2011O0023 — EN — 01.06.2014 — 001.001

This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents

►B GUIDELINE OF THE EUROPEAN CENTRAL BANK of 9 December 2011 on the statistical reporting requirements of the European Central Bank in the field of external statistics (recast) (ECB/2011/23) (2012/120/EU) (OJ L 065, 3.3.2012, p.1)

Amended by:









▼B

GUIDELINE OF THE EUROPEAN CENTRAL BANK

of 9 December 2011

on the statistical reporting requirements of the European Central Bank in the field of external statistics

(recast)

(ECB/2011/23)

(2012/120/EU)







THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK, Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular Articles 3.1 and 3.3, Articles 5.1, 12.1, 14.3 and Article 16 thereof, Having regard to Council Regulation (EC) No 2533/98 of 23 November 1998 concerning the collection of statistical information by the European Central Bank ( 1 ), and in particular Articles 4 and 8 thereof, Whereas: (1) Guideline ECB/2004/15 of 16 July 2004 on the statistical reporting requirements of the European Central Bank in the field of balance of payments and international investment position statistics, and the international reserves template ( 2 ) has been substantially amended. Since further amendments are to be made, it should be recast in the interests of clarity. (2) To fulfil its tasks, the European System of Central Banks (ESCB) requires comprehensive and reliable external statistics consisting of balance of payments and international investment position statistics, and the international reserves template, showing the main items affecting monetary conditions and exchange markets in the euro area, and statistics on cross-border shipments of euro banknotes. (3) The first sentence of Article 5.1 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter ‘the Statute of the ESCB’) requires the European Central Bank (ECB), assisted by the national central banks (NCBs), to collect either from the competent authorities other than NCBs, or directly from economic agents, the statistical information necessary for it to undertake the tasks of the ESCB. The second sentence of Article 5.1 provides that for these purposes it will cooperate with the Union institutions or bodies and with the competent authorities of the Member States or third countries and with international organisations. Article 5.2 stipulates that the NCBs will carry out, to the extent possible, the tasks described in Article 5.1. (4) Information necessary to meet the ECB's requirements in the field of external statistics may be collected and/or compiled by competent authorities other than NCBs. Therefore, some of the tasks to be undertaken under this Guideline require cooperation between the ECB or the NCBs and such competent authorities. Article 4 of Regulation (EC) No 2533/98 requires the Member States to organise themselves in the field of statistics and to cooperate fully with the ESCB to ensure the fulfilment of the obligations arising out of Article 5 of the Statute of the ESCB. (5) Part of the necessary statistical information relates to the financial account of the balance of payments, the related income and the international investment position for which the Eurosystem has prime responsibility. In order to be able to fulfil their obligation to assist the ECB in this area, it should be ensured that the NCBs are equipped with the necessary statistical expertise, in particular as regards concepts, methodology and data collection, compilation, analysis and transmission. (6) Since the adoption of Guideline ECB/2004/15, the international statistical standards which are the reference for the compilation of the balance of payments and the international investment position have been revised. In particular, the International Monetary Fund (IMF) has published the sixth edition of the Balance of Payments and International Investment Position Manual (hereinafter the ‘BPM6’) and the United Nations Statistical Commission has revised the international statistical standard for national accounts in its latest version in 2008 of the System of National Accounts. In addition, the European Commission has proposed a regulation on the European system of national and regional accounts in the European Union (ESA 2010) ( 3 ). (7) Given the inherent difficulties in the compilation of portfolio investment statistics, it was considered necessary to define common approaches for the collection of this information across the euro area. Portfolio investment collection systems in the euro area should conform to a common standard, i.e. one of the four models entailing, as a minimum, the collection of quarterly stocks on a security-by-security basis as set out in the table contained in Annex VI. (8) Reporting of data on transactions and positions in the assets and/or liabilities of euro area residents vis-à-vis residents of other euro area Member States is necessary to fulfil the ECB's statistical requirements in the area of portfolio investment (and related income). The data are used to compile the euro area aggregated transactions and positions in portfolio investment liabilities and debits in portfolio investment income. This is in accordance with national requirements or established practices. (9) Quarterly euro area balance of payments and international investment position statistics are used as input in the compilation of the rest of the world account in the quarterly euro area financial accounts. Also for this purpose, information on transactions and positions vis-à-vis residents in other euro area Member States as described in this Guideline needs to be collected and compiled. (10) The centralised securities database (hereinafter the ‘CSDB’) is made available to NCBs and to other competent authorities, subject to licence and other relevant constraints. The CSDB will be the main source of securities reference data to be used in their production of the required data for the compilation of the euro area transactions and positions statistics concerning portfolio investment. In particular, by combining information from the CSDB with data collected on a security-by-security basis, it should be possible to accurately compile transactions and positions in portfolio investment securities issued by euro area residents and held by residents in other euro area Member States. This will ultimately allow the compilation of a sectoral breakdown in respect of the euro area portfolio investment liabilities data. (11) As a contribution to the annual review of the international role of the euro, statistical data on transactions and positions in debt securities broken down by currency are needed to assess the role of the euro as an investment currency. (12) The ESCB needs comprehensive statistics to estimate holdings of euro banknotes by entities outside the euro area. To this end, statistical information on the cross-border shipments of euro banknotes between Member States whose currency is the euro and countries outside the euro area is of particular relevance. Such statistics are necessary to facilitate decision-making in the area of euro banknote issuance with respect to the production planning of euro banknotes, management of stocks and the coordination of the issuance and transfers of euro banknotes by NCBs and the ECB in accordance with their respective competences. Euro banknote shipment statistics contribute to the assessment of monetary and foreign exchange developments and are needed to assess the role of the euro as an investment currency outside the euro area. (13) The quality assessment for the euro area balance of payments and international investment position statistics and the international reserves template should be performed in accordance with the ECB Statistics Quality Framework. The NCBs, in cooperation with other competent authorities, where appropriate, should assess the quality of the data which they contribute. (14) According to Article 3a of Regulation (EC) No 2533/98 and the Public Commitment on European Statistics by the European System of Central Banks, the development, production and dissemination of European statistics by the ESCB are governed by the principles of impartiality, objectivity, professional independence, cost-effectiveness, statistical confidentiality, minimisation of the reporting burden and high output quality. (15) Transmission from the NCBs to the ECB of confidential statistical information takes place to the extent and in the detail necessary for the exercise of the tasks of the ESCB. Where competent authorities other than NCBs are the sources of statistical information marked as confidential, such confidential statistical information should be used by the ECB in accordance with Regulation (EC) No 2533/98. (16) It is necessary to set up a procedure to carry out technical amendments to the Annexes to this Guideline in an effective manner, provided that such amendments neither change the underlying conceptual framework nor affect the reporting burden of reporting agents in Member States. Account will be taken of the views of the ESCB Statistics Committee when following this procedure. NCBs may propose such technical amendments through the ESCB Statistics Committee, Whereas: HAS ADOPTED THIS GUIDELINE:







Article 1

Definitions

For the purposes of this Guideline:

(1) ‘external statistics’ means balance of payments and international investment position statistics, the international reserves template and statistics on the cross-border shipment of euro banknotes;

(2) ‘balance of payments’ means the statistical statement that reports, with the appropriate breakdown, international transactions during the period under review;

(3) ‘international investment position’ means the balance sheet that reports, with the appropriate breakdown, the stock of international financial assets and liabilities at a reference date;

(4) ‘international reserves template’ means the statistical statement that reports, with the appropriate breakdown, stocks of reserve assets, other foreign currency assets and reserve-related liabilities of the Eurosystem at a reference date;

(5) ‘cross-border shipment of euro banknotes’ means the export and/or import of euro banknotes;

(6) ‘export of euro banknotes’ means any delivery of euro banknotes from an NCB or from another monetary financial institution (MFI) resident in the euro area to any legal person outside the euro area;

(7) ‘import of euro banknotes’ means any delivery of euro banknotes to an NCB or to another MFI resident in the euro area from any legal person outside the euro area;

(8) ‘resident’ and ‘residing’ have the same meaning as defined in Article 1(4) of Regulation (EC) No 2533/98;

(9) ‘rest of the world’ means all international organisations and residents in all territories other than a specific euro area Member State, which act as counterparts to the residents in that Member State;

(10) ‘international transaction’ means any transaction that creates or redeems, in full or in part, claims or debts, or any transaction that implies the transfer of a right over an object between residents in a euro area Member State and non-residents in that Member State;

(11) ‘international positions’ means the stock of financial claims on and financial liabilities to non-residents in a euro area Member State. International positions also encompass: (a) land, other tangible non-produced assets and other immovable assets physically located outside a euro area Member State that are owned by residents in that Member State, and/or physically located inside a euro area Member State and owned by non-residents; and (b) monetary gold and special drawing rights (SDRs) owned by residents;

(12) ‘revaluations’ means holding gains and losses on international positions arising from changes to the exchange rate and/or other prices;

(13) ‘reserve assets’ means highly liquid, marketable and creditworthy claims held by the Eurosystem on non-euro area residents and denominated in currencies other than the euro, plus gold, reserve positions in the IMF and SDR holdings;

(14) ‘other foreign currency assets’ means (a) claims held by the Eurosystem on euro area residents denominated in currencies other than the euro; and (b) claims held by the Eurosystem on non-euro area residents denominated in currencies other than the euro which do not meet the liquidity, marketability and creditworthiness criteria of reserve assets;

(15) ‘reserve-related liabilities’ means predetermined and contingent short-term net drains on the Eurosystem, similar to reserve assets and other foreign currency assets of the Eurosystem;

(16) ‘security-by-security’ data collection means the collection of data broken down into individual securities.

Article 2

Statistical obligations of the NCBs

1. The NCBs shall make available to the ECB data on the international transactions, positions and revaluations, as well as on the stocks of reserve assets, other foreign currency assets and reserve-related liabilities, necessary to enable the ECB to compile the aggregated balance of payments and international investment position statistics and the international reserves template of the euro area. The data shall be made available as defined in Tables 1 to 5 of Annex II and in accordance with the deadlines defined in Article 3.

2. The NCBs shall also make available to the ECB data on cross-border shipments of euro banknotes as defined in Table 6 of Annex II. The NCBs shall report data on cross-border shipments of euro banknotes where the best estimate of the total amount of all cross-border shipments within the previous year exceeds EUR 1 000 million.

