exercise between i.i.p. stocks andb.o.p. flows is carried out by making otheradjustments.

Data on direct investment are broken down byinstrument. Data on direct investment in Latviabroken down by kind of activity and investingcountry are disseminated quarterly one quarterafter the end of the reference quarter.


The coverage and concepts of portfolioinvestment are in line with the definitions usedin the financial account of the b.o.p. and thedata sources are the same as those of b.o.p.data (see Sub-section 10.1). Information onportfolio investment is collected in the form ofreal stock data and refers to book values forliabilities, with the exception of data onsecurities traded in the secondary market. Areconciliation exercise between i.i.p. stocks andb.o.p. flows is carried out on the basis ofexchange rate changes and other adjustments.

Data on portfolio investment are brokendown by instrument and sector.


The coverage and concepts of financialderivatives are in line with the definitions usedin the financial account of the b.o.p. and thedata sources are the same as those of b.o.p.data (see Sub-section 11.1). The main datasource is the monthly survey on securitiestraded in the secondary market carried out bythe Financial and Capital Market Commission,which provides aggregated data on flows withan instrument and sectoral breakdown usingmarket values. Therefore, financial derivativestocks are accumulated flows.


The coverage and concepts of other investment

are in line with the definitions used in thefinancial account of the b.o.p. and the datasources are the same as those of b.o.p. data(see Sub-section 12.1). Data on otherinvestment are collected in the form of realstocks and are broken down by instrument,sector and maturity.


The coverage and concepts of reserve assetsare in line with the definitions used in the BPM5and with the financial account of the b.o.p. Dataon reserve assets are compiled on a monthlybasis in accordance with the gross concept andthe data sources are the same as those of b.o.p.data (see Sub-section 13.1).

Gold and debt securities denominated inconvertible foreign currencies are valued at theprevailing market prices. Gold is marked tomarket on a daily basis. Debt securitiesdenominated in convertible foreign currenciesare revalued on a monthly basis.

Data on reserve assets are broken down byinstrument and sector in accordance with theBPM5. Data sources also provide breakdownsby currency and country.


See Sub-sections 9.3 and 10.3.

14.3 Gaps

None.




None.


Chapter 3.6 Latvia

15 Contacts

This country information was drafted byLatvia in agreement with the ECB’s Balanceof Payments and External Reserves Division.Enquiries of a general nature should beaddressed to the Press Division of the ECB.Enquiries specific to Latvia should beaddressed to:

Ms Daiga Gaigala-LizbovskaHead of the Balance of Payments StatisticsDivisionStatistics DepartmentBank of LatviaK. Valdema-ra iela- 2aLV-1050 RigaLatvia



Chapter 3.6 Latvia

Lithuania

February 2002


Chapter 3.7 Lithuania


Chairman of the Board Govenor

Deputy Chairman Deputy Chairman Deputy Chairman 10 members

Monetary Policy Credit Institutions Supervison

Accounting Market Operations

International Relations Information Technologies

Cash Settelement Centre

Security General Services

Legal Internal Audit General Organisation and Personnel

Public Relations

Kaunas Branche Kleipeda Branche

BOARD

DEPARTMENTS

AUTONOMOUS DIVISIONS

BRANCHES

The Bank of Lithuania




2.1 Introduction

Since the beginning of 1995, Lietuvos bankas, theBank of Lithuania (BoL), has prepared thenational balance of payments (b.o.p.) statistics,has co-ordinated all work related to thecollection of the information necessary for thecompilation of these statistics and hassystematically monitored this work. Theb.o.p. is compiled according to the basicmethodological requirements and standards ofpresentation and publication of the InternationalMonetary Fund (IMF) and Eurostat. Lithuania’sb.o.p. is compiled quarterly and annually.


The Republic of Lithuania’s Law No. viii-1511Vilnius (23 December 1999) on the amendmentof the Law on Statistics, in particular thechapter entitled “Management of statistics”(Article 6., which deals with the agenciesmanaging official statistics), stipulates thatofficial statistics in the Republic of Lithuaniaare to be managed by the following agencies:

– government ministries;– other state and local self-government

institutions;– agencies; and– the BoL, if this is provided for in the work

programme for official statistics.

Accordingly, responsibility for the compilationof the b.o.p. was transferred to the BoL in1995. The following legislative provisionsform the basis of the BoL’s task in terms ofcompiling the b.o.p. and related statistics:

(i) the Law No. 1-678, (1994) on the Bank ofLithuania, as amended by the Law No. IX-205 (13 March 2001) on the Bank ofLithuania, Article 8 on the “Functionsof the Bank of Lithuania” which statesthat the BoL “shall draw up thebalance of payments of the Republic ofLithuania …”;

(ii) Resolution No. 42/2 (1995) of theGovernment of the Republic of Lithuaniaand the Board of the Bank of Lithuaniaon the Compilation of the Balance ofPayments of the Republic of Lithuania, assupplemented by Resolution No. 445/4(1997), which (a) approved the“Procedure for the submission of thedata necessary for the compilation ofthe b.o.p. of the Republic of Lithuania”and (b) established that the BoL is toprepare the quarterly and annual b.o.p.,co-ordinate all the activities related tothe compilation of the b.o.p. and managethese activities methodologically.It further specifies that the b.o.p. mustbe compiled in line with themethodological requirements of the IMFand the European Union (EU), as well asstandards of submission and publicationof the b.o.p. Moreover, it stipulates thatthe information necessary to compilethe b.o.p. according to the scope,structure and terms agreed upon withthe BoL is to be presented to the BoLby the ministries, other publicinstitutions and economic units listed inthe “Procedure for the submission ofthe data necessary for the Compilationof the b.o.p. of the Republic ofLithuania” and approved by thisResolution. The BoL must resolve allmatters on the preparation,implementation and organisation of newsurveys (reporting forms) necessary tocompile the b.o.p.

(iii) Resolution No. 94 (29 June 2000) of theBoard of the Bank of Lithuania onapproving the forms of statisticalstatements used for compilation of theb.o.p.

(iv) Law on the National Debt (11 November1997): “national debt means the amountof domestic and foreign debt of theRepublic of Lithuania; national currencymeans Lithuanian litas (LTL), thestandard monetary unit of the Republicof Lithuania; foreign currency means thecurrency of any foreign state or the



currency used by two or more foreignstates, including the euro and specialdrawing rights (SDRs)”.

(v) Resolution No. 1200/8 (30 October 1997,)of the Government of the Republic ofLithuania and the Board of the Bank ofLithuania on foreign loans procured onbehalf of the state and guaranteed by theGovernment.

(vi) Procedure No. 1200/8 (30 October 1997)for granting, distributing and repayingforeign loans procured in the name of thestate and guaranteed by the Government.

(vii) Procedure No. 77 (27 May 1999) for theregistration with the Bank of Lithuania offoreign loans received without a guaranteeof the Government by legal persons orenterprises without the status of a legalperson in the Republic of Lithuania and ofloans granted to foreign economic entities:“economic entities must register withthe Bank of Lithuania foreign loansreceived without the guarantee of theGovernment by the Republic ofLithuania or loans granted to foreigneconomic entities within ten businessdays from the day of signing the loanagreement or other debt instruments”.

(viii) Resolution No. 537 (2 June 1997) of theGovernment of the Republic of Lithuaniaon the application of the Special DataDissemination Standard (SDDS) of theInternational Monetary Fund in Lithuania:“… to appoint the Bank of Lithuania asco-ordinator of the application of theSpecial Data Dissemination Standard ofthe International Monetary Fund inLithuania. The BoL shall also beresponsible for the application of thisStandard to the data categories of thebanking sector’s analytical accounts(monetary survey) … balance ofpayments, international investmentposition …”.

The 2001 Law on the Bank of Lithuaniagoverns the compilation of data oninternational reserves. The Law is availableon the BoL’s website (http://www.lbank.lt) inLithuanian.


The compilation of the b.o.p. is theresponsibility of the Balance of PaymentsDivision in the Monetary Policy Department.A small team of nine people is currentlyinvolved in this compilation, dealing with allactivities relating to the b.o.p. process, fromthe methodology, the revision ofquestionnaires to analysis and the drafting ofreports.


Please see Sub-section 3.2.

2.5 Users

Data on the b.o.p. are presented to theGovernment of the Republic of Lithuania, inparticular to the Ministry of the Economyand the Department of Statistics of theGovernment of the Republic of Lithuania(Statistics Lithuania), as well as to theCommittees of the Seimas (Parliament) of theRepublic of Lithuania. The data are alsosubmitted to international organisations suchas the IMF, the World Bank, the Bank forInternational Settlements (BIS), theOrganisation for Economic Co-operation andDevelopment (OECD) and the StatisticalOffice of the European Union (Eurostat).





B.o.p. statistics are compiled on a quarterlybasis using a survey method from various datareporters.

All reports by reporting agents include:

– a record of all credit and debittransactions;

– flow and stock data; and– a country breakdown.

For further details, please see the sub-sections on the individual b.o.p. items.


B.o.p. compilation by the BoL is based on thestatistical data collected from the followingdata sources and reporting agents:

(i) Statistics Lithuania supplies the main setsof data, namely data on foreign trade(on the basis of customs declarations),on transactions of non-bank entitieswith non-residents (services, income,financial transactions, portfolioinvestment and loans, all of which arerecorded on the same questionnaire(F06) by nearly 5,000 respondents),on international transportation,communication and tourism services (onthe basis of specific forms (F08, F10,F11, F12, F13, F14) submitted by 2,000respondents) and on flows and stocksof foreign direct investment (FDI) (onthe basis of specific forms (TUI1)submitted by 3,000 respondents). Thedata on commercial financial relationsinclude transactions by nationaleconomic entities of all ownership forms(excluding the banking sector) with non-residents, direct foreign investment inLithuania and direct investment byeconomic entities in foreign countries,as well as foreign humanitarian aid;

(ii) commercial banks submit statements ontheir own cross-border transactions(F06-02) directly to the BoL;

(iii) the Ministry of Finance submits data onforeign loans on behalf of the state andguaranteed by the Government, on theuse of loans and their servicing costs,on the inflows received from non-residents for privatised entities in theRepublic of Lithuania, on membershipfees paid to international financialorganisations and on consulates’budgetary income;

(iv) the Ministry of Foreign Affairs provides dataon the expenditure of embassies andrepresentative offices of the Republic ofLithuania, on the contributions of thecountry to international non-financialorganisations (entry and membership fees),on technical assistance by foreigncountries and international organisationsand on the value added tax returned toforeign embassies and representativeoffices in Lithuania;

(v) the Ministry of the Economy presents dataon newly established joint companiesand foreign capital companies (theamount of share capital and thestructure of the established company);

(vi) the Border Police Department at theMinistry of the Interior submits data onthe number of people arriving inLithuania and leaving it, broken downby nationality and mode of transportused;

(vii) the Board of the State Social InsuranceFund submits data on pension fundsreceived from and transferred abroadand on social insurance payments madeby foreign diplomatic services residingin Lithuania for their local employees;

(vii) the Central Securities Depository ofLithuania submits data on thedistribution of securities (includingGovernment securities) in the accountsof intermediaries for ascertaining thepublic distribution of securities betweenresidents and non-residents (total, bycountry and by investor group); and



(viii) the Bank of Lithuania provides data onthe official international reserves andon its balance sheet.

3.3 Thresholds

In the case of the b.o.p., no thresholds areused.


The b.o.p. is currently compiled quarterly bythe BoL, with input from Statistics Lithuaniafor the corporate sector and from public andinternational entities. The BoL is responsible,in particular, for collecting data from thebanking sector.

Data on the reserve assets are compiledmonthly both for official foreign reserves andfor the reserves template data. Data on thereserve assets are available within one weekafter the end of the reference month forofficial foreign reserves and within one monthafter the end of the reference month for thereserves template data.

Lithuania’s i.i.p. is compiled on a quarterlybasis and is available 12 to 13 weeks after theend of the reference quarter.

Data are collected and classified accordingto the international standards recommendedby the 5th edition of the IMF Balanceof Payments Manual (BPM5) and theclassification of Eurostat’s Balance ofPayments Vademecum of February 2000. Dataare broken down by economic sector, activityand country.

3.5 Data controls

The BoL carries out checks of individualreports and of the quality of time series. Italso cross-checks with other statisticalsources.

3.6 Revision policy

All quarterly data are changed when theannual b.o.p. is compiled.

3.7 Dissemination

The comprehensive data (the b.o.p. and thei.i.p.) are published, along with shortcomments, in a special quarterly b.o.p. bulletinentitled “Balance of Payments of the Republicof Lithuania” and in the BoL’s “QuarterlyBulletin”. The data are also published on theBoL’s website (http:/lbank.lt/Eng/publications/mb00_.htm) and in the IMF’s electronicbulletin, as well as on the National SummaryData Page which has a hyperlink to the homepage of the IMF’s Data Dissemination BulletinBoard (DSBB).

For the i.i.p., an advance release calendarthat meets the SDDS requirements, givingprecise release dates for at least one quarterahead, appears on the BoL’s website (http://www.lbank.lt in the section “Statistics:Advance Release Calendar”) and on the IMF’sDSBB, which can also be accessed via ahyperlink from the BoL’s website (under thesection entitled “Statistics: Special DataDissemination Standard”). A note to thiseffect is published in each issue of the BoL’s“Monthly Bulletin”. The same publication alsocontains a “rolling” advance release calendar,which provides precise release dates onequarter ahead. The data are releasedsimultaneously to all interested parties byposting them on the BoL’s website at thesame time as the b.o.p. data are posted. Anote informing the public that the data havebeen released on the internet is published ineach issue of the BoL’s “Monthly Bulletin”.

Two weeks later, the i.i.p. data are publishedin the quarterly “Balance of Payments of theRepublic of Lithuania”.

With regard to reserve assets, the BoL’s“Monthly Bulletin” and “Quarterly Bulletin”



have contained end-of-month data for thecurrent year, end-of-quarter data for the twoprevious years and end-of-year data for thefollowing components since December 1992:

gold; holdings of SDRs; the position in theIMF; and foreign exchange (securities,currency and deposits, reverse repos).

4 Goods


The primary data source is the foreign tradestatistics prepared by Statistics Lithuania onthe basis of data collected by the CustomsDepartment on import and exportdeclarations for goods. The CustomsDepartment then presents the customsdeclarations of importers and exporters (SADforms) to Statistics Lithuania.

4.2 Definition

The foreign trade volume is calculated on thebasis of the General Foreign Trade Principlesand the definition of the General TradeSystem and recommended methods by theStatistical Service of the United Nations. Allgoods that enter the country (imports) andall goods that leave the country (exports) areregistered.

The following items are considered imports:

– imports declared for use within thecountry;

– temporary imports for inward processing;– imported goods after processing; and– imports into customs warehouses.

The following items are considered exports:

– goods of Lithuanian origin;– re-exports of goods after processing; and– exports of goods from customs

warehouses.

Merchandise exports and imports arerecorded at the time of customs clearance.

Temporary exports and imports, repairs ofgoods, leasing goods and goods related tohumanitarian aid are also included in theaccounting item. Furthermore, besidescustoms data, trade with electricity andnatural gas is also included in this item. Thedata on goods delivered to transport agenciesat the ports are based on transport companyreports.

Imports are also compiled on an f.o.b. basis.In this respect, the BoL makes someadjustments in terms of freight (about 5% oftotal imports minus energy products).

4.3 Deviations

None.

4.4 Gaps

None.


None.


The BoL makes some adjustments to foreigntrade – part of which can be attributed toshuttle trade in goods and services – usingdata on cash purchases of foreign exchangeand on personal deposits converted intoforeign exchange.



5 Services


Data on the services provided by residentnon-financial enterprises to non-residents andthe services provided by non-residents toLithuanian economic entities are received onthe basis of statistical research carried out byStatistics Lithuania. All categories of servicesare divided up in the questionnaire toStatistics Lithuania (see Sub-section 3.2 (i)),which enables the available data to beaggregated according to the standard groupsof services as defined in the BPM5 and theextended classification of services by Eurostatand the OECD. More than 5,000 enterprisescomplete the said questionnaire.Approximately 75% of the answers to thisquestionnaire are completed.

5.2 Definition

(i) TransportationThis category includes cargo andpassenger transportation services usingall means of transportation, includingseaport and airport services. Data arebased on quarterly statistical reportsfrom Lithuanian enterprises engaged inthe international transportation ofgoods and passengers. Data on thedelivery of cargo by sea, air, road andrail as well as by pipelines are derivedfrom the reports of these enterprises(approximately 460 responses).

(ii) TravelTravel services include all goods andservices acquired by travellers in foreigncountries (a person living in a countryin which he/she is not a resident for lessthan one year is considered a traveller).Services in the area of internationalpassenger transportation – i.e. thetransportation of passengers betweencountries – are not included in the travelitem. Such services belong to thecategory of passenger transportationservices. Data on travel services are

calculated on the basis of the monthlydata on the number of incomingforeigners into and departing residentsfrom Lithuania, as provided by theBorder Police Department, and on theDepartment of Tourism’s selectiveresearch on incoming foreigners andtheir average expenditure and length ofstay.

(iii) Other servicesThe main source of information onincome and expenditure related toother types of services is the quarterlyreport on non-financial enterprises byStatistics Lithuania. In this report, theeconomic entities submit data onreceipts from and expenditure onsuch categories of services andpayments abroad as construction,communications, finance, computers andinformation technology, royalties,insurance, government services, theacquisition of licences, leasing andbusiness leases, other personal, culturaland entertainment services, otherbusiness services and other services.Data on government services arereceived from technical assistanceprojects provided by foreigngovernments and internationalorganisations. The largest amount ofinformation on government services isreceived from the Ministry of ForeignAffairs. Information is based on the dataon the expenditure of Lithuania’sembassies abroad and on salaries paidto Lithuanian employees workingabroad. Data on financial services areobtained from commercial bank reports.Additional information on variousservices is collected from other officialsources.

5.3 Deviations

None.



5.4 Gaps

None.


None.



6 Income


Data on income are obtained from thequarterly reports of non-banking enterprisesand from the reports submitted bycommercial banks, ministries and departmentsas well as the BoL.


Information on compensation of employeesis obtained from reports of non-financialenterprises and the Ministry of Foreign Affairs(data on the expenditure of Lithuania’sembassies abroad).


The main sources of data on investmentincome (expenditure) are as follows:quarterly reports by non-financial enterprisesand banks and information from the Ministryof Finance on interest paid on loans receivedon behalf of the state and guaranteed by theGovernment.

Income from direct investments meansincome calculated on behalf of a directinvestor on the capital invested by him in theform of direct investments. This incomecomprises:

– dividends;– distributed profits of foreign branches;– reinvested earnings; and– income (interest) on debt liabilities.

The total sum of dividends paid (i.e. beforetax) is reflected in the b.o.p. Dividends maybe paid in cash or in shares (capitalisation ofcurrent income). Dividends on liquidation areexcluded, since they reflect the return oninvested capital and not a transfer of income.These dividends are shown as capitalwithdrawals. Where declared dividends havenot been paid, the data presented as directinvestments under other bank assets areincreased by the respective sum.

Reinvested earnings are recorded in full forboth inward and outward investment.Reinvested earnings mean that a directinvestor’s profit (loss) is not distributed inthe form of dividends but is retained by theenterprise concerned. Reinvested earningsare recorded for the period under reviewduring which the respective profit was made(or loss incurred). They are calculated bydeducting the tax due, the dividends payable(if declared) and the remuneration of boardmembers from the profit made during thereporting period.


Income (interest) on portfolio investmentincludes income on preference shares thatgrant the right to receive additional paymentswithin a fixed amount (these payments arenot considered dividends and are treated asinterest). This income also comprises:

– dividends on preference shares that do notgrant the right to the assets of anenterprise in liquidation; and



– interest on other debt securities (bonds,bills, cheques and other similar liabilities).

The accruals principle is applied to incomeon portfolio investment on the basis ofquarterly surveys. An offsetting entry isrecorded in the underlying financial accountitem of portfolio investment.


This item comprises:

– interest on loans;– interest on liabilities for goods and

services.

Interest on loans also comprises interest onloans on behalf of the state, interest on loansguaranteed by the government and otherinvestment expenditure (penalties,forfeitures).

The main sources of data on investmentincome (expenditure) are as follows:

quarterly reports of non-financial enterprises,quarterly reports of banks and theinformation from the Ministry of Finance oninterest paid for loans received on behalf ofthe state and guaranteed by the government.


None.

6.3 Gaps

None.


None.


None.

7 Current transfers

Data are received from various governmentagencies and the banking sector. StatisticsLithuania submits data on charity received(granted). The Ministry of Finance and theMinistry of Foreign Affairs submit data onentry and membership fees paid by thegovernment to international organisations.The largest amount of information includedin the b.o.p. under the current transfers itemis received from the Ministry of ForeignAffairs, namely those on the technical

assistance projects carried out by foreigncountries and international organisations andfunds in Lithuania. The Ministry ofCommunications submits information onremittances to and from foreign countries.Data on pensions transferred from foreigncountries (Russia, Ukraine) are submitted bythe Savings Bank.

Also see Sub-section 8 below.

8 Capital account


This item only includes the value of foreigninvestment projects. Data are received fromthe Ministry of Foreign Affairs.

8.2 Definition





None.

8.4 Gaps

No other items are recorded except thosementioned in Sub-section 8.1. Inter alia, there

is no coverage of migrants’ transfers and theacquisition/disposal of non-produced non-financial assets.


None.

9 Direct investment


The sources are:

(i) Statistics Lithuania’s consolidatedquarterly and annual reporting data onfinancial and commercial activities ofeconomic entities and non-financialcorporations of all types of ownershipwith non-residents (the BoL collectsbanking sector data). Entities which haverelationships (nearly 5,000 respondents)with non-residents must complete aquestionnaire once every quarter. Thisquestionnaire encompasses more than100 items (outward and inwardtransactions – direct investment (equitycapital holdings of more then 10%, debtsecurities, all types of loans, moneymarket instruments, financial derivatives,trade credits, etc.)). Data are brokendown by country and by activity.

(ii) In line with OECD requirements,Statistics Lithuania has devised aquestionnaire on FDI, which is circulatedto more than 2,000 respondents fourtimes a year. This questionnaire coversall components of FDI by direction ofinvestment. It comprises resident directinvestment abroad and non-residentdirect investment in the Lithuania.Capital invested by a direct investmententerprise in its direct investor (reverseinvestment) is regarded as an offsettingitem to capital invested by a directinvestor and by related enterprises inthe direct investment enterprise. Inother words, such capital is considered

“disinvestment” by the direct investor,rather than an asset of the directinvestment enterprise. The data areavailable in full broken down by countryand activity.

(iii) The Ministry of Finance provides datareported monthly, quarterly and annually,broken down by country and activity, onrevenues received from non-residents forprivatised entities in the Republic ofLithuania and on other subsidies and fundsreceived from abroad.

(iv) The Ministry of the Economy providesdata reported quarterly and annually onjoint ventures and enterprisesestablished with foreign capital (i.e. theamount of an enterprise’s authorisedcapital and the share of its capital that isowned by non-residents). For the b.o.p.purposes, the 25% of the percentage offoreign subscribed capital is taken intoaccount at the time of the registrationof joint ventures or enterprisesestablished with foreign capital. In otherwords, those companies which areregistered in current quarter are notincluded in the statistical survey andtheir data are included directly in FDIflows and stocks.

(v) The Central Securities Depository ofLithuania provides data reportedquarterly and annually on how securitiesare distributed among Lithuanianeconomic entities and non-residents (intotal and broken down by country andtype of investor) as reflected in theaccounting of intermediaries in publicsecurities trading.



FDI data in the b.o.p. is broken down bygeographical area (i.e. by country, namelyEU 15, extra-EU 15, euro area, EFTA country,United States, Japan and Canada) and byeconomic activity (using ISIC/NACE codescorresponding to the economic activities usedin the Eurostat/OECD codification foreconomic activity groups).

9.2 Definition

Foreign direct investment is understood, in linewith the methodology of the IMF and themethodological directions of Eurostat, asinvestment creating long-term economicfinancial relations and interests between aforeign direct investor and a directinvestment company. According to therecommendations of the OECD, a holding of10% of the voting rights is recognised as thelowest limit under which a foreign directinvestor is able to participate in themanagement of a direct investment company.Foreign investment holdings of less than 10%of the voting rights are attributed toportfolio investment, instead of to directinvestment. Not only primary capitalinvestment is attributed to foreign directinvestment, but also all later operationsbetween the investor and the directinvestment company. Foreign directinvestments consist of stock capital (sharesvalued at market price), reinvested earnings(the proportion of profit (loss) directlyattributed to a foreign investor that was notdistributed in the form of dividends duringthe period under review and remained in thecompany) and other capital (liabilitiesbetween the foreign direct investor and thedirect investment company in borrowing andlending assets).

Foreign investors are understood to be foreignenterprises (legal persons) other than citizensof Lithuania (natural persons), or personswithout citizenship, permanently residingabroad, whose capital at the time ofinvestment is of foreign origin and who investin the Republic of Lithuania.

Investments are understood as monetary fundsand tangible, intangible and financial assetsappraised in the manner established by lawsand other legal acts, invested with a view toearning profit (income) from the object ofinvestment. Investing means actions byinvestors whereby they acquire the right ofownership or of creditors against theinvestment object, or the right to manageand use this object.

Investors are understood as the Republic ofLithuania and foreign states, internationalorganisations, legal and natural persons ofthe Republic of Lithuania, as well asenterprises without the rights of a legalperson, who, in accordance with theprocedures established by the law of theRepublic of Lithuania, invest their ownborrowed assets in trusts. Strategic investorsare investors with whom the Government ofthe Republic of Lithuania, or an authorityempowered by it, enters into an investmentcontract. Investment objects are understoodas the ownership capital of an economicentity, all types of securities, fixed assets andlong-term intangible assets.

In compliance with both the Law on CommercialBanks of Lithuania and the Companies Act, paid-up but not registered capital does not entail anyawarding of property and non-property rightsto a shareholder, so that the said capital maynot be attributed to direct investment. It istreated like other liabilities and entered underother investment (portfolio investment, otherinvestments). Other bank assets and other liabilitieswith respect to direct investment comprise:

– other debt securities (including preferenceshares that do not award any right to anenterprise’s assets upon its liquidation);

– loans (when a direct investor awards aloan to a subsidiary enterprise, or viceversa);

– overdue loans (if their maturity is notextended);

– liabilities on goods and services, otherfinancial assets and other liabilities to non-residents;



– calculated but unpaid dividends; and– interest on loans (if not paid out).


