Proposal for a Regulation of the European Parliament and of the Council On Community statistics on the structure and activity of foreign affiliates
Date: 2005-03-15
Institutions: European Commission
Subjects: EU statistics, dissemination of information, economic statistics, financial statistics, information system, statistical method

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 15.3.2005 
COM(2005) 88 final 

2005/0016 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

On Community statistics on the structure and activity of foreign affiliates 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

Background 

Economic globalisation affects businesses and statistics are needed in order to help national 
and EU policy-makers formulate appropriate policies and to help enterprises assess ongoing 
developments. In addition, statistics are necessary to assist in various other policy areas, e.g. 
the functioning of the internal market or the implementation of the GATS1. 

The  voluntary  collection  of  data  on  the  structure  and  activity  of  foreign  affiliates  in  the 
Member  States  has  shown  that  it  is  feasible  to  collect  data.  Inward  statistics  on  foreign 
affiliates  (Inward  FATS)  have  been  collected  in  the  framework  of  Structural  Business 
Statistics, by breaking down business statistics by the nationality of the enterprises exercising 
the  foreign  control.  Inward  FATS  have  also  been  collected  in  the  framework  of  Balance  of 
Payments statistics, by generating data for the subset in which foreign direct investment has 
attained a level corresponding to foreign control. Data for statistics on the activity of affiliates 
abroad (Outward FATS) are collected on a strictly voluntary basis in the Balance of Payments 
framework.  They  are  also  based  on  extensions  of  the  variables  collected  for  foreign  direct 
investment, for the foreign affiliates that are controlled by the direct investor. 

Although  all  EU15-Member  States  provided  data  for  inward  FATS  in  one  or  other  of  the 
statistical  frameworks,  it  was  not  possible  to  calculate  EU-15  aggregates  as  these  data 
collections differed in terms of coverage, variables and methodology. As all users depend on 
the availability of EU aggregates, it was necessary to harmonise the data collection of inward 
FATS in order to establish a common framework for the production of coherent FATS. For 
outward FATS, only nine Member States collect data on a voluntary basis.  

The proposed regulation specifies the deliverables expected, while leaving it to the discretion 
of the Member States to decide on the best way of obtaining those deliverables.  

The  proposal  regarding  FATS  is  the  fruit  of  numerous  consultations  and  meetings  with 
Member States, a large majority of which support it. 

2. 

Content of the Regulation 

The regulation contains two common modules, for inward FATS (Annex 1) and for outward 
FATS (Annex 2).  

The  common  module  for  inward  FATS  (Annex  1)  is  largely  based  on  data  collected  in  the 
framework  of  Council  Regulation  (EC,  Euratom)  No.  58/97  concerning  Structural  Business 
Statistics  (SBS  Regulation).  The  collection  of  the  characteristics  allows  the  extent  and 
intensity  of  globalisation  in  the  internal  market  to  be  measured  and  provides  information 
about  capital  movements,  direct  investment  and  technology.  The  direct  link  to  structural 
business  statistics  allows  a  comparison  of  foreign-controlled  enterprises  with  nationally 
controlled enterprises, and the differences in productivity, performance  and profitability can 
thus be analysed easily as well as the impact on economic performance measured in terms of 
growth, employment and research and development. 

1 

General Agreement on Trade in Services 

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The activity breakdown based on the NACE2 gives information on the distribution of foreign 
control  in  the  economy  of  the  reporting  country  and  the  respective  international 
competitiveness  of  certain  sectors.  The  breakdown  by  controlling  country  shows  the  role  of 
specific foreign countries as domicile for enterprises controlling affiliates in the EU Member 
States and the attractiveness of individual Member States. 

The common module for outward FATS (Annex 2) also includes a breakdown by country of 
location and by activity of the foreign affiliates controlled abroad. The structure of the detail 
for the characteristics proposed is the same as that used for foreign direct investment in the 
Draft  Regulation  for  Balance  of  Payments  Statistics.  Opposition  by  Member  States  to  a 
previous version presented to the SPC in September 2003 entailed that all characteristics for 
outward FATS, as defined in Annex II, will be subject of pilot studies. 