3. The data shall be accompanied by readily available information on single major events and on reasons for revisions, when the magnitude of the change to the data caused by such single major events or revisions is significant or on request by the ECB. Available information on single major events shall also be exchanged with other euro area NCBs in the framework of existing arrangements, for instance in the context of foreign direct investment.

4. For monthly and quarterly transactions and quarterly positions, the required data shall be made available to the ECB as laid down in Annexes I, II and III, which conform with current international standards, notably the BPM6. For the monthly international reserves template, the required data shall be made available to the ECB as laid down in Annexes I, II and III, which conform with the IMF ‘International Reserves and Foreign Currency Liquidity: Guidelines for a Data Template’.

5. The required data on the balance of payments shall be made available on a monthly and quarterly basis. The required data on the international reserves template shall be made available on a monthly basis. The required data on the international investment position shall be made available on a quarterly basis. The required data on cross-border shipments of euro banknotes shall be made available on a monthly basis.

6. Portfolio investment collection systems shall conform with one of the models set out in the table contained in Annex VI.

7. In the event of an enlargement of the euro area, both the NCB of that Member State and the NCBs of all other euro area Member States at the time that Member State adopts the euro shall provide the ECB with back data to enable the compilation of aggregates covering the euro area in its new composition. These NCBs shall provide back data from 2008 on a best estimate basis. The items and breakdowns to be reported shall be decided by the Executive Board of the ECB on proposal by the ESCB Statistics Committee on a case-by-case basis.

If the Member State that adopts the euro joined the Union after 2007, the back data shall cover, as a minimum, the period from the date on which that Member State joined the Union.

8. In the event of an enlargement of the euro area, those euro area Member States that were part of a monetary union for a period prior to the physical introduction of the euro shall provide, for that period, back data for that monetary union as a whole.

By derogation from Article 2(7), the Banque centrale du Luxembourg shall not be required to transmit back data for the period ending December 2001. The Nationale Bank van België/Banque Nationale de Belgique shall transmit joint back data for Belgium and Luxembourg for the period ending December 2001. The same procedure is applied in case of any back data regarding a period prior to the physical introduction of the euro required in case of methodological changes or any other modification in the requirements.

Article 3

Timeliness

1. The data required for the compilation of the monthly balance of payments of the euro area and the data on revaluations of euro area reserve assets shall be made available to the ECB by 2.00 p.m. Central European Time (CET) ( 4 ) of the 44th calendar day following the end of the month to which the data relate.

2. The data required for the compilation of the quarterly balance of payments and the quarterly international investment position of the euro area shall be made available to the ECB by 2.00 p.m. of:

(a) the 85th calendar day following the end of the quarter to which the data relate, from 2014 to 2016;

(b) the 82nd calendar day following the end of the quarter to which the data relate, in 2017 and 2018;

(c) the 80th calendar day following the end of the quarter to which the data relate, from 2019.

3. The data required for the compilation of the international reserves template of the Eurosystem shall be made available to the ECB by 2.00 p.m. of the 10th calendar day following the end of the month to which the data relate.

4. The data required on the cross-border shipments of euro banknotes as defined in Table 6 of Annex II shall be made available to the ECB by 2.00 p.m. of the 35th calendar day following the end of the month to which the data relate.

5. Where a deadline referred to in paragraphs 1 to 4 falls on TARGET2 closing day, the deadline shall be extended to the following TARGET2 operating day ( 5 ).

6. The national collection of the data referred to in paragraphs 1 to 5 shall be organised with a view to meeting these deadlines.

Article 4

Cooperation with competent authorities other than NCBs

1. Where the sources for part or all of the data described in Article 2 are competent authorities other than NCBs, NCBs shall establish the appropriate modalities of cooperation with these authorities to ensure a permanent structure for transmission of data which fulfils the ECB's standards, in particular on data quality, and any other of its requirements as set out in this Guideline, unless the same result is already achieved by national legislation.

2. For the financial account of the balance of payments, the related income, and the international investment position, the NCBs shall be responsible for ensuring that the standards regarding concepts, methodology and data collection, compilation, analysis and transmission in these areas are maintained and developed.

3. Where competent authorities other than NCBs are the source of statistical information marked as confidential, such information shall be used by the ECB in accordance with Regulation (EC) No 2533/98.

Article 5

Transmission standard

The required statistical information shall be made available to the ECB in a form which meets the requirements laid down in Annex IV.

Article 6

Quality of the statistical information

1. Without prejudice to the ECB's monitoring tasks as laid down in Annex V, the NCBs shall, in cooperation with other competent authorities as mentioned in Article 4 where relevant, ensure the monitoring and the assessment of the quality of statistical information made available to the ECB. The ECB assesses these data in a similar manner. The assessment shall be carried out in a timely manner. The Executive Board of the ECB shall report yearly to the Governing Council on the quality of the data.

2. The assessment of the quality of data on portfolio investment transactions and positions, as well as on related income is subject to sufficient coverage and quality of the securities information in the CSDB.

3. Where the data for an item in Tables 1 to 5 of Annex II are of negligible or of insignificant size for euro area and national statistics, or the data for that item cannot be collected at reasonable cost, best estimates based on sound statistical methodologies shall be permitted provided the analytical value of the statistics is not compromised. In addition, best estimates shall be permitted for the following breakdowns in Tables 1, 2 and 6 of Annex II:

(a) sub-items of primary income on other investment;

(b) sub-items of other primary income and of secondary income;

(c) sub-items of capital transfers in the capital account;

(d) geographical breakdown of financial derivatives liabilities;

(e) reinvested earnings credits on investment funds shares without an ISIN code;

(f) breakdown of cross-border banknote shipments by denomination.

4. The ECB's monitoring of the quality of statistical information may include scrutiny of revisions made to these data: firstly, to include the latest assessment of the statistical information, thereby improving the quality; secondly, to ensure as far as possible consistency between the corresponding balance of payments items for each of the different frequencies.

Article 7

Simplified amendment procedure

Taking account of the views of the ESCB Statistics Committee, the Executive Board of the ECB shall be entitled to make technical amendments to the Annexes to this Guideline, provided that such amendments neither change the underlying conceptual framework nor affect the reporting burden of reporting agents in Member States.

Article 8

First transmission of data to the ECB

1. The first transmission of data relating to balance of payments and international investment position statistics, and international reserves template, shall take place in June 2014.

2. The first transmission of data relating to cross-border shipments of euro banknotes shall take place in March 2013.

Article 9

Repeal

1. Guideline ECB/2004/15 is repealed from 1 June 2014.

2. References to Guideline ECB/2004/15 shall be construed as references to this Guideline.

Article 10

Entry into force

1. This Guideline shall enter into force on 1 March 2012.

2. Without prejudice to Article 8(2), this Guideline shall apply from 1 June 2014.

Article 11

Addressees

This Guideline is addressed to all Eurosystem central banks.









ANNEX I

STATISTICAL REQUIREMENTS OF THE EUROPEAN CENTRAL BANK

1. Balance of payments statistics

The European Central Bank (ECB) requires balance of payments statistics at two frequencies: monthly and quarterly in respect of the corresponding reference calendar periods. Annual data are compiled by adding up the quarterly data reported by the Member States for the corresponding year. As far as possible, balance of payments statistics should be consistent with other statistics provided for the conduct of monetary policy.

1.1. Monthly balance of payments statistics

Objective

The objective of the monthly balance of payments of the euro area is to show the main items affecting monetary conditions and exchange markets (see Annex II, Table 1).

Requirements

It is essential that the data are suitable for use in the calculation of the balance of payments of the euro area.

In view of the short deadline for the provision of the monthly balance of payments data, their highly aggregated nature and their use for monetary policy purposes and foreign exchange operations, the ECB allows some departure from international standards (see Article 2(4) of this Guideline), where unavoidable. Recording on a full accruals or transactions basis is not required. Where necessary to meet the deadline, the ECB will accept estimates or preliminary data.

The requirement for each broad category of transaction is assets and liabilities (or credits and debits for current account items). In general this requires NCBs, as regards international transactions, to distinguish between transactions with residents of other euro area Member States and transactions outside the euro area. NCBs do this in a consistent manner.

When membership of the euro area changes, NCBs are required to implement the change in the definition of the country composition of the euro area from the date on which the change in membership takes effect. Best estimates for historical data covering the enlarged euro area are requested from NCBs of the euro area in its previous composition and from the NCB of the new euro area Member States.

In order to permit a meaningful aggregation of the data relating to the euro area on a monthly basis in the area of portfolio investment, a distinction is required between transactions in securities issued by euro area residents and transactions in securities issued by non-euro area residents. The statistics on net transactions in portfolio investment assets of the euro area are compiled by aggregating reported net transactions in securities issued by non-euro area residents. Statistics on net transactions in portfolio investment liabilities of the euro area are compiled by consolidation of net transactions in total national liabilities and net transactions in securities issued and purchased by euro area residents.

An analogous reporting requirement and compilation method for the aggregate data are applied for portfolio investment income.

With a view to compiling the monetary presentation of the balance of payments, NCBs are required to submit the data broken down by institutional sector. For the monthly balance of payments the following is the sectoral breakdown:

— for direct investment: (a) deposit-taking corporations except the central bank; (b) money market funds; (c) general government; (d) other sectors,

— for portfolio investment assets and other investment: (a) the central bank; (b) deposit-taking corporations except the central bank; (c) money market funds; (d) general government; (e) other sectors.

With a view to compiling a sectoral breakdown of the balance of payments, thereby allowing the construction of a monetary presentation, NCBs will be required to provide data on net transactions in portfolio investment securities issued by euro area residents broken down by the institutional sector to which the issuer belongs. In addition, portfolio investment liabilities will include a breakdown by institutional sector of the domestic issuer.

The statistics on net transactions in portfolio investment liabilities of the euro area broken down by sector are then compiled by consolidation of the respective sectors' net total national liabilities and the corresponding net transactions in securities issued and purchased by euro area residents.

NCBs (and other competent authorities where appropriate) collect portfolio investment data according to one of the models set out in the table contained in Annex VI.

1.2. Quarterly balance of payments statistics

Objective

The objective of the quarterly balance of payments of the euro area is to provide more detailed information to permit further analysis of international transactions.

These statistics notably contribute to the compilation of the euro area sectoral and financial accounts and to the joint publication of Union/euro area balance of payments in cooperation with the European Commission (Eurostat).