Private non-business real estate investmentis not included.

9.4 Gaps

None.


None.


Estimates are necessary in order to recordsome of the flows and stocks of stockcompanies which are not fully covered by theusual reporting system of Statistics Lithuania.In particular, if a new stock company isestablished in Lithuania, it is obliged, underthe procedures for the registration of jointventures and foreign capital enterprises, todeposit 25% of its total registered foreigncapital with a Lithuanian bank. Since theseflows are not captured by the usual reportingsystem of Statistics Lithuania, the BoL has toestimate these flows.

The estimation methods applied are asfollows:

(i) The BoL counts final FDI indicators –flows and stocks – on the basis ofcollected data. From Statistics Lithuania,

the BoL receives aggregated reports onFDI, total data on portfolio investmentsand, separately, the same kind of dataon stock companies and commercialbanks. The BoL aggregates all foreigndirect and portfolio investment data onstock companies (except for data oncorporations whose shares are notquoted on the stock exchange) andbanks and calculates the shares of FDIand portfolio investment.

(ii) The BoL uses data on foreign investment(buying and selling) in resident equitycapital from the Central SecuritiesDepository and Lithuanian SecuritiesCommission. Although these data donot distinguish between FDI andportfolio investment and although thecoverage of economic entities is lower,they indicate transactions with non-residents at market prices. From thesedata, the BoL deducts total FDI andportfolio data, which it has obtainedfrom quarterly surveys of stockcompanies and banks (see item (i)above).

(iii) If the final result is larger, i.e. if the sumtotal of FDI and portfolio investment atmarket prices exceeds that taken fromthe statistical surveys, the BoL makesadjustments – expands the survey dataproportionally in the shares of FDI andportfolio investment.

(iv) To the adjusted figure, the BoL addsdata on privatisation and data on newregistered foreign capital (25% of totalregistered foreign capital, as is requiredto deposit under the procedure for theregistration of joint ventures and foreigncapital enterprises) in the respectiveaccounting period (see also Sub-section 9.1 (iv)).



Primary sources of portfolio investment stockdata are the quarterly reports of enterprisesand commercial banks, as well as data from

the Central Securities Depository on thedistribution of securities (includingGovernment securities). These data areobtained from the accounts of intermediarieson transactions in securities between



residents and non-residents. Portfolioinvestment stocks are broken down furtherby instrument, sector and maturity.

Investments in securities are reflected in thespecial monthly reports of intermediaries,which are requested under the GeneralRegulations on Accounting for Investments inSecurities in Credit Institutions (ResolutionNo. 253 of the Board of the Bank of Lithuaniaof 20 November 1997).

10.2 Definition

Portfolio investment is understood as foreigninvestment involving less than 10% of the votingrights and no extensive powers in corporatemanagement decisions. Portfolio investmentcomprises acquired debt securities (sharesconfirming the participation of holders thereofin the capital and awarding less than 10% of thevoting rights) as well as market and investmentsecurities (bonds, bills, promissory notes,certificates of deposits, etc.) that confirm theissuer’s debt and that will be repurchased withina certain time-frame.

In compliance with the b.o.p. compilationmethodology, the remaining proportion ofequity (including reserves) that awardsproperty rights to a shareholder is excludedfrom portfolio investment.


None.

10.4 Gaps

None.


None.


None.



Banks account for financial derivatives in off-balance sheet items: amounts receivable areshown as off-balance-sheet claims, whereasamounts payable are shown as off-balance-sheet liabilities. Financial derivatives areaccounted for when they are created or sold,or when other actions provided thereunderare effected. Purchase (sale) transactions areaccounted for at the market value.

11.2 Definitions

Included are foreign exchange purchases(sales), interest rate, precious metals andliability-related financial derivativestransactions (forwards, swaps, futures andoptions).


None.

11.4 Gaps

None.


None.


None.



12 Other investment


The data sources are as follows:

(i) the banking sector: specific quarterlyquestionnaire in accordance with b.o.p.requirements (real flows and stocks);and

(ii) trade credits: quarterly surveys of non-financial enterprises and banks (25 daysafter the reference period).

Breakdowns are available by sector,instrument and maturity.

12.2 Definition

Other investment is classified by the type offinancial instrument: deposits and cash, loans,debts for goods and services and otherfinancial assets and liabilities that are notattributed to direct investment and portfolioinvestment.

Other investment of the banking sector isunderstood as all remaining financialoperations, other than those included indirect investment and portfolio investment.They comprise liabilities for goods andservices, loans, cash and deposits, as well asother assets and liabilities. Liabilities forgoods and services are understood as financialclaims and liabilities arising when goods andservice flows differ from the time of actualsettlement.

Loans cover all loans granted by banks tonon-residents as well as loans received fromnon-residents (excluding loans raised onbehalf of the state and guaranteed by theGovernment). Loans also include leases, reposand overdrafts. In the case a lease, the lesseecovers expenditure incidental to theacquisition of goods. Other investmentreflects the payment of the principal, whereasincome and expenses are treated as interestpayable or receivable on the lease. In

accordance with their economic intent, reposare attributed to collateralised loans, in whichcase the seller of securities grants the buyera certain sum of money which is guaranteedby securities for the period of validity of theagreement, and subsequently, uponrepurchase of the securities, receives intereston the fixed price. As a rule, ownership ofthe securities does not change and the sellerdoes not have the right to sell them.

Cash and deposits comprise cash in foreigncurrency and travellers’ cheques in banks(shown only in the financial assets part ofcommercial banks’ monthly statements),demand deposits and correspondent accountbalances with foreign banks. Time depositsare attributed to loans for the purposes ofthe b.o.p.

Other assets and other liabilities coveroperations not included in theaforementioned items. Other assets includenon-resident loans that have not been repaidor extended, as well as outstanding dividendsand interest, whereas other liabilitiescomprise outstanding loans to non-residents,outstanding dividends, etc. In line with boththe Law on Commercial Banks of Lithuaniaand the Companies Act, paid-up but notregistered capital of banks may not awardproperty or non-property rights to ashareholder; therefore, this capital isattributed to other investment and is enteredunder other liabilities in commercial banks’monthly statements. This item includes creditor debit liability (i.e., miscellaneous payable andreceivable accounts).


None.

12.4 Gaps

None.




None.


None.

13 Reserve assets


The data source is the BoL’s AccountingDepartment. IMF data is used to compile thereserve position in the IMF.

13.2 Definition

Reserve assets are external assets that arereadily available to and controlled bymonetary authorities for the direct financingof payment imbalances, for indirectlyregulating the magnitude of such imbalancesthrough intervention in exchange markets toaffect the exchange rate and/or for otherpurposes.

Reserve assets refer to liquid, marketable andcreditworthy foreign currency-denominatedclaims (consisting of foreign exchange anddeposits, securities and reverse repos) onnon-residents plus monetary gold, holdingsof SDRs and the reserve position in the IMF.

The reserve assets are under the effectivecontrol of the monetary authority.

Positions vis-à-vis residents and positions innon-convertible and local currencies vis-à-visnon-residents are excluded.

Reserve assets are compiled in accordancewith the gross concept, without any nettingwith monetary authorities’ liabilities.

Reserve assets include interest accruals onsecurities.

The BoL does not perform reversibletransactions with gold, but such transactionswould be treated as collateralised loans.

At present, there are no financial derivativespositions to be included in the reserve assetsitem.


There are no deviations from the BPM5 inreserve assets.

13.4 Gaps

At present, there are no transactions thatcannot be covered by the reporting system.


At present there are no plans for improvingthe data regarding reserve asset transactions.



14.1.1 General

Lithuania’s i.i.p. is compiled on a quarterlybasis and becomes available 12 to 13 weeksafter the end of the reference quarter. The

data on the i.i.p. are disseminated inLithuanian litas (LTL) and US dollars (USD)for each of the standard componentsaccording to the BPM5. The i.i.p. is compiledon the basis of real stock data.

The i.i.p. is compiled separately for assetsand liabilities. The foreign assets component



includes direct investment abroad, portfolioinvestment, other investment and reserveassets. The foreign liabilities componentincludes direct investment in Lithuania,portfolio investment and other investment.Portfolio investment is broken down furtherby instrument, namely into equity securitiesand debt securities, and other investment issubdivided into trade credits, loans, foreignexchange and deposits, other assets andliabilities.

The data on the assets and liabilities positionsare broken down further by sector (BoL,commercial banks, non-financial enterprisesand government) and show the position as atthe end of the reference period. Themethodology used to compile the i.i.p. data isbased on the BPM5. A country breakdown isalso available.

Scope of the data(i) Institutional coverage:

– banks: all banks are included;– non-banks: information on the

financial and commercial relations ofall national economic entities,irrespective of the form ofownership, with non-residents.Currently, data are collected fromaround 6,000 enterprises.

(ii) Geographical coverage:no geographical regions are excludedfrom recording.

Accounting conventions(i) Conversion to unit of account:

data are reported in LTL, in accordancewith the Accountancy Act.

(ii) Valuation:transactions are generally recorded atmarket prices.

Compilation practices(i) Verification and other practices:

all i.i.p. components are analysed bothfor internal consistency and forconsistency over time. In addition, data

are reconciled with those obtainedthrough other sources and statisticalframeworks.

(ii) Adjustments to improve coverage/classification/timing/valuation:No adjustments are made to the valuesthe BoL obtains from commercial banks,enterprises and Statistics Lithuania.


Direct investment data are derived fromquarterly reports from enterprises andcommercial banks. For further details on datacollection, see Sub-section 9.1.

In principle, the basis for valuation is themarket price, but a market price is often notavailable for enterprises whose shares arenot quoted on the stock exchange. Inpractice, the book value is used to determinethe proportion of the value of the directinvestment stock.

Lithuania uses the directional principle for thecalculation of FDI, which is in line with theBPM5. All transactions by the direct investorwith the direct investment enterprise are FDIabroad and all transactions by the directinvestment enterprise with the direct investorare FDI in the reporting economy. Capitalinvested by the direct investment enterprisein its direct investor (reverse investment) isregarded as an offsetting item to capitalinvested in the direct investment enterprisesby a direct investor and its relatedenterprises. In other words, such capital isregarded as disinvestment by the directinvestors, rather than as an asset of the directinvestment enterprise.

Direct investment is broken down by countryand activity.

The BoL carries out adjustments for changesin exchange rates, as well as otheradjustments.




The primary sources of portfolio investmentstock data are the quarterly reports ofenterprises and commercial banks as well asthe data of the Central Securities Depositoryof Lithuania on the distribution of securities(including Government securities). These dataare obtained from the accounts ofintermediaries on transactions in securitiesbetween residents and non-residents.Portfolio investment stocks are broken downfurther by instrument, sector and maturity.

For further details, please see Sub-sections10.1 to 10.6.


Stocks for financial derivatives (assets andliabilities) are compiled separately.


The primary sources of data are the quarterlyreports from enterprises and commercialbanks, as well as data from the BoL and theMinistry of Finance.


The primary source of data is the BoL’saccounts. The data are compiled monthly forboth official foreign reserves and for thereserves template. Data on the reserve assetsbecome available within a week after the endof the reference month with respect to theofficial foreign reserves and within a monthafter the end of the reference month withrespect to the reserves template.

The gross official reserves data are fullyreconciled with the b.o.p. data; both sets ofdata are published in the “Quarterly Bulletin”.Historical data on gross official reserves andmajor reserve-related liabilities of the BoLcan be found on the bank’s website (http://www.lbank.lt).

Data on the total gross official foreignreserves are disseminated in USD millions.The data cover the reserves of the centralbank and the position in the IMF, and arebased on the accounting records of the BoL.The data are published with the followingbreakdown by instrument and currency:

– gold;– convertible foreign currency (securities,

currency and deposits and reverse repos);– holdings of SDRs; and– the position in the IMF.

International reserves are measured fromstocks of claims on non-residents.

International reserves are valued at currentmarket prices. Data on deposits with foreignbanks do not include interest accrued butnot yet credited to the BoL’s accounts.

Monetary gold holdings are revalued once ayear on the last working day, at the lowestvalue of the London gold fixing during a year,if this value is lower than the book value.Most recently, the gold holdings wererevalued at USD 252.8 per fine ounce at theend of 1999. Holdings of foreign exchange(cash) are revalued on a daily basis. Coupon-bearing securities are revalued once a monthon the last working day and discountsecurities are revalued once a year on thelast working day using the bid prices prevailingon the secondary markets. The value ofsecurities on the reference date includesaccrued interest.

Data are converted into LTL or USDequivalents on the basis of the officialexchange rates announced by the BoL.

Since the end of April 2000, Lithuania hasdisseminated data on the internationalreserves and reserve-related liabilities in theData Template on International Reserves andForeign Currency Liquidity (IMF DataTemplate). The IMF’s Operational Guidelinesprovide the metadata for both the officialreserve assets and the complete reservestemplate. For the template, stocks of major



reserve-related liabilities of the BoL arepublished, including banks’ required reservesin foreign currency, central governmentdeposits in foreign currency, IMF loans to theBoL and repos.

Reserve assets data comprise the officialreserves of the BoL and government claimson the IMF. Template data also cover theactivities of the central government, excludingsocial security funds. Foreign assets in non-convertible currencies, as well as all otherassets that do not meet the definition ofreserve assets, are excluded. At present,there are no financial derivatives positions tobe included in the reserve assets.


None.

14.3 Gaps

In direct investment, private non-business realestate investment is not included.


None.


None.

15 Contacts

This country information was drafted byLithuania in agreement with the ECB’s Balanceof Payments and External Reserves Division.Enquiries of a general nature should beaddressed to the Press Division of the ECB.Enquiries specific to Lithuania should beaddressed to:

Mr. Alfredas JancaitisDeputy Head of the Balance of PaymentsDivisionMonetary Policy DepartmentLietuvos Bankas6 Gedimino Ave.2001 VilniusLithuania

Tel.: +370 2 68 04 12Fax: +370 2 68 04 26E-mail: [email protected]



Malta

February 2002

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NATIONAL STATISTICS OFFICE

Malta Statistics

Authority Board

Legal International/

Communications Officers

Population

Education and

Culture

Labour Market

Living Conditions

Social

Statistics Division

Business Structures

Enterprise

Statistics

Agriculture and

Fisheries

Tourism

Transport

Business Statistics

Division

National Accounts

Government and

Financial Insitutions

Balance of International

Payments

International Trade

Consumer Prices

and PPP

Environment, Energy

and Regional

Economic Statistics

Division

Management

Services

Research and

Methodology

Library and

Information Unit

Information

Systems

Corporate Services

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Director General

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ECONOMICS DIVISION

DEPUTY GENERAL MANAGER

Mr Alfred Demarco

Economic Research DepartmentSenior Manager

Mr Anton Caruana Galizia

Library & External Relations Dept.

External Relations Office

Manager

Mr Alex Borg

Library

Manager

Mr Gaetano Mallia

Economic Analysis Office

Manager

Mr John Caruana

Statistics Office

Manager

Mr Jesmond Pule'

Balance of Payments Office

Manager

Mr Edmund Calleja

Research Office

Manager

Mr Alexander Demarco

Capital Flows Section

Mr Francis Caruana

(Assistant Executive)

Data Compilation Section

Mr Gerard Grant

(Executive)

External Debt Section

Mr Saviour Buttigieg

Deputy Manager

Central Bank of Malta


Chapter 3.8 Malta


2.1 Introduction

The preparation and presentation of thebalance of payments (b.o.p.) statement ofMalta has been the responsibility of theNational Statistical Office (NSO) since 1954,the year that such data started to bepublished by the statistical authorities inMalta. Since 1993, the compilation processhas been enhanced by the participation of theCentral Bank of Malta (CBM). The CBM,through its Balance of Payments DataCompilation Section, co-operates activelywith the NSO in the collection, vetting andcompilation of b.o.p. data throughout theyear. The b.o.p. statement is compiled on atransaction basis. Both the current and thecapital and financial accounts are publishedquarterly and annually.

The CBM has an additional role in the b.o.p.compilation process. It collects data on cash-based transactions between residents andnon-residents, as recorded by local banks, ona monthly basis. It also collects and compilesdata on the external financial assets andliabilities of the various sectors of the Malteseeconomy.

The CBM and NSO have shared competencyin the compilation of the internationalinvestment position (i.i.p.). In 1999, the CBMand NSO undertook to align b.o.p. andrelated data with international standards. ByMarch 2000, data covering the years 1995 to1999 were revised and reclassified inaccordance with the 5th edition of the IMFBalance of Payments Manual (BPM5).

At present, the NSO together with the CBMare developing a framework for a futuredirect reporting data collection system (DR),which will be based on statistical surveys.The system will be used for compiling bothmonthly and quarterly b.o.p. and i.i.p.statistics.


The Malta Statistics Authority Act (Act XXIVof 2000) provides for the establishment of anAuthority to regulate functions regardingresources relating to the collection,compilation and publication of officialstatistics. The legislation also regulates theNSO and establishes its functions, whichinclude the collection, compilation, extractionand release of official statistics. The DirectorGeneral who heads the NSO is also an exofficio member of the Board of the Authority.He carries out the day-to-day operations ofthe office within the Authority in accordancewith the general lines of policy established bythe Authority (Section 9).

One of the main functions of the Authority isto regulate and generally supervise theproduction of official statistics in accordancewith international requirements and standards(Section 7 (b)).

The First Schedule to the Act covers matters,including the b.o.p., in respect of whichstatistics may be collected, prepared andpublished. Section 43 of the Act outlines theadministrative penalties. A person is liable topay a penalty of MTL 50 (EUR 127)1 for everymonth that elapses from the end of thedeadline for the provision of requestedinformation (Section 43-1 (a)). A person isliable to pay a penalty of MTL 100 (EUR 254)1

if that person fails or refuses to provideinformation requested by the DirectorGeneral (Section 43-1 (b)).

The CBM will be empowered to collectstatistical information under the proposeddraft amendments to the Central Bank ofMalta Act 1994 (Section 24 (a)). In fact, “anyperson who holds external assets andliabilities or carries out cross-bordertransactions which the Bank determines arerelevant to compile b.o.p. statistics or to

1 Opening middle EUR/MTL exchange rate on 31 May 2001:MTL 2.5369.


Chapter 3.8 Malta

establish the balance of the stock of externalfinancial assets and liabilities for Malta,otherwise referred to as the “InternationalInvestment Position”, may be required tosubmit such information”. The CBM may,through the adoption of appropriatedirectives, provide for administrativepenalties.


The BOP Section of the NSO is responsiblefor the collection, checking and processing ofdata. A similar section at the CBM providessupport in this task. There are nine staffmembers working in these units, four at theNSO and five at the CBM.

An analysis of the quarterly b.o.p. is given inthe NSO News Release, which is publishedless than three months after the reportingperiod. Furthermore, an analysis of b.o.p. datais carried out by the Economic Analysis Officeof the Economic Research Department of theCBM. This analysis is published in the CBM’sQuarterly Bulletin. Annual data are alsoanalysed and published by the CBM and theEconomic Policy Division of the Ministry ofEconomic Services.


At the NSO, the BOP Section works closelywith the National Accounts Section,particularly where GDP and GNP issues areconcerned. As regards merchandise tradedata (customs-based), these are received bythe Trade Section of the NSO and passed onto the BOP Section every month. The BOPData Compilation Section of the CBM in turnprovides information about travel earningsand expenditure to the Travel Section of theNSO, as the latter is responsible for compilingtourism statistics. In addition, the BOP DataCompilation Section of the CBM receives datain line with specific requests made to theMinistry of Finance and the Treasury

Department. These data cover debt servicing,the acquisition of immovable property inMalta by non-residents and capital grants.

The BOP sections of the NSO and the CBMhave recently been in close contact with ab.o.p. expert from De Nederlandsche Bankin connection with the development of a DRdata collection system. The sections have alsobeen working closely with Eurostat onelectronic data interchange (EDI)requirements and with the European CentralBank (ECB) on new developments in the areaof b.o.p./i.i.p. statistics. Technical missionsfrom the International Monetary Fund (IMF)have also advised the Maltese statisticalauthorities on b.o.p. issues in recent years.The NSO sends b.o.p. data to the IMF andEurostat on a regular basis.

2.5 Users

The main user within the NSO of b.o.p. andrelated statistics, where data on exports andimports of goods and services as well asinvestment income are concerned, is theNational Accounts Section. Other internalusers include the Travel Section of the NSOwith regard to travel earnings andexpenditure. The Economics ResearchDepartment of the CBM also uses b.o.p. andrelated statistics for economic analysis.

The external users of b.o.p. and relatedstatistics at the government level are theEconomic Policy Division of the Ministry ofEconomic Services. Outside the public sector,there are several organisations andenterprises in tourism, industry and thefinancial sector which frequently make use ofsuch data. International organisations alsousing these data include the IMF and Eurostatand, recently, the ECB, the Organisation forEconomic Co-operation and Development(OECD) and the United Nations. Furtherexternal users are credit rating agencies andfinancial institutions.


Chapter 3.8 Malta



The type of data collection system used tocompile b.o.p. statistics is a mixed systembased on enterprise survey data, a partialsettlement system, customs data and otherdata sources. The partial settlement systemcaptures cash-based transactions betweenresidents and non-residents that pass throughthe local banking system. The data collectedon services and the financial account are usedin conjunction with other data sources.

Another important element of the collectionsystem is the quarterly enterprise surveybased on the top companies operating in thevarious sectors of the national economy andan annual survey sent to an even largernumber of companies. This survey covers theservices transactions of these enterprises andtheir financial account transactions. Thechanges in the short-term assets and liabilitiesof non-financial enterprises are derived fromstock statistics, i.e. the changes in such assetsand liabilities, as shown in the enterprises’balance sheet positions from year to year.

Merchandise trade data are provided to theNSO by the Government’s CustomsDepartment. Exports are reported f.o.b.,while imports are given on a c.i.f. basis.

Financial account transactions of the bankingsector are derived from changes in the stocksof assets and liabilities, as reported by bankinginstitutions in the financial returns theysubmit to the CBM’s Banking SupervisionOffice on a monthly and quarterly basis. Dataon the current account transactions of thebanking institutions are derived from theirprofit and loss accounts.

In addition, the b.o.p. compilers obtain furtherstatistical information on specific current andfinancial account transactions from variousgovernment departments.

Data on external reserves are submitted tothe b.o.p. compilers by the CBM’s Finance

Office on a monthly basis. Supplementaryinformation in this regard includes revaluationadjustments, investment income and servicepayments effected by the CBM.

The i.i.p. is compiled for all the varioussectors of the economy. Details on datasources, concepts, methods and the coverageof the i.i.p. are given in Sub-section 14.1below.

All b.o.p. and i.i.p. information submitted byreporting agents, except for the bankingsector, includes a regional breakdown whereservices, financial account transactions andstock positions are concerned. In the case ofmerchandise trade data reported by theTrade Section of the NSO, a completecountry breakdown is provided. However, aclassification by currency of b.o.p. and i.i.p.data is not available.

Additional sources of information for b.o.p.purposes include:

– data on loans and portfolio investmentabroad from the CBM’s BOP Office;

– newspaper clippings on b.o.p. issues anddevelopments;

– the aggregated balance sheet of collectiveinvestment schemes, which is provided bythe Malta Financial Services Centre(MFSC). This institution is currentlyresponsible for regulating and supervisingall institutions involved in financial servicesin Malta except banking institutions; and

– annual financial reports of non-financialenterprises.


(i) The monetary authority sector: the CBM’sstatutory functions to conduct monetarypolicy, promote a sound financial systemand advise the Government on economic


Chapter 3.8 Malta

and financial matters are performedmainly on the basis of money and bankingstatistics compiled by the CBM’s StatisticsOffice, and b.o.p. and related datacompiled by the BOP sections of the CBMand NSO.

The Finance Office of the CBM preparesthe Bank’s monthly balance sheet, whichis submitted to the Statistics Office forconsolidation with the rest of the bankingsector. The Finance Office also submitsto the b.o.p. compiler data on externalreserves and additional information onrevaluation adjustments, investmentincome and service payments of themonetary authority.

The CBM’s Statistics Office is responsiblefor preparing aggregated money andbanking statistics on a monthly basis. Itsubmits such data and selected aggregateditems of reserve assets to the IMF forinclusion in the IMF’s InternationalFinancial Statistics (IFS) publication.Monetary and related data, includingdetails of reserve assets, are publishedmonthly by the CBM in a report entitled“Release of Monetary Aggregates andtheir Determinants”. Detailed tables onmonetary and related data are alsopublished quarterly and annually in theCBM’s publications.

(ii) The banking sector: the definition of thebanking sector in Malta coincides with theEuropean System of Central Banks’definition of Monetary Financial Institutions(MFIs), except for the fact that the CBM’sdefinition does not currently include moneymarket funds. The monthly statements andschedules that credit and financialinstitutions have to submit to the CBM areincorporated in a Banking Directive (BD 06)issued under the Banking Act of 1994 andin a Financial Institutions Directive (DO2)issued under the Financial Institutions Actof 1994. The documents submitted providedetailed information on the financial positionof these institutions. They include a balancesheet, a profit and loss account and an

appropriation account. The statements andschedules are classified so that sub-divisionsfor resident and non-resident stocks andflows are indicated. Financial accounttransactions are derived from end-of-periodstock positions. Current accounttransactions are derived from the profitand loss accounts.

(iii) General government: general governmentis the central government for thepurposes of b.o.p. and i.i.p. datacollection. The Ministry of Finance isrequested by the b.o.p. compiler toprovide data on external loans andrelated interest payments. Moreover, theMinistry of Finance provides informationon grants received from overseas by theGovernment, as well as on the acquisitionof real estate by non-residents.

(iv) Other sectors: the corporate sector issurveyed on a quarterly basis to providedata on financial and services transactions.The response rate for the top 100companies surveyed, accounting forapproximately 80% of total b.o.p. data, is95%. The response rate for the remainingcompanies is about 30%.

3.3 Thresholds

There are no exemption thresholds stipulatedby the b.o.p. compilers. However, the CBMdoes apply four simplification thresholdswhen collecting data from banking institutionsin connection with its b.o.p. exercise basedon banking transactions (partial settlements).These are:

– MTL 100,000 for merchandise tradetransactions;

– MTL 10,000 for services transactionsexcluding travel;

– MTL 25,000 for travel transactions; and

– MTL 10,000 for financial accounttransactions.


