23. 7. 90 Official Journal of the European Communities No C 182/1 
II 
(Preparatory Acts) 
ECONOMIC AND SOCIAL COMMITTEE 
Opinion on the proposal for a Council Regulation (EEC) on the Statistical Classification of 
Economic Activities in the European Communities (l) 
(90/C 182/01) 
On 13 February 1990 the Council decided to consult the Economic and Social Committee, under 
Article 100a of the Treaty establishing the European Economic Community, on the 
abovementioned proposal. 
The Section for Economic, Financial and Monetary Questions, which was responsible for 
preparing the Committee's work on the subject, adopted its opinion on 10 May 1990. (Rapporteur: 
Mr Giacomelli). 
At its 277th plenary session (meeting of 30 May 1990), the Economic and Social Committee 
unanimously adopted the following opinion: 
1. Background explanation 
1.1. The explanatory memorandum to the draft Regu­
lation correctly points out that market operators, i.e. 
companies, governments and all other economic agents, 
whether at national, international or Community level, 
invariably need constant access to reliable and comparable 
statistics which are as up-to-date and detailed as possible. 
Statistics are now an essential aid to economic and political 
decision-making at all levels. 
1.2. Statistics themselves cannot be compiled, however, 
without reference to systems which provide a transparent 
and orderly way of classifying the multitude of phenomena 
to be recorded and trends to be explained. Classifications, 
or standard category lists, have been drawn up because of 
the differences between the entities to be covered, i.e. 
commodities and economic activities. Users of statistics, 
who require as much information as possible, are still 
frequently inclined to confuse the two classifications 
(commodities and activities). Obviously they are closely 
related, in that the commodity is commonly a function of 
the activity and the activity produces the commodity; 
(!) OJ No C 58, 8. 3. 1990, p. 25. nevertheless, the two classifications fulfil quite separate 
aims and needs. 
1.3. The purpose of commodity classifications (intra-
Community trade in commodities is at present covered by 
the combined EC classification, although it is due to be 
replaced at some stage by a permanent system of collecting 
statistical data known as INTRASTAT, cf. the proposal 
for a Council Regulation (OJ No C 84, 5 April 1989, p. 4) 
and the Economic and Social Committee opinion (OJ No C 
159, 26 June 1989, p. 16) is to categorize commodities or 
goods where it has been shown statistically that there is a 
functional relationship with the economic activities which 
produce, process or deliver these goods to their destination. 
These activities may include manufacturing, external trade 
and transport. 
1.4. Classifications of economic activities, on the other 
hand, deal not with commodities but with categorizing the 
production units (normally speaking, firms) according to 
the activities through which they participate in the 
economic process. This may include output, the input of 
factors of production (labour, raw materials, additional 
machinery, investment) or the revenue of the units 
concerned. 
1.5. The present draft Regulation seeks to harmonize 
Community and national classifications by systematically 
No C 182/2 Official Journal of the European Communities 23. 7. 90 
categorizing economic activities so that statistical research 
can in future be conducted within a uniform framework. 
1.6. Although the General Industrial Classification of 
Economic Activities in the European Communities 
(NACE) is currently applicable, it is not covered by a 
binding regulation. This means that national classifi­
cations, which are more likely to meet the needs of a 
particular Member State, continue to operate alongside 
NACE, even though the data collected then have to be 
aligned with the Community classification by means of 
conversion keys. Unfortunately the final statistics still have 
to be handled with caution as this method reduces 
compatibility. 
Moreover, world-wide compatibility with other classifi­
cations of economic activities leaves much to be desired. 
NACE bears virtually no relation to the commodity 
classification, although cross-referencing is becoming 
increasingly necessary given the degree of sophistication of 
statistics as a whole. 