Requirements

Quarterly balance of payments statistics conform as far as possible to international standards (see Article 2(4) of this Guideline). The required breakdown of quarterly balance of payments statistics is presented in Annex II, Table 2. Harmonised concepts and definitions used in the capital and financial accounts are set out in Annex III.

The breakdown of the quarterly current account is similar to the one required for the monthly figures. However, for income a more detailed breakdown is needed on a quarterly basis.

In the financial account, the ECB follows the requirements of the sixth edition of the International Monetary Fund (IMF) Balance of Payments and International Investment Position Manual (hereinafter the ‘BPM6’) for the ‘other investment’ item. There is a difference in the presentation of the breakdown (i.e. sector as first priority). This sectoral breakdown is however compatible with the breakdown of the BPM6 where instruments have priority. As in the BPM6 presentation, currency and deposits are distinguished from loans and other investments.

NCBs are required to distinguish between transactions with euro area Member States and all other international transactions. The statistics on net transactions in portfolio investment assets of the euro area are compiled by aggregating reported net transactions in securities issued by non-euro area residents. Statistics on net transactions in portfolio investment liabilities of the euro area are compiled by consolidation of net transactions in total national liabilities and net transactions in securities issued and purchased by euro area residents.

An analogous reporting requirement and compilation method for the aggregate data are applied for portfolio investment income.

For direct investment NCBs are required to submit quarterly the following sectoral breakdown: (a) deposit-taking corporations except the central bank; (b) general government; (c) financial corporations other than MFIs; (d) non-financial corporations, households and non-profit institutions serving households. For the ‘portfolio investment assets’ and ‘other investment’ items the breakdown of reports according to institutional sectors follows the standard components of the IMF comprising (a) central bank; (b) deposit-taking corporations except the central bank; (c) money market funds; (d) general government; (e) financial corporations other than MFIs; (f) non-financial corporations, households, and non-profit institutions serving households.

For compiling the statistics on euro area net transactions in portfolio investment liabilities by sector of the euro area resident issuers, the requirements for quarterly data are similar to those for monthly balance of payments.

In line with the system of national accounts, the BPM6 recommends that interest should be recorded on an accruals basis. This requirement affects the current account (investment income) as well as the financial account.

2. International reserves template

Objective

The international reserves template is a monthly statement of the reserve assets, other foreign currency assets and reserve-related liabilities held by NCBs and the ECB following the IMF template on International Reserves and Foreign Currency Liquidity as defined in the IMF manual ‘International Reserves and Foreign Currency Liquidity: Guidelines for a Data Template’. This information complements the data on reserve assets included in the euro area balance of payments.

Requirements

Reserve assets of the euro area are highly liquid, marketable and creditworthy claims held by the ECB (‘pooled reserves’) and by the NCBs (‘unpooled reserve assets’) on non-euro area residents and are denominated and settled in a convertible foreign currency (i.e. in currencies other than the euro), plus gold, reserve positions in the IMF and special drawing rights (SDR) holdings. They may include net positions in financial derivatives. As a general rule, reserve assets are compiled on a gross basis without any netting out of reserve-related liabilities. Exceptionally, positions in financial derivatives should be recorded on a net basis. The breakdown of the data required from the NCBs is presented in Annex II, Table 3, Section I.A.

Foreign currency-denominated assets of the Eurosystem which do not meet this definition, i.e. claims on euro area residents and assets held for monetary policy or other purposes that are unrelated to balance of payments or exchange rate policies, are included under the ‘other foreign currency assets’ item of the international reserves template (Annex II, Table 3, Section I.B).

Euro-denominated claims on non-residents and balances in foreign currency held by governments of euro area Member States are not considered as reserve assets; such amounts are not included in the Eurosystem reserves template and are recorded as ‘other investment’ within the international investment position if they represent claims on non-euro area residents.

In addition, information on predetermined and contingent short-term net drains on the Eurosystem connected to reserve assets and other foreign currency assets of the Eurosystem, the so-called ‘reserve-related liabilities’, is to be reported under Annex II, Table 3, Sections II to IV.

3. International investment position statistics

Objective

The international investment position is a statement of the external assets and liabilities of the euro area as a whole, for monetary policy and exchange market analysis. In particular, it contributes to the assessment of the Member States’ external vulnerability and to monitoring the developments in holdings of liquid assets abroad by the money-holding sector. This statistical information is key to the compilation of the rest of the world account in the euro area quarterly financial accounts and may also assist in the compilation of balance of payments flows.

Requirements

The NCBs must deliver international investment position statistics on a quarterly basis in respect of end-of-period stock levels and revaluations due to exchange rate or other price changes.

The international investment position data conform as far as possible with international standards (see Article 2(4) of this Guideline). The ECB compiles the international investment position for the euro area as a whole. The breakdown of the international investment position for the euro area is presented in Annex II, Table 4.

The international investment position shows financial stocks at the end of the reference period, valued at end-period prices. Changes in the value of stocks could be due to the following factors. First, part of the change in the value during the reference period will be due to the financial transactions that have taken place and been recorded in the balance of payments. Second, part of the changes in positions at the beginning and at the end of a given period will be caused by changes in the prices of the financial assets and liabilities shown. Third, in the event that stocks are denominated in currencies other than the unit of account used for the international investment position, changes in the exchange rates vis-à-vis other currencies will also affect the values. Finally, any other change which is not due to the above factors will be considered as due to other changes in volume during the period.

A proper reconciliation between the financial flows and stocks of the euro area requires changes in value owing to price, to exchange rate changes and to other changes in volume to be distinguished.

Coverage of the international investment position should be as close as possible to that for quarterly balance of payments flows. The concepts, definitions and breakdowns are in line with those used for quarterly balance of payments flows.

As far as possible, data on the international investment position should be consistent with other statistics, such as money and banking statistics, financial accounts and national accounts.

As for the monthly and quarterly balance of payments, NCBs are required to distinguish in their international investment position statistics between holdings vis-à-vis euro area Member States and all other international positions. A distinction between holdings in securities issued by euro area residents and in securities issued by non-euro area residents is required in the portfolio investment accounts. Statistics on net assets in portfolio investment of the euro area are compiled by aggregating reported net assets in securities issued by non-euro area residents. Statistics on net liabilities in portfolio investment of the euro area are compiled by consolidation of net total national liabilities and net holdings in securities issued and purchased by euro area residents.

Portfolio investment assets and liabilities within the international investment position are compiled purely from stock data.

NCBs (and other competent statistical authorities where appropriate) collect, as a minimum, quarterly portfolio investment stocks of assets and liabilities on a security-by-security basis according to one of the models set out in the table contained in Annex VI.

4. Monthly revaluations of reserve assets due to exchange rate and other price changes

Objective

The monthly revaluations of euro area reserve assets contribute to the assessment of the euro area external vulnerability.

Requirements

The NCBs must deliver statistics on the revaluations of reserve assets due to exchange rate and other price changes on a monthly basis. These data conform with international standards (see Article 2(4) of this Guideline).

The required breakdown of this report is presented in Annex II, Table 5.

The revaluations of reserve assets show the holding gains or losses, i.e. the changes in the monetary value of reserve assets that accrue as a result of changes in the level and structure of their prices.

5. Monthly cross-border shipments of euro banknotes by denomination

Objective

The ESCB needs comprehensive statistics to estimate holdings of euro banknotes by entities outside the euro area. To this end, statistical information on cross-border shipments of euro banknotes between the euro area and countries outside the euro area is of particular relevance. Such statistics are necessary to facilitate decision-making in the area of euro banknote issuance with respect to the production planning of euro banknotes, management of stocks and the coordination of the issuance and transfers of euro banknotes by NCBs and the ECB in accordance with their respective competences. Euro banknote shipment statistics contribute to the assessment of monetary and foreign exchange developments and are needed to assess the role of the euro as an investment currency outside the euro area.

Requirements

The NCBs must deliver information on the monthly imports and exports of euro banknotes by euro area Member States to/from countries outside the euro area, as specified in Annex II, Table 6. A breakdown by denomination is required on a best estimate basis.









ANNEX II

REQUIRED BREAKDOWNS







Table 1 Monthly balance of payments Credit Debit 1. Current account (1) Goods (2) Geo 3 (3) Geo 3 Services Geo 3 Geo 3 Primary income Compensation of employees Geo 3 Geo 3 Investment income Direct investment Equity Geo 3 Geo 3 Of which: reinvested earnings by resident sector (Sec 1) (4) Geo 2 Geo 2 Debt instruments Geo 3 Geo 3 Portfolio investment Equity and investment fund shares Geo 3 Geo 1 Debt securities Geo 3 Geo 1 Other investment Geo 3 Geo 3 Of which: interest Geo 2 Geo 2 Reserve assets Geo 3 Geo 3 Of which: interest Geo 2 Geo 2 Other primary income Geo 3 Geo 3 Secondary income Geo 3 Geo 3 2. Capital account Geo 3 Geo 3 Net acquisition of financial assets Net incurrence of liabilities Net 3. Financial account Direct investment Equity by resident sector (Sec 1) Geo 2 Geo 2 Debt instruments by resident sector (Sec 1) Geo 2 Geo 2 Portfolio investment Equity and investment fund shares By resident sector (Sec 1) Geo 2 Geo 1 By counterpart issuer sector (Sec 1) Geo 2 Debt securities Short-term By resident sector (Sec 1) Geo 2 Geo 1 By counterpart issuer sector (Sec 1) Geo 2 Long-term By resident sector (Sec 1) Geo 2 Geo 1 By counterpart issuer sector (Sec 1) Geo 2 Financial derivatives (other than reserves) and employee stock options Geo 2 Other investment By resident sector (Sec 1) Geo 2 Geo 2 Of which: currency and deposits Geo 2 Geo 2 Reserve assets Monetary gold Gold bullion Geo 1 Unallocated gold accounts Geo 1 Special drawing rights (SDRs) Geo 1 Reserve position in the International Monetary Fund (IMF) Geo 1 Other reserve assets Currency and deposits Claims on monetary authorities, the IMF and the Bank for International Settlements (BIS) Geo 1 Claims on other entities (banks) Geo 1 Securities Debt securities Short-term Geo 1 Long-term Geo 1 Equity and investment fund shares Geo 1 Financial derivatives (net) Geo 1 Other claims Geo 1 (1) Concepts and definitions of selected items are specified in Annex III. (2) Includes branding — quasitrade adjustment. (3) The details of the required geographical breakdowns are specified in Table 7. (4) The details of the required institutional sector breakdowns are specified in Table 8.