Chapter 3.8 Malta

For transactions below these thresholds, noinformation is required concerning the natureof the underlying transaction or the countryof the non-resident counterpart.

No simplification thresholds are applied toother data sources.


B.o.p. data on a transaction basis in line withthe BPM5 are available quarterly. However,work is currently under way to compile b.o.p.data on a monthly DR basis. The quarterlyb.o.p. data are available before the end of thethree months following the end of thatquarter. Classifications by sector andinstrument are available. However, only inthe case of the current account are dataclassified by region, i.e. the European Union(EU) and the rest of the world.

External reserves are compiled on a dailybasis by the CBM and made available to theb.o.p. compilers both on a monthly basis andon a quarterly basis, in the latter case withadditional information.

The i.i.p. data are currently compiled on anannual basis nine months after the end of thereporting period. The i.i.p. is currentlyclassified by instrument and sector. Theinformation submitted does not include ageographical or currency breakdown.

3.5 Data controls

Formal checking and vetting of enterprisesurvey responses is carried out on a regularbasis. Data are verified using, inter alia,company balance sheets, permits issued bythe Capital Flows Section of the CBM’s BOPOffice and newspaper clippings. Consistencychecks of corporate data are built into theb.o.p. software program for enterprises.

The banking institutions’ own financialtransactions are derived from the change intheir stock positions, adjusted for exchange

rate changes. The CBM questions thereporting institutions about large movementsin stock positions.

On an aggregate level, checks are alsoundertaken to ensure consistency betweendata received from enterprise surveyquestionnaires and data received frombanking institutions covering transactions ofthe corporate sector. Particular attention ispaid to the magnitude of the errors andomissions item and to large transactions thatsignificantly depart from past trends. Thecompilers try their best to discover theunderlying causes of such movements in thedata.

3.6 Revision policy

Quarterly b.o.p. accruals data are revised onan annual basis. The previous year’s dataremain subject to revision. Data areconsidered final once published in the annualpublication of the NSO entitled “The NationalAccounts of the Maltese Islands”. This isnormally published one year after the end ofthe reporting period.

3.7 Dissemination

Users have access to b.o.p. data in regularpublications issued by the NSO and the CBM.These include the NSO’s news releases,national accounts publication and quarterlyeconomic surveys (issued by the Ministry ofEconomic Services), and the CBM’s quarterlyreviews and annual reports. The b.o.p. dataare published regularly in IMF and Eurostatpublications. Data are also available on theNSO’s website at www.nso.magnet.mt. B.o.p.data are disseminated in accordance with theIMF’s General Data Dissemination System(GDDS).

Data on external reserve assets are publishedregularly on a monthly basis and in the CBM’squarterly and annual publications. They arealso available on the CBM’s website atwww.centralbankmalta.com. In the near


Chapter 3.8 Malta

future, a detailed statement of externalreserve assets is expected to be submitted tothe ECB by the CBM.

I.i.p. data are expected to be publishedregularly in the NSO news releases, the

national accounts publication, the IFS of theIMF and the CBM’s publications. They willalso be made available on the NSO’s websiteat www.nso.magnet.mt. I.i.p. data aredisseminated in accordance with the GDDS.

4 Goods


(i) General merchandise: the main source formerchandise trade data are the tradestatistics compiled by the Trade Section ofthe NSO from records received from theCustoms Department. Adjustments forcoverage are subsequently made by theb.o.p. compiler to both imports (which arereported by Customs on a c.i.f. basis) andexports. Thus, merchandise trade data arereported on an f.o.b. basis.

The adjustments that are made to thecustoms data are also based on informationobtained through the issuance of ad hocletters to various respondents. In addition,deposits and advance payments made onlarge and exceptional items are also usedto adjust the trade data.

(ii) Repairs on goods: data on repairs on goodsare collected from the quarterly surveyof private and public entities. The dataessentially include information aboutincome earned on aircraft and shiprepairs carried out locally, as well asexpenditure on aircraft and ship repairscarried out abroad.

(iii) Goods procured in ports by carriers:statistical data on goods sold in domesticports to non-resident carriers are derivedfrom trade statistics, whereas data ongoods purchased by resident entities inforeign ports are compiled on the basisof the quarterly survey of residentshipping and airline companies.

(iv) Non-monetary gold: data for non-monetarygold are derived from trade statistics.

4.2 Definition

Goods data conform with the definitions setout in the BPM5. Imports and exports areadjusted on an f.o.b. basis and merchandisetrade statistics by country of destination arealso compiled.

4.3 Deviation

There are no serious deviations from theBPM5, except for transactions related to shiprepairs and shipbuilding. These are includedunder general merchandise, whereas in thecompilation of cash-based foreigntransactions reported by banks, ship repairsare included under services.

4.4 Gaps

None.


None.


10% of the c.i.f. value of merchandise importsis added to the amount shown under freightin the transportation account (see Sub-section 5.1 below).


Chapter 3.8 Malta

5 Services


(i) Transportation: data for transportationservices are subdivided into threeidentifiable categories, namely passenger,freight and other transportation.

Data on receipts and payments forpassenger carriage are primarily retrievedfrom the quarterly b.o.p. enterprise surveycarried out for both shipping and airlinecompanies (including their representativeagencies operating in Malta).

Data on revenue from freight are derivedfrom the same survey. For freightpayments, however, an estimate of 10% ofthe c.i.f. value of imports is made. Of this10% estimate, 90% is allocated to freightand the remainder to the insurancepayments item (which is included in thecurrent transfers account). A statisticaladjustment is made for freight on importstransported by domestic carriers.

Other transportation services are obtainedfrom the quarterly b.o.p. enterprise survey,the monthly b.o.p. settlement-basedstatement prepared by the CBM andspecific data requests sent to publicauthorities such as the Malta InternationalAirport and the Maritime Authority.

(ii) Travel: data on gross earnings fromtourism and on gross expenditure byresidents travelling abroad are derivedmainly from foreign currency transactionsreported by banking institutions andother authorised dealers to the CBM ona monthly basis.

During a joint exercise between the NSOand the CBM, it was found that there wasa significant and persistent under-recording of tourism-related foreignexchange transactions reported throughthe local banks. Subsequently, a study wascarried out to identify the extent of theunder-reporting. Consequently, an

upward adjustment of 15% to gross travelreceipts reported by the banks wasrecommended and is being implemented.

(iii) Other services: the primary sources of datafor other services are the quarterly andannual b.o.p. surveys of non-financialenterprises. The data sources forgovernment transactions are the Ministryof Finance and the CBM’s settlement-basedsystem. The latter is also the source ofdata in respect of transactions of thepersonal sector. The services transactionsof the banking sector are obtained frombanks’ profit and loss accounts.

5.2 Definition

The reporting of services transactionsconforms to the definitions and guidelinesset out in the BPM5.

5.3 Deviations

There are no serious deviations from theBPM5, except for transactions in connectionwith financial services, which are currentlyclassified under other services.

5.4 Gaps

Country data are not available.


A more comprehensive classification ofservices on a country-by-country basis willbe a feature of the proposed monthly DRdata collection system.


Data from the annual InternationalTransactions in Services survey for


Chapter 3.8 Malta

enterprises are used as a benchmark for thefurther breakdown of services transactions.Estimates for non-respondents areextrapolated from historical data.

As mentioned under Sub-section 5.1 above,the gross travel receipts reported by banksare inflated by 15%.

6 Income



Data are obtained from the enterprise surveyand from the CBM’s monthly b.o.p.settlement-based statement.


There are two main sources of data onincome from direct investment. Theenterprise survey provides information onreinvested earnings, dividends and interestincome. The investment income of credit andfinancial institutions is obtained from thebanks’ profit and loss accounts, which aresubmitted to the CBM.

Income is classified by type of financialinstrument. A limited geographicalclassification, i.e. the EU or the rest of theworld, is also provided.

Income on equity is recorded in accordancewith BPM5 recommendations. Reinvestedearnings of enterprises are reported on aquarterly basis in the b.o.p. questionnaire andare based on transactions reported in theirmanagement accounts. The reinvestedearnings of banking institutions are based onstock statistics and are derived from theirbalance sheets every quarter.

When earnings are reinvested, an offsettingentry in the financial account is recordedunder direct investment.

With regard to income on debt, income oninter-company loans is recorded as incomeon direct investment. The enterprise surveys

indicate whether the income on loans isderived from a foreign parent company, asubsidiary or other non-resident sources.Income on debt securities between affiliatesis recorded as income on direct investment.To qualify as an affiliate, and thus be recordedas income on direct investment, the criterionof a minimum 10% shareholding is applied(see Sub-section 9.2 below for a detailedexplanation). If any income on debt is not yetpaid/received, an offsetting entry is recordedin the receivables/payables item under directinvestment.


There are two main sources of data forincome on portfolio investment. Theenterprise survey provides information oninterest on bonds, notes and money marketinstruments, as well as on dividends on equity.The investment income of credit and financialinstitutions is obtained from the bankinginstitutions’ profit and loss accounts, whichare submitted to the CBM. The income onportfolio investment reported by bankinginstitutions is classified according to the typeof portfolio investment instrument.Information on the sectoral classification isalso available. The geographical classificationis limited to two regions, i.e. the EU and therest of the world. The criterion applied inthis regard is the country of the issuer. Acurrency classification is not available.

Income on equity and debt securities followsthe definitions recommended in the BPM5,except for the accrued interest of othersectors. Dividends are obtained from theenterprise survey and the profit and lossaccounts of banking institutions.


Chapter 3.8 Malta


There are three main data sources for incomeon other investment. Non-financialenterprises provide information on interestincome and expenditure through the b.o.p.enterprise survey, which also includesinformation on income from trade credits.Income on other investment of the bankinginstitutions is obtained from their profit andloss accounts. The income of the personalsector is derived from the CBM’s monthlyb.o.p. settlement-based statement. TheMinistry of Finance provides data on interestpayments on the Government’s external debt.Income on the external reserve assets of theCBM is provided by its Finance Office and isrecorded monthly on an accruals basis.

The definitions of the BPM5 are followed,except in the case of accrued interest ofother sectors.


The accruals principle is not followed for allsectors of the economy.

6.3 Gaps



The proposed DR data collection system willensure that the accruals principle is appliedto income transactions.


In the absence of reliable statistics on theexternal financial assets and liabilities of thepersonal sector, estimates are made. Anoffsetting entry is recorded in portfolioinvestment and/or other investment.

7 Current transfers

See the following section on the capitalaccount.

8 Capital account

8.1 Special features of data collection

Current transfers

(i) General government: data on officialtransfers, which are shown under thisaccount, are obtained from the CBM’smonthly b.o.p. settlement-basedstatement.

(ii) Other sectors: aggregated data on personalremittances, pensions and other transfersare obtained on a quarterly basis from theCBM. Also included under thisclassification are non-life insurancepremiums and claims reported by private

and public entities in a quarterly survey;additional information is obtained throughspecific data requests.

As from 1995, following therecommendations set out in the BPM5,the data related to current and capitaltransfers were disaggregated. Hence, dataon emigrants’ capital transfers, debtforgiveness and government grants arecurrently included in the capital account.Data on government grants are providedby the Ministry of Finance, while otherrelated data are obtained from the CBM.


Chapter 3.8 Malta

8.2 Definition

The definitions of the BPM5 are adhered to.For the data sources, see Sub-section 8.1.


None.

8.4 Gaps

There are no gaps. Both migrants’ transfersand the acquisition/disposal of non-producednon-financial assets are currently capturedthrough the CBM’s settlement-based system.


None.

9 Direct investment


The enterprise survey is used to collectforeign direct investment (FDI) data from thecorporate sector. The enterprisequestionnaires are designed in such a way asto identify all inter-company transactions,including loans and trade credits. Data on thebanking institutions are obtained from theirbalance sheets submitted to the CBM.Information on the acquisition of real estatein Malta by non-residents is provided by theMinistry of Finance. Acquisition of real estateby Maltese abroad is derived from exchangecontrol forms submitted to the Capital FlowsSection of the CBM. Direct investmentabroad by households is captured throughthe CBM’s monthly b.o.p. settlement-basedstatement and exchange control formssubmitted to the CBM’s Capital FlowsSection.

The business register for the largestcompanies in Malta has been constructed onthe basis of detailed information obtainedfrom the CBM’s monthly b.o.p. settlement-based statement. In addition, furtherinformation is obtained from the exchangecontrol forms submitted to the Capital FlowsSection of the CBM, historical data from theenterprise survey, trade data, annual reportsof companies and newspaper clippings.

Data are available by sector and byinstrument. A country breakdown is availablefor the banking sector. However, only limited

regional breakdowns are available for non-financial enterprises.

9.2 Definition

The 10% ownership criterion is used todistinguish between direct and portfolioinvestment. This guideline is applied toidentify types of investment (i.e. direct orportfolio) relationships in the corporatesector. The enterprise survey is structured insuch a way as to indicate the direction of theFDI relationship, with the exception of tradecredits and debits. Inter-company loans andtrade credits/debits with related enterprisesare included in FDI. For the banking sector,the direction of FDI is determined on a case-by-case basis by the b.o.p. compiler.

Special-purpose entities (SPEs) are consideredas non-residents and are included under otherinvestment – currency and deposits. A smallnumber of SPEs are nonetheless consideredto have a centre of economic interest in thedomestic economy and are thereforeconsidered as residents.

All transactions between affiliated companiesare included under direct investment.Moreover, an offsetting entry for reinvestedearnings is shown as part of income andincluded under FDI. As a general rule, directinvestment transactions are recorded whenthe transactions occur. Geographicalallocation of FDI is based on the country of


Chapter 3.8 Malta

residence of the parent, subsidiary or affiliate,as the case may be.


There are no serious deviations from theagreed definition, except for trade credits/debits with subsidiaries, which are currentlyincluded under direct investment in thereporting country. Furthermore, for certainFDI instruments, the accruals principle is notadhered to fully.

9.4 Gaps

Information on the switching of overseasassets between the FDI, portfolio investmentand other investment categories by

households is not available (see Sub-section9.3).


The proposed monthly DR data collectionsystem should ensure that FDI data arerecorded by country. Furthermore, thedirection of trade credits and debits shouldalso be established. The DR system will alsobe based on the accruals principle. Thestatistical treatment of the residency of allSPEs is presently under consideration.


Estimates for non-respondents areextrapolated from historical data.



Data on portfolio investment are collectedon an aggregated basis. Surveys are used tocollect portfolio investment data on thecorporate sector. Data on the banking sectorare obtained from the balance sheetssubmitted by the banking institutions to theCBM. Information on the portfolio investmenttransactions of households is obtained fromexchange control forms submitted to theCapital Flows Section of the CBM andsupplemented by information obtainedthrough the CBM’s monthly b.o.p. settlement-based statements. Information on portfolioinvestment transactions of collectiveinvestment schemes is aggregated frombalance sheets submitted to the MFSC, whichforwards them on to the b.o.p. compiler.Purchases of domestic equity and debtsecurities by non-residents on the MaltaStock Exchange (MSE) are reported directlyto the b.o.p. compiler by the MSE.

Classifications by sector and instrument areavailable. No currency or countrybreakdowns are presently available.

10.2 Definition

The compilation of portfolio investmenttransactions is generally in line with the BPM5.However, the accruals principle is appliedonly to portfolio investment instruments heldby the banking sector. Equity securities, bondsand notes as well as money marketinstruments are included in the definition.Service charges, fees and commissions arerecorded separately under services. Nogeographical breakdown is available for theportfolio investment data of the bankingsector. A regional breakdown is howeveravailable for non-financial enterprises(through the enterprise survey) andhouseholds (through the CBM’s monthlyb.o.p. settlement-based statements).

10.3 Deviations from agreed data

The only deviation from the BPM5 is thelimited application of the accruals principle,particularly in the case of banking sectortransactions.


Chapter 3.8 Malta

10.4 Gaps

Information on the switching of overseasassets between the FDI, portfolio investmentand other investment categories byhouseholds is not available. See also Sub-section 10.3 above in this regard.


The proposed DR data collection system willensure that the accruals principle is appliedto portfolio investment transactions and will

also provide for a country breakdown. Thenew system should also provide forInternational Securities IdentificationNumbers. Under this new reporting system,surveys of custodians and partial end-investors will also be conducted.


Estimates of the value of transactions carriedout by non-respondents are made. These arebased on historical data where these areavailable.



None.

11.2 Definitions




11.4 Gaps






12 Other investment


The enterprise survey is used to record theother investment transactions of companies.Data on the banking sector are derived frombanks’ balance sheets submitted to the CBM,while other investment holdings of collectiveinvestment schemes are aggregated frombalance sheets submitted to the MFSC. Thehousehold sector is captured through thesettlement system (see Sub-section 3.1) andexchange control forms submitted to theCapital Flows Section of the CBM.

Trade credits are reported in the quarterlyb.o.p. enterprise survey. Other related

information is obtained from the balancesheets of the banking institutions.

Breakdowns are available by sector andinstrument. No currency breakdown isavailable. A regional breakdown is onlyavailable for non-financial enterprises.

12.2 Definitions

Other investment transactions are generallyin line with the BPM5, but the accrualsprinciple is only applied to banking sectortransactions. Transactions related to


Chapter 3.8 Malta

repurchase agreements and trade credits areincluded under other investment.


See Sub-section 12.2 above.

12.4 Gaps

Information on the switching of overseasassets between the FDI, portfolio investmentand other investment categories byhouseholds is not available.


The proposed monthly DR data collectionsystem should cater for the countrybreakdown and the accruals principle. Underthis new reporting system, surveys ofcustodians and partial end-investors will alsobe conducted.


Estimates of the value of transactions carriedout by non-respondents are made. These arebased on historical data where these areavailable.

13 Reserve assets


The Accounting Department of the FinanceOffice of the CBM is the source of data onreserve assets. Reserve assets are availableby instrument, maturity, country andcurrency. Changes in reserve assets arecalculated by the b.o.p. compiler on aquarterly basis.

Reserve assets are compiled in accordancewith the gross concept. Offsetting entries foraccruals are limited to the amortisation ofdiscount and premium securities. Noreversible gold transactions are carried out.The CBM transacts in financial derivatives,but these are not shown separately.

13.2 Definitions

The definition of reserve assets is in line withthe BPM5. Reserve assets are under theeffective control of the CBM. Reserve assets

include highly liquid claims on non-residentsin foreign currency. Positions in localcurrency are excluded. Other reserve assetsinclude gold, special drawing rights (SDRs)and the reserve position in the IMF.



13.4 Gaps



The proposed monthly DR data collectionsystem should cater for the countrybreakdown. Moreover, financial derivativeswill be shown separately.


Chapter 3.8 Malta


14 Specific features of data collectionand definitions

14.1.1 General

The i.i.p. is compiled annually to show theposition at the end of the calendar year (i.e.the reporting period). However, not all financialaccount items for each sector are compiled.The following is a breakdown by sector of thefinancial account items, which are compiled:

(i) banking sector: compiled for all financialaccount items, except financialderivatives;

(ii) non-financial enterprises (including publiccompanies): based on the top 700companies, all financial account items arecompiled, except financial derivatives;

(iii) households: the only information availablewith regard to households is the amount ofborrowing/lending with non-residents; and

(iv) central government: all financial accountitems are available with the exception oftrade credits and debits.

Reserve assets are included.

Assets and liabilities are compiled separatelyand Malta’s i.i.p. is published annually in theNSO’s news releases and in the IMF’s IFS.


The i.i.p. of the banking sector is compiled byinstrument and is also available by country.No currency breakdown is available. The maindata sources are the banking schedulessubmitted to the CBM’s Banking SupervisionOffice. Data are available approximately afortnight after the end of the quarter and arebased on real stock positions.

There are no significant deviations from BPM5definitions. The valuation criteria used for

equity securities are market values, but bookvalues are used for the equity of those banksthat are not listed on the MSE. However, allother direct investment instruments, such asinter-company loans, are recorded at the end-of-period exchange rates.

A reconciliation exercise is carried out takinginto account the actual price movements inthe equity of listed banks. The banks report atotal revaluation amount due to exchangerate movements for all the financial accounts.An estimate is then made to allocate thisamount to the different financial accounts andthe various financial instruments.

The direct investment stock of the non-financial enterprises (including publiccompanies) is compiled by instrument. Nocountry or currency breakdowns areavailable. Data are compiled on the basis ofthe quarterly b.o.p. enterprise surveysubmitted to the NSO. Data are availableapproximately two months after the end ofthe quarter.

The stock of long-term financial instruments,with the exception of loans from abroad, isderived from accumulated flows. Short-terminstruments are compiled from real stockpositions. There are no deviations from BPM5definitions.

Equity securities are given at book value, butall other direct investment instruments arerecorded on the basis of market value. Areconciliation exercise is carried out for theloans of the public entities.

The government sector has no directinvestment abroad and no data are availablefor the household sector.


The portfolio investment stocks of thebanking sector are compiled by instrument.No maturity, country or currency


Chapter 3.8 Malta

breakdowns are available. As in the case ofFDI stocks, the portfolio investment positionis available from the banking returnssubmitted to the CBM’s Banking SupervisionOffice. Similarly, data on real stock positionsare available approximately a fortnight afterthe end of the quarter and follow BPM5definitions.

Trading securities are recorded at the lowerof book value and market value, butinvestment securities are based on bookvalue. As already indicated for FDI stocks, anestimate to apportion the total revaluationamount is made.

The portfolio investment stock position ofnon-financial enterprises (including publiccompanies) is compiled by instrument. Nomaturity, country or currency breakdownsare available. Data for this sector arecompiled from the quarterly b.o.p. enterprisesurvey submitted to the NSO. These surveydata are available approximately two monthsafter the end of the reference period. Theinitial portfolio investment stock position iscompiled in accordance with the BPM5.However, subsequent stock data are basedon accumulated flows. No reconciliationexercise is carried out for portfolioinvestment.

Data on the government sector is madeavailable by instrument, but there are nocountry, maturity or currency breakdowns.Real stock positions are collected using theGovernment’s Annual Financial Report(available six months after the end of theyear) and replies to quarterly data requeststo the MSE on government securities held bynon-residents. Market valuation criteria areused and the compilation of theGovernment’s portfolio investment positionis in line with the definitions of the BPM5. Areconciliation exercise is carried out takingprice changes into consideration.

No data are available for the householdsector.


Data on financial derivatives are not shownseparately.


The other investment stock position of thebanking sector is compiled by instrument. Nomaturity, country or currency breakdownsare available. As in the case of FDI andportfolio investment stocks, the otherinvestment position is available from thebanking returns submitted to the CBM’sBanking Supervision Office. Similarly, data onreal stock positions are availableapproximately a fortnight after the end of thequarter and are compiled in accordance withthe BPM5. Market valuation criteria are used.As already indicated for FDI and portfolioinvestment stocks, an estimate to apportionthe total revaluation amount is made.

The other investment stock position of non-financial enterprises (including publiccompanies) is compiled by instrument. Nomaturity, country or currency breakdownsare available. Data for this sector arecompiled from the quarterly b.o.p. enterprisesurvey submitted to the NSO. These surveydata are available approximately two monthsafter the end of the reference period. Thestock of long-term financial instruments, withthe exception of loans from abroad of publicenterprises, is derived from accumulatedflows. However, short-term assets andliabilities are compiled from real stockpositions. A reconciliation exercise is carriedout for the loans of public sector enterprises.

The government sector is compiled byinstrument, with the exception of tradecredits and debits, which are not available.Data for loans by currency are available, butthere are no country or maturityclassifications. Data on other investment arecompiled from replies to specific datarequests sent to the Ministry of Finance andinformation provided by the Statistics Officeof the CBM. Data on real stock positions are


Chapter 3.8 Malta

available approximately two months after theend of the quarter. There are no deviationsfrom BPM5 definitions. Market valuationcriteria are used and a reconciliation exerciseis carried out taking exchange ratemovements into consideration.

The only data available for the householdsector are for loans from non-residents.These are compiled on a quarterly basis andbased on exchange control forms submittedto the Capital Flows Section of the CBM. Theonly breakdown available is by currency.


The source for these data is the FinanceOffice of the CBM. Data are in line with theBPM5 and a reconciliation is performed on aquarterly basis for price and exchange ratemovements.

14.2 Deviations from the agreeddefinitions

See Sub-sections 14.1 to 14.1.5.

14.3 Gaps

See Sub-sections 14.1 to 14.1.5.


A proposed DR data collection system shouldbe implemented whereby the differentsectors would report a full i.i.p. on a monthlybasis, including a reconciliation for price andexchange rate movements. The statementshould also include a country breakdown. Theproposed DR system should incorporate asecurity-by-security register.


See Sub-section 14.1 on the banking sector.

15 Contacts

This country information was drafted by Maltain agreement with the ECB’s Balance ofPayments and External Reserves Division.Enquiries of a general nature should beaddressed to the Press Division of the ECB.Enquiries specific to Malta should beaddressed to:

Mr. Gerard GrantCentral Bank of MaltaBalance of Payments DataCompilation SectionCastille PlaceValetta CMR 01Malta

Tel.: +356 247480Fax: +356 243051E-mail: [email protected]

Mr. Ray MicallefNational Statistics OfficeBalance of Payments SectionLascarisValletta CMR 02Malta



Chapter 3.8 Malta

Poland

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ResearchDepartment

Departmentof Statistics

Foreign ExchangeDepartment

InformationTechnology and

TelecommunicationDepartment

InternationalDepartment

Security Department

Office ofthe President

Internal AuditDepartment

LegalDepartment

PersonnelDepartment

Bank LicensingDivision

Supervisory PolicyDivision

Banking System Off-SiteAnalysis Division

On-Site ExaminationDivision

Co-operative BankingDivision

Monetary and CreditPolicy Department

Accounting andOperationsDepartment

Payment SystemsDepartment

Issue and TreasuryDepartment

Departmentof Information and

Public Relations

First DeputyPresident

DeputyPresident

General Inspectorateof Banking Supervision

Chairperson – Presidentof the NBP

Commission forBanking Supervision

Chief Branch ofForeign Exchange

in Warsaw

Support ServicesOffice in Warsaw 13 regional branches

Administration Department

Presidentof the NBPMonetary Policy

CouncilNBP

Management Board

NBP Head Office

Organ

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Chapter 3.9 Poland

Organisation chart of the Statistics Department of theNational Bank of Poland (NBP)

Director

DeputyDirector

DeputyDirector

Non-bankingStatisticsDivision

Balance of PaymentsMethodology

and Analysis Section

Balance of PaymentsCompilation

Division

Analysis Division

PreliminaryInformation Section

Bank’s BalanceSheet Division

AdministrationSection

InformationTechnology

Section

Non-financialSectorSection

Expert inStatistical Databases

Expertin b.o.p. Current

Account Statistics

Expert in MerchandiseTrade Statistics

Expertin Interpretationof Banking Chart

of Accounts

Expert in Non-bank

Monetay Statistics

Monetary Statistics Balance of PaymentsStatistics


Chapter 3.9 Poland


2.1 Introduction

Narodowy Bank Polski, the National Bank ofPoland (NBP), is responsible for compilingand publishing Poland’s balance of payments(b.o.p.) and related statistics (e.g. theinternational investment position (i.i.p.),external debt, foreign direct investment (FDI)statistics, reserve assets).