1.7. By way of a conclusion to this background account 
of the draft Regulation and its predecessors, it should be 
remembered that NACE (which is currently in use even 
though it has never been based on a regulation) was the 
fruit of a long process and took shape, briefly, in the 
following stages: 
— between 1961 and 1963 the Classification of Industries 
Established in the European Communities (NICE) was 
drawn up. It initially contained broad divisions with 
entries of up to three digits making up the ad hoc code, 
although the 1963 version contained a more detailed 
breakdown. NICE covered mining and quarrying, 
energy production, manufacturing and the construction 
industry, 
— in 1965 the Classification of Trade and Commerce in 
the European Communities (NEC) was added, covering 
all commercial activities, 
— in 1967 a classification for service industries was drawn 
up, followed by a classification — also in broad 
divisions — of all forms of farming, 
— in 1970 the General Industrial Classification of 
Economic Activities within the European Communities 
(NACE), based on the preceding classifications, was 
drawn up. At that time it marked the culmination of the 
process, but the present draft Regulation is proposing a 
revised version to be known as NACE Rev. 1. 2. General comments 
2.1. Preliminary comments 
Before going on to discuss in greater detail the proposal for 
a new classification, NACE Rev. 1, the Committee wishes 
to express its approval of the revised version of NACE 
(subject to a number of comments outlined below). This is 
undoubtedly a more refined version of the present 
classification: it is more detailed, more reliable and more 
comparable with worldwide classifications, in particular 
the International Standard Industrial Classification of All 
Economic Activities (ISIC) adopted by the Statistical 
Commission of the United Nations in February 1989. 
EUROSTAT and representatives of EC Member States 
were closely involved in work on the third revision of ISIC. 
The Committee realizes that this represents a step forward 
for both statisticians and users, who will clearly benefit 
greatly from a more internationally standardized source of 
information when devising economic development stra­
tegies. 
2.2. The Committee also welcomes the fact that the 
working party, made up of EUROSTAT and representat­
ives of the Member States, pressed ahead with its work on 
the Community's NACE Rev. 1, using the logical structure 
of ISIC Rev. 3 as a model. NACE Rev. 1 is more detailed 
than ISIC Rev. 3, however, reflecting the similarities in the 
economic structures of the Member States as well as 
highlighting the most striking differences between them. 
The working party has thus made every effort to ensure 
that the revised Community classification takes account of 
the characteristics of national classifications. 
2.3. Although NACE Rev. 1 retains the basic charac­
teristics of national economic structures, it cannot be 
confined solely to activities common to all Member States. 
It also has to include major activities which are not 
necessarily found in all the Member States, or whose degree 
of importance varies considerably from one Member State 
to another. In other words, a leading economic activity in 
one Member State may play only a marginal role in the 
economy of another. Any solution, however good, is bound 
to represent a compromise in that it will have to apply to 
twelve countries whose economic structures at times 
diverge considerably. The individual Member States 
should not therefore expect to find in NACE Rev. 1 only 
those activities which are most relevant to its own case. 
Besides, the regulation makes provision for derogations, 
where justified, authorizing the application of aggregated 
levels. 
Nevertheless, while appreciating the advantages of a more 
aggregated level for Community-wide classification of 
economic activities, and notwithstanding the possibilities 
for derogations allowing more detailed breakdown of 
23. 7. 90 Official Journal of the European Communities No C 182/3 
statistics in line with national data requirements, the 
Committee would draw the Commission's attention to the 
problems which can arise when comparing data between 
Member States if Community-wide statistics breakdown of 
the aggregated level is not adequate. Against this 
background, this matter should be discussed and resolved 
by the management committee which, the Committee has 
proposed (under 2.12, 3.7 and 4.1), to replace the advisory 
committee provided for under Article 7 of the draft 
regulation. 
2.4. The Committee is pleased to see that the working 
party has taken account of the specific needs of firms, by 
holding consultations with the relevant trade associations. 
The Committee understands that there has been close 
contact with UNICE, inter alia, and that after initial 
hesitation UNICE decided to play an active part, insisting 
on the need for a more detailed breakdown in the industrial 
activities classification. The iron and steel industry has 
been taken as the benchmark for activities covered by the 
ECSC Treaty, which is likely to remain in force for another 
fifteen years or so. In the caseNof the textile and chemical 
industries, problems were solved by incorporating as many 
as possible of the amendments proposed. One particular 
problem that arose in the case of the textile industry was the 
desire for a minute breakdown of different types of clothing 
and underclothes. The problem was finally resolved by 
opting for a more aggregated level, with the question of 
breakdowns resting with individual Member States, 
provided their national classifications conformed to the 
general framework laid down by NACE Rev. 1; this, 
however, raised the same problem of data comparability 
between Member States, as outlined above (2nd paragraph 
of 2.3). In Denmark, where a distinction is made between 
building and civil engineering, the difficulty lay in the 
classification of the construction industry. As the aim of the 
classification was to cover the main activity of the 
statistical unit, i.e. the firm, despite the fact that any one of 
the activities listed in the breakdown may take the lead at 
different times, depending on the economic situation or 
seasonal factors, it was finally decided to opt for the 
aggregated category of 'construction'. 