Table 2 Quarterly balance of payments Credit Debit 1. Current account (1) Goods Geo 4 (2) Geo 4 General merchandise on a balance of payments (BOP) basis Geo 3 Geo 3 Net exports of goods under merchanting Geo 3 Goods acquired under merchanting (negative credit) Geo 3 Goods sold under merchanting Geo 3 Non-monetary gold Geo 3 Geo 3 Branding — quasi-transit trade adjustment Geo 4 Geo 4 Services Geo 4 Geo 4 Manufacturing services on physical inputs owned by others Geo 4 Geo 4 Maintenance and repair services not included elsewhere (n.i.e.) Geo 4 Geo 4 Transport Geo 4 Geo 4 Travel Geo 4 Geo 4 Construction Geo 4 Geo 4 Insurance and pension services Geo 4 Geo 4 Financial services Geo 4 Geo 4 Explicitly charged and other financial services Geo 3 Geo 3 Financial intermediation services indirectly measured (FISIM) Geo 3 Geo 3 Charges for the use of intellectual property n.i.e. Geo 4 Geo 4 Telecommunications, computer, and information services Geo 4 Geo 4 Other business services Geo 4 Geo 4 Research and development services Geo 3 Geo 3 Professional and management consulting services Geo 3 Geo 3 Technical, trade-related, and other business services Geo 3 Geo 3 Personal, cultural and recreational services Geo 4 Geo 4 Government goods and services n.i.e. Geo 4 Geo 4 Primary income Compensation of employees Geo 4 Geo 4 Investment income Direct investment Equity Geo 4 Geo 4 Dividends and withdrawals from income of quasi-corporations In direct investment enterprises Geo 3 Geo 3 In direct investor (reverse investment) Geo 3 Geo 3 Between fellow enterprises Geo 3 Geo 3 By resident sector (Sec 2) (3) Geo 2 Geo 2 Reinvested earnings Geo 4 Geo 4 By resident sector (Sec 2) Geo 2 Geo 2 Debt instruments Geo 4 Geo 4 In direct investment enterprises Geo 3 Geo 3 In direct investor (reverse investment) Geo 3 Geo 3 Between fellow enterprises Geo 3 Geo 3 Of which: interest By resident sector (Sec 2) Geo 2 Geo 2 Portfolio investment Equity and investment fund shares Geo 4 Geo 1 Equity securities Dividends By resident sector (Sec 2) Geo 3 Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Investment fund shares Dividends By resident sector (Sec 2) Geo 3 Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Reinvested earnings By resident sector (Sec 2) Geo 3 Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Debt securities Short-term Geo 4 Geo 1 Interest By resident sector (Sec 2) Geo 3 Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Long-term Geo 4 Geo 1 Interest By resident sector (Sec 2) Geo 3 Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Other investment Geo 4 Geo 4 Withdrawals from income of quasi-corporations Geo 3 Geo 3 Interest Geo 3 Geo 3 By resident sector (Sec 2) Geo 2 Geo 2 Of which: interest on SDRs Geo 1 Of which: interest before FISIM Geo 3 Geo 3 By resident sector (Sec 2) Geo 2 Geo 2 Investment income attributable to policyholders in insurance, pension schemes, and standardised guarantee schemes Geo 3 Geo 3 By resident sector (Sec 2) Geo 2 Geo 2 Reserve assets Geo 3 Of which: interest Geo 3 Other primary income Geo 4 Geo 4 General government Geo 3 Geo 3 Taxes on production and on imports Union institutions Union institutions Taxes on products Union institutions Union institutions Other taxes on production Union institutions Union institutions Subsidies Union institutions Union institutions Subsidies on products Union institutions Union institutions Other subsidies on production Union institutions Union institutions Rents Geo 3 Geo 3 Other sectors Geo 3 Geo 3 Taxes on production and on imports Union institutions Union institutions Taxes on products Union institutions Union institutions Other taxes on production Union institutions Union institutions Subsidies Union institutions Union institutions Subsidies on products Union institutions Union institutions Other subsidies on production Union institutions Union institutions Rents Geo 3 Geo 3 Secondary income Geo 4 Geo 4 General government Geo 3 Geo 3 Current taxes on income, wealth, etc. Geo 3 Geo 3 Social contributions Geo 3 Geo 3 Social benefits Geo 3 Geo 3 Current international cooperation Geo 3 Geo 3 Of which: vis-à-vis the Union institutions (excluding the ECB) Union institutions Union institutions Miscellaneous current transfers Geo 3 Geo 3 Value added tax and gross national income-based Union own resources Union institutions Union institutions Other sectors Geo 3 Geo 3 Current taxes on income, wealth, etc. Geo 3 Geo 3 Social contributions Geo 3 Geo 3 Social benefits Geo 3 Geo 3 Net non-life insurance premiums Geo 3 Geo 3 Non-life insurance claims Geo 3 Geo 3 Miscellaneous current transfers Geo 3 Geo 3 Of which: personal transfers (between resident and non-resident households) Geo 3 Geo 3 Of which: workers’ remittances Geo 4 Geo 4 Adjustment for change in pension entitlements Geo 3 Geo 3 2. Capital account Geo 4 Geo 4 Gross acquisitions/disposals of non-produced non-financial assets Geo 3 Geo 3 Capital transfers Geo 3 Geo 3 General government Geo 3 Geo 3 Capital taxes Geo 3 Geo 3 Investment grants Geo 3 Geo 3 Other capital transfers Geo 3 Geo 3 Of which: debt forgiveness Geo 3 Geo 3 Other sectors Geo 3 Geo 3 Capital taxes Geo 3 Geo 3 Investment grants Geo 3 Geo 3 Other capital transfers Geo 3 Geo 3 Of which: debt forgiveness Geo 3 Geo 3 Net acquisition of financial assets Net incurrence of liabilities Net 3. Financial account Geo 1 Geo 1 Direct investment Geo 4 Geo 4 Equity Geo 4 Geo 4 Equity other than reinvestment of earnings In direct investment enterprises Geo 3 Geo 3 In direct investor (reverse investment) Geo 3 Geo 3 Between fellow enterprises Geo 3 Geo 3 By resident sector (Sec 2) Geo 2 Geo 2 Listed Geo 2 Geo 2 Unlisted Geo 2 Geo 2 Other (e.g. real estate) Geo 2 Geo 2 Reinvestment of earnings Geo 4 Geo 4 By resident sector (Sec 2) Geo 2 Geo 2 Debt instruments Geo 4 Geo 4 In direct investment enterprises Geo 3 Geo 3 In direct investor (reverse investment) Geo 3 Geo 3 Between fellow enterprises Geo 3 Geo 3 By resident sector (Sec 2) Geo 2 Geo 2 Portfolio investment Geo 4 Geo 1 Equity and investment fund shares Geo 4 Geo 1 Equity securities By resident sector (Sec 2) Geo 3 Geo 1 Listed Geo 2 Geo 1 Unlisted Geo 2 Geo 1 By counterpart issuer sector (Sec 2) Listed Geo 2 Unlisted Geo 2 Investment fund shares By resident sector (Sec 2) Geo 3 Geo 1 Of which: reinvestment of earnings Geo 3 Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Of which: reinvestment of earnings Geo 2 Debt securities Short-term Geo 4 Geo 1 By resident sector (Sec 2) Geo 3 Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Long-term Geo 4 Geo 1 By resident sector (Sec 2) Geo 3 Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Financial derivatives (other than reserves) and employee stock options By resident sector (Sec 2) Geo 3 Other investment Geo 4 Geo 4 By resident sector (Sec 1) Geo 4 Geo 4 Other equity Geo 3 Geo 3 Currency and deposits By resident sector (Sec 2) Short-term Geo 3 Geo 3 Long-term Geo 3 Geo 3 Loans By resident sector (Sec 2) Short-term Geo 3, IMF Geo 3, IMF Long-term Geo 3, IMF Geo 3, IMF Insurance, pension schemes, and standardised guarantee schemes By resident sector (Sec 2) Geo 3 Geo 3 Trade credits and advances By resident sector (Sec 2) Short-term Geo 3 Geo 3 Long-term Geo 3 Geo 3 Other accounts receivable/payable By resident sector (Sec 2) Short-term Geo 3 Geo 3 Long-term Geo 3 Geo 3 SDRs Geo 1 Reserve assets Geo 3 4. Balancing items Balance on goods and services Geo 4 Current account balance Geo 1 Net lending (+)/net borrowing (–) (balance from current and capital account) Geo 1 Net lending (+)/net borrowing (–) (from financial account) Geo 1 Net errors and omissions Geo 1 (1) Concepts and definitions of selected items are specified in Annex III. (2) The details of the required geographical breakdowns are specified in Table 7. (3) The details of the required institutional sector breakdowns are specified in Table 8.