The NBP is the central bank of the Republicof Poland. In line with its statute, the basicobjective of the NBP’s activity is to maintainprice stability and to strengthen Poland’scurrency. This objective is pursued by:

– developing and implementing monetarypolicy;

– creating the institutional basis for ensuringthe requisite level of financial safety andstability within the banking sector;

– regulating the relevant principles andmechanisms for guaranteeing the liquidityof monetary settlements within theeconomy.

Under the Constitution of the Republic ofPoland of 2 April 1997 (Article 227), the NBPis the central bank of the State and has theexclusive right to issue legal tender as well asto develop and pursue monetary policy.

Responsibility for b.o.p. and related statisticslies with the Department of Statistics of theNBP.

The tasks performed involve:

(i) maintaining statistical records on thebasis of bank and non-bank reports(including collaboration with NBPregional branches in collecting andanalysing the statistical data required);

(ii) developing instructions and guidelinesfor, and providing ongoing guidance to,banks and other parties compilingstatistical reports;

(iii) conducting monthly analyses ofmovements and developments impacting

particular items of b.o.p. and otherrelated statistical statements,

(iv) conducting methodological studiesregarding the b.o.p. and related statistics,

(v) preparing and publishing data on b.o.p.and related statistics,

(vi) co-operating with domestic and foreigninstitutions in work on b.o.p. and relatedstatistics.


According to the Act on the National Bankof Poland of 29 August 1997, as published inthe Dziennik Ustaw (Journal of Laws) of 1997,No. 140, Item 938, the NBP is obligated tocompile the b.o.p. and the i.i.p. and to reportthereon to Parliament.

The Act on the National Bank of Poland andthe Prawo dewizowe (Foreign Exchange Act),as published in the Journal of Laws of 1998,No. 160, Item 1063, specifies the reportingrequirements. Under these acts and otherlegal regulations, namely (i) the Government’sDecree dated 29 March 1999, as published inthe Journal of Law of 1999 No. 27, Item 246,and (ii) the Resolution of NBP’s ManagementBoard dated 29 March 1999, as published inthe Dziennik Urzesdowy NBP (Official Journalof the NBP) of 1999, No. 8, the NBP isauthorised to request data from residentsfor the purposes of compiling b.o.p. statistics.

In cases of non-compliance with legalrequirements sanctions are imposed on non-reporting agents in the form of a fine that isregulated by the Kodeks Karny Skarbowy (Penaland Fiscal Code), as published in Journal ofLaw of 1999, No. 83, Item 930.


Within the Statistics Department of the NBP,three divisions are in charge of themethodology, compilation, publication andanalysis of b.o.p and related statistics. These


Chapter 3.9 Poland

are the Balance of Payments Methodologyand Analysis Division, the Balance ofPayments Compilation Division and the Non-banking Statistics Division. There are also twoexperts in charge of b.o.p. statistics: one forb.o.p. current account statistics and one formerchandise trade statistics.

The staff of NBP’s regional branches are alsoinvolved in b.o.p. data collection and control.


The NBP co-operates with domesticorganisations (mainly the Central StatisticalOffice (CSO) and the Ministry of Finance(MoF)) and foreign institutions in theexchange of data and other tasks related tob.o.p. statistics.

Several institutions provide the NBP withadditional information on certain b.o.p. items.The CSO, as a result of co-operation in themethodology of statistical research, suppliestrade figures corresponding to physicaltransactions for the goods item in b.o.p. on atransactions basis. The CSO uses NBP datafor the production of national accounts, inparticular data on income, current transfersand services for the compilation of theaccount for the rest of the world (ROW).The CSO also supplies the data on non-resident holdings of Polish securitiesregistered on securities accounts with Polishbrokerage houses and the informationnecessary to maintain a b.o.p. businessregister.

The Commission of Securities and StockExchanges (CSSE) supplies data on major non-resident shareholders in Polish publiccompanies and data on resident holdings ofsecurities issued on foreign markets.

The MoF supplies data on externaltransactions of the government sector.

Furthermore, the NBP is co-operating withEU institutions (the ECB and Eurostat) andinternational organisations (the InternationalMonetary Fund (IMF), the Organisation forEconomic Development and Co-operation(OECD) and the World Bank) regarding theb.o.p. methodology and reporting.

2.5 Users

Data on the b.o.p. on a cash basis, the b.o.p.on a transactions basis, the internationalinvestment position (i.i.p.), the external debt,the official reserve assets, the internationalreserves and foreign currency liquidity areposted on the NBP’s internet website andare thus made available to all users.

Moreover, data are forwarded to Parliament,the MoF, the CSO and to private and publicresearch institutes, universities, ratingagencies, etc.

Data on b.o.p statistics, the i.i.p. and directinvestment statistics are supplied to theEuropean Commission (Eurostat), the IMF,the OECD and the World Bank on a regularbasis.



The Polish b.o.p. system comprises:

– a system for the monthly b.o.p. on a cash/settlements basis;

– a system for the annual/quarterly b.o.p. ona transactions basis.

The system for the monthly b.o.p. on a cash/settlements basis relies on paymentsrecorded by the Polish banking system. Thesettlements comprise transactions realised bythe banks on their own and on behalf of theirclients. It is a closed system, i.e. all changes inthe level of external accounts are explained.The balance on external accounts at thebeginning of the period plus transactions


Chapter 3.9 Poland

during the period equal the balance at theend of the period. Transactions in cashthrough bureaux de change of banks are alsocovered and, in majority, recorded asunclassified transactions.

Thresholds are not applicable in bankingreporting. The system provides for thecompilation of the b.o.p. with detailedinstrument/category and sector breakdowns.The reports include the reporting of all creditand debit transactions as well as currencyand country breakdowns.

The system for the annual/quarterly b.o.p. ona transactions basis incorporates data fromthe b.o.p. on a cash basis, with data derivedfrom surveys of enterprises and other entitiesin goods, services, income, FDI, trade creditsand loans. It also includes transactions onaccounts held by Polish residents with banksabroad. The transactions in cash throughbureaux de change of banks (recorded asunclassified transactions in the monthly b.o.p.)are reclassified for appropriate b.o.p. items,i.e. goods, travel and workers’ remittances.In general, it is a full-coverage system witha limited application of exemption andsimplification thresholds. The system providesfor the compilation of the b.o.p. with detailedbreakdown by item. Credit and debit entriesare available for all items except those thatcontain data estimated on a net basis. Dataon trade credit flows are derived from purestock data. For portfolio investment, data arecompiled in the b.o.p. on a transactions basis,using banking statistics data with adjustmentsbased on the i.i.p. (derived from stocks).

Currency and country breakdowns areavailable for selected items.

Flow data are reconciled with stocks. Othersources, such as information on relevantstocks, the central register of the Treasurybills database, internet and press informationand data on privatisation are used for cross-checking.


(i) Banks:– self-balancing decade reports on

stocks and flows on current accounts(vostro and nostro);

– self-balancing decade reports onforeign borrowing/lending;

– self-balancing monthly reports onforeign currency cash transactions;

– monthly reports on assets/liabilitiespositions;

– monthly reports on non-residentholdings of Polish equity securitiesregistered on custody accounts.

(ii) Enterprises and individuals:– self-balancing quarterly reports on

stocks and flows on accounts withbanks abroad;

– self-balancing quarterly reports onstocks and flows of foreign lending/borrowing;

– annual reports of enterprises withforeign participation on FDI to Poland;

– annual reports on Polish directinvestment abroad;

– quarterly reports on trade credits andnetting;

– individual reports of Polish non-bankcompanies issuing securities on foreignmarkets.

(iii) NBP: reports on self-balancing documentslike other banks. Being the centralgovernment agent, the NBP reports ongovernment transactions/accounts.

(iv) CSO:– supplies trade figures corresponding

to physical movements of goods forthe goods item in the b.o.p. on atransaction basis;

– quarterly reports on non-residentholdings of Polish securities registeredon securities accounts with Polishbrokerage houses.

(v) MoF: reports data on the externaltransactions of the government sectorand local government transactions.


Chapter 3.9 Poland

(vi) Commission of Securities and StockExchanges (CSSE):– monthly reports on resident holdings

of securities issued on foreignmarkets;

– annual reports on major non-residentshareholders in Polish publiccompanies (shareholdings of over 5%).

3.3 Thresholds

Thresholds are only applied in directreporting by enterprises and individuals.

Exemption thresholds: for trade credits, dataare supplied for stocks above EUR 25,000 atthe quarter end. For foreign lending/borrowing by enterprises, a threshold of EUR10,000 is applied.

Simplification thresholds: for foreign lending/borrowing by enterprises of an amount aboveEUR 10,000 but less than EUR 1,000,000, asimplified form is applied.


The b.o.p. on a cash basis is compiled monthlyand published one month after the end of thereference period. Since 2001, the b.o.p. on atransactions basis has been compiled quarterlyand distributed three months after the referencequarter. Until 2000, the b.o.p. on a transactionsbasis was compiled annually and published ninemonths after the reference year.

An advance release calendar, providing theprecise release dates one quarter ahead, isavailable on the NBP’s website (http://www.nbp.pl). A note to this effect is publishedin “Preliminary Information”.

For the b.o.p. on a cash basis, a “detaileditems” breakdown and a “sector breakdown”are available. The reports include all creditand debit transaction, as well as currency andcountry breakdowns. Information posted onthe website covers limited breakdownsaccording to key items.

The b.o.p. on a transactions basis is availablewith detailed instrument/category and sectorbreakdowns. Currency and countrybreakdowns are available for selected items.Information posted on the website coverslimited breakdowns.

3.5 Data controls

At the level of individual information, the dataare checked for errors by means of an automaticprocedure for the data sent by file transfer andon a PC for data sent in paper form.

The data are also controlled at an aggregatedlevel for validation of classification errors aswell as for an evaluation of time series forspecific items.

Flow data are reconciled with relevant stocks.

Data derived directly from enterprises’reports and information derived from banks’reports on enterprises’ transactions arecross-checked before being published in theb.o.p. on a transactions basis.

The data are cross-checked with othersources, e.g. information on relevant stocks,the central register of Treasury bills database,internet and press information, data onprivatisation, etc.

3.6 Revision policy

Regarding the b.o.p. on a cash basis, the dataare routinely revised. The first release of data(i.e. one month after the end of the referencemonth) is preliminary. Amendments are madein the next two disseminations when the datafor the two following months are published.The second revision is considered to be final.However, in addition, once a year the datafor the whole calendar year are revised.

In the b.o.p. on a transaction basis the firstpublication is considered to be final.However, amendments are made in the nextquarters’ publications, depending on whether


Chapter 3.9 Poland

reporting agents send further corrections ornot.

3.7 Dissemination

The data are released simultaneously to allinterested parties by posting them on theNBP’s website (http://www.nbp.pl). Publishingtimetables are available on the website inadvance.

More detailed data on the b.o.p., i.i.p.,external debt, reserve assets, directinvestment, etc. are published as separatepublications at quarterly/annual intervals.Only Polish versions are disseminated. Thetitles of the publications are:

– Bilans pl/atniczy Rzeczypospolitej Polskiej(Balance of Payments of the Republic ofPoland) – on a quarterly basis;

– Bilans pl/atniczy na bazie transakcji orazbilans aktywów i pasywów zagranicznychRzeczypospolitej Polskiej (Balance ofPayments on a Transactions Basis and theInternational Investment Position of theRepublic of Poland) – on an annual basis;

– Zagraniczne inwestycje bezpos/rednie w Polsce(Foreign Direct Investment in Poland) –on an annual basis.

The titles of other publications (both in Polishand in English) produced by the NBP thatinclude information on b.o.p. statistics are:

– Preliminary Information – on a monthlybasis;

– Information Bulletin – on a monthly basis;– NBP’s Annual Report – on an annual basis.

4 Goods


The goods item is compiled:

– in the monthly b.o.p. on a cash basis (banksrecords);

– in the annual b.o.p. on a transactions basisup to the end of 2000 (banks records plussurveys);

– in the quarterly b.o.p. on a transactionsbasis since 2001 (custom statistics plusestimations).

The sources of data on goods for the monthlyb.o.p. relate to settlements made through thePolish banking system.

Until the year 2000, the banking statisticsdata in the b.o.p. on a transactions basis weresupplemented with surveys submitted byenterprises and estimations of non-recordedforeign trade turnovers and adjustments foran f.o.b. basis.

The methods and frequency of compilationof the b.o.p. on a transactions basis changedin 2001. The main source of data on goodsfor a quarterly b.o.p. on a transactions basisis customs statistics (data from SingleAdministrative Documents, SAD), which isalso used by the CSO for the compilation ofthe International Trade Statistics. Dataprovided by the customs statistics areadjusted and converted in line with thedefinitions and methodology of the BPM5.The additional estimations are madeconcerning foreign trade flows not recordedby the customs statistics.

4.2 Definition

Data in the monthly b.o.p. include payments,which are recorded both on an f.o.b. and ona c.i.f. basis. The appropriate estimates aremade in the quarterly and annual b.o.p., sothat the data are presented on an f.o.b. basis.


Chapter 3.9 Poland

Until the end of 2000, for the monthly b.o.p. ona cash basis and the annual b.o.p. on atransactions basis, a geographical breakdown isnot available. The customs data can be brokendown using the country of origin for importsand the country of destination for exports.

4.3 Deviations

Not all the transactions recorded as goodsfor processing may be made without a legalchange of ownership.

4.4 Gaps

None.


Development of data-collection andestimation systems to enable a compilationand reclassification of credit and debit entries,which have been possible until recently onlyas the net balance for some components.


Estimation of non-recorded foreign trade andadjustments for an f.o.b. basis are made.

5 Services


Data on services for the monthly b.o.p. arebased on settlements made through the bankingsystem. The detailed breakdown of services isconsistent with BPM5 recommendations.However, some transactions are recorded asthe net balance amounts.

For the b.o.p. on a transactions basis, thedata are supplemented with informationderived from surveys of enterprises’transactions in services with non-residents.The surveys include reports on trade credits,loans, accounts held with banks abroad andalso data on foreign services redounded withtechnical assistance programmes.

(i) TransportationData provided by the banking system onpayments for transportation servicesinclude services broken down by type(sea, air, railway and other). These dataare not broken down by passengertransportation, freight and other forms.In the b.o.p. on a transactions basis,detailed data on transportation servicesare obtained from surveys of domesticcarriers. Adequate estimates are made

for the reclassification of costs of foreigntransport from goods items to services.

(ii) TravelForeign travel comprises data from thebanking system on settlements betweenPolish travel offices and foreigncounterparts on group and individual travel,settlements with non-resident banks ontravellers’ cheques, settlement of paymentsmade through credit cards and settlementon business, training and health trip costs.In the b.o.p. on a transactions basis, thesedata are supplemented with data andestimates of travel transactions notcovered by the banking statistics system,using researches of the Tourism Instituteand the CSO. The transactions in cashthrough bureaux de change desks of banks(recorded as unclassified transactions inthe b.o.p. on a cash basis) are reclassifiedfor appropriate b.o.p. items, i.e. goods,travel and workers’ remittances.

(iii) Other servicesData provided monthly by the bankingsystem records, in b.o.p. on atransactions basis, supplemented withdata from surveys of enterprises.


Chapter 3.9 Poland

5.2 Definition

Definitions and the detailed breakdown ofservices are generally in line with therequirements of BPM5. However, in the case ofthe b.o.p. on a cash basis, the quality of theservices item classification by detailed categoryis questionable.

5.3 Deviations

Customs statistics include transaction codes,which enable the reclassification of somegoods to services items.

5.4 Gaps

The geographical breakdown of data onservices is not published, because estimateddata are not available in this format.


Development of data collection andestimation system to enable the compilationand reclassification of credit and debit entries,which have been available until recently onlyas the net balance for some components.The development of the estimations systemwould allow for a geographical reclassificationof estimated data.


Estimations of non-recorded foreign trade inservices.

6 Income



Compensation of resident employeescomprises wages, salaries and other benefitsin cash, earned by individuals, paid by non-resident employers and transferred to Poland.Compensation of non-resident employeescomprises wages, salaries and other benefitsin cash, earned by individuals, paid by residentemployers and transferred abroad. The dataare derived from banking statistics.


The monthly b.o.p. includes information onsettlements made through the domesticbanks. The records cover data on interestand dividends paid. Income on reinvestedearnings from direct investment is notcovered in the banking system data.

In the b.o.p. on a transactions basis,investment income on direct investment, bothfor inward and for outward investment,includes interest on inter-company loans andon equity (dividends, remittances of branchprofits, reinvested earnings and undistributedbranch profit).

The data on interest is collected from directinvestors (outward investment) and directinvestment enterprises (inward investment)in quarterly surveys and the information onincome on equity through annual surveys.

Dividends and distributed branch earnings arerecorded when payable, and reinvestedearnings as well as undistributed profits arerecorded in the period in which they areearned.

Reinvested earnings are calculated as profitsearned (collected on an all-inclusive basis)during the period less dividends payable. TheFully Consolidated System is not applied:reinvested earnings are counted for directly-


Chapter 3.9 Poland

owned enterprises only. Since 1996, directinvestors’ shares of losses have beenintroduced as negative reinvested earnings.The flows equal to reinvested earnings arerecorded as additional equity capital in thefinancial account.

Interest on inter-company loans is recordedfor both directly and indirectly ownedenterprises as of the date on which they aredue for payment. Capitalised interest is offseton a directional basis under other capital.Income on debt securities between affiliatesis considered to be insignificant for themoment, and is recorded – if any – as aportfolio investment income.

Data are broken down by country, by regionand by economic zone. The income is allocatedto the countries as a result of the debtor/creditor principle of foreign assets and liabilities.


Data on portfolio investment income arederived from banking statistics. The informationis available in a breakdown by instrument(equity, bonds and notes, money marketinstruments). There is also breakdown bydomestic sector available (monetary authorities,general government, banks, other). For incomeon equity securities, only dividends areregistered as income on portfolio investment;other gains on equity securities are classified asportfolio investment in the financial account.

No accrued interest (e.g. on zero-couponbonds) is registered in the current account.


Both in the b.o.p. on a cash basis and in theb.o.p. on a transactions basis, interest is

recorded on a settlement or due-for-paymentbasis.

In the b.o.p. on a cash basis, income fromother investment includes interest on creditsextended and received and interest on bankaccount deposits and repos. Interest flowson loans, deposits, etc. are provided by banksengaged in foreign exchange operationsabroad. Income on reserve assets is alsoincluded under other investment income.

For the b.o.p on a transactions basis, thebanking statistics data are supplemented byinterest on loans unrecorded by the bankingsystem, and interest received on deposits ofnon-banking institutions held with banksabroad.


Data on investment income is not recordedon an accruals basis. Income on debtsecurities between affiliates is considered tobe insignificant for the moment, and isrecorded – if any – as a portfolio investmentincome.

6.3 Gaps

Reinvested earnings are not covered in themonthly b.o.p.


None.


None.


Chapter 3.9 Poland

7 Current transfers

In the b.o.p. on a cash basis, data on currenttransfers comprise mainly workers’remittances, measured as payments into andwithdrawals from specialised foreign currencyaccounts that cannot be used for operationsrelated to business activities. The item alsoincludes transfers associated with pensionallowances, membership contributions andfinancial assistance from abroad. The data arerecorded by the banking system.

In the b.o.p. on a transactions basis, theinformation on workers’ remittance creditsalso includes estimates for net workers’ cashremittances. The various data sources andestimations used only provide for adjustmentson a net basis. The bank data are alsosupplemented with information on grantsreceived in kind.

8 Capital account


See Sub-sections 3.1 and 3.2. In the b.o.p. ona cash basis, data are derived from thebanking statistics. For the b.o.p. on atransactions basis, the banking data aresupplemented with information on debtforgiveness and grants in kind.

8.2 Definition

The capital account comprises:

(i) capital transfers that include donationsand grants to finance fixed assets, debtforgiveness;

(ii) acquisition/disposal of non-produced andnon-financial assets.

Capital transfers include donations and grantsto finance fixed assets, debt forgiveness.

The acquisition/disposal of non-produced andnon-financial assets refers to patents,copyrights, trademarks, etc. purchased byresidents or sold to non-residents, and landsold to foreign embassies in Poland orpurchased by Polish embassies abroad.


None.

8.4 Gaps

No information on migrants’ transfers isprovided.


None.

9 Direct investment


The monthly data on foreign directinvestment are derived from the flows ofinternational payments reported by thedomestic banking sector. The data are brokendown into equity and inter-company loans.Equity contributions without payment are notcovered.

On a quarterly basis, the survey on externalloans of more than EUR 10,000 to enterprisesprovides further details on inter-companyloans in accordance with the directionalprinciple.

Annual data on equity capital and reinvestedearnings come from surveys of directinvestment enterprises in Poland and from


Chapter 3.9 Poland

Polish direct investors. Equity contributionswithout payment are covered. Enterprisesurveys are a unique source from which tocompile the data. Information from additionalsources, e.g. press reports, publishedcompany accounts, bilateral sources,exchange control authorities, are used onlyto update the business register.

The data on direct investment flows areavailable by country, region, economic zoneand industrial sector (the NACEnomenclature on the level of class).

9.2 Definition

The criterion of 10% ownership of directly-owned enterprises is used to identify a directinvestment relationship. The flows of directinvestment are recorded on a directionalbasis. Reverse capital investments areobserved, but are negligible for the moment.

Inter-company loans are broken down bymaturity. Financial leasing is also included.Trade credits between affiliated enterprisesare derived from stock data. The informationis collected, but recorded as trade creditsunder other investment.

Until now, special-purpose entities (SPEs)have not been established in the Polisheconomy, although resident enterprisesestablish enterprises abroad that have thesole purpose of serving as financialintermediaries. Only equity investments of

these SPEs are included in the directinvestment item.

For banks, only equity capital, reinvestedearnings and permanent debt are included.

The debtor/creditor principle serves as a basisfor the geographical allocation of directinvestment flows.


Trade credits between affiliated enterprisesare included in other investment.Transactions in securities between affiliatesare not included under FDI, but are recordedin the portfolio investment item. Monthly datado not include equity contributions withoutpayments and reinvested earnings.

9.4 Gaps

No information is available on financialderivatives between affiliates.


The recording of all claims and liabilitiesbetween affiliated enterprises is plannedunder direct investment item.


None.



The source of data for the b.o.p. on a cash basisis the Polish banking system. The data for theb.o.p. on a transactions basis are compiled usingthe banking statistics data with adjustmentsbased on the stock data collected.

Data on flows and stocks of inward andoutward portfolio investment are generallycollected on an aggregated basis. There are,however, exceptions (see the i.i.p. section)for stocks of Polish securities issued abroadand Polish equity securities registered oncustody accounts with Polish banks. These


Chapter 3.9 Poland

data are collected on a security-by-securitybasis, for the latter case using the ISIN codes.

Breakdowns by domestic sector of the issuerfor liabilities and of the holder for assets areavailable.

10.2 Definition

Equity securities include all types of tradableshares, and, as regards data on stocks for thei.i.p., other types of non-tradable equitysecurities which bear ISIN codes, however (e.g.nominative shares). Shares in investment fundsare also treated as equity. Debt securitiesinclude all kinds of long and short-termsecurities. The one-year original maturitycriterion is applied to classify securities as longor short-term. Included are Treasury bonds andnotes, corporate bonds, Treasury bills,commercial paper, negotiable certificates ofdeposit. Debt securities with embedded financialderivatives (e.g. convertible bonds or bonds witha put option) are also included.

Financial derivatives (tradable separately) areexcluded from portfolio investment and arerecorded in a separate item of the b.o.p.Transactions in repurchase agreements andrelated operations are also excluded fromportfolio investment and are presented ascurrency and deposits in the other investmentcategory.

Data broken down geographically on the basisof the first known counterpart principle arecollected, but not published.


Interest on debt securities is not accrued.

10.4 Gaps

Geographical and currency breakdowns –either of foreign issuers for assets or offoreign holders for liabilities – are availableonly for selected types of securities and datasources.


The securities database and the security-by-security data compilation system are underconstruction.


The data for the b.o.p. on a transactions basisare compiled using the banking statistics datawith adjustments based on the stock datacollected.



The source of data on financial derivativesfor both the b.o.p. on a cash basis and theb.o.p. on a transactions basis is the Polishbanking system.

All financial flows caused by the settlementof the transactions (except for repayableinitial margins) are registered as financialderivatives. This means that variation andoption margins are classified as financialderivatives. The data are collected on a gross

basis (except for foreign exchange options).For derivatives based on instruments otherthan foreign currencies, the data from Polishbanks may not be of adequate quality. Thesedata may not include flows resulting fromforward-type transaction settlements.Compared with foreign exchange derivatives,registered financial flows on derivatives withother types of underlying instruments arevery small.

Only a breakdown by underlying instrument(foreign exchange or other) is available.


Chapter 3.9 Poland

11.2 Definitions

Financial derivatives constitute a separatecategory of financial account in the Polishb.o.p. statement. The definitions used by theNBP are generally in line with the BPM5 asregards foreign exchange derivatives (see Sub-section 11.1). The financial derivativescategory includes all symmetric riskinstruments such as futures, forwards, swapsand asymmetric risk instruments such asoptions. Income on foreign exchangederivatives transactions is classified asfinancial derivatives.

The first-known counterpart criterion is usedto identify the residency of counterparts.



11.4 Gaps

Flows which are the result of the settlementof financial derivatives with underlyinginstruments other than foreign currencies arenot fully captured.


It is planned to clarify the definitions used inthe data collection system and to constructmore complete data collection systems.


None.

12 Other investment


Other investment covers trade credits, loans,currency and deposits and other assets andliabilities.