Once the lingering confusion on the part of some operators 
as to the difference between the commodity classification 
and the economic activities classification had been cleared 
up, it was finally possible to reach a compromise. Thus the 
international classification (ISIC), based on a harmonized 
system made up of 293 4-digit codes (158 3-digit codes and 59 2-digit codes) served as a model for formulating NACE 
Rev. 1, containing 535 4-digit codes (212 3-digit codes and 
59 2-digit codes), which aims to better serve the need of 
economic operators in the Community. 
2.5. As we have already said, economic operators 
require as much detail as possible, which means that they 
must be prepared to take on the extra work involved in 
collecting data, although trade associations will pre­
sumably offer vital assistance. As the proposal says, NACE 
Rev. 1 should reflect the needs of users (firms) for a 
common classification language, whilst respecting the 
principles of the system and preventing NACE Rev. 1 from 
becoming too complicated. 
2.6. Generally speaking, whatever the differences 
amongst them, it is important to ensure that national 
classifications are fully compatible once data has been 
converted into the language and structure of NACE, so as 
to guarantee the maximum degree of comparability. 
2.7. Although NACE Rev. 1 contains fewer headings 
than NACE 70, which is made up of 758 4-digit codes (383 
3-digit codes and 80 2-digit codes), it is more detailed. This 
is because some of the NACE 70 categories were never used 
and 2-digit codes predominate. 
It should also be remembered that NACE 70 did not 
contain a very detailed breakdown of the services sector, 
whereas a considerable proportion of NACE Rev. 1 is 
devoted to new activities which have developed since 1970, 
including future-oriented sectors such as electronics, 
computer engineering, services related to advanced 
technologies, marketing, management consultancy etc. 
2.8. The purpose of the draft Regulation is to ap­
proximate national classifications. Although they ob­
viously have to reflect their own economic structures and 
needs, national classifications must nonetheless be com­
patible in order to guarantee comparability at Community 
level. Member States will therefore be required to adapt 
their national classifications so that NACE Rev. 1 forms 
the core. 
No C 182/4 Official Journal of the European Communities 23. 7. 90 
More detailed breakdowns can be introduced, as can 
additional levels, although each level, apart from the 
highest, must be aggregated exactly into the level above. 
Member States may also use a different coding system, but 
in this case they will be required to publish their 
classification with a supplementary alphanumeric code 
showing the relation to NACE Rev. 1. 
2.9. The aim of the draft Regulation concerning NACE 
Rev. 1 is to ensure compatibility of data at Community 
level and internationally (by conforming to ISIC Rev. 3), to 
make for swifter transmission of statistical data and to 
bring about economies of scale and time for operators by 
facilitating exchanges of data. 
2.10. Whilst Member States will be under no obligation 
to compile and supply statistics, they will be expected to use 
NACE Rev. 1 as the common statistical vehicle in the 
Community. 
Derogations will be granted if it emerges that certain 
subdivisions in the Community classification are incom­
patible with a Member State's national economic structure, 
making it difficult or impossible to use NACE Rev. 1. 
Under exceptional circumstances, therefore, a Member 
State will be authorized to use, in a specific area, a more 
aggregated level than the Community classification. It will 
not be possible to subdivide the aggregated level differently 
from NACE Rev. 1, however. 
The derogation does not exempt the Member State from 
furnishing estimates in the detail specified in ad hoc 
Community legislation. 
2.11. Unlike NACE 70, NACE Rev. 1 has been created 
for purely statistical purposes. Member States may, 
however, use it in other areas to meet administrative or 
fiscal needs etc., such as the classification of activities 
where proof of professional qualifications is required in 
order to practise. NACE Rev. 1 may also be used as a 
reference for defining activities in contracts or legal texts, in 
which case it serves merely as a guide. 