Table 3

Monthly international reserves template







I. Official reserve assets and other foreign currency assets (approximate market value) All maturities A. Reserve assets (1) Monetary gold (including gold deposits and gold swaps) Of which: monetary gold under swap for cash collateral Geo 0 Gold bullion Geo 1 (2) Memo: volume in millions of fine troy ounces Geo 1 Unallocated gold accounts Geo 1 Memo: volume in millions of fine troy ounces Geo 1 SDRs Geo 1 Reserve position in the IMF Geo 1 Other reserve assets Currency and deposits Claims on other non-euro area central banks, the IMF and the BIS Geo 1 Claims on entities (banks) Headquartered in Member States whose currency is the euro Geo 1 Headquartered outside Member States whose currency is the euro Geo 1 Securities Of which: securities under repo for cash collateral Geo 0 Of which: issuer headquartered in Member States whose currency is the euro Geo 1 Debt securities Short-term Geo 1 Long-term Geo 1 Equity and investment fund shares Geo 1 Financial derivatives (net) Geo 1 Other claims Loans to non-banks Geo 1 Other Geo 1 B. Other foreign currency assets (not included in reserve assets) Securities Geo 0 Deposits headquartered in Member States whose currency is the euro Geo 0 headquartered outside Member States whose currency is the euro Geo 0 Loans Geo 0 Financial derivatives (net) Geo 0 Gold Geo 0 Other Geo 0

▼M1







II. Predetermined short-term net drains on foreign currency assets (nominal value) Residual maturity Up to one month More than one month and up to three months More than three months and up to one year All maturities Foreign currency loans, securities and deposits Geo 0 Geo 0 Geo 0 Outflows (–) Geo 0 Geo 0 Geo 0 Principal Geo 0 Geo 0 Geo 0 Interest Geo 0 Geo 0 Geo 0 Inflows (+) Geo 0 Geo 0 Geo 0 Principal Geo 0 Geo 0 Geo 0 Interest Geo 0 Geo 0 Geo 0 Aggregate short and long positions in forwards and futures in foreign currencies vis-à-vis the domestic currency (including the forward leg of currency swaps) Geo 0 Geo 0 Geo 0 Short positions (–) Geo 0 Geo 0 Geo 0 Long positions (+) Geo 0 Geo 0 Geo 0 Other Geo 0 Geo 0 Geo 0 Outflows related to repos (–) Geo 0 Geo 0 Geo 0 Inflows related to reverse repos (+) Geo 0 Geo 0 Geo 0 Trade credits (–) Geo 0 Geo 0 Geo 0 Trade credits (+) Geo 0 Geo 0 Geo 0 Other accounts payable (–) Geo 0 Geo 0 Geo 0 Other accounts receivable (+) Geo 0 Geo 0 Geo 0 III. Contingent short-term net drains on foreign currency assets Contingent liabilities in foreign currency Geo 0 Geo 0 Geo 0 Collateral guarantees on debt falling due within one year Geo 0 Geo 0 Geo 0 Other contingent liabilities Geo 0 Geo 0 Geo 0 Foreign currency securities issued with embedded options (puttable bonds) Geo 0 Undrawn, unconditional credit lines provided by: Geo 0 Geo 0 Geo 0 Other national monetary authorities, BIS, IMF, and other international organisations Geo 0 Geo 0 Geo 0 Other national monetary authorities (+) Geo 0 Geo 0 Geo 0 BIS (+) Geo 0 Geo 0 Geo 0 IMF (+) Geo 0 Geo 0 Geo 0 Other international organisations (+) Geo 0 Geo 0 Geo 0 With banks and other financial institutions headquartered in the reporting country (+) Geo 0 Geo 0 Geo 0 With banks and other financial institutions headquartered outside the reporting country (+) Geo 0 Geo 0 Geo 0 Undrawn, unconditional credit lines provided to: Geo 0 Geo 0 Geo 0 Other national monetary authorities, BIS, IMF, and other international organisations Geo 0 Geo 0 Geo 0 Other national monetary authorities (–) Geo 0 Geo 0 Geo 0 BIS (–) Geo 0 Geo 0 Geo 0 IMF (–) Geo 0 Geo 0 Geo 0 Other international organisations (–) Geo 0 Geo 0 Geo 0 With banks and other financial institutions headquartered in the reporting country (–) Geo 0 Geo 0 Geo 0 With banks and other financial institutions headquartered outside the reporting country (–) Geo 0 Geo 0 Geo 0 Aggregate short and long positions of options in foreign currencies vis-à-vis the domestic currency Geo 0 Geo 0 Geo 0 Short positions Geo 0 Geo 0 Geo 0 Bought puts Geo 0 Geo 0 Geo 0 Written calls Geo 0 Geo 0 Geo 0 Long positions Geo 0 Geo 0 Geo 0 Bought calls Geo 0 Geo 0 Geo 0 Written puts Geo 0 Geo 0 Geo 0 PRO MEMORIA: In-the-money options Geo 0 Geo 0 Geo 0 At current exchange rates Geo 0 Geo 0 Geo 0 Short position Geo 0 Geo 0 Geo 0 Long position Geo 0 Geo 0 Geo 0 + 5 % (depreciation of 5 %) Geo 0 Geo 0 Geo 0 Short position Geo 0 Geo 0 Geo 0 Long position Geo 0 Geo 0 Geo 0 – 5 % (appreciation of 5 %) Geo 0 Geo 0 Geo 0 Short position Geo 0 Geo 0 Geo 0 Long position Geo 0 Geo 0 Geo 0 + 10 % (depreciation of 10 %) Geo 0 Geo 0 Geo 0 Short position Geo 0 Geo 0 Geo 0 Long position Geo 0 Geo 0 Geo 0 – 10 % (appreciation of 10 %) Geo 0 Geo 0 Geo 0 Short position Geo 0 Geo 0 Geo 0 Long position Geo 0 Geo 0 Geo 0 Other Geo 0 Geo 0 Geo 0 Short position Geo 0 Geo 0 Geo 0 Long position Geo 0 Geo 0 Geo 0

▼B







IV. Memo items Residual maturity Up to 1 year More than 1 year All maturities Short-term domestic currency debt indexed to the exchange rate (nominal value) Geo 0 Financial instruments denominated in foreign currency and settled by other means (e.g., in domestic currency) (nominal value) Geo 0 Financial derivatives (forwards, futures and options contracts) Geo 0 Short positions Geo 0 Long positions Geo 0 Other instruments Geo 0 Pledged assets Geo 0 Included in reserve assets Geo 0 Included in other foreign currency assets Geo 0 Securities lent and on repo (market value) Geo 0 Lent or repoed and included in section I (–) Geo 0 Lent or repoed but not included in section I (–) Geo 0 Borrowed or acquired and included in section I (+) Geo 0 Borrowed or acquired but not included in section I (+) Geo 0 Financial derivatives assets (net, marked to market) Geo 0 Forwards Geo 0 Futures Geo 0 Swaps Geo 0 Options Geo 0 Other Geo 0 Financial derivatives (forward, futures, or options contracts) that have a residual maturity greater than 1 year (nominal value) Geo 0 Aggregate short and long positions in forwards and futures in foreign currencies vis-à-vis the domestic currency (including the forward leg of currency swaps) Geo 0 Short positions (–) Geo 0 Long positions (+) Geo 0 Aggregate short and long positions of options in foreign currencies vis-à-vis the domestic currency Geo 0 Short positions (–) Geo 0 Bought puts Geo 0 Written calls Geo 0 Long positions (+) Geo 0 Bought calls Geo 0 Written puts Geo 0 Currency composition of reserves assets (by groups of currencies) Geo 1 Currencies in SDR basket Geo 1 Currencies not in SDR basket Geo 1







Table 4 Quarterly international investment position Assets Liabilities Positions Revaluations due to exchange rate changes Revaluations due to other price changes Positions Revaluations due to exchange rate changes Revaluations due to other price changes Financial account (1) Geo 1 (2) Geo 1 Direct investment Geo 4 Geo 4 Equity Geo 4 Geo 2 Geo 2 Geo 4 Geo 2 Geo 2 In direct investment enterprises Geo 2 Geo 2 In direct investor (reverse investment) Geo 2 Geo 2 Between fellow enterprises Geo 2 Geo 2 By resident sector (Sec 2) (3) Geo 2 Geo 2 Listed Geo 2 Geo 2 Unlisted Geo 2 Geo 2 Other (e.g. real estate) Geo 2 Geo 2 Debt instruments Geo 4 Geo 2 Geo 2 Geo 4 Geo 2 Geo 2 In direct investment enterprises Geo 2 Geo 2 In direct investor (reverse investment) Geo 2 Geo 2 Between fellow enterprises Geo 2 Geo 2 By resident sector (Sec 2) Geo 2 Geo 2 Portfolio investment Geo 4 Geo 1 Equity and investment fund shares Geo 4 Geo 1 Equity securities By resident sector (Sec 2) Geo 3 Geo 1 Listed Geo 2 Geo 2 Geo 2 Geo 1 Geo 1 Geo 1 Unlisted Geo 2 Geo 2 Geo 2 Geo 1 Geo 1 Geo 1 By counterpart issuer sector (Sec 2) Listed Geo 2 Geo 2 Geo 2 Unlisted Geo 2 Geo 2 Geo 2 Investment fund shares By resident sector (Sec 2) Geo 2 Geo 2 Geo 2 Geo 1 Geo 1 Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Geo 2 Geo 2 Debt securities Short-term Geo 4 Geo 1 By resident sector (Sec 2) Geo 3 Geo 2 Geo 2 Geo 1 Geo 1 Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Geo 2 Geo 2 By currency: Euro Geo 2 Geo 1 US dollar Geo 2 Geo 1 Other currencies Geo 2 Geo 1 Long-term Geo 4 Geo 1 By resident sector (Sec 2) Geo 3 Geo 2 Geo 2 Geo 1 Geo 1 Geo 1 With redemption due in 1 year or less Geo 1 With redemption due in more than 1 year Geo 1 By counterpart issuer sector (Sec 2) Geo 2 Geo 2 Geo 2 With redemption due in 1 year or less Geo 2 With redemption due in more than 1 year Geo 2 By currency: Euro Geo 2 Geo 1 US dollar Geo 2 Geo 1 Other currencies Geo 2 Geo 1 Financial derivatives (other than reserves) and employee stock options Geo 4 Geo 4 By resident sector (Sec 2) Geo 2 Geo 2 Geo 2 Geo 2 Other investment Geo 4 Geo 4 By resident sector (Sec 1) Geo 4 Geo 4 By resident sector (Sec 2) Geo 2 Geo 2 Geo 2 Geo 2 Other equity Geo 2 Geo 2 Geo 2 Geo 2 Geo 2 Geo 2 Currency and deposits Geo 4 Geo 2 Geo 4 Geo 2 By resident sector (Sec 2) Short-term Geo 3 Geo 3 Long-term Geo 3 Geo 3 Loans Geo 4 Geo 2 Geo 4 Geo 2 By resident sector (Sec 2) Short-term Geo 3, IMF Geo 3, IMF Long-term Geo 3, IMF Geo 3, IMF Insurance, pension schemes, and standardised guarantee schemes Geo 2 Geo 2 Geo 2 Geo 2 By resident sector (Sec 2) Geo 3 Geo 3 Trade credits and advances Geo 4 Geo 2 Geo 4 Geo 2 By resident sector (Sec 2) Short-term Geo 3 Geo 3 Long-term Geo 3 Geo 3 Other accounts receivable/payable Geo 2 Geo 2 By resident sector (Sec 2) Short-term Geo 3 Geo 3 Long-term Geo 3 Geo 3 SDRs Geo 1 Geo 1 (1) Concepts and definitions of selected items are specified in Annex III. (2) The details of the required geographical breakdowns are specified in Table 7. (3) The details of the required institutional sector breakdowns are specified in Table 8.