For  inward  FATS,  as  the  information  requested  by  the  users  goes  beyond  the  scope  of  the 
draft  regulation,  pilot  studies  are  planned  to  assess  whether  data  collection  is  feasible  for 
additional detail. Concerning outward FATS, as a result of opposition by Member States to a 
previous version presented to the SPC in September 2003, the entire Annex 2 is now included 
in pilot studies.  

The regulation has been thoroughly discussed with Member States’ and Candidate Countries’ 
representatives in the FATS Joint Working Group. The FATS JWG includes both groups of 
data  providers,  namely  the  national  statistical  institutes  collecting  FATS  data  in  the 
framework  of  Structural  Business  Statistics  and  the  central  banks  providing  data  in  the 
Balance of Payments working framework. The proposal was also discussed at the CMFB3 and 
at  the  BSDG4  with  Member  States  and  Candidate  Countries,  and  received  general  support. 
Both  modules  have  been  drawn  up  after  extensive  consultation  with  Member  States,  which 
support both the content and the lists themselves. 

2 
3 
4 

Statistical Classification of economic activities in the European Community 
Committee for Monetary, Financial and Balance of Payments statistics 
Business Statistics Directors Group 

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2005/0016 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

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 Commission5, 

Having  consulted  the  European  Central  Bank  in  accordance  with  Article  105(4)  of  the 
Treaty6, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty7, 

Whereas: 

(1) 

(2) 

(3) 

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-owned  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.  

The  implementation  and  the  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.  

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.  

5 
6 
7 

OJ C , , p. . 
OJ C […], […], p. […]. 
OJ C , , p. . 

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(4) 

(5) 

(6) 

(7) 

(8) 

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.  

European  Parliament  and  Council  Regulation  (EC)  No  …/…8  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 agreement, it 
is essential that detailed statistics on foreign affiliates be produced regularly. 

Council  Regulation  (EC,  Euratom)  No  58/97  of  20  December  1996  concerning 
structural business statistics9 and Regulation (EEC) No 696/93 of 15 March 1993 on 
the  statistical  units  for  the  observation  and  analysis  of  the  production  system  in  the 
Community10  established  a  common  framework  for  the  collection,  compilation, 
transmission  and  evaluation  of  Community  statistics  on  the  structure  and  activity  of 
businesses in the Community. 

The  compilation  of  national  accounts  according  to  the  Council  Regulation  (EC)  No 
2223/9611 of 25 of June 1996 on the European System of Accounts in the Community 
requires comparable, complete and reliable business statistics on foreign affiliates. 

Collectively, the Manual on Statistics of International Trade in Services of the United 
Nations  (UN),  the  Balance  of  Payments  Manual  (5th  edition)  of  the  International 
Monetary Fund (IMF), the Benchmark Definition on foreign direct investment and the 
Manual  on  Economic  Globalisation  Indicators  of  the  Organisation  for  the  Economic 
Co-operation  and  Development  (OECD)  define  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 
Regulation (EC) No 322/9712. 

(10)  Since the objective of the action to be taken, 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 Commission13. 

8 
9 

10 
11 
12 

OJ L , , p. . 
OJ  L  14,  17.1.1997,  p.1  .  Regulation  as  last  amended  by  Regulation  (EC)  No  1670/2003  (OJ  L  244, 
29.09.2003, p. 74)  
OJ L 76, 30.3.1993, p.1. 
OJ L 310, 30.11.1996, p.1. 
OJ L 52, 22.2.1997, p. 1.  

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(12)  The Statistical Programme Committee and the Committee on Monetary, Financial and 

Balance of Payments Statistics 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) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

“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. 

“Control”  shall  mean  the  ability  to  determine  the  general  policy  of  an 
enterprise  by  choosing  appropriate  directors,  if  necessary.  Enterprise  A  is 
deemed to be controlled by an institutional unit B when B controls - directly or 
indirectly - more than half of the shareholders’ voting power or more than half 
of the shares. 

“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.  

“Branches”  shall  mean  local  units  without  separate  legal  identity,  which  are 
dependent on foreign owned enterprises. They are treated as quasi-enterprises. 

“Statistics  on  foreign  affiliates"  shall  mean  statistics  describing  the  overall 
activity of foreign affiliates. 

“Inward  statistics  on  foreign  affiliates”  shall  mean  statistics  describing  the 
activity of foreign affiliates resident in the compiling economy. 

