EN Official Journal of the European Union L 171/17

REGULATION (EC) No 716/2007 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 20 June 2007

on Community statistics on the structure and activity of foreign affiliates

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 285(1) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Central Bank (1),

Acting in accordance with the procedure laid down in Article 251 of the Treaty (2),

Whereas:

(1) Regular and good quality Community statistics on the structure and activity of foreign affiliates in the whole economy are essential for an adequate assessment of the impact of foreign-controlled enterprises on the European Union economy. This would also facilitate the monitoring of the effectiveness of the internal market and the gradual integration of the economies in the context of globalisation. In this context, multinational enterprises are playing a leading role, but small and medium-sized enterprises can also be concerned by foreign control.

(2) The implementation and review of the General Agreement on Trade in Services (GATS) and of the Trade-Related Intellectual Property Rights Agreement (TRIPs) as well as the current and future negotiations on further agreements call for the relevant statistical information to be made available in order to assist the negotiations.

(3) For the preparation of economic, competition, enterprise, research, technical development and employment policies in the context of the liberalisation process, statistics on foreign affiliates to measure direct and indirect effects of foreign control on employment, wages and productivity in particular countries and sectors are necessary.

(4) The information provided under existing Community legislation or available in Member States is insufficient, inadequate or insufficiently comparable to serve as a reliable basis for the work of the Commission.

(5) Regulation (EC) No 184/2005 (3) establishes a common framework for the systematic production of Community statistics on balance of payments, international trade in services and foreign direct investment. As balance of payments statistics cover only partially the data included in the GATS, it is essential that detailed statistics on foreign affiliates be produced regularly.

(6) Council Regulation (EC, Euratom) No 58/97 of 20 December 1996 concerning structural business statistics (4) and Council Regulation (EEC) No 696/93 of 15 March 1993 on the statistical units for the observation and analysis of the production system in the Community (5) established a common framework for the collection, compilation, transmission and evaluation of Community statistics on the structure and activity of businesses in the Community.

(7) The compilation of national accounts according to the Council Regulation (EC) No 2223/96 of 25 June 1996 on the European system of national and regional accounts in the Community (6) requires comparable, complete and reliable business statistics on foreign affiliates.

(8) Collectively, the Manual on Statistics of International Trade in Services of the United Nations, the Balance of Payments Manual (fifth edition) of the International Monetary Fund, the Benchmark Definition on foreign direct investment and the Handbook on Economic Globalisation Indicators of the Organisation for the Economic Cooperation and Development establish the general rules for compiling international comparable statistics on foreign affiliates.

(9) The production of specific Community statistics is governed by the rules set out in Council Regulation (EC) No 322/97 of 17 February 1997 on Community Statistics (7).

(10) Since the objective of this Regulation, namely the creation of common statistical standards for the production of comparable statistics on foreign affiliates, cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the action, be better achieved at Community level, the Community may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary to achieve that objective.

(11) The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (8).

(12) In particular, power should be conferred on the Commission to adapt the definitions in Annexes I and II and the level of detail in Annex III as well as to make any consequential changes to Annexes I and II, to implement the results of the pilot studies and to define the proper common quality standards and the contents and periodicity of the quality reports. Since those measures are of general scope and are designed to amend non-essential elements of, or to supplement, this Regulation by the addition of new non-essential elements, they should be adopted in accordance with the regulatory procedure with scrutiny laid down in Article 5a of Decision 1999/468/EC.

(13) The Statistical Programme Committee, established by Council Decision 89/382/EEC, Euratom (9), and the Committee on Monetary, Financial and Balance of Payments Statistics, established by Council Decision 2006/856/EC (10), have been consulted,

HAVE ADOPTED THIS REGULATION:

Article 1

Subject matter

This Regulation establishes a common framework for the systematic production of Community statistics on the structure and activity of foreign affiliates.