Table 5 Monthly revaluations of reserve assets Revaluations due to exchange rate changes Revaluations due to other price changes Reserve assets (1) Monetary gold Gold bullion Geo 1 (2) Unallocated gold accounts Geo 1 SDRs Geo 1 Reserve position in the IMF Geo 1 Other reserve assets Currency and deposits Geo 1 Securities Debt securities Short-term Geo 1 Geo 1 Long-term Geo 1 Geo 1 Equity and investment fund shares Geo 1 Geo 1 Financial derivatives (net) Geo 1 Other claims Geo 1 Geo 1 (1) Concepts and definitions of selected items are specified in Annex III. (2) The details of the required geographical breakdowns are specified in Table 7.







Table 6 Monthly cross-border shipments of euro banknotes Exports (total) Extra-euro area By denomination: 5 euro Extra-euro area 10 euro Extra-euro area 20 euro Extra-euro area 50 euro Extra-euro area 100 euro Extra-euro area 200 euro Extra-euro area 500 euro Extra-euro area Imports (total) Extra-euro area By denomination: 5 euro Extra-euro area 10 euro Extra-euro area 20 euro Extra-euro area 50 euro Extra-euro area 100 euro Extra-euro area 200 euro Extra-euro area 500 euro Extra-euro area







Table 7 Geographical breakdowns Geo 0 Geo 1 Geo 2 Geo 3 Geo 4 Domestic + rest of the world Rest of the world Rest of the world Rest of the world Rest of the world Intra-euro area Intra-euro area Intra-euro area Extra-euro area Extra-euro area Extra-euro area Intra-Union Intra-Union Extra-Union Extra-Union Union Member States outside the euro area (1) Brazil Canada China Hong Kong India Japan Russian Federation Switzerland United States Union institutions (excluding the ECB) European Investment Bank Offshore financial centres International organisations (excluding Union institutions) IMF (1) Individual breakdown by country is required.







Table 8 Sector breakdowns Sec 1 Sec 2 Central bank Central bank Other MFIs Other MFIs Deposit-taking corporations except the central bank Deposit-taking corporations except the central bank Money market funds Money market funds General government General government Other sectors Other sectors Financial corporations other than MFIs Non-financial corporations, households, and non-profit institutions serving households









ANNEX III

CONCEPTS AND DEFINITIONS TO BE USED IN THE BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION STATISTICS, AND THE INTERNATIONAL RESERVES TEMPLATE

In order to construct meaningful aggregated external statistics for the euro area, concepts and definitions have been defined in the field of balance of payments statistics, international investment position statistics and the international reserves template. Current international standards, such as the sixth edition of the International Monetary Fund (IMF) Balance of Payments and International Investment Position Manual (hereinafter ‘the BPM6’), and the IMF's Guidelines for the Data Template on International Reserves and Foreign Currency Liquidity, as well as the European Commission's proposal for a new regulation of the European Parliament and of the Council on the European system of national and regional accounts in the European Union (ESA 2010) ( 8 ) are the reference for these concepts and definitions.

In the case of the euro area, the economic territory comprises: (i) the economic territory of the Member States whose currency is the euro; and (ii) the European Central Bank (ECB) that is regarded as a resident unit of the euro area.

The rest of the world (RoW) comprises all third countries and international organisations, including those physically located within the euro area. Apart from the ECB, the Union institutions are considered to be resident outside the euro area. Consequently, all transactions of euro area Member States vis-à-vis Union institutions except the ECB are recorded and classified as non-euro area transactions in the euro area balance of payments and international investment position statistics.

In the cases set out below, residence is determined as follows:

(a) When undertaking international transactions in land and/or buildings (e.g. holiday homes), property owners are treated as if they have transferred their ownership to a notional institutional unit that is actually resident in the country where the property is located. The notional unit is treated as being owned and controlled by the non-resident owner.

(b) In the absence of any significant physical dimension to a legal entity, e.g. investment funds (as distinct from their managers), securitisation vehicles, and some special purpose entities, its residence is determined by the economic territory under whose laws the entity is incorporated. If the entity is not incorporated, it is considered to be resident in the country whose legal system governs the creation and continued existence of the entity.

1. Concepts and definitions of selected items

A. Current account

The current account shows flows of goods, services, primary and secondary income between residents and non-residents.

1. GOODS

This component covers moveable goods for which a change of ownership occurs between residents and non-residents.

1.1. General merchandise on a balance of payments basis

General merchandise on a balance of payments (BOP) basis covers goods for which a change of economic ownership occurs between a resident and a non-resident and that are not included in other specific categories, such as goods under merchanting (see 1.2) and non-monetary gold (see 1.3), or as part of a service. General merchandise should be measured at market value on a free on board (FOB) basis. In the countries' contribution to the compilation of Union aggregates, imports and exports of goods in quasi-transit trade have to be included and, for intra-Union trade, the partner country should be defined according to the consignment principle.

1.2. Net exports of goods under merchanting

Merchanting is defined as the purchase of goods by a resident (of the compiling economy) from a non-resident, combined with the subsequent resale of the same goods to another non-resident without the goods being present in the compiling economy. Net exports of goods under merchanting represent the difference between sales over purchases of goods for merchanting. This item includes merchants' margins, holding gains and losses, and changes in inventories of goods under merchanting.

1.2.1. GOODS ACQUIRED UNDER MERCHANTING

The goods acquired under merchanting are shown as a negative export/credit of the economy of the merchant.

1.2.2. GOODS SOLD UNDER MERCHANTING

The sale of goods is shown under goods sold under merchanting as a positive export/credit of the economy of the merchant.

1.3. Non-monetary gold

Non-monetary gold covers all gold other than monetary gold. Monetary gold is owned by monetary authorities and held as a reserve asset (see 6.5.1). Non-monetary gold can be in the form of bullion (i.e. coins, ingots, or bars with a purity of at least 995 parts per 1 000, including such gold held in allocated gold accounts), gold powder, and gold in other unwrought or semi-manufactured forms.

1.4. Branding — quasi-transit trade adjustment

Quasi-transit trade is a term used to define goods imported into a Member State, cleared through customs for free circulation within the Union (and submitted to import duties) by an entity that is not considered as a resident institutional unit, and are then dispatched to another Member State.

Branding must be recorded by the Member States affected by the ‘quasi-transit trade’ to report the gap between the value of general merchandise declared when the goods are initially imported from a third country and their value when dispatched to another Member State. The geographical breakdown should be compiled on the basis of the country of residence of the parent enterprise controlling the company that manages the customs procedure related to these goods in the reporting economy.

2. SERVICES

Services are the result of a production activity that changes the conditions of the consuming units, or facilitates the exchange of products or financial assets. Services are not generally separate items over which ownership rights can be established and cannot generally be separated from their production.

2.1. Manufacturing services on physical inputs owned by others

Manufacturing services on physical inputs owned by others covers processing, assembly, labelling, packing, and so forth, undertaken by enterprises that do not own the goods concerned. The manufacturing is undertaken by an entity that receives a fee from the owner. Since the ownership of the goods does not change, no general merchandise transaction is recorded between the processor and the owner. The value of fees charged for manufacturing on physical inputs owned by others is not necessarily the same as the difference between the value of goods sent for processing and the value of goods after processing. Excluded are the assembly of prefabricated construction (included in construction) and labelling and packaging incidental to transport (included in transport).

2.2. Maintenance and repair services not included elsewhere

Maintenance and repair services not included elsewhere cover maintenance and repair work by residents on goods that are owned by non-residents (and vice versa). The repairs may be performed at the site of the repairer or elsewhere. The value of maintenance and repairs includes any parts or materials supplied by the repairer and included in the charges. Parts and materials charged separately should be included in general merchandise. Repairs and maintenance on ships, aircraft and other transport equipment are included in this item. Cleaning of transport equipment is excluded as it is included in transport services. Construction maintenance and repairs are excluded as they are included under construction. Maintenance and repairs of computers are excluded as they are included under telecommunication, computer and information services.

2.3. Transport

Transport is the process of carriage of people and objects from one location to another, as well as related supporting and auxiliary services. Transport also includes postal and courier services. Transport services are recorded in balance of payments when provided by residents of one economy for the benefit of those of another.

2.4. Travel

Travel credits cover goods and services for own use, or to give away, acquired from an economy by non-residents 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 these other economies. Travel includes local transport (i.e. transport within the economy being visited and provided by a resident of that economy), but excludes international transport (which is included in transport). Also excluded are goods purchased by a traveller for resale in the traveller's own economy or in any other economy.

2.5. Construction

Construction covers the creation, renovation, repair or extension of fixed assets in the form of buildings, land improvements of an engineering nature and other engineering constructions (including roads, bridges, dams, etc.). It includes related installation and assembly work, site preparation and general construction, specialised services such as painting, plumbing and demolition, and management of construction projects. The construction contracts covered in international trade in services are generally of a short-term nature. A large-scale construction project contracted by a non-resident enterprise that takes a year or more to be completed will usually give rise to a resident branch.

2.6. Insurance and pension services

It comprises direct insurance, reinsurance, auxiliary insurance services, pension and standardised guarantee services. These services are estimated or valued by the charges included in total premiums rather than by the total value of the premiums.

2.7. Financial services

Financial services cover intermediary and auxiliary services, except insurance and pension fund services, usually provided by banks and other financial corporations.

2.7.1. EXPLICITLY CHARGED AND OTHER FINANCIAL SERVICES

Services are charged for by explicit charges in the case of many financial services and require no special calculation. They include fees for deposit-taking and lending, fees for one-off guarantees, early or late repayment fees or penalties, account charges, fees related to letters of credit, credit card services, commissions and charges related to financial leasing, factoring, underwriting, and clearing of payments. Also included are financial advisory services, custody of financial assets or bullion, financial asset management, monitoring services, liquidity provision services, risk assumption services (other than insurance), merger and acquisition services, credit rating services, stock exchange services and trust services. Dealers in financial instruments may charge, in full or part, for their services by having a spread between their buying and selling prices. Margins on buying and selling transactions are included in explicitly charged and other financial services.