“Outward  statistics  on  foreign  affiliates”  shall  mean  statistics  describing  the 
activity of foreign affiliates abroad controlled by the compiling economy. 

13 

OJ  L  184,  17.7.1999,  p.  23. Regulation  amended by  Regulation  (EC) No 1882/2003  of  the  European 
Parliament and of the Council (OJ L 284, 31.10.2003, p. 1). 

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(h) 

(i) 

“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. 

“Enterprise”, “Local unit” and “Institutional unit” shall each have the meaning 
attributed  to  it  in  Regulation  (EEC)  No  696/93  of  15  March  199314  on  the 
statistical unit for the observation and analysis of the production system in the 
Community. 

Article 3 

Submission of data 

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

Article 4 

Data sources 

Member  States  may,  whilst  complying  with  conditions  as  to  quality  referred  to  in 
Article  6,  collect  the  information  required  under  this  Regulation  using  any  sources 
they consider relevant.  

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.  

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

Article 5 

Pilot studies 

The  Commission  shall  draw  up  a  programme  for  pilot  studies  to  be  carried  out  by 
national  authorities  in  the  meaning  of  Article  2  of  Council  Regulation  (CE)  No 
322/97 on a voluntary basis to investigate the feasibility and costs of collecting data 
on additional variables and breakdowns for inward statistics on foreign affiliates, and 
of collecting data on outward statistics of foreign affiliates. 

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

1. 

2. 

3. 

1. 

2. 

14 

OJ L 76, 30.3.1993, p. 1. 

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3. 

4. 

1. 

2. 

3. 

4. 

On the basis of the conclusions of the pilot studies, the Commission shall adopt the 
necessary implementation measures in accordance with the procedure referred to in 
Article 10(2). 

The pilot studies shall be conducted at the latest within three years after the entry into 
force of this Regulation. 

Article 6 

Quality standards and reports 

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

Member States shall supply the Commission, through Eurostat, with a report on the 
quality of the data transmitted (hereafter referred to as “quality reports”). 

The common quality standards as well as the content of the quality reports shall be 
specified by the Commission in accordance with the procedure referred to in Article 
10(2). 

The Commission shall assess the quality of the data transmitted on the basis of the 
quality reports transmitted by the Member States, and shall define the periodicity of 
such exercise. 

Article 7 

Recommendations manual 

The  Commission  shall,  in  close  co-operation  with  the  Member  States,  publish  a 
recommendations manual which contains supplementary guidance concerning the Community 
statistics produced pursuant to this Regulation. 

Article 8 

Timetable and derogations 

1. 

2. 

Member States shall compile the data according to the implementation timetable as 
specified in Annex I. 

During a transitional period that shall not exceed four years from the first reference 
year, derogations may be granted by the Commission to Member States when their 
national statistical systems require major adaptations. 

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Article 9 

Implementing measures 

The  measures  for  implementing  this  Regulation  shall  be  adopted  in  accordance  with  the 
procedure referred to in Article 10(2). In particular, these shall include measures: 

(a) 

(b) 

for  adjustment  to  economic  and  technical  developments  in  the  collection  and 
statistical processing of data, as well as the processing and the transmission of 
results; 

for  adjustment  of  the  definitions,  if  necessary,  according  to  economic  and 
methodological developments; 

(c) 

for adaptation of the level of detail listed in Annexes I, II and III; 

(d) 

(e) 

for the definition of the proper common quality standards and the contents of 
the quality reports; 

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

(f) 

for the implementation of the results of the pilot studies. 

Article 10 

Committee 

1. 

2. 

3. 

4. 

The  Commission  shall  be  assisted  by  the  Statistical  Programme  Committee 
established by Decision 89/382/EEC, Euratom15. 

Where  reference  is  made  to  this  paragraph,  the  regulatory  procedure  referred  to  in 
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. 

The Committee shall adopt its rules of procedure. 

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

15 

OJ L 181, 28.6.1989, p. 47. 

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Article 11 

Co-operation 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  (CMFB)  established  by  Council 
Decision  91/115/EEC16.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, within five years of the entry into force of this Regulation, submit a 
report to the European Parliament and the Council on its implementation. 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;  

(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 twentieth day following that of its publication in 
the Official Journal of the European Union. 