Article 2

Definitions

For the purpose of this Regulation, the following definitions apply:

(a) ‘foreign affiliate’ shall mean an enterprise resident in the compiling country over which an institutional unit not resident in the compiling country has control, or an enterprise not resident in the compiling country over which an institutional unit resident in the compiling country has control;

(b) ‘control’ shall mean the ability to determine the general policy of an enterprise by choosing appropriate directors, if necessary. In this context, enterprise A is deemed to be controlled by an institutional unit B when B controls, whether directly or indirectly, more than half of the shareholders’ voting power or more than half of the shares;

(c) ‘foreign control’ shall mean that the controlling institutional unit is resident in a different country from the one where the institutional unit over which it has control is resident;

(d) ‘branches’ shall mean local units not constituting separate legal entities, which are dependent on foreign-controlled enterprises. They are treated as quasi-corporate enterprises within the meaning of point 3(f) of the Explanatory notes to Section III (B) of the Annex to Regulation (EEC) No 696/93;

(e) ‘statistics on foreign affiliates’ shall mean statistics describing the overall activity of foreign affiliates;

(f) ‘inward statistics on foreign affiliates’ shall mean statistics describing the activity of foreign affiliates resident in the compiling country;

(g) ‘outward statistics on foreign affiliates’ shall mean statistics describing the activity of foreign affiliates abroad controlled by an institutional unit resident in the compiling country;

(h) ‘ultimate controlling institutional unit of a foreign affiliate’ shall mean the institutional unit, proceeding up a foreign affiliate's chain of control, which is not controlled by another institutional unit;

(i) ‘enterprise’, ‘local unit’ and ‘institutional unit’ shall each have the same meaning as in Regulation (EEC) No 696/93.

Article 3

Submission of data

Member States shall submit to the Commission (Eurostat) data on foreign affiliates in respect of the characteristics, the economic activities and the geographical breakdown as referred to in Annexes I, II and III.

Article 4

Data sources

1. Member States shall, while complying with conditions as to quality referred to in Article 6, collect the information required under this Regulation using all the sources they consider relevant and appropriate.

2. Natural and legal persons required to supply information shall, when responding, comply with the time limits and definitions set by the national institutions responsible for the collection of data within the Member States in accordance with this Regulation.

3. Where the required data cannot be collected at a reasonable cost, best estimates, including zero values, may be transmitted.

Article 5

Pilot studies

1. The Commission shall draw up a programme for pilot studies to be carried out by national authorities within the meaning of Article 2 of Regulation (EC) No 322/97 on a voluntary basis on additional variables and breakdowns for inward and outward statistics on foreign affiliates.

2. The pilot studies shall be carried out in order to assess the relevance and feasibility of collecting data, taking into account the benefits of the availability of the data in relation to the cost of the statistical system and the burden on enterprises.

3. The Commission programme for pilot studies shall be consistent with Annexes I and II.

4. On the basis of the conclusions of the pilot studies, the Commission shall adopt the necessary implementation measures for inward and outward statistics on foreign affiliates in accordance with the regulatory procedure with scrutiny referred to in Article 10(3).

5. The pilot studies shall be completed by 19 July 2010.

Article 6

Quality standards and reports

1. Member States shall take all measures necessary to ensure the quality of the data transmitted according to common quality standards.

2. Member States shall supply the Commission (Eurostat) with a report on the quality of the data transmitted (quality reports).

3. The common quality standards as well as the content and periodicity of the quality reports shall be specified by the Commission in accordance with the regulatory procedure with scrutiny referred to in Article 10(3).

4. The Commission shall assess the quality of the data transmitted.

Article 7

Recommendations manual

The Commission shall, in close cooperation with the Member States, publish a recommendations manual which contains the relevant definitions and supplementary guidance concerning the Community statistics produced pursuant to this Regulation.

Article 8

Timetable and derogations

1. Member States shall compile the data according to the implementation timetable as specified in Annexes I and II.

2. During a transitional period that shall not exceed four years from the first reference year as referred to in Annexes I and II, derogations from the provisions of this Regulation may be granted for a limited period by the Commission to Member States, in accordance with the regulatory procedure referred to in Article 10(2), when their national systems require major adaptations.

Article 9

Implementing measures

1. The following measures for implementing this Regulation shall be adopted in accordance with the regulatory procedure referred to in Article 10(2):

(a) setting out the appropriate format and procedure for the transmission of results by Member States; and

(b) granting derogations to Member States when their national systems require major adaptations, including granting derogations from any new requirements following pilot studies, pursuant to Article 8(2).

2. The following measures designed to amend non-essential elements of this Regulation, including by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 10(3):

(a) adapting definitions in Annexes I and II, adapting the level of detail in Annex III, and making any consequential changes in Annexes I and II;

(b) implementing the results of the pilot studies, pursuant to Article 5(4); and

(c) defining proper common quality standards and the contents and periodicity of the quality reports, pursuant to Article 6(3).