2.7.2. FINANCIAL INTERMEDIATION SERVICES INDIRECTLY MEASURED (FISIM)

Actual interest can be considered as including both an income element and a charge for a service. Lenders and deposit-takers operate by providing rates of interest to their depositors that are lower than the rates that they charge to their borrowers. The resulting interest margins are used by the financial corporations to defray their expenses and to provide an operating surplus. By convention, these indirect charges in respect of interest apply only to loans and deposits, and only when those loans and deposits are provided by, or deposited with, financial corporations.

2.8. Charges for the use of intellectual property not included elsewhere

Charges for the use of intellectual property not included elsewhere include:

(a) charges for the use of proprietary rights (such as patents, trademarks, copyrights, industrial processes and designs including trade secrets and franchises). These rights can arise from research and development, as well as from marketing; and

(b) charges for licences to reproduce or distribute intellectual property embodied in produced originals or prototypes (such as copyrights on books and manuscripts, computer software, cinematographic works, and sound recordings) and related rights (such as for live performances and television, cable, or satellite broadcast).

2.9. Telecommunication, computer and information services

Telecommunications services encompass the transmission of sound, images or other information by telephone, telex, telegram, radio and television cable and broadcasting, satellite, electronic mail, facsimile services etc., including business network services, teleconferencing and support services. They do not include the value of the information transported. Also included are mobile telecommunication services, Internet backbone services and online access services, including provision of access to the Internet. Excluded are installation services for telephone network equipment as they are included in construction.

Computer services consist of hardware and/or software-related services, and data-processing services. Also included are hardware and software consultancy and implementation services; maintenance and repair of computers and peripheral equipment; disaster recovery services, provision of advice and assistance on matters related to the management of computer resources; analysis, design and programming of systems ready to use (including web page development and design), and technical consultancy related to software; licences to use non-customised software; development, production, supply and documentation of customised software, including operating systems made to order for specific users; systems maintenance and other support services, such as training provided as part of consultancy; data-processing services, such as data entry, tabulation and processing on a time-sharing basis; web page hosting services (i.e. the provision of server space on the Internet to host clients' web pages); and computer facilities management. Excluded are charges for licences to reproduce and/or distribute software which are included in charges for the use of intellectual property n.i.e. Leasing of computers without an operator is included in technical, trade-related and other business services.

Information services comprise news agency services, database services (database conception, data storage and the dissemination of data and databases, including directories and mailing lists), both online and through magnetic, optical or printed media; and web search portals (search engine services that find Internet addresses for clients who input keyword queries). Also included are direct, non-bulk subscriptions to newspapers and periodicals, whether by mail, electronic transmission or other means; other online content provision services; and library and archive services. Bulk newspapers and periodicals are included under general merchandise.

2.10. Other business services

This includes: research and development services, professional and management consulting services, technical, trade-related, and other business services.

2.10.1. RESEARCH AND DEVELOPMENT SERVICES

Research and development services consist of services that are associated with basic research, applied research, and experimental development of new products and processes. In principle, such activities in the physical sciences, social sciences, and humanities are covered within this category, including the development of operating systems that represent technological advances. Also included is commercial research related to electronics, pharmaceuticals and biotechnology.

2.10.2. PROFESSIONAL AND MANAGEMENT CONSULTING SERVICES

Professional and management consulting services include: (a) legal services, accounting, management consulting, managerial services and public relations services; and (b) advertising, market research, and public opinion polling services.

2.10.3. TECHNICAL, TRADE-RELATED, AND OTHER BUSINESS SERVICES

These comprise: (a) architectural, engineering, scientific and other technical services; (b) waste treatment and de-pollution, agricultural and mining services; (c) operating leasing services; (d) trade-related services; and (e) other business services n.i.e.

2.11. Personal, cultural and recreational services

These include audiovisual and related services, and other personal, cultural and recreational services.

Audiovisual and related services are services and associated fees related to the production of motion pictures (on film or videotape), radio and television programmes (live or on tape) and musical recordings. Included are rentals of audiovisual and related products, and access to encrypted television channels (such as cable or satellite services); mass-produced audiovisual products purchased or sold for perpetual use that are delivered electronically (downloaded); fees received by performing artists (actors, musicians, dancers), authors, composers, etc. Excluded are charges or licences to reproduce and/or distribute audiovisual products as these are included in charges for the use of intellectual property n.i.e.

Other personal, cultural and recreational services are: (a) education services; (b) health services; (c) heritage and recreational services; and (d) other personal services.

2.12. Government goods and services not included elsewhere

This is a residual category covering government transactions (including those of international organisations) in goods and services that it is not possible to classify under other items. Included are all transactions (in both goods and services) by enclaves such as embassies, consulates, military bases and international organisations with residents of economies in which the enclaves are located. Excluded are transactions of the enclaves with residents of the home economies.

3. PRIMARY INCOME

Primary income represents the return that accrues to institutional units for their contribution to the production process, or for the provision of financial assets or from renting natural resources to other institutional units. It comprises compensation of employees, investment income and other primary income.

3.1. Compensation of employees

Compensation of employees is recorded when the employer (the producing unit) and the employee are resident in different economies. For the economy where the producing units are resident, compensation of employees is the total remuneration (including contributions paid by employers to social security schemes or to private insurance or pension funds), in cash or in kind, payable by resident enterprises to non-resident employees in return for work done by the latter during the accounting period. For the economy where the individuals are resident, compensation is the total remuneration, in cash or in kind, receivable by them from non-resident enterprises in return for work done during the accounting period. It is important to establish whether an employer-employee relationship exists; if not, the payment constitutes a purchase of services.

3.2. Investment income

Investment income is derived from a resident's ownership of an external financial asset (credit) and symmetrically, income derived from a non-resident's ownership of a domestic financial asset (debit). Investment income includes income on equity (dividends, withdrawals from income of quasi-corporations, reinvested earnings) and on debt (interest), and investment income attributable to policyholders in insurance, pension schemes, and standardised guarantee schemes.

In balance of payments, investment income is also classified according to the function of the underlying investment, as direct investment, portfolio investment, other investment or reserve assets, and further detailed according to the type of investment. For the definitions of investment by function, see the financial account.

Where they are separately identifiable, gains and losses on (capital) holdings are not classified as income on investments, but as changes in the value of investments due to market price developments. Net flows associated with interest rate derivatives are recorded solely under financial derivatives in the financial account.

3.2.1. INTEREST

Interest is a form of investment income that is receivable by the owners of certain kinds of financial assets, namely deposits, debt securities, loans and other accounts receivable, for putting the financial assets at the disposal of another institutional unit. Income on special drawing rights (SDR) holdings and SDR allocations is also included in interest.

The primary income account records ‘pure interest’ by eliminating the FISIM component from ‘actual interest’. Interest income is recorded on an accrual basis.

3.2.2. DISTRIBUTED INCOME OF CORPORATIONS

3.2.2.1. DIVIDENDS

Dividends are the distributed earnings allocated to the owners of equity shares for placing funds at the disposal of corporations. Dividends are recorded at the moment the shares go ex-dividend.

3.2.2.2. WITHDRAWALS FROM INCOME OF QUASI-CORPORATIONS

Withdrawals from income of quasi-corporations (unincorporated enterprises that behave as if they were corporations, e.g. branches, notional resident units for land and other natural resources owned by non-residents, joint ventures, trusts, etc.) are the amounts that owners of quasi-corporations withdraw for their own use from the profits earned by the quasi-corporations that belong to them. Withdrawals from the income of quasi-corporations are recorded as occurring when they actually took place.

3.2.3. REINVESTED EARNINGS ON FOREIGN DIRECT INVESTMENT

Reinvested earnings represent the direct investors' proportion, in terms of equity held, of the earnings that foreign subsidiaries, associates and branches do not distribute as dividends. They are defined as the direct investor's share of the total consolidated profits earned by the direct investment enterprise in the reference period (after allowing for tax, interest and depreciation) less dividends due for payment in the reference period, even if these dividends relate to profits earned in previous periods. Reinvested earnings are to be recorded in the period in which they are earned.

3.2.4. INCOME OF INVESTMENT FUND SHARES

Investment income attributable to collective investment fund shareholders, including mutual funds and unit trusts, is composed of two separate items:

3.2.4.1. DIVIDENDS (SEE 3.2.2.1), AND

3.2.4.2. REINVESTED EARNINGS

Earnings from investment funds can be viewed as being passed on to their shareholders (or unit holders) as they are earned in the form of investment income on their equity. Investment funds earn income by investing the money received from shareholders. Shareholders' income from investment funds is defined as the investment income earned on the fund's investment portfolio after deducting operating expenses. The net earnings of investment funds after deducting the operating expenses belong to shareholders. Where only a part of the net earnings is distributed to shareholders as dividends, the retained earnings should be treated as if they were distributed to the shareholders and then deemed reinvested.

3.2.5. INVESTMENT INCOME ATTRIBUTABLE TO POLICYHOLDERS IN INSURANCE, PENSION SCHEMES AND STANDARDISED GUARANTEE SCHEMES

Investment income attributable to insurance policy holders corresponds to the total primary incomes received from the investment of insurance technical reserves. The reserves are those for which the insurance corporation recognises a corresponding liability to the policyholders.

Pension entitlements arise from either defined contribution schemes or defined benefit schemes.

3.3. Other primary income

Classified according to the institutional sector of the compiling economy (general government or other sectors) and include the following components: taxes on production and imports, subsidies, and rent.

3.3.1. TAXES ON PRODUCTION AND IMPORTS

Include the following components:

3.3.1.1. TAXES ON PRODUCTS

Taxes on products are payable per unit of some good or service produced or traded cross-border. Examples include VAT, import duties, excise duties and consumption taxes.

3.3.1.2. OTHER TAXES ON PRODUCTION

Other taxes on production consist of all taxes that enterprises incur as a result of engaging in production, and include taxes paid for business and professional licences.

3.3.2. SUBSIDIES

Include the following components:

3.3.2.1. SUBSIDIES ON PRODUCTS

Subsidies on products are payable per unit of a good or service produced.

3.3.2.2. OTHER SUBSIDIES ON PRODUCTION

Other subsidies on production consist of subsidies, except subsidies on products that resident producer units may receive as a consequence of engaging in production.

