Services Account: Treatment of Transport and Travel Workshop on International Trade in Services Beirut April 18-20, 2011

Services Account:Treatment of Transport and Travel

Workshop onInternational Trade in Services

Beirut April 18-20, 2011

Transport Services: CoverageTransport services includes: services provided by all modes of transport

performed by residents of one economy for those of another.

carriage of passengers and the movement of goods (freight) as well as rentals (charters) of carriers with crew.

supporting and auxiliary services: cargo handling, navigation fees and maintenance and cleaning of carriers.

ostal and courier services cover the pick-up, transport, and delivery of letters, newspapers etc., including post office counter and mailbox rental services.

Services Account--Transport and Travel

Transport Services: Classification By type of carrier Sea Transport Air Transport Other Transport Postal and Courier Services

By functional category Passenger Freight Other


Transport Services: Classification

The standard components breakdown transport by both dimensions.

A breakdown of total transport services into freight transport passenger transport and other transport alone is proposed as simplified standard components for those countries that are unable (for example, for reasons of confidentiality) to provide the full breakdown by mode of transport.


Transport Services: Classification By type of carrier

Sea transport covers all transport services by sea.

Air transport covers all transport services provided by air, including international passenger transport.

Other transport: Additional modes such as

Space Rail Road Inland waterway Pipeline transport and electricity transmission


Passenger Services All services provided, between the compiling

economy and abroad or between two foreign economies, in the international transport of: Nonresidents by residents carriers (credit);

and Residents by nonresident carriers (debit)

Excluded are passenger services provided to nonresidents

by resident carriers within the resident economies (included under “travel”)

Included are passenger services performed within an economy by nonresident carriers.


Passenger Services: Exclusions

Services to nonresidents within the economy of the carrier; this is travel.

Carriers do not ask the residence of internal ticket buyers.

All goods and services bought by nonresidents within compiling economy are either travel or government services n.i.e.


Passenger Services: Inclusions Fares and incidental outlays: On-board food, gifts, souvenirs Excess baggage charges Accompanying personal effects, including autos Any taxes levied on passenger services e.g., sales or value

added taxes. For practical reasons fares that are part of package tours

are included, but exclude cruise fares which are included in travel.

Rental of transport equipment with crew to transport persons.

Covers rentals or operational leases of vessels, aircraft, freight cars, or other commercial vehicles with crews for limited periods for the carriage of passengers.


Freight Services The treatment of freight services is a

consequence of adopting FOB as the uniform valuation principle for goods.

Since the FOB valuation is as at the customs frontier of the exporting economy, so: all freight costs up to the customs frontier

are shown as incurred by the exporter; all freight costs beyond the customs

frontier are shown as incurred by the importer.


Freight Services When actual arrangements for paying freight costs

differ from the FOB terms of delivery, rerouting is needed.

Rerouting of freight services may mean that a transaction that is actually between two residents is treated as a transaction between a resident and a nonresident and vice versa, as shown in Box 10.1 in BPM6.

Freight services include loading on board or the unloading of goods from carriers if the contracts between owners of goods and carriers require that carriers provide the service.


Other Transport“Other” subhead under sea and air includes”: Cargo handling (stevedoring-NOT done by or for

account of nonresident carrier) Navigation fees Maintenance and cleaning of equipment Commissions and agent fees for transport related

services Warehousing Packing, packaging, binding Forwarding, handling, and transferring Airport and harbor dues Towing, pilotage, and other navigational aid for

carriers Salvage operations


Travel Travel credits cover goods and services for own use or

to give away, acquired from an economy by nonresidents during visits to that economy.

Travel debits cover goods and services for own use or to give away acquired from other economies by residents during visits to other economies.

The standard component breakdown of travel is between business and personal travel.

Supplementary data for groups of special interest e.g. border, seasonal, and other short-term workers within business travel, health-related and education-related outlays under personal travel.


Travel A separate supplementary breakdown of travel into types

of goods and services is also suggested.