3. Particular consideration shall be given to the principle that the benefits of such measures must outweigh their costs, and to the principle that any additional financial burden on MemberStates or enterprises should remain within a reasonable limit.

Article 10

Committee

1. The Commission shall be assisted by the Statistical Programme Committee (the Committee).

2. Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

The period referred to in Article 5(6) of Decision 1999/468/EC shall be three months.

3. Where reference is made to this paragraph, Article 5a(1) to (4) and Article 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

4. The European Central Bank and the national central banks may attend the meetings of the Committee as observers.

Article 11

Cooperation with the Committee on Monetary, Financial and Balance of Payments Statistics

In implementing this Regulation, the Commission shall request the opinion of the Committee on Monetary, Financial and Balance of Payments Statistics on all matters falling within that committee's competence, notably about all measures for adjustment to economic and technical developments concerning the collection and statistical processing of data, the processing and transmission of results.

Article 12

Report on implementation

The Commission shall, by 19 July 2012, submit a report to the European Parliament and the Council on the implementation of this Regulation. In particular, that report shall:

(a) assess the quality of the statistics produced;

(b) assess the benefits accruing to the Community, the Member States, the providers and users of statistical information of the statistics produced in relation to the costs;

(c) assess the progress of the pilot studies and their implementation; and

(d) identify areas for potential improvement and amendments considered necessary in light of the results obtained and the costs involved.

Article 13

Entry into force

This Regulation shall enter into force on the 20th day following its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Strasbourg, 20 June 2007. For the European Parliament The President H.-G. PÖTTERING For the Council The President G. GLOSER

(1) OJ C 144, 14.6.2005, p. 14.

(2) Opinion of the European Parliament delivered on 12 December 2006 (not yet published in the Official Journal) and Council Decision of 25 May 2007.

(3) OJ L 35, 8.2.2005, p. 23. Regulation as amended by Commission Regulation (EC) No 602/2006 (OJ L 106, 19.4.2006, p. 10).

(4) OJ L 14, 17.1.1997, p. 1. Regulation as last amended by Regulation (EC) No 1893/2006 of the European Parliament and of the Council (OJ L 393, 30.12.2006, p. 1).

(5) OJ L 76, 30.3.1993, p. 1. Regulation as last amended by Regulation (EC) No 1882/2003 of the European Parliament and of the Council (OJ L 284, 31.10.2003, p. 1).

(6) OJ L 310, 30.11.1996, p. 1. Regulation as last amended by Regulation (EC) No 1267/2003 of the European Parliament and of the Council (OJ L 180, 18.7.2003, p. 1).

(7) OJ L 52, 22.2.1997, p. 1. Regulation as amended by Regulation (EC) No 1882/2003.

(8) OJ L 184, 17.7.1999, p. 23. Decision as amended by Decision 2006/512/EC (OJ L 200, 22.7.2006, p. 11).

(9) OJ L 181, 28.6.1989, p. 47.

(10) OJ L 332, 30.11.2006, p. 21.