3.3.3. RENT

Rent covers income receivable for putting natural resources at the disposal of a non-resident institutional unit. Examples of rent include amounts payable for the use of land extracting mineral deposits and other subsoil assets, and for fishing, forestry, and grazing rights. The regular payments made by the lessees of natural resources, such as subsoil assets, are often described as royalties, but they are classified as rents.

4. SECONDARY INCOME

The secondary income account shows current transfers between residents and non-residents. A transfer is an entry that corresponds to the provision of a good, service, financial asset or other non-produced asset by an institutional unit to another institutional unit where there is no corresponding return of an item of economic value. Current transfers consist of all transfers that are not capital transfers. Current transfers are classified according to the institutional sector making or receiving the transfer in the compiling economy (general government or other sectors).

General government current transfers comprise current taxes on income, wealth, etc., social contributions, social benefits, current international cooperation, miscellaneous current transfers, VAT and GNI-based Union own resources.

Other sectors current transfers comprise current taxes on income, wealth, etc., social contributions, social benefits, miscellaneous current transfers, net non-life insurance premiums, non-life insurance claims and adjustments for the changes in pension entitlements. Miscellaneous current transfers include personal transfer between resident and non-resident households (of which workers' remittances).

4.1. Current taxes on income, wealth, etc.

Current taxes on income, wealth, etc. in the international accounts consist mainly of taxes levied on the income earned by non-residents from the provision of their labour or financial assets. Taxes on capital gains arising from assets of non-residents are also included. Taxes on income and capital gains from financial assets are generally payable by ‘other sectors’ (individuals, corporations and non-profit institutions) and receivable by ‘general government’.

4.2. Social contributions

Social contributions are the actual or imputed contributions made by households to social insurance schemes to make provision for social benefits to be paid.

4.3. Social benefits

Social benefits include benefits payable under social security and pension schemes. They include pensions and non-pension benefits from events or circumstances such as sickness, unemployment, housing and education, and may be in cash or in kind.

4.4. Net non-life insurance premiums

Non-life insurance premiums consist of both the gross premiums payable by policyholders to obtain insurance during the accounting period (premiums earned) and the premium supplements payable out of the investment income attributable to insurance policyholders, after deducting the service charges of insurance enterprises arranging the insurance. The service charges constitute purchases of services by the policyholders and are recorded as insurance services. Net premiums on standardised guarantees are included under this item.

4.5. Non-life insurance claims

Non-life insurance claims are the amounts payable in settlement of claims that become due during the current accounting period. Claims become due at the moment when the eventuality occurs that gives rise to a valid claim. Claims payable under standardised guarantees are recorded under this item.

4.6. Current international cooperation

Current international cooperation consists of current transfers in cash or in kind between the governments of different countries or between governments and international organisations. Part of current international cooperation is vis-à-vis the Union institutions.

4.7. Miscellaneous current transfers

Miscellaneous current transfers, in cash or in kind, include current transfers to non-profit institutions serving households, current transfers between households, other miscellaneous current transfers including fines and penalties, part of the payments for lottery tickets and gambling, payments of compensation and others.

4.7.1. PERSONAL TRANSFERS BETWEEN RESIDENT AND NON-RESIDENT HOUSEHOLDS

Personal transfers between resident and non-resident households consist of all current transfers in cash or in kind made or received by resident households to or from non-resident households. Personal transfers include ‘of which’ workers' remittances.

4.7.1.1. WORKERS' REMITTANCES

Workers' remittances consist of personal transfers made by migrants resident and employed in new economies to non-resident households. Persons who work for and stay in new economies for less than a year are considered non-residents and their remuneration is recorded under compensation of employees.

4.8. VAT and GNI-based Union own resources

The VAT and GNI-based third and fourth Union own resources are current transfers paid by the general government of each Member State to the Union institutions.

4.9. Adjustment for change in pension entitlements

The adjustment for the change in pension entitlements is necessary to reconcile the treatment of pensions as current transfers with the treatment of pension entitlements as financial assets. After the adjustment, the current account balance is the same as it would have been if social contributions and pension receipts were not recorded as current transfers.

B. Capital account

The capital account covers capital transfers and the acquisition/disposal of non-produced non-financial assets. Capital transfers consist of: (a) transfers of ownership of fixed assets; (b) transfers of funds linked to, or conditional on the acquisition or disposal of fixed assets; and (c) the cancellation, without any consideration being received in return, of liabilities by creditors. Capital transfers may be in cash or in kind (such as debt forgiveness). The distinction between current and capital transfers, in practice, rests on the use of the transfer by the recipient country. Acquisition/disposal of non-produced non-financial assets covers mainly intangibles such as patents, leases or other transferable contracts. Only the purchase/sale of such assets, but not their use, is to be recorded in this item of the capital account.

5.1. Gross acquisitions and disposals of non-produced non-financial assets

Non-produced, non-financial assets consist of: (a) natural resources; (b) contracts, leases and licences; and (c) marketing assets (brand names, trademarks) and goodwill. Acquisitions and disposals of non-produced, non-financial assets are recorded separately on a gross basis, rather than netted. Only the purchase/sale of such assets, but not their use, is to be recorded in this item of the capital account.

5.2. Capital transfers

Capital transfers consist of: (i) transfers of ownership of fixed assets; (ii) transfers of funds linked to, or conditional on, the acquisition or disposal of fixed assets; and (iii) the cancellation, without any consideration being received in return, of liabilities by creditors. Capital transfers may be in cash or in kind (such as debt forgiveness). The distinction between current and capital transfers, in practice, rests in the use of the transfer by the recipient country.

Capital transfers are classified according to the institutional sector making or receiving the transfer in the compiling economy (general government or other sectors). Capital transfers include: capital taxes, investment grants and other capital transfers.

5.2.1. CAPITAL TAXES

Capital taxes consist of taxes levied at irregular and infrequent intervals on the values of the assets or net worth owned by institutional units, or on the values of assets transferred between institutional units. These include inheritance taxes and taxes on gifts between persons levied on the capital of the beneficiaries.

5.2.2. INVESTMENT GRANTS

Investment grants consist of capital transfers, in cash or in kind, made to finance all or part, of the costs of acquiring fixed assets. The recipients are obliged to use investment grants received in cash for purposes of gross fixed capital formation, and the grants are often tied to specific investment projects, such as large construction projects.

5.2.3. OTHER CAPITAL TRANSFERS

These include major non-recurrent payments in compensation for extensive damages or serious injuries not covered by insurance policies, large gifts, legacies and donations, including those to non-profit institutions. This category includes debt forgiveness.

5.2.3.1. DEBT FORGIVENESS

Debt forgiveness is the voluntary cancellation of all, or part, of a debt obligation within a contractual agreement between a creditor and a debtor.

C. Financial account and international investment position

In general, the financial account records transactions that involve financial assets and liabilities that have taken place between residents and non-residents. The financial account shows transactions in net terms: net acquisitions of financial assets correspond to acquisitions of assets less reductions in assets.

The international investment position (IIP) shows, at the end of each quarter, the value of financial assets of residents of an economy that are claims on non-residents, and the liabilities of residents of an economy, to non-residents, plus gold bullion held as reserve assets. The difference between the assets and liabilities is the net position in the IIP, and represents either a net claim on or a net liability to the rest of the world.

The value of the IIP at the end of a period results from positions at the end of the previous period, transactions in the current period, and other changes that arise from reasons other than transactions between residents and non-residents, that may be attributed to other changes in volume and revaluations due to changes in exchange rates or prices.

According to the functional subdivision, cross-border financial transactions and positions are classified as direct investment, portfolio investment, financial derivatives (other than reserves) and employee stock options, other investment, and reserve assets. Cross-border financial transactions and positions are further classified by type of instrument and institutional sector.

Market prices are the basis for the valuation of transactions and positions. Nominal valuation is used for positions in non-negotiable instruments, namely loans, deposits and other accounts receivable/payable. However, any transactions in these instruments are valued at market prices. To account for the inconsistency between the market valuation of transactions and nominal valuation of positions, the seller records revaluations due to other price changes during the period in which the sale occurs, equal to the difference between the nominal and the transaction value, whilst the buyer records an opposite amount as revaluations due to other price changes. A similar recording occurs for transactions and positions in direct investment equity where the positions reflect own funds at book value (see next section).

The financial account of the balance of payments and the IIP includes offsetting entries for accrued income on the instruments classified in the respective functional categories.

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6.1. Direct investment

Direct investment is associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise that is resident in another economy. Following international standards (BPM6), the direct or indirect ownership of 10 % or more of the voting power of an enterprise resident in one economy by an investor resident in another economy is evidence of such a relationship. Based on this criterion, a direct investment relationship can exist between a number of related enterprises, regardless of whether the linkage involves a single or a number of chains. It can extend to a direct investment enterprise’s subsidiaries, sub-subsidiaries and associates. Once the direct investment is established, all subsequent financial flows/holdings between the related entities are recorded as direct investment transactions/positions.

Equity capital comprises equity in branches as well as all shares in subsidiaries and associates. Reinvested earnings consist of the offsetting entry to the direct investor’s share of earnings not distributed as dividends by subsidiaries or associates, and earnings of branches not remitted to the direct investor and that are recorded under ‘investment income’ (see 3.2.3).

Direct investment equity and debt are further disaggregated according to the type of relationship between entities and according to the direction of the investment. Three types of direct investment relationships can be distinguished:

(a) Direct investors’ investment in direct investment enterprises. This category includes investment flows (and stocks) from the direct investor to its direct investment enterprises (regardless of whether it is directly or indirectly controlled or influenced).

(b) Reverse investment. This type of relationship covers investment flows (and stocks) from the direct investment enterprises to the direct investor.

(c) Between fellow enterprises. This covers flows (and stocks) between enterprises that do not control or influence each other, but that are both under the control or influence of the same direct investor.

With regard to the valuation of direct investment positions, the equity stocks listed in stock exchanges are valued at market prices. Conversely, in the case of unlisted direct investment companies, equity stocks are valued on the basis of book values using a common definition comprising the following accounting items:

(a) paid-up capital (excluding own shares and including shares premium accounts);

(b) all types of reserves (including investment grants when accounting guidelines consider them as company’s reserves);

(c) non-distributed profits net of losses (including results for the current year).

For equity shares of unlisted companies, the transactions recorded in the financial account may differ from the own funds at book value recorded in the IIP. Such differences are recorded as revaluations due to other price changes.

To increase the consistency in the valuation of assets and liabilities, equity stocks in unlist