16 

OJ L 59, 6.3.1991, p. 19. Decision amended by Decision 96/174/EC (OJ L 51, 1.3.1996, p. 48). 

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

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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COMMON MODULE FOR INWARD STATISTICS ON FOREIGN AFFILIATES 

ANNEX I 

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 statistics17 
are to 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 (*) 

22 12 0 

Total number of R&D personnel (*) 

If the number of persons employed is not available, the number of employees (code 16 13 0) should 
be compiled instead. 

17 

(*) 

(**) 

OJ  L  344,  18.12.1998.  Regulation  amended  by  Commission  Regulation  (EC)  No  1670/2003,  OJ  L  244, 
29.9.2003, p. 74. 
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 E 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 to be collected for the purposes of this Regulation. If necessary for 
Community policy requirements, the Commission may, in accordance with the procedures laid down in Article 
10(2) of this Regulation, request ad-hoc collection of this data. 
For NACE Rev. 1.1 division 65 turnover will be replaced by production value. 

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Variables total intra-mural R & D expenditure (code 22 110) and total number of R & D personnel 
(code 22 120) 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  (**)  and  the  number  of  persons 
employed (or the number of employees instead) should be compiled. 

Section 3 

Level of detail 

Data shall 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 total activity. 

Section 4 

First reference year and periodicity 

1. 

2. 

The first reference year for which annual statistics shall be compiled is the calendar year of 
the entry into force of this Regulation. 

Member States shall provide data for every calendar year thereafter. 

Section 5 

Transmission of results 

The results shall be transmitted within 20 months from the end of the reference year. 

Section 6 

Reports and pilot studies 

1. 

2. 

3. 

Member  States  shall  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. 

For the level of detail covered by this Annex, the Commission will institute pilot studies to 
be  carried  out  by  national  authorities  in  the  meaning  of  Article  2  of  Council  Regulation 
(CE) No 322/97 according to Article 5 of this Regulation. 

The pilot studies are carried out in order to assess the feasibility of obtaining data, taking 
into account the benefits of the availability of the data in relation to the cost of collection 
and the burden on business. 

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4. 

Pilot studies will be conducted for the following characteristics 

Code 

Title 

Exports of goods and services 

Imports of goods and services 

Intra-group export of goods and services 

Intra-group import of 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, J, 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. 

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COMMON MODULE FOR OUTWARD STATISTICS ON FOREIGN AFFILIATES 

ANNEX II 

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 economy, according to the definitions contained in Article 2. 

Section 2 

Pilot studies 

For  the  level  of  detail  covered  by  this  Annex,  the  Commission  will  institute  pilot  studies  to  be 
carried  out  by  national  authorities  in  the  meaning  of  Article  2  of  Council  Regulation  (CE)  No 
322/97 according to Article 5 of this Regulation. 

The pilot studies are carried out in order to assess the relevance and feasibility of obtaining data, 
taking into account the benefits of the availability of the data in relation to the cost of collection and 
the burden on business. 

Section 3 

Characteristics 

The collection of 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 statistics18, will be the object of pilot studies: 

Title 

Code 
12 11 0 
16 130 
11 11 0 
13 31 0 

12 15 0 
15 11 0 

Turnover 
Number of employees 
Number of enterprises 
Personnel costs 
Exports of goods and services 
Import of goods and services  
Intra-group export of goods and services 
Intra-group import of goods and services 
Value added at factor cost 
Gross investment in tangible goods 

Section 4 

Level of detail 

Data shall be provided with the detail by country of location and by kind of activity of the foreign 
affiliate  specified  in  annex  3.  The  detail  by  country  of  location  and  kind  of  activity  shall  be 
combined as follows: 

18 

OJ L 344, 18.12.1998. 

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– 

– 

– 

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. 