Trade credits are not covered in the b.o.p. on acash basis. Data for trade credits are collectedthrough quarterly surveys of major exportersand importers. The surveys provide quarter-end information on assets (prepayments onimports and trade credit extended to exportsseparately) and liabilities (prepayments onexports and trade credits received on imports).Data on trade credits regard the other sectors,although the low amount of credit received bylocal governments are covered. Geographicalallocation is recorded. There is no maturitybreakdown between long and short-term tradecredits. They are all classified as short term.

Data regarding the external loans andborrowings of the general government areprovided by the NBP and Bank Handlowy w

Warszawie S.A. (both play the role ofgovernment agents). For the banking sector(including the monetary authority), the flowdata (settled transactions) are provided bybanks that are engaged in foreign exchangeoperations abroad. These flows are checkedand reconciled with stocks. Data on financialleasing are recorded. Information reportedby private individuals is also included. Thesedata are used in the b.o.p. both on a cashbasis and on a transactions basis. Abreakdown by maturity is available.

For the b.o.p. on a cash basis, the data onenterprises’ loans are obtained from bankreports and are broken down by maturity.The data published in the b.o.p. on atransactions basis are derived from a surveyconducted on a quarterly basis. Theinformation regards loans extended andrepaid in cash, goods or services as well as acancellation of the loan amount or areorganisation of debt through rescheduling,debt forgiveness, refinancing or payments.


Chapter 3.9 Poland

Currency and deposits comprise transactionsof Polish banks’ assets and liabilities arising fromcurrent accounts and deposits as well as foreigncurrency banknotes and coins held in banks’vaults. The data are published in the b.o.p. on acash basis. Quarterly, these data aresupplemented with information on changes ofstocks in accounts the Polish non-bankinginstitutions hold with banks abroad and arepresented in the b.o.p. on a transactions basis.

12.2 Definition

In principle, the definitions for other investmenttransactions are in line with the BPM5.

The other investment item in the monthlyb.o.p. on a cash basis covers loans, currencyand deposits and other assets and liabilities.Financial leasing is covered under loans.Foreign currency banknotes and coins, as wellas repurchase agreements, are included undercurrency and deposits.

In the b.o.p. on a transactions basis, tradecredits are also included.


Trade credits between affiliated enterprisesare currently not recorded under directinvestment but under other investment.

12.4 Gaps

In the monthly b.o.p., trade credits are notcovered and in the b.o.p on a transactionsbasis no maturity breakdown of trade creditsis available.


The recording of trade credits betweenaffiliated enterprises under direct investmentis planned.


None.

13 Reserve assets


Data on transactions in reserve assets areobtained from the NBP’s records on amonthly basis.

A breakdown by instrument is available, butnot published. The data on reserve assets arecollected in currencies in which particulartransactions were settled.

13.2 Definition

The NBP is the holder of the official Polishinternational reserves. In principle, therecommendations of the BPM5 are appliedfor the recording of reserve assets. Thereserve assets comprise monetary gold,special drawing rights (SDRs), the reserve

position in the IMF, foreign exchange(currency and deposits, securities andfinancial derivatives) and other claims(repurchase agreements). Transactions withresidents are excluded.


None.

13.4 Gaps

The accruals principle is not applied.


None.


Chapter 3.9 Poland



14.1.1 General

The i.i.p. is compiled for all financial accountitems (i.e. direct investment, portfolioinvestment, financial derivatives, otherinvestment and reserve assets). Assets andliabilities are compiled separately.

The i.i.p. is compiled annually and publishednine months after the end of the referenceyear. Components constituting external debtitems are compiled quarterly. The informationon external debt is published three monthsafter the end of a reference quarter.


The data on direct investment stocks arederived from an annual survey among directinvestors and direct investment enterprisesresident in Poland. Data from the surveyscover information on investment in equity,contribution in kind, reinvested earnings andinter-company loans. The data on equity referto the balance sheet value based on an interimbut not current revaluation. Data on stocksof loans are based on the face value. Onlypure stock data are used. The reconciliationexercise includes adjustments for exchangerate changes and other adjustments. In thenear future, there are plans to compile a firstproxy of the market value on a global basis.

A full geographical (by immediate country)and industrial allocation (NACE) can beprovided.


Data on portfolio investment are generallysupplied by intermediaries, i.e. custodianbanks, brokerage houses and clearing houses(for Treasury bills). Data on government

assets in the form of securities and liabilitiesarising from securities issued abroad areobtained from banks operating as settlementagents to service the government’s externaldebt. Data on securities issued on foreignmarkets by non-government and non-bankentities are reported individually to theNBP by Polish issuers. For liabilities, theinformation on equity securities is based, ingeneral, on the market value and informationon debt securities is based, in general, on theface value. For assets, information on bothequity securities and debt securities is basedon the book value in the case of most datasources and, exceptionally, on the marketvalue.

For the separation of direct and portfolioinvestment in liabilities, the value of non-resident direct investors’ holdings of equitysecurities registered on custody accountswith Polish banks is estimated by the use ofdata on major shareholders in Polishcompanies, provided by the Polish Securitiesand Exchange Commission. The 10% holdingcriterion is applied. This is a company-by-company estimation rather than a security-by-security estimation based on theassumption that preferred, nominative andother types of non-tradable shares of eachpublic company are priced as ordinary sharesof this company. No separation for corporatedebt securities is made. They are classified asportfolio investment in the i.i.p. Assetsseparation is made only for selected datasources.

The i.i.p. stocks and b.o.p. flows arereconciled (only for liabilities) with regard toexchange rate changes and with regard toprice changes (for equities only; estimatedwith the WIG – Warsaw Stock ExchangeIndex).




Chapter 3.9 Poland


Other investment covers trade credits, loans,currency and deposits, as well as other assetsand liabilities.

Trade credits data are based on the answersto a quarterly survey of major exporters andimporters. The information is based on thenominal value. The data refer mainly to othersectors.

Information on loans is broken down bysector. The general government’s loans areprovided by settlement agents. Figures onbanks’ external loans are derived mainly frombanking statistics. Data on corporate loansare obtained from quarterly surveys and arecompiled on a loan-by-loan basis, and in theoriginal currency. Information on any changesto individual loans, such as a cancellation ofthe loan amount or a reorganisation of debtthrough rescheduling, debt forgiveness,refinancing or repayments, is compiled. Theinformation is based on the face value.

The data on currency and deposits arederived from the NBP’s balance sheet for theNBP and from banking statistics for otherbanks. Data on assets of non-government andnon-bank entities in the form of accountswith banks abroad are also included. Theposition covers repurchase agreementtransactions. The data are based on the facevalue.

Other assets and liabilities cover data onassets and liabilities other than loans, debtsecurities, trade credits, currency anddeposits.


The information on stocks of official reserveassets is derived from the NBP’s balancesheet and is available on a monthly basis. TheNBP is the holder of the official Polishinternational reserves. The coverage andconcepts are in line with the BPM5. Reserveassets are calculated at market or

approximate-to-market value and cover onlyactually existing assets denominated in foreigncurrencies. Claims on residents are excluded.

A detailed instrument breakdown is publishedmonthly in a the Data Template onInternational Reserves and Foreign CurrencyLiquidity.


For direct investment, no other form of non-equity liabilities than those mentioned underSub-section 14.1.2 are covered, i.e. neitherdebt securities nor trade credits betweenaffiliated enterprises are included. Thesetransactions are recorded under portfolioinvestment (debt securities) or under otherinvestment (trade credits).

14.3 Gaps

With regard to portfolio investment (Sub-section 14.1.3), the current data collectionsystem provides only for a partial coverageof Polish non-banks’ holdings of foreignsecurities (e.g. data from insurance companiesand investment funds). Work on a newportfolio investment system is beingundertaken.

No data of publishable quality andmethodologically consistent with the BPM5on stocks of financial derivatives (for the i.i.p.)is available. The data collected from Polishbanks are insufficient for the proper valuationof positions in financial derivatives. They area measure of risk exposure only.


None.


None.


Chapter 3.9 Poland

15 Contacts

This country information was drafted byPoland in agreement with the ECB’s Balanceof Payments and External Reserves Division.Enquiries of a general nature should be

addressed to the Press Division of the ECB.Enquiries specific to Poland should beaddressed to:

Ms. Anna JanzHead of the BOP Methodology and AnalysesDivisionDepartment of StatisticsNarodowy Bank PolskiSwietokrzyska 11/2100-919 WarszawaPoland


Mr. Jacek KocerkaEconomistBOP Methodology and Analysis DivisionDepartment of StatisticsNarodowy Bank PolskiSwietokrzyska 11/2100-919 WarsawPoland



Chapter 3.9 Poland

Romania

February 2002

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Chapter 3.10 R

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1O

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artO R G A N I S A T I O N C H A R T O F T H E N A T I O N A L B A N K O F R O M A N I A *

Monetary Analysis DivisionMonetary Forecasting DivisionInternational Relations and EU Integration Division

MONETARY POLICY DEPARTMENT

Economic Research DivisionPublications DivisionDocumentation and Library Division

RESEARCH AND PUBLICATIONS DEPARTMENT

Statistical Reporting DivisionData Processing DivisionStatistical Analysis and Information Division

STATISTICS DEPARTMENT

IT Systems DivisionNetwork Administration Division

IT DEPARTMENT

VICE - GOVERNOR

Market Operations DivisionState Treasury Operations DivisionForeign Reserve Management Division

MARKET OPERATIONS DEPARTMENT

Settlements DivisionIssuance and Treasury Division

BANK OPERATIONS DEPARTMENT

Secretariat DivisionBank Correspondence DivisionPublic Relations and Protocol DivisionArchives Division

SECRETARIAT

Financial DivisionAccounting DivisionInternal Financial Audit Division

ACCOUNTING DEPARTMENT

Net Settlements Division Gross Settlements Division

Special Settlements Division Design and Operational Co-ordination Division

Payment Incident Bureau Division Computer Operations Division

Structures Management Division Logistics Division

BANKING SETTLEMENTS DEPARTMENT

FIRST VICE - GOVERNOR

Analysis and Strategy DivisionBanking Regulation DivisionLicensing DivisionBanking Risk Division

FINANCIAL AND BANKING POLICIES DEPARTMENT

Synthesis DivisionInspection Division IInspection Division IIInspection Division III

SUPERVISION DEPARTMENT

Investment and Procurement DivisionTransport DivisionGeneral Administration DivisionTechnical Services and Maintenance DivisionBank Security DivisionSocial Relations Division

LOGISTICS DEPARTMENT

VICE - GOVERNOR

Human Resources Management DivisionProfessional Training DivisionThe NBR Museum and the Conference Hall

HUMAN RESOURCES DEPARTMENT

Legislation, Authorisation, and Legal DocumentationDivisionContract Assistance and Disputed Claims Division

LEGAL DEPARTMENT

The NBR Internal Audit DivisionThe Governor's Control Division

INTERNAL AUDIT DEPARTMENT

BRANCHES AND AGENCIES

GOVERNOR

B O A R D O F D I R E C T O R S

Monetary Policy Committee Supervision Committee

* As at 31 December 1999.


Chapter 3.10 Romania


the first division, processed by the secondand disseminated by the third. At present, 11people are involved with b.o.p. statistics: sixare involved in compilation, one in IT, andfour in analysis, methodology, etc. TheReporting Division collects data from allreporting banks and other sources (customs,Government, agencies, etc.), maintainscontact with the reporting community and isresponsible for methodological issues. Itshould be noted that, within the reportingcommunity, banks codify transactions on thebasis of the b.o.p. principle, applying double-entry accounting. The Processing Divisionreceives the data in electronic format and isresponsible for aggregating the information(one person from this division supervises theprocess). The Analysis and StatisticalInformation Division is responsible for thefinal compilation of the b.o.p., produces tablesand analyses, and disseminates the data in therequired format to Eurostat, the InternationalMonetary Fund (IMF), users within the NBR,etc.


The NBR co-operates with the GeneralDirectorate for Customs (GDC) and theNational Institute for Statistics (NIS) in thearea of foreign trade statistics. The trade dataare published monthly in the NIS’s StatisticsBulletin. The classification of accounts anddefinitions regarding foreign trade statisticsare largely in line with the recommendationsof the BPM5. In the area of national accounts,the principles of the System of NationalAccounts (SNA) 1993 are used. Theimplementation of the European System ofAccounts (ESA) 1995 in the NIS’sclassification of goods is also envisaged.

The Government provides information forspecific b.o.p. items, such as:

– expenses of Romania’s diplomatic missionsabroad, submitted once a year by theMinistry of Foreign Affairs;

2.1 Introduction

The institution responsible for thecompilation of balance of payments (b.o.p.)and international investment position (i.i.p.)statistics in Romania is the Banca Nationala aRomâniei, the National Bank of Romania(NBR), through its Statistics Department.Monthly and annual data have been compiledsince 1993, following the recommendation ofthe 5th edition of the IMF Balance ofPayments Manual (BPM5). The NBR, which isthe national central bank, may actindependently from the Government and co-operates with the central and local publicauthorities to achieve its targets. The Boardof the NBR is appointed by the RomanianParliament.


The legal basis for the compilation of the b.o.p.is provided by Law No. 101/1998 regarding theStatute of the NBR, which empowers the NBRto require information needed for b.o.p.compilation, and Circular No. 7/1994, whichenables the NBR to collect b.o.p. data from thecommercial banks. According to this regulation,the commercial banks must record and reportb.o.p. transactions, as they are defined in thecircular, to the NBR on a monthly basis. In thecase of non-compliance with the legalrequirements, the NBR may issue writtenwarnings to and impose fines on reportingagents.


The statistical activities of the NBR arecentralised in the Statistics Department,which comprises three divisions – theStatistical Reporting Division, the ProcessingDivision and the Analysis and StatisticalInformation Division. Statistical informationflows horizontally through these threedivisions, i.e. data related to money, bankingand external sector statistics are collected by

ˆ



– some information on grants received,available from the Ministry of Finance(MoF);

– estimates of general government debtforgiveness; and

– information on public and publiclyguaranteed external debt, available fromthe MoF.

The NBR co-operates with Eurostat, theEuropean Central Bank (ECB) and the IMF inthe b.o.p. methodology area by participatingin international meetings, working parties,seminars and statistical missions in order toharmonise national standards with theinternational criteria.

2.5 Users

The monthly b.o.p. is externally disseminatedto the Government, the NIS, the Institute forMacroeconomic Studies and the branchoffices of international organisations such asthe International Bank for Reconstruction andDevelopment (IBRD) and the IMF Mission inBucharest. B.o.p. data are also provided on aregular basis to Eurostat in GESMES/CBformat and to the IMF via the internet.

Within the NBR, it is distributed to theMonetary Policy Department and to theResearch (Economic Studies) and PublicationsDepartment.



The collection system used to report b.o.p.data is an International Transaction ReportingSystem (ITRS) of a semi-open type based onthe collection of settlement data. Statisticsare compiled from forms submitted monthlyby commercial banks and containing aggregatefigures on the external transactions of theircustomers, as well as transactions made fortheir own account. For each of these externaltransactions, it is assumed that an entry ismade in the financial account to offset thecorresponding changes in the bank’s foreigncurrency account.

The data are prepared monthly on acumulative basis.

For some b.o.p. components, additional datasources are used:

– the GDC and NIS for trade data;

– bureaux de change for tourism;

– the Debt Management and Financial AnalysisSystem (DMFAS): a database which is thejoint responsibility of the MoF and the NBR,

used for monitoring Romania’s external debt.Borrowers report medium and long-termcredits contracted from non-residentsdirectly to the MoF and the NBR. While theMoF manages public and publicly guaranteedexternal debt, the NBR monitors the privatesector’s external debt. Information is keyedinto the database on a transaction-by-transaction basis. Details regarding debtsecurities transactions and interest payableare also entered into the database. For b.o.p.purposes, real flow data are available.Transactions denominated in othercurrencies are converted into US dollars(USD) at the rates applicable at the time oftransaction; and

– the NBR balance sheet and data providedby the Market Operations Department forestimated reserve asset transactions.Adjustments are made for changes invaluation due to exchange rate fluctuations.

The b.o.p. data are compiled in US dollars(USD). Wherever possible, transactionsdenominated in other currencies areconverted into USD at the exchange ratesapplicable at the time. For data derived fromthe balance sheets, the exchange rate



applicable at the end of the period is used. Acurrency breakdown is only available forreserve assets and debt flows.

A geographical breakdown is available forexports and imports of general merchandiseand for information obtained from theDMFAS (medium and long-term loans andcredits received, income payable, debtsecurities, etc.).


(i) Banking sector: the banks are required toreport all external transactionsundertaken on behalf of their customersand for their own account. The banksthemselves assess whether a transactionis a b.o.p. transaction or not, and allocatethe operation by type of b.o.p. transaction.According to the double-entry principle,an entry should be made in the financialaccount for these external transactions inorder to offset the corresponding changesin the bank’s foreign currency account.

(ii) Monetary authority sector: the NBRprovides data on reserve assets and othertransactions involving the monetaryauthorities.

(iii)General government sector: data regardingthe general government’s medium and long-term liabilities are provided by the DMFAS(the primary source of these data is theMoF). An Aid Co-ordinating Unit was setup at the MoF with the aim of monitoringall the grants received by Romania.

3.3 Thresholds

For the time being, no thresholds are used inthe Romanian data collection system.


Romania’s b.o.p. data are compiled on amonthly basis by the Statistics Department of

the NBR and are disseminated approximately45 days after the end of the reference period.Data are published on a cumulative basis aseach month’s data are produced. Revisedannual figures are available approximately sixmonths after the year-end. To the extentallowed by the data collection methodology,the classification of accounts and definitionsused in Romania’s b.o.p. follow the guidelinesof the BPM5. While a geographical breakdownis available only for the trade balance andmedium and long-term credits received, aninstitutional sector breakdown is available forall the components of the financial account.

Romania’s i.i.p. is produced on a quarterlyand annual basis by the NBR’s StatisticsDepartment. The quarterly i.i.p. is compiledapproximately two months after the end ofthe reporting period and annual figures areavailable six months after the year-end.

The i.i.p. data are largely consistent with thecorresponding financial account items in theb.o.p., in accordance with a recommendationof the BPM5.

3.5 Data controls

Banks report b.o.p. data on an aggregate basis,and it is therefore often difficult to check thedata. Controls are carried out mainly on theitems of the financial account; for example, itis possible to verify whether repayments ofloans exceed disbursements. For somefinancial account transactions, such astransactions made by banks for their ownaccount, monetary balance sheet data arecompared with the information received fromthe banks, in accordance with the RomanianBalance of Payments Regulation.

3.6 Revision policy

If necessary, data are revised on a quarterlybasis. Revised annual data, published in theNBR’s Annual Report, are disseminated afterapproval by Parliament.



3.7 Dissemination

Romania’s b.o.p. data are disseminatedthrough the NBR’s website (http://www.bnro.ro) and are also published in theNBR’s Monthly Bulletin, Annual Report, andBalance of Payments and InternationalInvestment Position Annual Report. The

information is posted on the NBR’s websiteapproximately two weeks before publication.

Romania participates in the IMF’s GeneralData Dissemination System (GDDS) and usesthis system as a framework for statisticaldevelopment.

4 Goods


Exports and imports of goods are recordedin the b.o.p. based on customs data providedon a monthly basis by the GDC. The GDCprocesses customs declarations (made on theSingle Administrative Document for Europe)and statistical reports drawn up for somecategories of goods transported by cable orpipeline (such as crude oil, natural gas andelectricity). Customs statistics are based onthe foreign trade methodology of the NIS,which is aligned with that of Eurostat.

4.2 Definition

The primary source of data is the foreigntrade statistics, which is currently the onlyreliable data source. The data included inforeign trade statistics are classified accordingto the Combined Nomenclature of theEuropean Union. The GDC passes these dataon to the NIS for official dissemination.

Imports are available on a c.i.f. basis and areconverted to an f.o.b. basis by the NBR, usinga transformation coefficient (1.0834 atpresent) periodically calculated by the NIS(on the basis of a survey of key commercialcompanies).

The NIS groups the countries together bycontinent, according to Eurostatrecommendations, and by the level ofdevelopment, according to United Nationsrecommendations (developed countries,transition countries and developingcountries).

4.3 Deviations

With the entry into force of the RomanianCustoms Code (approved by Law No. 141/1997) on 1 October 1997, which brought thecountry’s customs statistics into line withEuropean Community regulations andprocedures, the problem of goodsidentification was resolved thanks to thealignment of customs and statisticalprocedures. Nevertheless, there are stillsome codification problems. Goods forprocessing, repairs on goods and financialleasing can be derived from the generalclassification.

4.4 Gaps

None.


None.


No estimation methods are used for thegoods item. A commodity breakdown isavailable when trade data are released by theNIS. Estimates are used for forecasting only.Nevertheless, in current account projections,trade data are estimated for each goods itemin accordance with the “CombinedNomenclature” of international standards forforeign trade statistics compilation.



5 Services


As a heterogeneous position, many datasources are implied, with the primary sourcebeing banking data flows. The items requiringthe use of other sources are: merchandisetransport, foreign exchange through bureauxde change, embassy and consulate-relatedservices, other business services, andprofessional and technical services.

A special case is the travel item. Datareported by banks and bureaux de changehave mainly been used for compiling the travelbalance, although these two sources do notcover the whole range of transactions.

5.2 Definition

The current methodology for compilingservices is largely in line with the BPM5. Dataon financial services are collected throughthe banking system.

5.3 Deviations

None.

5.4 Gaps

Receipts related to business travel andtransactions with credit cards are notcovered by the data collection system. It isassumed that the travel debits estimate isoverstated, as not all foreign exchangepurchased by residents is used for travellingabroad.


To improve the quality of the travel data,supplementary data sources (such asreporting on accounts held abroad byenterprises and the reporting of transactionswith credit cards) are envisaged in order tocreate a mixed data collection system in thisfield. A better estimation method will beintroduced for compiling the debit entriesregarding amounts of foreign exchange spentabroad by Romanian travellers.


An estimate is made so that the amounts offoreign exchange sold/purchased by residentsthrough bureaux de change, which are notrelated to travel, do not have to be recordedin the travel balance. The method ofestimation is basically as follows:

– credit entries are calculated as thedifference between the amounts of foreignexchange sold and purchased by non-residents; and

– for debit entries, an assumption is madeon the amounts of foreign exchange spentby a resident abroad. In this respect, theamounts of foreign exchange spend in theprevious year are taken as a basis and areweighted, in a second step, by the index ofRomanian tourists who have travelledabroad in the reporting period (providedby the NIS).

6 Income


Data regarding income balances are collectedthrough banking and non-banking sources.

Transactions involving compensation ofemployees, direct and portfolio investmentincome are covered by the data collectionsystem.



Bank reporting is the main source forcompiling income data. Data are submittedmonthly on an aggregated basis and arecumulated from the beginning of the year.

A non-banking source is used for compilingother investment income in the form ofinterest paid on medium and long-termcredits. This source is the DMFAS, which isbased on direct reporting by companies.


Data are collected from banks and mainlyconcern compensation paid to Romanianresidents by foreign employers for seasonalor short-term work.


Direct investment income is derived fromthe ITRS. Consequently, the data only includedividends and interest paid in cash. Data fordirect investment income paid in kind are notavailable. Reinvested earnings are notincluded in this item as, for the time being,these data are not being estimated. Datasupplied by banks concern both income onequity and income on debt.

Compilation of direct investment incomecomplies partially with the principles set outin the BPM5.


For income on equity, commercial bankreports are used. Dividends refer toshareholdings of less than 10% of anenterprise’s total capital. The collection ofdata regarding income on debt is based onthe ITRS, combined with information suppliedby the DMFAS. This system measures actualinterest payments to non-residents onmedium and long-term debt securities duringa specified period of time. In addition, theNBR provides information on its own receiptsfrom the management of portfolio securities.

Data are available broken down by instrumentand institutional sector.


Data sources are in this case the ITRS, NBRreports and the DMFAS. The latter recordsincome on both government debt (public andpublicly guaranteed debt) and private sectordebt. Further income flows are derived fromreports submitted by commercial banks to theNBR and from the NBR’s own records.Furthermore, interest on short-term tradecredits is provided by bank reports and intereston long-term trade credits by the DMFAS.


Income receipts and payments are compiledon a cash basis. The data are derived fromthe ITRS, which does not allow data oninterest to be compiled on an accruals basis.

Transactions related to income on interestrate swaps and foreign exchange forwardcontracts are recorded under income onportfolio investment (money marketinstruments and financial derivatives).

6.3 Gaps

Direct investment income paid in kind andreinvested earnings (and other undistributedearnings) are not included.

It is not possible to check income dataprovided by commercial banks. In addition,Romania’s ITRS has only limited coverage oftransaction types.


A foreign direct investment (FDI) survey willbe introduced with the aim of monitoring FDIin Romania and Romanian direct investmentabroad. Data regarding reinvested earningsstocks will be provided via this survey.



As soon as this survey is introduced, anestimation method will be devised to compilemonthly flows related to reinvested earnings.


No estimation methods are currently usedfor income.

7 Current transfers

(i) General government: data are obtained frombank reports and mainly cover subsidiesgranted by non-residents for currentbudget support, as well as theGovernment’s contributions to theadministrative budgets of internationalorganisations.

(ii) Other current transfers: additionalinformation concerning aid, donations,contributions and technical assistance(under the PHARE programme, etc.) isrecorded under private transfers. TheStatistics Department obtains these datafrom import statistics.

8 Capital account


Capital transfers:

(i) General government debt forgiveness: thisis estimated on the basis of theGovernment’s budgetary documents andinformation from bank accounts. Debtforgiveness is not a regular occurrence inRomania.

(ii) Private transfers: once a year, theStatistics Department receivesinformation from the MoF on technicalassistance received during the year.Depending on the nature of the assistanceprovided, transactions are assigned tocapital transfers if, for example, equipmentis acquired abroad (with an offsettingentry under imports), or to services (withan offsetting entry under current transfersfor the total value of the technicalassistance).

8.2 Definition

In Romania’s b.o.p., current and capitaltransfers are compiled separately and theyare recorded in the current and capitalaccounts, respectively. Following therecommendations of the BPM5, the criteria

used to distinguish current transfers fromcapital transfers are linked to the definitionof capital transfers:

– a transfer in kind is a capital transfer whenit is related to the transfer of ownershipof a fixed asset;

– a transfer in cash is a capital transfer whenit is linked to, or conditional upon, theacquisition or disposal of a fixed asset byone or both parties to the transaction;and

– the forgiveness of a liability by a creditoris a capital transfer when no counterpartis received in return.