2.12. The draft Regulation adopts the text of Article 2, 
Procedure I of Council Decision 87/373/EEC of 13 July 
1989 as regards the procedures for the exercise of the 
Commission's implementing powers. The Commission is to be assisted by an Advisory 
Committee made up of representatives of the Member 
States and chaired by a Commission representative. In line 
with the abovementioned procedure, the Advisory Com­
mittee will issue an opinion on the draft measures 
submitted by the Commission representative. The Com­
mission will give the utmost consideration to this opinion, 
but is not obliged to act on it. It will, however, inform the 
Advisory Committee of the manner in which its opinion 
has been taken into account. 
Given that communications at all levels and the complete 
compatibility of all data exchanged at Community or 
national level are of paramount importance to economic 
operators, an Advisory Committee on the classification of 
economic activities or commodities does not seem to be a 
powerful enough body, while the powers given the 
Commission, as the ultimate decision-making body seem 
excessive. 
It was for this reason that in the discussion leading up to the 
present proposal, as is stated in the explanatory memo­
randum, the working party expressed its preference for a 
management committee, as it would have greater powers, 
would involve representatives of Member States with an 
adequate knowledge of the needs and characteristics of 
their respective economies and would therefore be better 
placed to act as spokesmen for their countries' economic 
operators. 
The Economic and Social Committee made exactly the 
same comments in its opinion of 28 April 1989 (OJ No 
C 159, 26 June 1989, p. 16) on the proposal for a Council 
Regulation (EEC) on the statistics relating to the trading of 
goods between the Member States (OJ No C 89, 5 April 
1989, p. 4) with respect to Articles 28 and 29 of that 
proposal, viz.: 
'A substantial reservation needs to be expressed 
regarding Articles 28 and 29. Although Article 28 sets 
up a "committee on the statistics relating to the trading 
of goods between Member States" and lays down how 
this committee is to be made up and operate, Article 29 
only gives an advisory role to it, even though the 
provisions necessary to the implementation of the draft 
regulation which may be enacted in pursuance of this 
same Article 29 may be the source of decisions involving 
financial investments by companies and administrative 
authorities in the different Member States. It therefore 
seems inadmissible to exclude the committee from the 
decision-making process, especially as Article 29 gives a 
maximum of power to the Commission; the only 
23. 7. 90 Official Journal of the European Communities No C 182/5 
restriction is that in Article 27(b), which states that 
measures adopted by the Commission concerning the 
simplification of statistical information cannot apply 
before 1 January 1999. 
As regards the function of the committee, it is worth 
noting that the present Committee on External Trade 
Statistics is a management committee. In view of the 
implications of Article 29 therefore, among other 
things, it is requested that the committee on the statistics 
relating to the trading of goods between Member States 
also be made a management committee where the 
Member States can be involved more effectively in the 
taking of decisions concerning the measures provided 
for within the framework of the present draft regu­
lation. Article 29 will therefore have to be amended, 
which will avoid divergences arising between the 
structures of the committees dealing with intra-
Community and extra-Community trade statistics.' 
2.13. Finally, there is the perennial danger of national 
authorities of some countries (mainly the smaller Member 
States, but sometimes the larger ones where very large-scale 
and possibly unique enterprises are concerned) running 
into the problem of national laws on statistical secrecy 
when they are required to furnish the Community 
authorities with data. Where an enterprise enjoys a 
dominant or exclusive position with respect to a particular 
economic activity, there may be an implicit ban on 
divulging information under national legislation safeguar­
ding statistical secrecy. 
The problem of the confidentiality of data transmitted by 
national governments has apparently been raised on a 
number of occasions within the Commission as there is no 
such guarantee of confidentiality at Community level. It 
would appear that a draft EC Regulation is being drawn 
up, making it mandatory to respect the confidentiality of 
data transmitted by national authorities. This stipulation 
should be adopted as soon as possible and a clause to this 
effect should be inserted in all Community provisions (both 
those already in force and those to be adopted in future) 
relating to statistical data. In the meantime, it is only to be 
expected that the Member States will find ways of 
concealing the origin of data which they are entitled to 
protect under national legislation on statistical secrecy, for 
obvious reasons. 