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ANNEX III 

LEVELS FOR DETAILED INFORMATION BY GEOGRAPHY AND BY ACTIVITY 

GEOGRAPHICAL 
BREAKDOWN 
LEVELS 

Level 1 

Level 2-OUT   
(Level 1 + 34 countries) 

D5 

CH 

RU 

CA 
US 

BR 

CN 
HK 
IN 

JP 

D6 
W5 
C4 

Extra-EU 25 

Switzerland  

Russian Federation 

Canada 
United States of America 

Brazil 

China 
Hong Kong 
India 

Japan 

Candidate Countries 
Extra EU-25 not allocated 
Offshore Financial Centres 

D5 
IS 
LI 
NO 
CH 
BG 
HR 
RO 
RU 
TR 
EG 
MA 
NG 
ZA 
CA 
US 
MX 
AR 
BR 
CL 
UY 
VE 
IL 
CN 
HK 
IN 
ID 
JP 
KR 
MY 
PH 
SG 
TW 
TH 
AU 
NZ 

W5 
C4 

Extra-EU 25 
Iceland 
Liechtenstein 
Norway 
Switzerland 
Bulgaria 
Croatia 
Romania 
Russian Federation 
Turkey 
Egypt 
Morocco 
Nigeria 
South Africa 
Canada 
United States 
Mexico 
Argentina 
Brazil 
Chile 
Uruguay 
Venezuela 
Israel 
China 
Hong Kong 
India 
Indonesia 
Japan 
South Korea 
Malaysia 
Philippines 
Singapore 
Taiwan 
Thailand 
Australia 
New Zealand 

Extra EU-25 not allocated 
Offshore Financial Centres 

EN 

17 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Level 2-IN 

A1 
Z9 
A2 

D3 
BE 
CZ 
DK 
DE 
EE 
GR 
ES 
FR 
IE 
IT 
CY 
LV 
LT 
LU 
HU 
MT 
NL 
AT 
PL 
PT 
SI 
SK 
FI 
SE 
UK 

D5 
AU 
BG 
CA 
CH 
CN 
HK 
IL 
IS 
JP 
LI 
NO 
NZ 
RO 
RU 
TR 
US 

C4 
W5 

World total (all entities including compiling country) 
Rest of the World (excluding compiling country) 
Controlled by the compiling country 

EU-25 (Intra-EU-25) excluding compiling country 
Belgium 
Czech Republic 
Denmark 
Germany 
Estonia 
Greece 
Spain 
France 
Ireland 
Italy 
Cyprus 
Latvia 
Lithuania 
Luxembourg 
Hungary 
Malta 
Netherlands 
Austria 
Poland 
Portugal 
Slovenia 
Slovak Republic 
Finland 
Sweden 
United Kingdom 

Extra-EU 25 
Australia 
Bulgaria 
Canada 
Switzerland 
China 
Hong Kong 
Israel 
Iceland 
Japan 
Liechtenstein 
Norway 
New Zealand 
Romania 
Russian Federation 
Turkey 
United States 

Offshore Financial Centres 
Extra-25 not allocated 

EN 

18 

   EN 

 
 
 
 
 
 
 
Level 3 

AD  Andorra 
United Arab Emirates 
AE 
AF 
Afghanistan 
AG  Antigua and Barbuda 
Anguilla 
AI 
AL 
Albania 
AM  Armenia 
AN  Netherlands Antilles 
AO  Angola 
AQ  Antarctica 
AR  Argentina 
American Samoa 
AS 
AT 
Austria* 
AU  Australia 
AW  Aruba 
AZ 

Azerbaijan 

BA 

Bosnia and Herzegovina 

Barbados 
Bangladesh 
Belgium* 
Burkina Faso 
Bulgaria 
Bahrain 
Burundi 
Benin 

BB 
BD 
BE 
BF 
BG 
BH 
BI 
BJ 
BM  Bermuda 
BN 
BO 
BR 
BS 
BT 
BV 
BW  Botswana 
BY 
BZ 
CA 
CC 

Brunei Darussalam 
Bolivia 
Brazil 
Bahamas 
Bhutan 
Bouvet Island 

Belarus 
Belize 
Canada 
Cocos (Keeling) Islands 

CD 

CF 
CG 

CH 
CI 
CK 
CL 

the  Democratic 

Congo, 
Republic of the 
Central African Republic 
Congo 

Switzerland 
Côte d’Ivoire 
Cook Islands 
Chile 

CM  Cameroon 

CN 
CO 
CR 
CU 
CV 
CX 
CY 
CZ 
DE 
DJ 

China 
Colombia 
Costa Rica 
Cuba 
Cape Verde 
Christmas Island 
Cyprus* 
Czech Republic* 
Germany* 
Djibouti 