All other transfers are considered currenttransfers.

The definitions used for compiling currentand capital transfers are theoretically in linewith those recommended by the BPM5.


A distinction between current and capitaltransfers is not always possible; some capitaltransfers may be included in current transfers.



8.4 Gaps

At present, it appears that some grants andother aid flows related to capital projects arenot being recorded.

Estimates of migrants’ transfers are recordedin the b.o.p. to the extent allowed by thedata collection system, which is a settlements-based ITRS.


An Aid Co-ordinating Unit was set up thisyear at the MoF, with the aim of monitoringall grants received by Romania using theDMFAS. The use of the DMFAS will enablethe NBR to distinguish current transfers fromcapital transfers, which will lead to a greaterconcordance with the BPM5.

9 Direct investment


As noted under income on direct investmentabove, data on FDI and Romanian investmentabroad are derived mainly from banking datacollected through the ITRS. Therefore, thesedata measure only cash transactions by directinvestment enterprises with parentcompanies. In addition, in order to includenon-cash direct investment (i.e. in kind), someadjusted customs data are taken intoconsideration. These data are to some extentapproximate, as they cannot always beextracted from the general trade data. As fordirect investment by the banking sector, someinformation about other capital is derivedfrom bank balance sheets.

Data are available broken down into two ofthe three major components of directinvestment: equity capital and other capital.However, the accuracy of the data, especiallyfor other capital, is limited by two factors:the inadequate coverage of the ITRS and thesometimes inaccurate assessments bycompilers at commercial banks. Some otherinformation is captured through the massmedia. Regarding the liabilities side of othercapital, accurate data on medium and long-term borrowings are obtained from theDMFAS.

The collection system does not, for the timebeing, allow for any breakdowns, whether byregion or by economic sector.

9.2 Definition

The 10% ownership rule for distinguishingdirect from portfolio investment is observedby the Romanian methodology. Thedirectional principle for recordingtransactions is also followed, with theexception of other capital, which is onlyincluded on a net basis for investment abroadand investment in Romania. Coverage ofinter-company loans is limited to parent-subsidiary transactions. Furthermore, thecurrent collection system is unable to captureintra-group transactions.

As mentioned in Sub-section 7.1.2, reinvestedearnings are not included because no datasource is available.

All transactions in cash effected through thebanking system are included in the b.o.p.when payments are made.


As explained in Sub-sections 9.1 and 9.2,there are some deviations from BPM5recommendations. For example, data onreinvested earnings are missing, only partialrecords exist in respect of the assets/liabilitiesprinciple for other capital, trade credits arenot included in other capital, and securitiesbetween affiliates are not captured underdirect investment.



9.4 Gaps



The NBR is planning to conduct an annualsurvey in 2002 to more accurately measuredirect investment. Furthermore, planned co-

operation with the Trade Register and theForeign Investors’ Council is expected toyield more complete information on directinvestment in Romania.


None.



Several complementary sources are used tocompile portfolio investment in order toobtain a more realistic picture of thesetransactions. Data on portfolio investmentare derived from the ITRS, especially fortransactions in equity shares on the assetsside. These data are supplemented by datatransmitted by the domestic financial marketand the DMFAS, the main source for data onmedium and long-term debt securities,including the NBR’s own portfolioinvestments. For some items (e.g. portfoliosecurities held by banks), data are derivedfrom asset holdings recorded in banks’balance sheets. At the same time, in the caseof bank liabilities, the bank balance sheetsand the DMFAS are cross-checked. With theexception of the DMFAS, all other sourcesprovide data on an aggregated basis.

The present collection system allows for afull institutional sector breakdown and aninstrument breakdown, the main distinctionbeing between equity securities and debtsecurities.

A breakdown by country is available only forother sectors’ medium and long-term debtsecurities.

10.2 Definition

The compilation of portfolio investment databy the NBR complies with the general

guidelines of the BPM5. Both equity securitiesand debt securities are recorded underportfolio investment. While equity securitiesare limited to equity shares, debt securitiesinclude various instruments such as bondsand notes, and money market instruments.

Service charges, fees and commissions areexcluded from portfolio investment.Information on these items is obtained fromthe banking settlement system and isrecorded under financial services.

The accruals principle for interest income isnot applied to the compilation of portfolioincome, meaning that no offsetting entry isrecorded under portfolio investment.

No geographical allocation of assets isavailable.


There are no major deviations from the BPM5with regard to portfolio investment, otherthan the neglect of the accruals principle andthe inclusion of some financial derivatives.

10.4 Gaps

The collection system does not allow forrecording on a security-by-security basis.Furthermore, an instrument breakdown onthe assets side is not possible.




In the new data collection system, an annualsurvey will be conducted. Banks will submitdetailed reports to the NBR on transactionsfor their own account.


None.



Transactions in financial derivatives are notrecorded separately in the financial account.Transactions related to income on interestrate swaps and foreign exchange forwardcontracts are recorded under income onportfolio investment (money marketinstruments and financial derivatives).

11.2 Definitions




11.4 Gaps

For the time being, it is not possible toseparately identify transactions involving

options contracts and futures (flows andmargins), or to record them under financialderivatives.


A new data collection system is to be set upin order to meet IMF, Eurostat and ECBcriteria. Under the new system, banks willreport transactions with non-residents fortheir own account on special forms, includinga specific one for recording financialderivative transactions. The form will gatherdetails allowing a geographical breakdown.

The approach for recording financialderivatives intended to be used in the newsystem is that presented in the Supplementto the BPM5.


None.

12 Other investment


Information regarding other investment isavailable by sector (monetary authority,general government, banking system andother), by maturity and by instrument (loans,trade credits, currency and deposits, andother).

Transactions in other assets and liabilities bybanks cover medium and long-term creditsextended or received by the banking system

and trade-related credits; for assets the dataare obtained from banking flows and forliabilities from the DMFAS.

In the case of commercial banks, the stocksof liabilities reported by the DMFAS arereconciled with balance sheet information ona monthly basis.

Short-term liabilities of commercial banks arederived from balance sheet data. They arerecorded on a net basis, and the data are



calculated as differences between opening andclosing stocks.

For the monetary authority and banks, areconciliation of the balance sheets of thecommercial banks and the NBR with thetransactions shown in the b.o.p. is carriedout periodically.

General government assets cover the mediumand long-term credits extended to the formercentrally planned economies (which are nowmainly residual). These data are obtainedfrom the banking system. Data on theGovernment’s medium and long-termliabilities are provided by the DMFAS.

Other sector assets and liabilities mainlycomprise medium and long-term commercialcredits contracted by the private sector.Private sector external debt is monitored ona loan-by-loan basis by the NBR using theDMFAS. This item also includes outstandingexport and import bills, such as letters ofcredits, cash against documents, letters ofguarantee, etc., which reflect a claim on or aliability to an importer or an exporter (takinginto account the maturity distinction betweenmedium and long-term and short-term), aswell as other assets and liabilities not includedelsewhere.

The Romanian b.o.p. contains a specific itemrecording changes in the clearing and barteraccounts. The clearing and barter agreements

were concluded by the RomanianGovernment before 1989 and most of theseaccounts have now been liquidated. Clearingand barter transactions are denominated innon-convertible currencies and transferableroubles. For b.o.p. purposes, they areconverted into USD. The gross changes areadjusted for exchange rate variations.

12.2 Definition

The definitions used for other investment arein line with the recommendations of theBPM5. For trade credits, see Sub-section 12.1.


None.

12.4 Gaps

None.


None.


None.

13 Reserve assets


Reserve asset data are compiled anddisseminated by the NBR on a monthly basis.The data are provided by the NBR’sAccounting Department and appear in theBank’s balance sheet structured byinstrument, except for the data on Treasurybills and foreign securities which are providedby the Market Operations Department. Thisdepartment also provides the breakdown bycurrency. The monthly flows are obtained

from the difference between opening and end-month-positions. For b.o.p. requirements,exchange rate influences are deducted fromthe gross. The exchange rate changes areobtained from the currency structure of theassets.

13.2 Definition

In principle, the definitions are in line withthe BPM5. Reserve assets comprise monetary



gold, special drawing rights (SDRs), currencyand deposits abroad, treasury bills and foreignsecurities. Foreign exchange assets withdomestic banks are excluded.

The stock of monetary gold is valued usingthe price of an ounce gold on the Londongold bullion market at the end of the month.Flows related to monetary gold includefinancial transactions only. Other reserveasset components are recorded on a netbasis.


None.

13.4 Gaps

None.


None.


None.



14.1.1 General

The compilation of i.i.p. statistics follows, tothe extent allowed by the data collectionmethodology, the guidelines of the BPM5,which was introduced as the framework forRomanian statistics in 1994.

The NBR’s Statistics Department compilesthe i.i.p. in USD on a quarterly basis. Selectedi.i.p. items (international reserves, externaldebt and other) are published in the NBR’sMonthly Bulletin. The i.i.p. data are sentelectronically to the IMF via the internet witha time-lag of two months. Revised annual i.i.p.data are published six months after the year-end. Sectoral and instrumental breakdownsare possible. The i.i.p. includes the stocks ofdirect investment, portfolio investment, otherinvestment and reserves.

The Balance of Payments and InternationalInvestment Position Annual Report publishedby the Statistics Department includes stocks,flows, changes in prices and exchange rates,and other adjustments of financial externalassets and liabilities vis-à-vis the rest of the

world. A reconciliation between i.i.p. stocksand b.o.p. flows (including exchange rate andother adjustments) is carried out.

The data collected is a combination of purestocks of external assets and liabilities andcumulative flows. The main statistical sourcesfor compiling the i.i.p. are:

– commercial bank and NBR balance sheets;

– commercial bank reports; and

– the DMFAS.

Cumulative b.o.p. flows are recorded fordirect investment and other investment.


The Statistics Department separately compilesasset and liability stocks of direct investmenton a quarterly basis. The asset position includesresident investment and contributions to banksabroad, while the liability position includes FDIin the banking and non-banking sectors, privateparent-subsidiary loans and medium and long-term deposits of foreign banks with theirbranches in Romania.



Breakdowns by instrument, country andcurrency are not available for the non-bankingsector, which are mainly enabled by thecumulative b.o.p. flows. Direct investmentstock data for the banking sector are obtainedfrom commercial bank balance sheets. TheDMFAS is the main source of data on privateparent-subsidiary loans, both for banks andnon-banks. Breakdowns by instrument,currency and country are possible using theDMFAS.

The commercial bank balance sheet data areavailable one month after the end of thereference period and the cumulative b.o.p.flows are available two months after thereference period. The coverage and conceptsare in line with the definition used in thefinancial account of the b.o.p.

The valuation of direct investment (bothassets and liabilities) of commercial banks isbased on the relevant end-of-period exchangerates.


Portfolio investment data are compiled anddisseminated on a quarterly basis, separatelyfor both external assets and liabilities. Theasset position includes capital subscriptionsto international bodies (such as the IMF, theIBRD, the European Bank for Reconstructionand Development, the International FinanceCorporation, the Multilateral InvestmentGuarantee Agency and the Bank forInternational Settlements) and debt securitiesheld by commercial banks. The liabilityposition includes capital subscriptions tointernational bodies in domestic currency,equity securities, and bonds and notes issuedby all sectors.

Data on capital subscriptions to internationalbodies are provided by the NBR’s MonetaryPolicy Department and the MoF. Breakdownsby instrument, currency and sector areavailable. Data for debt securities held bycommercial banks are derived from theirbalance sheets.

Pure stocks of external liabilities in the formof bonds and notes are compiled using theDMFAS. Breakdowns by currency, sector,instrument, country, maturity and creditorare also available. Cumulative b.o.p. flowsprovided by the National SecuritiesCommission are used for equity securities.

Balance sheet data are available one monthafter the end of the reference period and thecumulative b.o.p. figures are available twomonths after the reference period. DMFASdata are provided two to three months afterthe end of the reference period.

The coverage and concepts are in line withthe definition used in the financial account ofthe b.o.p.

The valuation criterion used for individualportfolio investment instruments is bookvalue for equity securities and nominal valuefor debt securities.


At present, the i.i.p. does not include data onfinancial derivatives, which are only used on avery small scale.


The other investment position is compiledon a quarterly basis, including Romanianinvestment abroad and foreign investment inRomania. Residents’ assets include externalmedium and long-term claims, accountsreceivable related to exports, creditsextended by banks to non-residents,residents’ deposits abroad, the value ofembassy buildings, and the balance on clearingaccounts. Residents’ liabilities comprise short,medium and long-term commercial creditsand loans, accounts payable related toimports, non-residents’ deposits, and thebalance on clearing accounts.

External asset data are provided mainly bycommercial banks, which record short,



medium and long-term claims, accountsreceivable related to exports, and the balanceon clearing accounts. Breakdowns by countryand maturity for external claims and byinstrument for accounts receivable related toexports are also available. The pure stocks ofcurrency and deposits of the banking sectorabroad are derived from the balance sheetsof commercial banks and the value of embassybuildings is recorded by the Ministry ofExternal Affairs. Breakdowns by instrumentand currency for commercial bank depositsand by country for the embassies areavailable.

Data on medium and long-term external loansand commercial credits received from non-residents are provided by the DMFAS.Breakdowns by currency, maturity, creditor,interest rate type and economic sector ofthe debtor are compiled on a monthly basis.Short-term liabilities of commercial banks arederived from balance sheet data.

Cumulative b.o.p. flows are used to obtaindata for long-term export and import bills,such as letters of credit, cash againstdocuments, letters of guarantee, etc., whichreflect a claim on or a liability to an importeror an exporter of the non-banking sector,and credits extended by banks abroad.

The short-term external assets and liabilitiesof the banking sector, the value of embassybuildings and medium and long-term externalloans are converted into USD at the end-of-period exchange rate. External claims arerecorded at nominal value.

The analytical accounts of commercial banksare generally available one month after theend of the reference period, while mediumand long-term external debt and externalclaims data are available two months afterthe reference period.

The coverage and concepts are in line withthe definitions used in the financial accountof the b.o.p.


Reserve assets are defined as gross claims onnon-residents and comprise holdings of SDRsand foreign exchange, deposits at foreignbanks and holdings of securities and Treasurybills issued by foreign governments.

Reserve assets are compiled and disseminatedon a monthly basis. Breakdowns by currencyand instrument are available.

The main statistical source for reserve assetsis the NBR’s balance sheet. Moreover, theTreasury bills and foreign securities data areprovided by the Market OperationsDepartment. The analytical accounts of theNBR and the monetary survey are generallyavailable one month after the end of thereference month; and the Treasury bill andforeign securities positions are available sevendays after the end of the reference month.

The coverage and concepts are in line withthe definitions used in the b.o.p. financialaccount.

In i.i.p., end-of-period market price valuationis used for the NBR’s gold holdings and thevaluation of foreign exchange is based on therelevant end-of-period exchange rate. Foreignsecurities held by the NBR are recorded atthe original purchase price and holdings ofSDRs are valued at the end-of-period USD/SDR exchange rate.


None.

14.3 Gaps

None.




None.

15 Contacts

This country information was drafted byRomania and agreed with the ECB’s Balanceof Payments and External Reserves Division.Enquiries of a general nature should beaddressed to the Press Division of the ECB.Enquiries specific to Romania should beaddressed to:

Mr. Virgil StefanescuHead of DivisionStatistics DepartmentNational Bank of RomaniaStrada Lipscani 2570421 BucharestRomania



None.



Slovak Republic

February 2002

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Chapter 3.11 S

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Monetary PolicyDepartment Statistic Department

General StatisticsSection

Banking StatisticsSection

Foreign ExchangeStatistic Section

Monetary PolicySection

Monetary AnalysesSection

National EconomySection

Balance of PaymentsSection

Public FinanceSection

Comperativ StudiesSection

Monetary Division


Chapter 3.11 Slovak Republic


2.1 Introduction

Since 1 January 1993, Národná bankaSlovenska, the National Bank of Slovakia (NBS)– as the central bank of the Slovak Republic –has been the institution responsible forcompiling balance of payments (b.o.p.) andinternational investment position (i.i.p.)statistics. The Balance of Payments (BOP)Section of the NBS’s Monetary PolicyDepartment collects data from a variety ofsources, including the banking sector, theStatistical Office of the Slovak Republic(SOSR), government ministries (such as theMinistry of Finance and the Ministry of theEconomy), government agencies (such as theNational Property Fund), stock marketbrokers and a large number of Slovakenterprises.

The b.o.p. is compiled monthly on acumulative basis and is published in hard copy.Data are also disseminated through the NBS’swebsite (www.nbs.sk) with a three-month lag.Reports are submitted to the SlovakParliament twice a year. The data arecompiled in Slovak koruna (SKK) and alsopublished in US dollars (USD). The collectionand compilation methods are being adjustedto bring them into line with therecommendations of the 5th edition of theBalance of Payments Manual (BPM5) of theInternational Monetary Fund (IMF). The i.i.p.is compiled on a yearly basis.

The b.o.p., i.i.p. and reserve asset data arecompiled and published according to variousActs of the NBS, independently of the generalgovernment.


The data are compiled under the terms andconditions of the NBS Act (No. 566/1992),with subsequent amendments, the BankingAct (No. 21/1992), the Foreign Exchange Act(No. 202/1995) and the internal NBS RuleNo. 34, amended in 1997.

(i) NBS Act No. 566/1992The NBS Act defines the independenceof the NBS in deciding on methodologyand the form and timing of datadissemination.

(ii) Banking Act No. 21/1992The Banking Act defines the reportingrequirements of commercial banks vis-à-vis the NBS.

(iii) NBS Rule No. 34NBS Rule No. 34 ensures theconfidentiality of individual banks’ data andrequires that only aggregate informationbe made available to the public.


The BOP Section is responsible for conceiving,developing, compiling and analysing b.o.p. andi.i.p. statistics. The section is also responsiblefor providing data to internationalinstitutions, such as the IMF, Eurostat andthe Organisation for Economic Co-operationand Development (OECD). The BOP Sectionoperates within the Monetary PolicyDepartment.

The Statistics Department consists of threesections, all of which co-operate in the taskof collecting and processing accurate andcomprehensive data.

(i) The Banking Statistics Section isresponsible for the collection, controland processing of money and bankingstatistics statements from commercialbanks related to transactions in domesticcurrency.

(ii) The Foreign Exchange Statistics Section isin charge of the collection, control andprocessing of money and bankingstatistics statements from commercialbanks related to transactions in foreigncurrency.

(iii) The General Statistics Section isresponsible for methodological



management and for the collection,control and processing of data from theSlovak corporate sector.

The International Relations Department is incharge of providing data on some of the NBS’sliabilities (e.g. those to the IMF and theEuropean Investment Bank).

The Treasury Department is responsible forcompiling, controlling and processing data onthe reserve assets of the NBS.

The Banking Transactions Department is incharge of providing stock and flow data onpart of the NBS’s liabilities (e.g. the portfolioinvestment of the NBS) and on governmentliabilities.


The SOSR provides the NBS with monthlydata on foreign trade. These data arecompiled in accordance with the BPM5 andindividual data are obtained with geographicaland commodity breakdowns according to theStandard International Trade Classification(SITC). Foreign trade figures are based oninformation from customs declaration forms.

The Ministry of Finance provides the NBS withdata on the assets and liabilities of the generalgovernment sector.

The National Property Fund provides the NBSwith data on non-resident investment in theSlovak Republic (for state-owned enterprisesonly).

The BOP Section of the NBS maintainsregular contacts and addressesmethodological, collection and compilationissues with other central banks (e.g. inAustria, Germany and the Czech Republic).

The BOP Section’s staff take part in severalof Eurostat’s b.o.p. technical groups and haveclose contacts with the European CentralBank (ECB) and the OECD. B.o.p.methodological issues are discussed regularlywith the Statistics Department of the IMFand, on the basis of these discussions, theBOP Section continually develops its system.

2.5 Users

Data are first disseminated to the public viathe NBS’s website. The public are informedof this practice by a note in the NBS’smonthly publication “Monetary Survey”. Thedata are published a few weeks later in therelevant issue of the monthly “MonetarySurvey”, as well as in the “StatisticalInformation” publications and the “AnnualReport of the NBS”.

Internally, the data are used and analysedwithin the Monetary Policy Department andthe Foreign Exchange Division of the NBS.

B.o.p. and i.i.p. figures are sent regularly tothe IMF, Eurostat, the OECD and otherinstitutions, according to their particularrequirements.



B.o.p. compilation is based on a mixed system,which uses a combination of settlement dataand surveys. The reporting by the bankingsystem does not include a full explanation ofthe changes in the level of external positions.The banking system settlements are

complemented with surveys from theGovernment, the Ministry of Finance, theSOSR, the Customs Office (for trade balancepurposes) and a large number of Slovakenterprises. Flows are derived from stockstatistics for the operations conducted bybanks’ on their own account.




(i) The SOSR reports data on Slovakexports and imports of goods, which arederived from customs declarations. Theexternal trade data record the physicalmovement of goods, which are valued atmarket prices and recorded at the timethey cross the frontier of the SlovakRepublic.

(ii) All commercial banks submit data to theNBS in the required format and time.For the purposes of b.o.p. compilation,commercial banks submit statements onforeign exchange income and paymentsto and from non-residents in foreign anddomestic currency, statements on theirforeign exchange and SKK positions, andstatistics on non-residents’ holdings ofsecurities in their custody departments.

(iii) The NBS reports data on reserve assetsand the liabilities of monetary authoritiesand government (flow and stock dataare available).

(iv) Slovak enterprises are direct reportinginstitutions. Each enterprise with foreignassets or liabilities exceeding SKK1 million at the reference date isrequired by Slovak law (the ForeignExchange Act) to provide the NBS witha monthly report on those foreign assetsand liabilities. Currently, the NBS obtainsdata from approximately 3,500enterprises. In the area of portfolioinvestment, all securities traders areobliged to submit data on theirtransactions with non-residents.

(v) The Ministry of Finance provides the NBSwith data on the assets and liabilities ofthe general government sector.

3.3 Thresholds

Generally, no threshold has been applied tothe transactions of commercial banks. Forthe corporate sector, a threshold of SKK1 million has been set, above whichenterprises must submit a monthly report onforeign assets and liabilities.


B.o.p. data are compiled monthly in acumulative form. Data are disseminated tothe public no later than three months afterthe reporting period.

I.i.p. data are compiled yearly and publishedno later than six months after the end of thereference year. Since 2001, the BOP Sectionhas been compiling the i.i.p. on a quarterlybasis. These data are disseminated no laterthan six months after the reference period.

Reserve assets are compiled on a weekly basisand the reference day is always Wednesday,or the preceding working day if theWednesday is a public holiday. Data arepublished on the following Monday, or thenext working day if the Monday is a publicholiday. On a monthly basis, data arestructured according to the new IMF DataTemplate on International Reserves andForeign Currency Liquidity (the IMF DataTemplate) and disseminated no later than onemonth after the reference period.

3.5 Data controls

Commercial banks return their data inelectronic form. A closed control system isused to check individual reports and inter-report controls are also carried out.

Checks are also performed at the aggregatelevel to verify consistency with otherstatistics. For example, commercial bankstatements are checked against enterprisesurveys for selected items.

The NBS also checks that time series dataare logical.

3.6 Revision policy

The b.o.p. and i.i.p. data are revised everytime new information becomes available.Owing to the eight-month lag in obtainingfinal data, the trade balance is revised



periodically. Commercial banks andenterprises revise their end-of-year data fourmonths later after an internal audit has beenperformed.

3.7 Dissemination

Data are first disseminated to the public viathe NBS’s website. The public is informed ofthis practice by a note in the NBS’s monthlypublication “Monetary Survey”. The data aredisseminated a few weeks later in the relevantissue of the monthly “Monetary Survey”, aswell as in the “Statistical Information”publications and the “Annual Report of theNBS”.

Internally, the data are used and analysed bythe Monetary Policy Department and theForeign Exchange Division of the NBS.

B.o.p. and i.i.p. figures are sent regularly tothe IMF, Eurostat, the OECD and otherinstitutions, according to their specificrequirements. The Slovak Republic is asubscriber to the IMF’s Special DataDissemination Standard (SDDS) anddisseminates metadata on the IMF’s DataDissemination Bulletin Board with a hyperlinkto the original data.

4 Goods


The international trade statistics in Slovakiaare based on a special trade system. Thestatistics refer to all merchandise entering orleaving the Slovak Republic free circulationarea and premises for inward processing.Included are non-monetary gold, oil,electricity, military goods, goods boughtunder financial leasing arrangements, bartertrade, postal consignments subject to customsformalities and, as of January 1998, goods forprocessing. The main exclusion is migrants’effects. Estimates are not made forunrecorded trade (e.g. smuggling and non-reported trade).

The Directorate of Customs of the SlovakRepublic compiles monthly international tradestatistics on a cumulative basis. Exports andimports are published on an f.o.b. basis.However, it is also possible to calculate tradedata on a c.i.f. basis.

4.2 Definition

Slovak foreign trade statistics on goods arecompiled according to the BPM5, whichmeans that data are divided into:

– general merchandise;– goods for processing;– repairs on goods; and– non-monetary gold.

Data on Slovak exports and imports of goodsare derived from customs declarations. Theexternal trade data record the physicalmovement of goods, which are valued atmarket prices and recorded at the time theycross the frontier of the Slovak Republic.

A geographical breakdown of figures isavailable, as well as a commodity breakdownaccording to the SITC.

4.3 Deviations

The current system records the data at thetime the border is crossed, and not at thetime of the change of ownership.

4.4 Gaps

International trade statistics do not fullycapture goods (e.g. fuels, including bunkerfuel) procured abroad by resident carriersand those procured in the Slovak Republic by



non-resident carriers. These relate mainly topurchases of fuel by trucks.


The gap mentioned in Sub-section 4.4 will beclosed when the planned methodologicalchanges are introduced in 2002.


The NBS does not make any estimates oftrade statistics data, which are obtained fromthe SOSR.

5 Services


Generally, data for services are obtained fromthe “Monthly report on foreign exchangeincome and payments” and the “Monthlyreport on receipts and payments for theaccount of non-residents”. The first reportcontains transactions in foreign exchange,while the latter covers transactions indomestic currency. These reports areprepared by all commercial banks on the basisof the methodology prepared by the BOPSection. The commercial banks return thedata electronically to the StatisticalDepartment of the NBS. The reporting formsare designed on the basis of the BPM5 andalso contain information needed by thecompilers.