A demand oriented activity; travelers moves to the location of the provider (residents of the economy visited) for the goods and services desired. An assortment of services, consumed by travelers. It is a transactor-based classification and is for this reason not identified as a service in the Central Product Classification.

Travel covers goods and services acquired in an economy by travelers during visits of less than ONE year in the economy.


Travel

One year rule does not apply to students and medical patients; their expenditures are included in travel.

Travel excludes goods for resale, which are included in general merchandise.

Travel excludes acquisition of valuable, consumer durable goods, and other consumer purchases for own use that are included in general merchandise (i.e., in excess of customs threshold).


Exclusions from Definition of Travelers

Personnel stationed on a military base

Diplomats and embassy personnel

Individual temporarily engaged in a productive activity directly for an entity resident in the compiling economy, BUT their expenditures on goods and services in the host economy are included in travel (BPM6).


Business Travel Carrier crews stopping over (but in-flight, or

shipboard expenses incurred by resident crew on resident carrier not included)

Government employees on official travel Employees of international organizations on official

business Employees doing work for enterprises that are not

resident in the economies in which the work occurs. Travel includes the personal acquisition of goods and

services while on business travel, but not the sales or purchases business travelers may conclude on behalf of the enterprise they represent.


Personal TravelPersonal travel - travelers going abroad for purposes other

than business

Goods and services covered under travel:

All goods and services acquired by travelers from the economies in which they are traveling and for their own use.

Paid or provided without quid pro quo (contra entry: current transfers)

Where important, supplementary data into subcomponents: Health-related outlays incurred by patients. Education-related outlays incurred by

students. All other personal travel


Other Issues Related to Travel A separate supplementary breakdown of travel

may be provided according to product group:

Goods Local transport services Accommodation services Food serving services; and Other services

This breakdown would allow for close links with tourism satellite accounts as well as supply and use tables.


Other Issues Related to Travel The term time-share covers a wide range of

arrangements. They can roughly be classified in the

categories described in Table 10.3 of BPM6.

Accommodation services consumed by the time-share holder would be partially received and paid in kind (with a counter entry of investment income receivable for the value of accommodation services in kind, net of operational costs such as periodic management fees)


Treatment of Alternative Time-Share Arrangements

TYPE OF

ARRANGEMENT CLASSIFICATION

UP-FRONT PAYMENT

ASSET

PERIODIC FLOW

DEEDED

OWNERSHIP OWNERSHIP OF LAND

AND BUILDINGS DIRECT INVESTMENT

IN NOTIONAL UNIT IN

ECONOMY WHERE

THE TIME SHARE IS

LOCATED

EQUITY OF THE

TIME-SHARE

HOLDER (DIRECT

INVESTMENT)

ACCOMMODATION

SERVICES IN TRAVEL

(IMPUTED BASED ON

EQUIVALENT

MARKET PRICES) AND

INVESTMENT INCOME

(INCOME ON EQUITY) RIGHT TO USE TRANSFERABLE

RIGHT TO USE

(AMOUNTS TO

ECONOMIC ASSET)

PREPAYMENT OF

ACCOMMODATION + CONTRACTS, LEASES, AND LICENSES (ONLY

RECOGNIZED WHEN

RESOLD, DIFFERENCE

BETWEEN SELLING

PRICE AND VALUE OF

PREPAID

ACCOMMODATION

SERVICES)

TRADE CREDIT AND

ADVANCES + NONPRODUCED

NONFINANCIAL

ASSET (CAPITAL

ACCOUNT)

ACCOMMODATION

SERVICES IN TRAVEL

MEMBERSHIP

SYSTEM NONTRANSFERABLE

RIGHT TO USE (DOES

NOT AMOUNT TO

ASSET)

PREPAYMENT OF

ACCOMMODATION TRADE CREDIT AND

ADVANCES ACCOMMODATION

SERVICES IN TRAVEL

Services Account--Transport and

Travel

Documents

Services Account: Treatment of Transport and Travel Workshop on International Trade in Services Beirut April 18-20, 2011