DK  Denmark* 
DM  Dominica 
DO  Dominican Republic 
DZ 
EC 
A2 

Algeria 
Ecuador 
Controlled  by  the  compiling 
country 

GH 

GI 
GL 
GM 
GN 
GQ 
GR 
GS 
GT 
GU 
GW 
GY 
HK 
HM 
HN 
HR 
HT 
HU 
ID 
IE 
IL 

IM 

IN 
IO 

IQ 
IR 
IS 
IT 

JE 

JM 
JO 
JP 
KE 
KG 
KH 
KI 
KM 
KN 
KP 

KR 
KW 
KY 

Estonia* 
Egypt 
Eritrea 
Spain* 
Ethiopia 
Finland* 
Fiji 
Falkland Islands (Malvinas) 

EE 
EG 
ER 
ES 
ET 
FI 
FJ 
FK 
FM  Micronesia, Federated States of 
FO 
FR 
GA 
GB 
GD 
GE 
GG 

Faroe Islands 
France* 
Gabon 
United Kingdom* 
Grenada 
Georgia 
Guernsey (No official ISO 3166-1 country code, 
exceptionally reserved code elements) 
Ghana 

Kazakhstan 
Lao People’s Democratic Republic 
Lebanon 
Saint Lucia 
Liechtenstein 
Sri Lanka 
Liberia 
Lesotho 
Lithuania* 
Luxembourg* 
Latvia* 
Lybian Arab Jamahiriya 

KZ 
LA 
LB 
LC 
LI 
LK 
LR 
LS 
LT 
LU 
LV 
LY 
MA  Morocco 
MD  Moldova, Republic of 
MG  Madagascar 
MH  Marshall Islands 

QA 
RO 
RU 
RW 
SA 
SB 
SC 
SD 
SE 
SG 
SH 
SI 
SK 
SL 
SM 
SN 

Qatar 
Romania 
Russian Federation 
Rwanda 
Saudi Arabia 
Solomon Islands 
Seychelles 
Sudan 
Sweden 
Singapore 
St Helena 
Slovenia* 
Slovakia* 
Sierra Leone 
San Marino 
Senegal 

MK19  Macedonia, 
Republic of 

the  Former  Yugoslav 

SO 

Somalia 

Northern Mariana Islands 

ML  Mali 
Gibraltar 
MM  Myanmar 
Greenland 
MN  Mongolia 
Gambia 
MO  Macau 
Guinea 
MP 
Equatorial Guinea 
Greece* 
MQ  Martinique 
South Georgia and the South Sandwich Islands  MR  Mauritania 
MS  Montserrat 
Guatemala 
MT  Malta* 
Guam 
MU  Mauritius 
Guinea-Bissau 
MV  Maldives 
Guyana 
MW  Malawi 
Hong Kong 
MX  Mexico 
Heard Island and McDonald Islands 
MY  Malaysia 
Honduras 
MZ  Mozambique 
Croatia 
NA 
Haiti 
NC 
Hungary* 
NE 
Indonesia 
NF 
Ireland* 
NG 
Israel 

Namibia 
New Caledonia 
Niger 
Norfolk Island 
Nigeria 

NI 

Nicaragua 

NL 
NO 

NP 
NR 
NU 
NZ 

Netherlands* 
Norway 

Nepal 
Nauru 
Niue 
New Zealand 

OM 

Oman 

Isle  of  Man  (No  official  ISO  3166-1  country 
code, exceptionally reserved code elements) 
India 
British Indian Ocean Territory 

Iraq 
Iran, Islamic Republic of 
Iceland 
Italy* 

Jersey  (No  official  ISO  3166-1  country  code, 
exceptionally reserved code elements) 
Jamaica 
Jordan 
Japan 
Kenya 
Kyrgyzstan 
Cambodia (Kampuchea) 
Kiribati 
Comoros 
St Kitts and Nevis 
Korea, Democratic People’s Republic of (North 
Korea) 
Korea, Republic of (South Korea) 
Kuwait 
Cayman Islands 

PA 
PE 
PF 
PG 
PH 
PK 
PL 
PN 
PR 
PS 

PT 
PW 
PY 

Panama 
Peru 
French Polynesia 
Papua New Guinea 
Philippines 
Pakistan 
Poland* 
Pitcairn 
Puerto Rico 
Palestinian Territory, Occupied 