ANNEX I COMMON MODULE FOR INWARD STATISTICS ON FOREIGN AFFILIATES SECTION 1 Statistical unit The statistical units are the enterprises and all branches, which are under foreign control according to the definitions contained in Article 2. SECTION 2 Characteristics The following characteristics as defined in the Annex to Commission Regulation (EC) No 2700/98 of 17 December 1998 concerning the definitions of characteristics for structural business statistics (1) will be compiled: Code Title 11 11 0 Number of enterprises 12 11 0 Turnover 12 12 0 Production value 12 15 0 Value added at factor cost 13 11 0 Total purchases of goods and services 13 12 0 Purchases of goods and services purchased for resale in the same condition as received 13 31 0 Personnel costs 15 11 0 Gross investment in tangible goods 16 11 0 Number of persons employed 22 11 0 Total intra-mural R & D expenditure (2) 22 12 0 Total number of R & D personnel (2) If the number of persons employed is not available, the number of employees (code 16 13 0) will be compiled instead. Variables total intra-mural R & D expenditure (code 22 11 0) and total number of R & D personnel (code 22 12 0) are only required to be compiled for activities in NACE sections C, D, E and F. For NACE section J only the number of enterprises, turnover (3) and the number of persons employed (or the number of employees instead) will be compiled. SECTION 3 Level of detail Data will be provided according to the concept of ‘ultimate controlling institutional unit’ with the geographical breakdown level 2-IN combined with the activity breakdown level 3 as specified in Annex III and the geographical breakdown level 3 combined with Business Economy. SECTION 4 First reference year and periodicity 1. The first reference year for which annual statistics will be compiled is the calendar year of the entry into force of this Regulation. 2. Member States will provide data for every calendar year thereafter. 3. The first reference year for which variables total intra-mural R & D expenditure (code 22 11 0) and total number of R & D personnel (code 22 12 0) will be compiled is 2007. SECTION 5 Transmission of results The results will be transmitted within 20 months after the end of the reference year. SECTION 6 Reports and pilot studies 1. Member States will provide the Commission with a report relating to the definition, structure and availability of the statistical data to be compiled for the purposes of this common module. 2. For the level of detail covered by this Annex, the Commission will institute pilot studies to be carried out by national authorities within the meaning of Article 2 of Regulation (EC) No 322/97 pursuant to Article 5 of this Regulation. 3. The pilot studies will be carried out in order to assess the feasibility of obtaining data, taking into account the benefits of the availability of such data in relation to the cost of collection and the burden on business. 4. Pilot studies will be conducted for the following characteristics: Code Title Exports of goods and services Imports of goods and services Intra-group exports of goods and services Intra-group imports of goods and services Exports, imports, intra-group exports and intra-group imports will be broken down into goods and services. 5. Pilot studies will also be conducted to study the feasibility of compiling data for activities in NACE sections M, N and O and of compiling the variables total intra-mural R & D expenditure (code 22 11 0) and total number of R & D personnel (code 22 12 0) for activities in NACE sections G, H, I, K, M, N and O. Pilot studies will also be conducted to assess the relevance, feasibility and costs of breaking down the data as specified in section 2 into size classes measured in terms of number of persons employed. (1) OJ L 344, 18.12.1998, p. 49. Regulation as last amended by Regulation (EC) No 1670/2003 (OJ L 244, 29.9.2003, p. 74). (2) Variables 22 11 0 and 22 12 0 shall be reported every second year. If the total amount of turnover or the number of persons employed in a division of NACE Rev. 1.1 Sections C to F represent, in a Member State, less than 1 % of the Community total, the information necessary for the compilation of statistics relating to characteristics 22 11 0 and 22 12 0 need not be collated for the purposes of this Regulation. (3) For NACE Rev. 1.1 division 65 turnover will be replaced by production value.

ANNEX II COMMON MODULE FOR OUTWARD STATISTICS ON FOREIGN AFFILIATES SECTION 1 Statistical unit The statistical units are the enterprises and all branches abroad that are controlled by an institutional unit resident in the compiling country, according to the definitions contained in Article 2. SECTION 2 Characteristics The following characteristics, as defined in the Annex to Regulation (EC) No 2700/98, will be compiled: Code Title 12 11 0 Turnover 16 11 0 Number of persons employed 11 11 0 Number of enterprises If the number of persons employed is not available, the number of employees (code 16 13 0) will be compiled instead. SECTION 3 Level of detail Data will be provided with the detail by country of location and by activity of the foreign affiliate specified in Annex III. The detail by country of location and activity will be combined as follows: — Level 1 of the geographical breakdown combined with Level 2 of the activity breakdown. — Level 2-OUT of the geographical breakdown combined with level 1 of the activity breakdown. — Level 3 of the geographical breakdown combined with data on total activity only. SECTION 4 First reference year and periodicity 1. The first reference year for which annual statistics will be compiled is the calendar year of the entry in force of this Regulation. 2. Member States will provide data for every calendar year thereafter. SECTION 5 Transmission of results The results will be transmitted within 20 months from the end of the reference year. SECTION 6 Reports and pilot studies 1. Member States will provide the Commission with a report relating to the definition, structure and availability of the statistical data to be compiled for the purposes of this common module. 2. For the level of detail covered by this Annex, the Commission will institute pilot studies to be carried out by national authorities within the meaning of Article 2 of Regulation (EC) No 322/97, pursuant to Article 5 of this Regulation. 3. The pilot studies will be carried out in order to assess the relevance and feasibility of obtaining data, taking into account the benefits of the availability of such data in relation to the cost of collection and the burden on business. 4. Pilot studies will be conducted for the following characteristics: Code Title 13 31 0 Personnel costs Exports of goods and services Imports of goods and services Intra-group exports of goods and services Intra-group imports of goods and services 12 15 0 Value added at factor cost 15 11 0 Gross investment in tangible goods