3. Specific comments 
3.1. Article 1 
Article 1 makes the use of NACE Rev. 1 as a common 
statistical classification of economic activities in the European Communities the subject of a Regulation, i.e. 
mandatory, thus guaranteeing once and for all compar­
ability between national and Community classifications 
and national and Community statistics. 
Paragraph 2 makes it clear that use of the Community 
classification is obligatory for statistical purposes only. It 
does not preclude its use for other purposes however. 
Paragraph 3 states that the Regulation merely imposes an 
obligatory system of classification and does not impose an 
obligation on Member States to collect, publish or supply 
data. Regulation of the latter aspect is thus left to other 
Community instruments. 
There are no specific comments on this Article. Reference 
should be made to the generally favourable views expressed 
in the General Comments section of this opinion. 
3.2. Article 2 
Article 2 lays down a common basis for statistical 
classifications of economic activities in the European 
Communities and gives details of the structure of the 
NACE Rev. 1 code which comprises four levels of activity, 
as follows: 
— a first level consisting of headings identified by an 
alphabetical code (sections) 
— an intermediate level consisting of headings identified 
by a two-character alphabetical code (sub-sections) 
— a second level consisting of headings identified by a two-
digit numerical code (divisions) 
— a third level consisting of headings identified by a three-
digit numerical code (groups) 
— a fourth level consisting of headings identified by a four-
digit numerical code (classes). 
It therefore follows that, under the classification appended 
to the draft Regulation, a fourth level activity is identified 
by an alphanumeric code consisting of two characters and 
four digits. 
3.3. Article 3 
Although NACE Rev. 1 must be used for all Commission 
statistics involving a breakdown of economic activities, 
Article 3(2) provides for derogations allowing the parallel 
use of national classifications. These derogations — which 
give greater flexibility to the application of the Community 
system — are intended to allay the concerns of economic 
operators, and even allow the use of different coding. These 
No C 182/6 Official Journal of the European Communities 23. 7. 90 
derogations have been commented on at length in the 
General Comments section of this opinion. 
Member States making use of the derogations may publish 
a comparative table consolidating the NACE classifications 
and the supplementary national classifications. Before 
publication the text must be communicated to the 
Commission to check its conformity with the NACE 
classification. 
3.4. Article 4 
Article 4 deals with cases of incompatability between 
certain NACE Rev. 1 subdivisions and the national 
economic structure of a Member State. The derogation 
allowing a more aggregated level of NACE Rev. 1 to be 
used in such a case has also been approved in the general 
comments. 
3.5. Articles 5 and 6 
There are no specific comments on Articles 5 and 6, except 
for the comment made elsewhere in this Opinion on the 
setting up of an Advisory Committee. 
3.6. Article 7 
Article 7 provides for the setting up of an Advisory 
Committee on statistical classification of economic 
activities of the European Communities. Reference should 
be made to the detailed discussions and arguments 
developed in paragraph 2.12 above (General Comments). 
Moreover, bearing in mind the present stage in the process 
of aligning statistics and the growing need for coordination 
between national and Community statistical bodies, the 
Committee considers that the scale of the powers and the 
implications of the decisions to be taken make it necessary 
to set up a management committee, thus involving the 
Council in the decision-making process, which the sitting 
up of an Advisory Committee would preclude. 
Article 7 of the draft should be amended accordingly. 
3.7. Article 8 
Article 8 defines the function and powers of the Advisory 
Committee provided for in Article 7. It follows from the 
General Comments section of this opinion and the specific comments on Article 7 that the management committee to 
be set up should instead assume these functions and 
powers. 
3.8. Article 9 
Article 9 requires the Member States to apply NACE Rev. 1 
as it is, or an adapted version pursuant to Article 3, as the 
national statistical classification of economic activities by 
1 January 1993, the date for completion of the Internal 
Market. 
If national classifications are published using the derog­
ations set out in Article 3, they must carry a supplementary 
code showing the relationship with NACE Rev. 1. 
3.9. Article 10 
From 1 January 1993 Member States must use NACE 
Rev. 1 when asked to provide statistics broken down by 
economic activity. Until that time NACE 70 will continue 
to be used where Member States are required, by an 
agreement or Community legal act, to supply statistical 
data. 