The data are collected on the basis of asystem using specific transaction codes, underwhich income and payments have to beassigned the relevant code from a list.

5.2 Definition

Data are compiled according to the BPM5.

(i) Transportation: data for transportationare generally obtained from the “Monthlyreport on foreign exchange income andpayments” and the “Monthly report onreceipts and payments for the accountof non-residents”, and several items aredirectly reported by pipeline operators.

(ii) Travel: data for travel are obtained fromthe “Monthly report on foreign exchange

income and payments” and the “Monthlyreport on receipts and payments for theaccount of non-residents”. Thecollection system covers purchases andsales of foreign exchange and cashlesspayments (i.e. transfers from oneaccount to- another), as well astransactions via credit cards.

(iii) Other services: data for this item areobtained from the “Monthly report onforeign exchange income and payments”and the “Monthly report on receipts andpayments for the account of non-residents”.

5.3 Deviations

None.

5.4 Gaps

None.


The NBS is planning to approve andimplement a survey system for non-bankingentities covering selected services items tocomplement the current banking statementsystem.


None.



6 Income



Data for compensation of employees areobtained from the “Monthly report on foreignexchange income and payments” and the“Monthly report on receipts and paymentsfor the account of non-residents”.


Income on direct investment is recorded inthe b.o.p., broken down into income onequity securities and income on debtsecurities (interest on credits between directinvestors and direct investment enterprises).Reinvested earnings data are also available.

The NBS obtains data on direct investmentincome from the “Monthly report on foreignexchange income and payments” and the“Monthly report on receipts and payments forthe account of non-residents” returned bybanks, and from the monthly enterprise survey“Monthly report on foreign assets and liabilities”.

A breakdown by sector is available for incomeon direct investment.


Income on portfolio investment is recordedin the b.o.p., broken down into income onequity securities (dividends) and income ondebt securities (interest). Data for incomeon debt securities are divided into bonds andnotes and money market instruments.

Data are obtained from the “Monthly reporton foreign exchange income and payments”and the “Monthly report on receipts andpayments for the account of non-residents”.Data on income received by generalgovernment and the NBS are obtained fromthe External Debt Management Section and

the International Relations and TreasuryDepartments of the NBS.

Data are recorded on a cash basis.

A geographical breakdown is not available forincome on direct investment or income onportfolio investment. A breakdown by sector isavailable for income on portfolio investment.


Data on income on other investment areavailable in a sectoral breakdown. Data areobtained from the “Monthly report on foreignexchange income and payments”, the “Monthlyreport on receipts and payments for the accountof non-residents” and the monthly enterprisesurvey “Monthly report on foreign assets andliabilities”. Data on interest received and paidby the NBS and general government areobtained from the External Debt ManagementSection and the International Relations andTreasury Departments of the NBS.


Interest is recorded on a cash basis.

6.3 Gaps

A geographical breakdown is not available forincome on direct investment or income onportfolio investment.


The NBS is planning to improve the coverage ofcompensation of employees by implementingnew estimation methods in order tocomplement current banking statements.


None.



7 Current transfers

Data for current transfers are obtained fromthe “Monthly report on foreign exchangeincome and payments” and the “Monthlyreport on receipts and payments for theaccount of non-residents”. The credit entriesfor general government cover amountsreceived under foreign technical assistance

projects and humanitarian aid. Debit entriescover contributions to the administrativebudgets of international organisations. Theentries for other sectors include workers’remittances, inheritances, alimony payments,gifts and pensions.

8 Capital account


Data for capital transfers are derived from thesame sources as data for current transfers andmainly include migrants’ transfers andinvestment grants received and extended.Transfers are broken down into governmentand other according to the institutional sectorof the resident. Transactions under the PHAREtechnical assistance programme are included.

8.2 Definition

Capital transfers are compiled according tothe BPM5.

Data are obtained from the “Monthly reporton foreign exchange income and payments”and the “Monthly report on receipts andpayments for the account of non-residents”.


In some cases, the banking foreign exchangestatistics lead to inconsistencies betweencurrent and capital transfers (e.g. gifts in theform of capital are included in currenttransfers together with other gifts).

8.4 Gaps

Non-financial transfers are not recorded.


The NBS is planning to introduce a newsurvey for non-financial transfers.

9 Direct investment


Direct investment data are collected througha two-survey system. The first survey is basedon monthly reporting and the second is thequarterly survey. The NBS has a list ofapproximately 1,500 respondents, whichregularly return the required questionnairesto the NBS.

In addition to both these surveys, the NBSuses supplementary sources of information,such as commercial banking statements, the

National Property Fund, company reports andthe press for information on new investors.

In both surveys, the column structureincludes:

– the position of assets/liabilities at thebeginning of the period;

– credits and debits for assets/liabilities;– exchange rate changes, price changes and

other adjustments; and– the position of assets/liabilities at the end

of the period.



The row structure of both surveys containsdirect investment abroad and directinvestment in the reporting economy. Theassets and liabilities under foreign directinvestment (FDI) are broken down into:

– equity capital (claims/liabilities);– reinvested earnings; and– other capital (claims/liabilities).

The quarterly survey provides the NBS withcountry and economic activity breakdowns.The economic activity breakdown is in linewith the International Standard IndustrialClassification (ISIC).

The data on FDI are disseminated monthlyvia the NBS’s website.

9.2 Definition

The definition of FDI is in line with the BPM5and with the recommendations of Eurostatand the OECD. This means that the principleslisted below are followed in the recording ofFDI:

– the 10% ownership criterion;– the directional principle for FDI;– the inclusion of inter-company financial

transactions (borrowing and lending –

loans and trade credits, securities andfinancial derivatives);

– data for special-purpose entities are notcompiled separately; and

– reinvested earnings are included in FDI.

When recording direct investmenttransactions, the actual operation concept isapplied.


None.

9.4 Gaps

Some gaps may occur in connection withthe identification of branch/subsidiaryrelationships.


None.


None.



The data on inward and outward portfolioinvestment are published monthly, broken downby instrument (into equity securities and debtsecurities). On the assets side, a breakdown bycreditor sector is available for foreign securitiesowned by residents. On the liabilities side, abreakdown by issuer sector is available forSlovak securities held by non-residents. Dataon portfolio investment are collected on anaggregated basis.

Portfolio investment figures are collected mainlyfrom monthly banking statements. This data

collection system is complemented with asurvey of Slovak securities held by non-residents. Commercial banks are therespondents in this survey, since they providecustody services for domestic securities held bynon-residents. They therefore provide the NBSwith monthly information on flows and stockswith the required breakdowns. This custodysurvey system combines with the monthlyenterprise survey “Monthly report on foreignassets and liabilities”. The combination of thesedifferent collection systems enables the BOPSection to obtain all the items of equitysecurities and debt securities at market prices,broken down by sector and instrument.



Currency and geographical breakdowns are notavailable at present.

10.2 Definition

The NBS defines portfolio investment inaccordance with the BPM5. Portfolio investmentincludes equity securities (shares, participationcertificates and interim certificates) and debtsecurities (bonds and notes and money marketinstruments). Neither financial derivatives norrepurchase agreements (repos) are included inportfolio investment. Service charges andbrokerage fees are recorded as services.


None.

10.4 Gaps

If a resident’s assets are sold directly by anon-resident custodian or bank, the portfolioinvestment collection system is unable torecord such information.


In 2002, the BOP Section is planning toapprove and implement a new statement,which will enable it to obtain a geographicalbreakdown of portfolio investment.


None.



Data on financial derivatives are compiled usingcommercial banking statements and theenterprise survey. Only monthly banking dataare used for compilation purposes, becausetransactions in the corporate sector have notyet been liberalised, i.e. no company data areavailable because the corporate sector is notyet allowed to carry out such transactions.Statements are based on transactions on a netbasis.

Geographical and sectoral breakdowns offinancial derivative transactions are not yetavailable. Financial derivatives are recorded atmarket values.

11.2 Definitions

Financial derivatives are recorded as aseparate item of the financial account.Financial derivative transactions are treatedin line with the BPM5, which means thattransactions relating to options, futures,swaps and forwards are recorded.


None.

11.4 Gaps

The collection system covers transactionsmade by residents via domestic banks only.The transactions effected via foreign banksare not covered by the collection system.


The NBS is planning to implement abreakdown of financial derivatives by type ofinstrument. The methodology for this will bedeveloped in 2002.


None.



12 Other investment


Other investment data is collected accordingto the definitions of the BPM5 and is brokendown primarily into assets and liabilities.Furthermore, a breakdown by sector(monetary authorities, general government,commercial banks and other sectors) and abreakdown by maturity (short versus long-term investment) are available.

For each sector, other investment is brokendown into the following instruments:

– trade credits;– loans;– currency and deposits; and– other assets/liabilities.

A breakdown by currency is available for theNBS, general government and the bankingsector.


(i) the NBS: the Treasury Department ofthe NBS provides the Bank’s foreignexchange position. Information on theBank’s liabilities is provided by therelevant units of the NBS;

(ii) the Government: information is providedby the relevant units of the NBS, whichis the fiscal agent of the Government inthe area of debt service. The NBS alsoreceives supplementary information onassets from the Ministry of Finance;

(iii) commercial banks: these returnstatements on foreign and domestic

currency positions vis-à-vis non-residents (assets/liabilities); and

(iv) other sectors: data from domesticenterprises is obtained from the monthlysurvey of foreign assets and liabilities.

12.2 Definition

The other investment item is basically in linewith the BPM5. Trade credits and repos arealso included.


None.

12.4 Gaps

A breakdown by country is not available.


None.


Transaction data from the banking sector arenot available. Currently the transactions areestimated from stock data, but the NBS willintroduce a new banking sector statementcontaining both stock and transaction data in2002.

13 Reserve assets


The source of the data for reserve assets isthe Treasury Department (Operations) of theNBS, which compiles and provides data on adaily basis. However, the data are

disseminated to the international institutionsand the public on a weekly basis and dailydata are used only for internal analysis. TheTreasury Department also providesbreakdowns of reserve assets by type ofinstrument and currency.



13.2 Definition

Reserve assets are those external assets thatare readily available to and controlled bymonetary authorities for the direct financingof payments imbalances, for indirectlyregulating the magnitude of such imbalancesthrough intervention in exchange markets toaffect the exchange rate and/or for otherpurposes. This definition is fully consistentwith the BPM5.

The reserve assets are under the effectivecontrol of the NBS and the position of centralgovernment is excluded from these assets.

The reserve assets consist of:

– foreign exchange: highly liquid, marketableand creditworthy foreign currency-denominated claims (consisting of currencyand deposits and securities) on non-residents. Positions vis-à-vis residents andpositions in domestic currency areexcluded from the reserve asset data;

– gold: total gold held by the NBS includingreversible gold transactions (gold swaps).The total volume of gold is valued at itshistorical price (i.e. USD 42.22/oz.);

– special drawing rights;

– the reserve position in the IMF; and– other reserve assets

Reserve asset data are compiled inaccordance with the gross concept (i.e. nonetting with monetary authorities’ liabilities)and published according to the structure ofthe IMF Data Template.


There are some methodological discrepanciesrelative to the IMF Data Template in theareas of gold valuation, reporting of sometransactions involving securities (e.g. reposand reverse repos) and gold swaps.

13.4 Gaps

All transactions in reserve assets are coveredby the BOP Section’s reporting system.


The NBS is currently planning to change themethodology for reserve asset data to bringit fully into line with IMF Data Template andECB requirements.



14.1.1 General

The classification of the i.i.p. follows therecommendation of the BPM5 andcorresponds to the standard presentation ofb.o.p. statistics. The i.i.p. includes the stocksof financial assets and liabilities vis-à-vis non-residents. Data for assets and liabilities arerecorded separately.

The i.i.p. is compiled on a yearly basis and ispublished on the NBS’s website no later than

six months after the end of the referenceyear. In 2001, the NBS started to compile thei.i.p. on a quarterly basis.


Direct investment stock data (on equitycapital) are compiled on a monthly basis andpublished on the NBS’s website. Thebreakdown by instrument is currentlyavailable on a monthly basis, but published ona yearly basis. Breakdowns by sector, countryand economic activity are also available on aquarterly basis.




(i) the banking sector: banks send inmonthly statements on foreign anddomestic currency positions vis-à-visnon-residents (assets/liabilities). Ageographical breakdown for this sectoris also available on a quarterly basis; and

(ii) other sectors: the monthly survey of theforeign assets and liabilities ofapproximately 1,500 domestic enterprisesprovides direct investment data. From thissurvey, the NBS obtains both transactionand stock data for all direct investmentitems (e.g. equity capital, reinvestedearnings and other capital) according tothe BPM5. The country and economicactivity breakdowns of FDI are availablethrough a separate quarterly survey, whichhas the same structure as a monthly report.The column structure of both enterprisesurveys is as follows:– the position of assets/liabilities at the

beginning of the period;– credits and debits for assets/liabilities;– exchange rate changes, price changes

and other adjustments; and– the position of assets/liabilities at the

end of the period.

Coverage and concepts are in line with thedefinitions used in the financial account ofthe b.o.p. Valuation approaches depend onthe availability of market values.


Data on portfolio investment stocks arecompiled and disseminated quarterly, brokendown by instrument (into equity securitiesand debt securities). On the assets side, abreakdown by creditor sector is available forforeign securities owned by residents. Onthe liabilities side, a breakdown by issuersector is available for Slovak securities heldby non-residents. Currency and geographicalbreakdowns are not available at present.


(i) the banking sector: banks send inmonthly statements on foreign anddomestic currency positions vis-à-visnon-residents (assets). The NBS obtainssupplementary information on Slovaksecurities held by non-residents(liabilities) from a special survey ofcommercial banks, which providecustody services to non-resident holdersof Slovak securities; and

(ii) other sectors: the monthly survey of theforeign assets and liabilities of domesticenterprises is used as an additionalsource of information on portfolioinvestment stocks.

The NBS defines portfolio investmentaccording to the methodology of the BPM5.Portfolio investment includes equity securitiesand debt securities (which include bonds andnotes and money market instruments).

The stock figures in all the breakdowns aregiven at market values.


Data on financial derivatives are compiled onthe basis of commercial banking statementsand the enterprise survey. Only monthlybanking data are used for compilationpurposes, because transactions in thecorporate sector are not yet liberalised.


(i) the banking sector: banks send inmonthly statements on foreign anddomestic currency positions vis-à-visnon-residents; and

(ii) other sectors: the monthly survey of theforeign assets and liabilities of domesticenterprises is used as an additionalsource of information on financialderivatives.

Geographical and sector breakdowns of thesestocks are not yet available.



Financial derivative stocks are recorded attheir real values and are treated inaccordance with the BPM5.


Data on other investment are collectedaccording to the definitions of the BPM5.Other investment is primarily broken downinto assets and liabilities. In addition, abreakdown by sector (monetary authorities,general government, commercial banks andother sectors) and a breakdown by maturity(short versus long-term maturity) areavailable.

For each sector, other investment is brokendown into the following instruments:

– trade credits;– loans;– currency and deposits; and– other assets/liabilities.

Breakdowns by currency are available for theNBS, general government and the bankingsector.


(i) the NBS: the Treasury Department ofthe NBS provides the Bank’s foreignexchange position. Information on NBSliabilities is provided by the relevant unitsof the Bank;

(ii) the Government: information is providedby the relevant units of the NBS, whichis the fiscal agent of Government in thearea of debt service. The NBS alsoreceives supplementary information onassets from the Ministry of Finance;

(iii) commercial banks: these returnstatements on foreign and domesticcurrency positions vis-à-vis non-residents (assets/liabilities); and

(iv) other sectors: data from domesticenterprises is obtained from the monthlysurvey of foreign assets and liabilities.

The column structure of all statements(except those from commercial banks) andsurveys contains:

– the position of assets/liabilities at thebeginning of the period;

– credits and debits for assets/liabilities;– exchange rate changes, price changes and

other adjustments; and– the position of assets/liabilities at the end

of the period.

Coverage and concepts are in line with thedefinitions used in the financial account ofthe b.o.p.


The source of reserve asset data is theTreasury Department (Operations) of theNBS, which compiles and provides data on adaily basis. However, the data aredisseminated to the international institutionsand the public on a weekly basis and dailydata are used only for internal analysis. TheTreasury Department also provides thebreakdowns of reserve asset data by type ofinstrument and currency.

The definition of reserve assets is fullyconsistent with the BPM5.

The reserve asset data are publishedaccording to the structure of the IMF DataTemplate.


None.

14.3 Gaps

Currently, coverage of the household sectoris insufficient.




The NBS is planning to compile anddisseminate the i.i.p. on a quarterly basis.


None.

15 Contacts

This country information was drafted by theSlovak Republic in agreement with the ECB’sBalance of Payments and External ReservesDivision. Enquiries of a general nature shouldbe addressed to the Press Division of theECB. Enquiries specific to the Slovak Republicshould be addressed to:

Mr. Peter FejkoHead of the Balance of Payments SectionMonetary Policy DepartmentNational Bank of SlovakiaŠtúrova 2813 25 Bratislava 1


Slovenia

February 2002


Chapter 3.12 Slovenia

1 Organisation chart

Bank of Slovenia departments, divisions and units involved in b.o.p. and i.i.p. compilation

Governor

Deputy- Governor

Vice-Governor

Vice-Governor

Vice-Governor

Secretary of the Bank

Forign OperationsDepartment

Financial Statistics Department

Monetary Statistics Division

International Investment Division

Fi nancial Markets Division

Statistical Methods Division

International Credit and Payments Division

Balance of Payments and International Investment Position Compilers




2.1 Introduction

In accordance with the National Programmeof Statistical Surveys and the ForeignExchange Act, the official compiler of theSlovenian balance of payments (b.o.p.) is theBanka Slovenije, the Bank of Slovenia (BS).

The BS has been responsible for compilingthe b.o.p. since 1991. Before then, Sloveniawas part of Yugoslavia and its b.o.p. wascompiled using a different methodology.

Slovenia’s b.o.p. is compiled by the BS on thebasis of the recommendations of the 5thedition of the IMF Balance of PaymentsManual (BPM5) and under limitations asregards the availability of data.

Responsibility for the collection of the datanecessary for b.o.p. compilation is sharedbetween the Statistical Office of the Republicof Slovenia (SORS) and the BS. Such data iscollected through Slovenia’s InternationalTransaction Reporting System (ITRS). Withinthe framework of the ITRS, the SORS isresponsible for collecting trade statistics fromcustoms declarations, while the BS collectsreports on other transactions betweenresidents and non-residents. Stock data forthe international investment position (i.i.p.)are collected exclusively by the BS.


The compilation and publication of b.o.p. andi.i.p. data are governed by the Law of 1991on the Bank of Slovenia and subsequentamendments (Official Gazette Nos. 1/1991,17/1991 and 13/1993), the Law of 1995 onNational Statistics (Official Gazette Nos. 45/1995 and 9/2001) and the Decree of 1992 onthe Obligation of Residents to Report Dataon the Stock of Claims and Liabilities andTransactions with Non-residents (OfficialGazette No. 60/1992), which came into effecton 1 January 1993. The data are also affectedby the BS’s Guidelines on Payment Transfers

with Foreign Countries, which came intoforce in November 1991.

(i) The Law on the Bank of Slovenia andsubsequent amendments established theBank’s independence and provide for it tocollect the data needed for its operations.

(ii) The Law on National Statistics guaranteesthe confidentiality of individuals’ personaldata and established the annual NationalProgramme of Statistical Surveys, underthe terms of which the BS is obliged topublish b.o.p. data.

(iii)The Decree on the Obligation of Residents toReport Data on the Stock of Claims andLiabilities and Transactions with Non-residentsprovides for the confidentiality ofindividuals’ personal data.


The BS is responsible for several sets ofstatistics provided by the Financial StatisticsDepartment, which in turn comprises thefollowing five divisions: the MonetaryStatistics Division, the InternationalInvestment Division, the Financial MarketsDivision, the Statistical Methods Division andthe International Credit and PaymentsDivision. This last division is responsible forcollecting data on transactions with non-residents settled via commercial banks. It alsocollects data on long-term loans and tradecredits to and from non-residents, as well asshort-term loans to and from non-residents.The International Investment Division, for itspart, collects data on direct investment,short-term trade credits and accounts heldby non-bank residents with foreign banks, aswell as inter-company accounts with non-residents.

The Financial Statistics Department has a totalof 53 staff, while the International Credit andPayments Division has 23. The InternationalInvestment Division has 17 staff, four of



whom are responsible for compiling b.o.p.and i.i.p. reports.


The SORS is an important external partnerof the Financial Statistics Department. Itprovides the b.o.p. compilers with foreigntrade statistics that are used to derive datafor transactions in goods for the Slovenianb.o.p.

Sources for some estimates are the SORSand institutions in neighbouring countries.

2.5 Users

B.o.p. and i.i.p. statistics are sent to internalusers at the BS and external users in Slovenia.The external users include the SORS, theChamber of Commerce, the Ministry ofFinance and some commercial banks.

The b.o.p. and i.i.p. data are also sent to theOrganisation for Economic Co-operation andDevelopment (OECD), the InternationalMonetary Fund (IMF) and Eurostat accordingto their respective standards.



The reporting system for the b.o.p. is theITRS, which is a closed system. There isintegrated reporting of the positions on non-resident accounts (these explain the changesin the assets or liabilities in the b.o.p.’s capitaland financial accounts) and the transactionssettled through these accounts (theseprincipally explain the changes in the b.o.p.’scurrent account). In the reporting form, theposition on each non-resident account at theend of the reporting period should equal theposition at the beginning, plus the credittransactions minus the debit transactions. Thetransactions are classified on the basis of theirdescription, as provided by the banks’customers, and the assignment of atransaction code. There are more than 300of these transaction codes and a list of themis available from the BS on request. Theyform the basis of the methodology that allowsbanking forms (e.g. payment orders and formsrelating to incoming payments) to be used inthe compilation of b.o.p. statistics.

The main reporting pillars of the ITRS are:

(i) Reports on transactions settled betweenresidents and non-residents via bankaccounts (so-called non-resident accounts).These accounts comprise:

– the banks’ foreign correspondentaccounts (nostro and loro accounts,including the central bank); and

– non-bank resident accounts abroad.

Transactions are classified using descriptionsprovided by the banks’ customers.

(ii) Customs declarations as the main sourcefor recording merchandise (compiled bythe SORS).

(iii) Reports to the BS on registered creditsgranted and disbursed abroad.

(iv) BS accounting data.

(v) Commercial bank balance sheet data.

(vi) Data on direct investment (reinvestedearnings).

(vii) Reports on goods sold to non-residents induty-free and border shops.

Some estimates are used in the b.o.p. andi.i.p. for the valuation of data on imports,incoming travel, labour income, short-termtrade credits, foreign exchange and depositsof resident households in foreign banks.



For the i.i.p., data are collected from residents’reports on inward and outward direct investment,reports of enterprises on short-term trade creditsand some of the other above-mentionedsources.


The b.o.p. and i.i.p. are compiled on the basisof reports from the following agents:

(i) commercial banks, which reporttransactions between resident and non-resident entities (banks, enterprises,individuals, etc.) as well as transactionsfor their own account;

(ii) non-bank residents report data on theiraccounts held abroad, on inter-companyaccounts with foreign partners and onthe sale of goods in duty free shops. Theyalso report short-term trade credits toand from non-residents;

(iii) residents report inward and outwarddirect investment stocks and transactions;

(iv) the SORS provides data derived fromcustoms declarations;

(v) the BS provides its accounting data; and

(vi) residents report data on loans and long-term trade credits to and from non-residents.

3.3 Thresholds

There is no special threshold for ITRS data.


The b.o.p. is compiled monthly anddisseminated no later than seven weeks afterthe end of the reference month. Althoughthe data have been available since 1988, onlydata for the key b.o.p. items are available forthe period 1988-1993. Figures for the period

1988-1991 exclude transactions with theformer Yugoslavia.

The i.i.p. is compiled yearly and disseminatedno later than six months after the end of thereference year. Data have been available since1994.

An advance release calendar is published onthe BS’s website (www.bsi.si) and in itsMonthly Bulletin.

3.5 Data controls

The first type of controls are computerised.They are installed on the reporting programsused by the reporting agents. These controlswarn the agents of processing errors.

The second type of controls are performedwithin the BS. They check the completenessof reports and their plausibility. If any dataare missing from or incorrect in the reports,the reporting agents are contacted and themistakes corrected. All discrepancies arechecked directly with the reporting agentconcerned.

The reports on flows are also compared withthe external position of the reporting bank.With high-value transactions, a manual checkis carried out.

The coding of data is also checked so thatthe flows and stocks are included under thecorrect item of the b.o.p.

3.6 Revision policy

For the current year, preliminary monthlyb.o.p. data are revised each month.

An official annual b.o.p. is compiled andpublished when the final data from customsdeclarations are made available. The SORSusually provides the BS with the final data forthe previous year in July of the current year,i.e. with a seven-month lag.



The i.i.p. data are revised yearly.

3.7 Dissemination

The data are first released on the BS’s website(at http://www.bsi.si/html/financni_podatki forthe Slovenian version and at http://www.bsi.si/html/eng/financial_data for the Englishversion). They are subsequently distributed

4 Goods


to all interested parties by fax or e-mail andare also published in the BS’s Monthly Bulletinapproximately one week later.

Detailed data on direct investment arepublished in the BS’s annual publication“Direct Investment”.

Details of data users are given in Sub-section2.5.

As explained in Sub-sections 3.1 and 3.2, themain data source for imports and exports ofgoods are customs declarations. However,some goods cross the border withoutcustoms declarations. The data on thesegoods are collected through transactionreporting systems and questionnairesreturned by duty-free shops.

4.2 Definition

The definition of goods in the Slovenian b.o.p.complies with that given in the BPM5. Goodsare classified as:

– general merchandise;

– goods for processing;

– repairs on goods;

– goods procured in ports by carriers; and

– non-monetary gold.

Coverage adjustments (for goods crossing theborder without customs declarations) andvaluation adjustments are made. A valuationadjustment is necessary because exports arevalued on an f.o.b. basis and imports on a

c.i.f. basis. Import data are thereforeconverted from a c.i.f. to an f.o.b. basis usinga coefficient equal to the weighted average ofcoefficients between the c.i.f. and f.o.b. valuesof imported goods (for the available sample)and are calculated separately for each type ofmerchandise, means of transport andexporting country.

4.3 Deviations

None.

4.4 Gaps

The most significant gap is in the b.o.p.coverage of free-trading zones.


