Proposal for a Council Regulation on the harmonisation of Gross National Income at market prices ("GNI Regulation").
Date: 2002-10-15
Institutions: European Commission
Subjects: EU statistics, European accounting system, committee (EU), data transmission, gross national product, own resources

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Official Journal of the European Union

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Proposal for a Council Regulation on the harmonisation of Gross National Income at market prices
(‘GNI Regulation’)

(2003/C 45 E/06)

COM(2002) 558 final — 2002/0245(CNS)

(Submitted by the Commission on 15 October 2002)

EXPLANATORY MEMORANDUM

1. Gross National Product (GNP) and Gross Domestic Product (GDP) play a major role in the own resource
system and various Community policies, notably since the fourth GNP resource was set up in 1988.
This makes it necessary to reinforce the comparability, reliability and exhaustiveness of Member States'
GNP data.

2. Up to now, GNP calculations were based on the former European System of Integrated Economic
Accounts, the so-called ESA 79. Based on a Commission proposal, the Council adopted GNP Directive
89/130/EEC, Euratom setting up a procedure to assess the comparability, reliability and exhaustiveness
of GNP. This procedure is centred on the GNP Committee in which Member States and the Commission
co-operate closely in order to further harmonise and improve the quality of GNP.

3. Starting from the budgetary year 2002, the new European System of Accounts (the ESA 95) will be
used to calculate GNP (now called GNI or Gross National Income) according to Decision 2000/597/EC,
Euratom on own resources. It is therefore necessary to redefine the legal framework for harmonisation
and improvement work on GNI, taking account of ESA 95 specificities.

4. This proposal for a Council GNI Regulation addresses this objective. Following the example of the

current GNP Directive, this proposal:

— defines the methods of calculation of GNI based on ESA 95,

— specifies Member States' obligations concerning data transmission,

— sets up the GNI Committee as the new forum for co-operation between Member States and the

Commission concerning verification and improvement work on GNI.

5. This proposal for a Regulation has been thoroughly discussed with Member States' representatives in

the GNP Committee.

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the proposal from the Commission,

Having regard to the Treaty establishing the European
Community,

Having regard to the opinion of the European Parliament,

Having regard to the Treaty establishing the European Atomic
Energy Community,

Whereas:

Having regard to Council Decision 2000/597/EC, Euratom of
29 September 2000 on the system of the Communities' own
resources (1), and in particular Article 8(2) thereof,

(1) OJ L 253, 7.10.2000, p. 42.

(1) The increasing share of the Community's own resource
based on the gross national product at market prices
the Member
referred to as GNPmp) of
(hereinafter
the
it necessary to further
States, makes
reinforce
comparability,
this
and exhaustiveness of
reliability
aggregate.

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(2) These data are also an important analytical tool for the
coordination of national economic policies and for
various Community policies.

(3) For

own

resource

purposes,

Council Decision
2000/597/EC, Euratom states that GNPmp is equal to
(hereinafter
gross national
referred to as GNI) as provided by the Commission in
application of
the European system of national and
regional accounts (hereinafter referred to as ESA 95) in
accordance with Council Regulation (EC) No 2223/96 (1).

income at market prices

(4) GNI data must be comparable. These data can be
comparable only if the relevant definitions and accounting
rules of ESA 95 are complied with. For that purpose, the
assessment procedures and the basic data actually used
should permit the correct application of the definitions
and accounting rules of ESA 95.

for

(9) In accordance with Article 2 of Council Decision
1999/468/EC of 28 June 1999 laying down the
implementing powers
procedures
conferred on the Commission (3), measures
the
implementation of this Regulation should be adopted by
use of the advisory procedure provided for in Article 3 of
that Decision.

the exercise of

for

(10) The Statistical Programme Committee (SPC) has been
consulted in accordance with Article 3 of Decision
89/382/EEC, Euratom (4),

HAS ADOPTED THIS REGULATION:

CHAPTER I

Definition and calculation of gross national

income at

market prices

Article 1

(5) The sources and methods used to compile GNI must be
reliable. This means that sound techniques should be
applied to robust and suitable basic statistics as much as
possible.

1.
Gross National Income at market prices (GNI) and Gross
Domestic Product at market prices (GDP) shall be defined in
accordance with the European System of National and Regional
Accounts (ESA 95).

(6) GNI data must be exhaustive. This means that they should
take account also of the activities that are not reported in
statistical surveys or to fiscal, social and other adminis-
trative authorities. Improved GNI coverage presupposes
developing suitable
and assessment
procedures and making adequate adjustments.

statistical bases

(7) In order to fulfil its mission of providing GNI data for
take
own resource purposes,
measures aimed at improving the comparability, reliability
and exhaustiveness of Member States' GNI.

the Commission shall

(8) Council Directive 89/130/EEC, Euratom of 13 February
1989 on the harmonization of the compilation of gross
national product at market prices (2) has
set up a
procedure to verify and assess the comparability, relia-
bility and exhaustiveness of GNP within the GNP
Committee in which Member States and the Commission
co-operate closely. This procedure should be adjusted to
take account of the use of ESA 95 GNI for the purposes
of own resources.

GDP is the final result of

2.
resident producer units. It can be defined in three ways:

the production activity of

(a) GDP is the sum of gross value added of the various insti-
tutional sectors or the various industries plus taxes and less
subsidies on products (which are not allocated to sectors
and industries). It is also the balancing item in the total
economy production account.