3.10. Article 11 
Article 11 establishes a transitional period starting on 
1 January 1993. Data collected before 1 January 1993 may 
be published during the transitional period in accordance 
with current classifications other than NACE Rev. 1. But, 
when submitted to the Commission, such data must be 
brought as closely as possible into line with NACE Rev. 1. 
In principle the transitional period will end on 1 January 
1995 but in certain cases it may be extended to 1 January 
1996. 
Member States must provide the Commission with the 
information required on the correlation tables between 
national classifications and NACE Rev. 1 used during the 
transitional period. The Commission will publish these 
correlation tables. 
3.11. Articles 12 and 13 
Under Article 12 the Commission is required to publish the 
table of correlation between NACE 70 and NACE Rev. 1 
within six months of the entry into force of the Regulation. 
The Regulation, which is binding in its entirety and directly 
applicable in all Member States, will enter into force on the 
twentieth day following its publication in the Official 
Journal of the European Communities. 
23.7.90 COfficialjournal of the European Communities ^oC1^7 
^. Conclusions 
^.1. l^he draft regulation ^EEC^ on the introduction of 
thel^ACER.ev.iCommunityclassificationis undoubtedly 
one of EUR.COSTAT^smost important initiatives aimed at 
giving formal and binding force to the statistical standards 
requiredinconnection with completion of the Internal 
Market on 1 January i993. COnly by using uniform 
statistical standards will it bepossible to collect and supply 
comparable statistics quickly enough and much more 
efficiently than at present. 
L^he revised classification, which the Member States are 
required to useasthebasisfortheirnational classifications, 
is undoubtedly an important step towards the creation of 
an integrated statistical system which will permit the 
essential comparison of data on products, economic 
activities, external trade etc. 
^B2. ^hile approving this draft regulation, the Com^ 
mittee cannot however but reiterate its request that the 
Advisory Committee provided for in Article7be replaced 
byamanagementcommittee.The Committee would also 
emphasise its comments on the question of secrecy of 
general Comments 
1, I^he proposals aim is to place all investment 
companies, irrespective of theirlegalform,on an equal 
footing as regards the application of capital duty. In 
addition, more favourable ta^ treatment is to be granted to 
investment companies in the interests of small savers. 
^o^o^un^m^D,^, statistics and the confidentiality of information provided, 
pendingapplicationofacorresponding^^o^Community 
regulation, 
^,3. Finally, echoing previously expressed fears, for 
example inits opinion of 2^ April 19^9 on the proposal for 
anew system of statistics on the trading of goods between 
Member States^CES^2B^, the Committee wishes to 
express its concern that the abolition of intra^Community 
frontier controls may lead toadecline in the qualityof 
statistics, 
^,^, ^ithreferenceto that Opinion, the Committeealso 
feels that in the current situation, parallel to the 
introduction of the new classification of economic 
activities, it would beagood idea for the Commission to 
provide technical, training and financial assistance for the 
statistical services ofthose Member States who do not have 
adequate facilities or qualified staff. 
Done at Brussels, 30 May 1990, 
2. According to Directive ^9^33^EEC as amended by 
Directive ^B303BEEC Member States are allowed to 
choose whether or not to applyacapitalduty,lf one is 
levied, it must necessarily be applied to capital companies. 
Exemptions are only permitted for companies which are 
not capital companies within the meaning of Article 3^of 
Directive ^9B33^BEEC, Because of this rule investment 
companies may be subject to different ta^ treatment, 
depending on their legal form.^fhis possibility should be Opinion on the proposal foraCouncil Directive amending Directive ^9^33^EEC concerning 
Indirect Pa^es on the raising of Capitals 
^90^C1^2B02^ 
I^he Council decided on9April 1990, in accordance with Article 99 oftheEEC^Freaty,toasle the 
Economic and Social Committee to draw up an opinion on the abovementioned proposal. 
The Committee referred the matter to its Section for Economic, Financial and Monetary 
C^uestions,which adopted its oppinion on 10 Mayl990,L^he rapporteur was Mr Broicher, 
The Economic and Social Committee adopted its opinion unanimously at its 277th plenary session 
^meeting of 30 Mayl990^,Phete^t was as follows^