None.


Besides valuation adjustment (see Sub-section4.2), there are no estimation methods usedfor the goods component of the b.o.p. currentaccount.



5 Services


As explained in Sub-sections 3.1 and 3.2, themain data source for services is thetransaction reporting in the ITRS. Someestimates are also included when compilingthe services component of the currentaccount.

5.2 Definition

The definition of services in the Slovenianb.o.p. complies with that stated in the BPM5.Services are divided into:

– transportation;

– travel;

– communications services;

– construction services;

– insurance services;

– financial services;

– computer and information services;

– royalties and licence fees;

– other business services;

– personal, cultural and recreational services;and

– government services (only for imports).

Each of these items is subdivided further.

5.3 Deviations

There are some deviations in the servicessection of the current account.

Business travel exports are not recordedseparately, but are included in the personaltravel component.

Short and long-term construction work isrecorded under services. Long-termconstruction work is therefore not recordedas direct investment.

Exports of government services are includedin other services.

Transaction reporting does not providedetailed enough data on transportationservices. Therefore, in some cases,transportation services are overestimated,whilst in others they are underestimated.

5.4 Gaps

There are gaps in the coverage of exports ofgovernment services (e.g. expenditure offoreign embassies in Slovenia).

Similarly, coverage of transportation servicesis insufficient (see Sub-section 5.3).


It is intended that a new transaction code forexpenditure of foreign embassies beimplemented and for these to be surveyedwith a yearly questionnaire.


An estimate of net sales of Slovene tolars(SIT) to non-residents in bureaux de changeis used in the travel exports item, whileestimates of the expenditure of Slovenianresidents abroad are included in travelimports.



6 Income



As explained in Sub-sections 3.1 and 3.2, theITRS is the main source of data on thecompensation of employees. Since wages forseasonal and cross-border workers are notpaid through domestic banks, an additionalestimate is made for these receipts fromneighbouring countries (Austria and Italy).


As mentioned in Sub-sections 3.1 and 3.2,the ITRS is the main data source coveringincome on direct investment.

Reinvested earnings are derived fromresidents’ reports on direct investment andan offsetting entry is made for them underdirect investment in the financial account.

Income on equity and reinvested earnings areincluded in direct investment income,whereas income on debt (e.g. inter-companyloans) is not.


As explained in Sub-sections 3.1 and 3.2, theITRS is the main data source covering incomeon portfolio investment.

Income on debt is included in portfolioinvestment income, whereas income onequity is not.

A breakdown by sector is available for incomeon debt. This breakdown has fourcomponents: the BS, government, banks andother.


As mentioned in Sub-sections 3.1 and 3.2,the ITRS is the main data source for incomeon other investment.

Income on other investment is broken downby sector into the BS, government, banks andother.


As explained in Sub-section 6.1, the mostsignificant deviation from the BPM5 in theSlovenian b.o.p. is for income on directinvestment and income on portfolioinvestment. In income on direct investment,only total income on equity is included andtherefore income on debt is missing. Inincome on portfolio investment, only totalincome on debt is included, meaning thatincome on equity is not covered.

6.3 Gaps

None.


None.


An estimation of workers’ income is madeon the basis of data provided by neighbouringcountries (Austria and Italy).



7 Current transfers

See Section 8 on the capital account.

8 Capital account


The ITRS is the main source for data oncapital account transactions.

8.2 Definition

The definition of the b.o.p. capital accountcomplies with that given in the BPM5. Capitalaccount transfers are classified under twosectoral components:

– government; and

– other sectors.

Current transfers, like capital transfers, aresubdivided into two sectoral components:

– government; and

– other sectors.

Under other sectors, there are three groupsof current transfers: first there are workers’

remittances, then there is insurance, and lastthere are other transfers. The main sourcefor current transfers is also the ITRS.


None.

8.4 Gaps

Although included in the definition, capitaltransfers in the form of debt forgiveness arenot covered. Debt forgiveness is not coveredin the other sectors component of capitaltransfers abroad either. Furthermore, othersectors/other transfers are not covered incapital transfers.


None.

9 Direct investment


The ITRS is the main source for collectingdata on direct investment. Direct investmentis therefore recorded on the basis oftransaction reporting and data from customsdeclarations.

The source for reinvested earnings is yearlyresident reports on direct investment.

9.2 Definition

The definition of direct investment is in linewith the recommendations set out in theBPM5. It is classified as:

– equity capital;

– reinvested earnings; and

– other capital.



The 10% ownership criterion is applied todistinguish direct investment from portfolioinvestment.

Reinvested earnings are derived from theyearly reports and are entered in the b.o.p.as a single amount at the end of the year.



9.4 Gaps

The other capital and financial derivativescomponents are not included in the directinvestment item. Other capital is included inthe other investment item, while financialderivatives are not recorded.


With the introduction of new reports onshort-term trade credits and the connectionof the databases on loans to and from non-residents to the direct investment database,the other capital component will be compiledas foreseen in the BPM5.

The possibility of collecting data on financialderivatives is currently being explored.


Before the results of the annual surveysbecome available, reinvested earnings areestimated on the basis of the previous annualsurvey data.



The ITRS is the main source for data onportfolio investment. Therefore, portfolioinvestment is recorded on the basis of datareported on payments made throughdomestic banks.

For portfolio investment, two types ofbreakdown are available: one by sector andone by instrument.

Until 1997 only data on sales and purchasesof debt securities through banks wereincluded in this item. Since February 1997,equity securities without the characteristicsdescribed in Section 9 on direct investmenthave also been included in portfolioinvestment.

10.2 Definition

The definition of portfolio investmentcomplies with the recommendations set out

in the BPM5. Portfolio investment in the b.o.p.is classified as:

– equity securities;

– debt securities; and

– money market instruments.

All of the categories listed above are alsosubdivided into sectors (government, banksand other).


None.

10.4 Gaps

None.




None.


None.



In Slovenia, data for financial derivatives arenot collected and are thus not included inthe b.o.p.

11.2 Definitions

See 11.1.


See 11.1.

11.4 Gaps

See 11.1.


The possibility of collecting data on financialderivatives is currently being considered.


See 11.1.

12 Other investment


The ITRS is the main source for data onother investment. Other investment istherefore recorded on the basis oftransaction reporting, commercial bankbalance sheets, registered credits, BSaccounting data, data from customsdeclarations and some estimates.

12.2 Definition

The definition of other investment complieswith the recommendations set out in theBPM5. Other investment in the b.o.p. isclassified as:

– trade credits;

– loans;

– currency and deposits; and

– other assets and liabilities.

Furthermore, trade credits are subdividedinto short and long-term credits. Short-termtrade credits are recorded on a net basis.

Loans are recorded on a gross basis and arebroken down by sector and maturity.

Foreign exchange and deposits and otherassets and liabilities are broken down bysector.


See Sub-section 12.4. It should also be notedthat inter-company loans are included inother investment.

12.4 Gaps

Data on repurchase agreements are notrecorded.




Estimates of short-term trade credits will bereplaced by data from new monthly reports.

13 Reserve assets



Short-term trade credits are estimated andrecorded on a net basis.

Estimates of net sales of foreign exchange toresidents in bureaux de change are used inthe other assets/other sectors item.

Reserve assets are recorded on the basis ofBS accounting data. As a monetary authority,the BS is the only source for data on reserveassets.

13.2 Definition

The definition of reserve assets is inaccordance with the recommendations setout in the BPM5. Reserve assets in the b.o.p.are classified as:

– monetary gold;

– special drawing rights (SDRs);

– the reserve position in the IMF; and

– foreign exchange assets.

Foreign exchange assets are subdivided intoforeign currency and deposits and securities.Transactions with residents are excluded.


None.

13.4 Gaps

None.


None.



14.1.1 General

The i.i.p. methodology is based on the BPM5recommendations.

The i.i.p. is compiled for all financial accountitems (direct investment, portfolioinvestment, other investment and reserveassets), except for financial derivatives. Assetsand liabilities are compiled separately.

Data sources for the i.i.p. and b.o.p. aredifferent. For some items, the i.i.p. and b.o.p.can be reconciled.


Data on direct investment are collected fromresidents’ reports on inward and outwarddirect investment. In accordance with therecommendations of the BPM5, this itemcomprises investment where direct investorsown 10% or more of the equity capital of an



enterprise. All claims on and liabilities toaffiliated enterprises are included under directinvestment in the i.i.p., except for short-termclaims and liabilities of affiliated banks.

Data on investment by Slovenian enterprisesin indirectly affiliated enterprises abroad have,since 1996, been included in the directinvestment abroad item (in cases whereenterprises abroad with Slovenian directinvestment hold 10% or more of equity inother foreign enterprises). In the directinvestment in Slovenia item, data oninvestment by foreign enterprises in indirectlyaffiliated enterprises in Slovenia are included(in cases where Slovenian enterprises withforeign direct investment hold 10% or moreof equity in other Slovenian enterprises).

Direct investment data are recorded at bookvalue.


The definition of the portfolio investmentcomponent of the i.i.p. is principally thatrecommended in the BPM5. Portfolioinvestment is classified as equity securitiesand debt securities. Money marketinstruments and financial derivatives are notincluded in the portfolio investmentcomponent of the i.i.p.

Data on equity securities and other equityshares are available (as are data on directinvestment) from residents’ reports on directinvestment. However, these reports onlyinclude data where investors own less than10% of an enterprise’s equity.

Data on debt securities are available fromcredit registration forms and commercialbank balance sheets.

In the portfolio investment component of thei.i.p., two types of breakdown are available:one by instrument and one by sector.

Portfolio investment data on equity arerecorded at book value.


Data on financial derivatives are not collected.


The definition of the other investmentcomponent of the i.i.p. is in line with thatrecommended in the BPM5. The otherinvestment component is subdivided intotrade credits, loans, foreign exchange anddeposits, and other assets and liabilities.

The sources for short-term trade credits arereports of enterprises on short-term tradecredits and inter-company accounts betweenresidents and non-residents.

The sources for long-term trade credits andloans are credit registration forms and arethe same for the i.i.p. and the b.o.p. In thei.i.p., claims and liabilities between affiliatedenterprises are recorded under directinvestment and are excluded from the itemstrade credits and loans.

Data sources for currency and deposits, otherassets and other liabilities are bank reportsand BS accounting data and are the same asthose for the b.o.p.

The assets/foreign exchange and deposits/other sectors sub-item of the i.i.p. alsoincludes estimates based on data from theBank for International Settlements (BIS) ondeposits of Slovenian households in banks inBIS member countries.

The other liabilities/other sectors sub-itemof the i.i.p. includes data on contractual jointventures.

Other investment is broken down byinstrument, sector and maturity.


The definition of the reserve assetscomponent of the i.i.p. is in line with that



recommended in the BPM5. They areclassified as: monetary gold, SDRs, the reserveposition in the IMF and foreign exchangeassets. Claims on residents are excluded.

The only source of data for the reserve assetsitem is BS accounting data.



14.3 Gaps

Neither financial derivatives nor moneymarket instruments are covered by theSlovenian reporting system.


At present, the possibility of collecting dataon financial derivatives is being explored.

A full reconciliation of the i.i.p. and the b.o.p.is planned.



15 Contacts

This country information was drafted bySlovenia in agreement with the ECB’s Balanceof Payments and External Reserves Division.Enquiries of a general nature should beaddressed to the Press Division of the ECB.Enquiries specific to Slovenia should beaddressed to:

Ms Eva Sencar-SvetinaFinancial Statistics DepartmentBank of SloveniaSlovenska 351505 LjubljanaSlovenia


ˆ


Annex

4 Annex

4.1 Glossary

The definitions of the terms included in thissection are mainly taken from the IMF Balanceof Payments Manual (5th edition). The termsare shown in alphabetical order.

Accruals principle – a continuous methodof recording that matches the cost of capitalwith the provision of capital. This concept,which is broader than the actual payment ofdividends and interests (on a cash orsettlement basis), covers dividends due forpayment, interest accrued, and unremittedprofits (reinvested earnings) of directinvestment enterprises.

Balance of payments (b.o.p.) – thestatistical statement that systematicallysummarises for a specific time period (usuallymonthly, quarterly and/or annually) theeconomic transactions of an economy withthe rest of the world. Transactions betweenresidents and non-residents consist of thoseinvolving goods, services and income; thoseinvolving financial claims on and liabilities tothe rest of the world; and those classified astransfers (such as gifts) which involveoffsetting entries to balance – in an accountingsense – one-sided transactions.

Bonds and notes – these are securitiesissued with an initial maturity of more thanone year which usually give the holder:(i) the unconditional right to a fixed monetaryincome or contractually determined variablemonetary income (payment of interest beingindependent of the earnings of the debtor);and (ii) the unconditional right to a fixed sumin repayment of the principal on a specifieddate or dates.

Capital and financial account – the capitalaccount covers all transactions that involvethe receipt or payment of capital transfersand the acquisition or disposal of non-produced, non-financial assets, while thefinancial account covers all transactionsassociated with changes of ownership in the

foreign financial assets and liabilities of aneconomy, including the creation andliquidation of claims on or by the rest of theworld.

Cash basis – see accruals principle.

C.i.f. (cost, insurance and freight at theimporter’s border) – valuation of thegoods at the market value at the customsborder of the economy into which they areimported, including in the import value theinsurance and transportation costs.

Credits and debits – a credit in the b.o.p.records the provision of goods or services, adecrease in holdings of a financial asset or anincrease in liabilities. Credits and debits formthe two elements in the simple double-entrysystem used for recording the b.o.p.

Current account – the b.o.p. currentaccount covers all transactions (other thanthose in financial items) between resident andnon-resident entities that involve economicvalues. Also covered are offsets to currenteconomic values provided or acquiredwithout a reciprocal exchange (howeversome transactions of this kind are recordedin the capital account). The majorclassifications are goods and services, incomeand current transfers.

Debtor/creditor principle – foreign assetsare geographically allocated to the country ofthe debtor (issuer), while liabilities areallocated to the country of the creditor(holder). This principle is the mostappropriate choice if the interest concerns achange in the geographical distribution of theitems on the nation’s balance sheet.

Direct investment – the category ofinternational investment that reflects a lastinginterest of a resident entity in one economyin an enterprise resident in another economy.The resident entity is the direct investor andthe enterprise is the direct investmententerprise. The lasting interest implies the


Annex

existence of a long-term relationship betweenthe direct investor and the enterprise and asignificant degree of influence by the investoron the management of the enterprise.

Direct investment enterprises – anincorporated or unincorporated enterprisein which a direct investor, who is resident inanother economy, owns 10% or more of theordinary shares or voting power (of theincorporated enterprise) or the equivalent(of the unincorporated enterprise).

Direct investors – these may be individuals,incorporated or unincorporated private orpublic enterprises, associated groups ofindividuals or enterprises, governments orgovernment agencies, or estates, trusts, orother organisations that individually own 10%or more of the ordinary shares or votingpower of an incorporated enterprise or theequivalent of an unincorporated enterprise ineconomies other than those in which thedirect investors reside.

Directional principle – the recording ofdirect investment flows according to thedirectional principle means, in general, thatall capital transactions with foreign directinvestment enterprises are recorded by thecountry of the direct investor as directinvestment abroad; all capital transactions ofresident direct investment enterprises withforeign direct investors are recorded by thecountry of the direct investment enterpriseas direct investment in the reporting country.The status of the resident enterprise(i.e. direct investor or direct investmententerprise) in relation to its counterpart inthe transaction is essential for the recordingof direct investment flows.

Equity – covers all instruments and recordsacknowledging, after the claims of allcreditors have been met, claims on theresidual value of incorporated enterprises.Shares, stocks, preference stock or shares,participation, or similar documents usuallydenote ownership of equity. Transactions inshares of collective investment institutions,e.g. investment funds, are also included.

Euro area – the area encompassing thoseMember States in which the euro has beenadopted as the single currency in accordancewith the Treaty establishing the EuropeanCommunity and in which a single monetarypolicy is conducted under the responsibilityof the ECB. The euro area comprises Belgium,Germany, Greece (as from 2001), Spain,France, Ireland, Italy, Luxembourg, theNetherlands, Austria, Portugal, Finland, andfor statistical purposes, the ECB.

European Central Bank (ECB) – the ECBis the centre of the ESCB and the Eurosystemand has legal personality under Communitylaw. It ensures that the tasks conferred uponthe Eurosystem and the European System ofCentral Banks (ESCB – composed of the ECBand NCBs of all EU Member States) areimplemented either by its own activitiespursuant to its Statute or through the nationalcentral banks.

European System of National andRegional Accounts (ESA 95) – this is aninternationally compatible accountingframework for a systematic and detaileddescription of a total economy (that is aregion, country or group of countries), itscomponents and its relations with other totaleconomies. The ESA 95 is fully consistentwith the SNA 93 (see below), but focusesmore on the circumstances and data needs inthe European Union. The ESA 95 was adoptedin the form of a Council Regulation dated25 June 1996.

European Union (EU) – comprises theMember States of the EU and the EUinstitutions. All EU institutions besides theECB are considered non-euro area residentunits.

Eurosystem – comprises the ECB and thenational central banks of the Member Stateswhich have adopted the euro in Stage Threeof EMU (see also euro area). There arecurrently 12 national central banks in theEurosystem. The Eurosystem is governed bythe Governing Council and the ExecutiveBoard of the ECB.


Annex

Financial derivatives – financialinstruments that are linked to a specificfinancial instrument, indicator or commodity,and through which specific financial risks canbe traded in financial markets in their ownright.

F.o.b. (free on board at the exporter’sborder) – valuation at the market value ofthe goods at the customs border of theeconomy from which they are exported,excluding the respective insurance andtransportation services incurred.

Goods – covers general merchandise, goodsfor processing, repairs on goods, goodsprocured in ports by carriers and non-monetary gold.

International investment position (i.i.p.)– the statistical statement of the value andcomposition of the stock of an economy’sfinancial assets or financial claims on the restof the world, and of an economy’s financialliabilities to the rest of the world.

Investment income – incorporates incomederived from a resident entity’s ownership ofa foreign financial asset (credits) and,symmetrically, income derived from a non-resident entity’s ownership of a domesticfinancial asset (debits).

Loans/currency and deposits – comprisetransactions in the following financialinstruments: loans, i.e. those financial assetscreated through the direct lending of fundsby a creditor (lender) to a debtor (borrower)through an arrangement in which the lendereither receives no security evidencing thetransactions or receives a non-negotiabledocument or instrument; deposits; repo-typeoperations; and currency (notes and coinsthat are in circulation and commonly used tomake payments). Included are, inter alia, loansto finance trade and other loans and advances(including mortgages). In addition, financialleases are covered.

Money market instruments (MMIs) –securities issued with an original maturity of

one year or less. They generally give theholder the unconditional right to receive astated, fixed sum of money on a specifieddate. These instruments are usually traded,at a discount, in organised markets; thediscount is dependent upon the interest rateand the time remaining to maturity.

Other assets/other liabilities – sub-itemof other investment which covers all itemsother than trade credits, loans and currencyand deposits.

Other investment – the residual categoryof the b.o.p. which therefore includes allfinancial transactions with non-residents notcovered in direct investment, portfolioinvestment, financial derivatives or reserveassets. It is subdivided into trade credits,loans/currency and deposits, and other assets/other liabilities.

Other services – those service transactionswith non-residents which are not coveredunder transportation and travel, such ascommunications services, constructionservices, insurance or financial services.

Portfolio investment – this coversinvestment in equity securities (quotedshares) and debt securities (bonds and notes,and money market instruments). Excluded areany of these instruments which are includedin direct investment or reserve assets.

Reinvested earnings – appear in thecontext of income on direct investment. Theyare defined as the direct investor’s share ofthe total consolidated profits earned by theaffiliated company in a certain period (afterallowing for tax, interest and depreciation)less dividends due for payment in the relevantperiod, even if these dividends relate toprofits earned in earlier periods.

Reserve assets – consist of external assetsthat are readily available to and controlled bymonetary authorities for the direct financingof payment imbalances, for the indirectregulation of the magnitude of suchimbalances through intervention in exchange


Annex

markets which affects the currency exchangerate and/or for other purposes. Reserveassets of the euro area are foreign currency-denominated claims on non-euro arearesidents which are held by the Eurosystem.

Residents – these comprise the generalgovernment, individuals, private non-profitmaking bodies serving households, andenterprises, whose centre of economicinterest lies within the territory of a giveneconomy.

Services – consists of transportation, traveland other services.

Settlement basis – the recording of flowsaccording to payments.

System of National Accounts of theUnited Nations (SNA 93) – this is theinternational standard for a comprehensive andsystematic framework for the collection andpresentation of the economic statistics of aneconomy. It encompasses transactions, otherflows, stocks, and other changes affecting thelevel of assets and liabilities from one accountingperiod to another. These guidelines have beenproduced under the joint responsibility of theUnited Nations, the IMF, the Commission ofthe European Communities, the OECD and theWorld Bank.

Trade credits – consist in claims orliabilities arising from the direct extension ofcredit by resident suppliers or buyers,respectively, for transactions in goods andservices and advance payments for work inprogress (or to be undertaken) that isassociated with such transactions.

Transaction – an economic flow thatreflects the creation, transformation,exchange, transfer or extinction of economicvalue and involves changes in ownership ofgoods and/or financial assets, the provisionof services, or the provision of labour andcapital.

Transaction basis – the recording of flowsaccording to the change in ownership and

not according to settlements. In the contextof securities, the term “transactions basis” isidentical to “accruals” principle.

Transactor principle – this principleallocates a transaction between a residentand a non-resident to the country of thedirect counterparty to the transaction. Thetransactor principle provides information onthe immediate direction of flows resultingfrom international settlements.

Transportation – covers all internationaltransportation services (sea, air and other –including land, internal waterway, space andpipeline) that are performed by residents ofone economy for residents of anothereconomy and that involve the carriage ofpassengers, the movement of goods (freight),rentals (charters) of carriers with crew, andrelated supporting and auxiliary services.Excluded are passenger services provided tonon-euro area residents by euro area carrierswithin the euro area economies, or vice versa(these are included under travel).

Travel – comprises primarily the goods andservices that travellers consume from oneeconomy during visits of less than one yearto that economy. It differs from othercomponents of services in that it is a demand-oriented activity. Thus, unlike other services,travel is not a specific type of service, but anassortment of services consumed bytravellers.

4.2 Contributors

The individual country information wasdrafted by the country concerned and agreedwith the ECB’s Balance of Payments Statisticsand External Reserves Division. Enquiries ofa general nature should be addressed to thePress Division of the ECB. The following listof points of contact within the central banks/compiling institutions is included to helpreaders direct their country-specific enquiriesin the most appropriate way.


Annex

Bulgaria1. Mr. Emil Dimitrov

HeadBalance of Payments and ExternalDebt DivisionBulgarian National Bank1, Alexander Battenberg Square1000 Sofia, Bulgaria

Phone: +35 92 91 45 12 43Fax: +35 9 29 80 24 25

or 980 64 93E-mail: [email protected]

2. Ms Liliana El HaddadExpertBalance of Payments and ExternalDebt Division, Rm. 314Bulgarian National Bank1, Alexander Battenberg Square1000 Sofia, Bulgaria

Phone: +359 2 9145 1965, 981 2534Fax: +359 2 980 2425 or 980 6493E-mail: [email protected]

Cyprus1. Ms. Stalo Haili

Officer ABalance of Payments and EuropeanUnion Issues SectionEconomic Research DepartmentCentral Bank of CyprusP.O. Box 25529CY-1395 NicosiaCyprusTel.: +357 22 714416Fax: +357 22 378155E-mail: [email protected]

2. Mr. Chrysostomos TsoundasOfficer BBalance of Payments and EuropeanUnion Issues SectionEconomic Research DepartmentCentral Bank of CyprusP.O. Box 25529CY-1395 NicosiaCyprus


3. Ms. Eleni NicolaouOfficer BBalance of Payments and EuropeanUnion Issues SectionEconomic Research DepartmentCentral Bank of CyprusP.O. Box 25529CY-1395 NicosiaCyprus


Czech RepublicMr. Rudolf OlšovskýDirector, Balance of Payments DivisionStatistics DepartmentCzech National BankNa Príkope 2811503 Praha 1Czech Republic


EstoniaMr. Jaanus KroonHead of Balance of Payments DivisionStatistics DepartmentBank of Estonia


HungaryMr. Mihály DurucskóAdvisorNational Bank of HungaryStatistics DepartmentSzabadsag ter 8-9H-1850 BudapestHungary


Annex

Tel.: +36 1 302 3000/2305Fax: +36 1 269 0762E-mail: [email protected]

LatviaMs Daiga Gaigala-LizbovskaHead of the Balance of PaymentsStatistics DivisionStatistics DepartmentBank of LatviaK. Valdemara iela 2aLV-1050 RigaLatvia


LithuaniaMr. Alfredas JancaitisThe Bank of LithuaniaGedimino 62001 VilniusLithuaniaTel.: +370 2 68 04 12Fax: +370 2 68 04 26E-mail: [email protected]

Malta1. Mr. Gerard Grant

Central Bank of MaltaBalance of Payments DataCompilation SectionCastille PlaceValetta CMR 01Malta


2. Mr. Ray MicallefNational Statistics OfficeBalance of Payments SectionLascarisValletta CMR 02Malta


Poland1. Ms. Anna Janz

Head of the BOP Methodology andAnalyses DivisionDepartment of StatisticsNarodowy Bank PolskiSwietokrzyska 11/2100-919 WarszawaPoland


2. Mr. Jacek KocerkaEconomistBOP Methodology and AnalysisDivisionDepartment of StatisticsNarodowy Bank PolskiSwietokrzyska 11/2100-919 WarsawPoland


RomaniaMr. Virgil StefanescuHead of DivisionStatistics DepartmentNational Bank of RomaniaStrada Lipscani 2570421 BucharestRomania


Slovak RepublicMr. Peter FejkoHead of the Balance of PaymentsSectionMonetary Policy DepartmentNational Bank of SlovakiaŠtúrova 2813 25 Bratislava 1


Annex


SloveniaMs Eva Sencar-SvetinaFinancial Statistics DepartmentBank of SloveniaSlovenska 351505 LjubljanaSlovenia


European Central Bank1. Mr. Jean-Marc Israël

ECBKaiserstr. 29D-60311 FRANKFURT AM MAINGermany


European Central Bank2. Ms Silvia von Ledebur

ECBKaiserstr. 29D-60311 FRANKFURT AM MAINGermany


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Annex