(b) GDP is the sum of final uses of goods and services by
resident institutional units (actual final consumption and
gross capital formation) plus exports and minus imports
of goods and services.

(c) GDP is the sum of uses in the total economy generation of
income account
taxes on
production and imports less subsidies, gross operating
surplus and mixed income of the total economy).

(compensation of employees,

(1) OJ L 310, 30.11.1996, p. 1.
(2) OJ L 49, 21.2.1989, p. 26.

(3) OJ L 184, 17.7.1999, p. 23.
(4) OJ L 181, 28.6.1989, p. 47.

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GNI

represents

total primary income receivable by
3.
resident institutional units: compensation of employees, taxes
on production and imports less subsidies, property income
(receivable less payable), gross operating surplus and gross
mixed income. GNI equals GDP minus primary income
payable by resident units to non-resident units plus primary
income receivable by resident units from the rest of the world.

CHAPTER II

Forwarding of GNI data and additional information

Article 2

1. Member States shall establish GNI
Article 1 in the context of regular national accounting.

in accordance with

2.
Before 15 September each year, Member States shall
provide the Commission (Eurostat), in the context of national
accounting procedures, with figures for aggregate GNI and its
referred to in
components, according to the definitions
Article 1. Totals
for GDP and its components may be
presented according to the three approaches mentioned in
Article 1, paragraph 2. The figures provided shall cover the
preceding year and any changes made to the figures for
previous years.

3. When they communicate the data foreseen in para-
graph 2, Member States
transmit a report on the
shall
quality of GNI data to the Commission (Eurostat). The report
shall supply the information necessary to show how the
aggregate was
any
significant changes in the procedures and basic statistics used
and explain the revisions made to earlier GNI estimates. The
content and format of this report shall follow the guidelines
laid down by the Commission after consulting the committee
referred to in Article 4.

and in particular describe

reached,

Article 3

in
Member States shall provide the Commission (Eurostat),
accordance with the guidelines laid down by the latter after
consulting the committee referred to in Article 4, with an
inventory of
the procedures and basic statistics used to
calculate GNI and its components according to ESA 95.
Member States shall
inventory
according to these guidelines.

improve and update their

2. Where reference is made to this paragraph, the advisory
procedure laid down in Article 3 of Decision 1999/468/EC
shall apply, in compliance with Article 7(3) thereof.

3.

The Committee shall adopt its rules of procedure.

Article 5

1.
The Commission shall verify the sources and methods
used by Member States to calculate GNI. Measures to make
GNI data more comparable, reliable and exhaustive shall be
adopted in accordance with the procedure referred to in
Article 4 paragraph 2.

2.
The Committee referred to in Article 4 shall examine
questions raised by its Chairman, either on his own initiative
or at the request of the representative of a Member State,
relating to the implementation of this Regulation, in particular
with regard to:

(a) Compliance each year with the definitions referred to in

Article 1.

(b) The examination each year of the data forwarded under the
terms of Article 2(2) and the information forwarded under
the terms of Article 2(3) concerning the statistical sources
and the procedures for calculating GNI and its components.
This examination shall lead to a GNI Committee's opinion
on the appropriateness of Member States' GNI data for own
resource purposes with respect to reliability, comparability
and exhaustiveness. This opinion will
indicate the main
documents on which the examination is based. Reliability,
comparability
its
exhaustiveness
components must be assessed taking account of the cost-
benefit principle.

of GNI

and

and

the

entails

context,

cost-benefit principle

a
In this
size and significance of
judgement on the potential
specific
transactions based on whatever
activities or
information is available. This information is often quali-
tative, though it may be quantitative in some cases. The
Commission (Eurostat) examines the comparability in the
treatment of similar cases in the Member States and reports
to the GNI Committee on all cases where the cost-benefit
principle is considered to apply. The application of this
principle
disproportionate
committing
resources to calculate insignificant items.

should

avoid

CHAPTER III

Procedures and checks on the calculation of GNI

Article 4

(c) Expressing its views, without prejudice to Article 4, on
Commission proposals aiming to improve GNI calculations,
including interpreting ESA 95 definitions where necessary
and quantifying the impact of these proposals on GNI.

1.
The Commission shall be assisted by a committee,
referred to as the GNI Committee, composed of representatives
of the Member States and chaired by the representative of the
Commission.

3.
The Committee shall dedicate particular efforts to the
improvement of Member States' GNI compilation practices
and to the dissemination of best practices in this domain.

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It shall also deal with questions relating to the revision of GNI
data and the problem of the exhaustiveness of GNI.

It shall, if necessary, suggest to the Commission measures to
make GNI data more comparable and more reliable.

CHAPTER IV

Final provisions

Article 7

Before the end of 2005, the Commission shall submit a report
on the application of
this Regulation to the European
Parliament and to the Council.

Article 6

Article 8

Without prejudice to the inspections foreseen in Article 19 of
Council Regulation (EEC, Euratom) No 1150/2000 (1),
joint
GNI
information visits may, where deemed appropriate, be
carried out to Member States by the Commission's services
and representatives from other Member States in consultation
with the Member States visited. The participation of Member
States in these visits is voluntary.

This Regulation shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Communities.

This Regulation shall be binding in its entirety and directly
applicable in all Member States.

(1) OJ L 130, 31.5.2000, p. 1.