SR 
ST 
SV 
SY 
SZ 
TC 
TD 
TG 
TH 
TJ 
TK 
TM 
TN 
TO 
TP 
TR 
TT 
TV 
TW 
TZ 

UA 

Suriname 
Sao Tome and Principe 
El Salvador 
Syrian Arab Republic 
Swaziland 
Turks and Caicos Islands 
Chad 
Togo 
Thailand 
Tajikistan 
Tokelau 
Turkmenistan 
Tunisia 
Tonga 
East Timor 
Turkey 
Trinidad and Tobago 
Tuvalu 
Taiwan, Province of China 
Tanzania,  United  Republic 
of  
Ukraine 

Minor 

(Vatican  City 

the 

VC 

States 

Vincent 

UG 
UM 

US 
UY 
UZ 
VA 

Uganda 
United 
Outlying Islands 
United States 
Uruguay 
Uzbekistan 
Holy  See 
State) 
St 
Grenadines 
Venezuela 
VE 
Virgin Islands, British 
VG 
Virgin Islands, US 
VI 
Viet Nam 
VN 
Vanuatu 
VU 
WF  Wallis and Futuna 
WS 
YE 
YT 
CS 

Samoa 
Yemen 
Mayotte 
Serbia and Montenegro 

and 

Portugal* 
Palau 
Paraguay 

ZA 
ZM 
ZW 

South Africa 
Zambia 
Zimbabwe 

W5 

Extra EU-25 not allocated 

* = Only for Inward 

19 

"Provisional  code  that  does  not  affect  the  definitive  denomination  of  the  country  to  be 
attributed  after  the  conclusion  of  the  negotiations  currently  taking  place  in  the  United 
Nations" 

EN 

19 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
ACTIVITY BREAKDOWN LEVELS 
Level 1 

Level 2

TOTAL ACTIVITY 
MINING & QUARRYING 

MANUFACTURING 

Petrol., chem.., rubber, plastic prod. 

Office  mach.,  comp.,  RTV,  comm. 

Vehicles, other transport equip. 

ELECTRIC., GAS & WATER 
CONSTRUCTION 
TOTAL SERVICES 
TRADE AND REPAIRS 

HOTELS & RESTAURANTS 
TRANSP., STORAGE AND COM. 

FINANCIAL INTERMED. 

COMPUT. & RELATED ACT. 
RESEARCH & DEVELOP. 
OTHER BUSINESS ACT. 

ICFA 
TOTAL ACTIVITY 
MINING AND QUARRYING 
Of which: 
Extraction of petroleum and gas 
MANUFACTURING 
Food products 
Textiles and wearing apparel 
Wood, publishing and printing 
TOTAL textiles + wood activities 
Refined petroleum prod. And other treatments 
Manufacture of chemicals & chemical products 
Rubber and plastic products 
TOTAL petroleum, chemic., rubber, plastic products 
Metal products 
Mechanical products 
TOTAL metal and mechanical products 
Office machinery and computers 
Radio, TV, communication equipments 
TOTAL machin., comput., RTV, comm. equip. 
Motor vehicles 
Other transport equipment 
TOTAL vehicles + other transport equipment 
Manufacturing n.i.e. 
ELECTRICITY, GAS AND WATER 
CONSTRUCTION 
TOTAL SERVICES 
TRADE AND REPAIRS 
Sale, maintenance and repair of motor vehicles and motor cycles; retail sale of automotive fuel 
Wholesale trade and commission trade, except of motor vehicles and motor cycles 
Retail trade, except of motor vehicles and motor cycles; repair of personal and household goods 
HOTELS AND RESTAURANTS 
TRANSPORTS, STORAGE AND COMMUNICATION 
Transport and storage 
Land transport; transport via pipelines 
Water transport 
Air transport 
Supporting and auxiliary transport activities; activities of travel agencies 
Post and telecommunications 
Post and courier activities 
Telecommunications 
FINANCIAL INTERMEDIATION 
Financial intermediation, except insurance and pension funding 
Insurance and pension funding, except compulsory social security 
Activities auxiliary to financial intermediation 
REAL ESTATE ACTIVITIES 
RENTING  OF  MACHINERY  AND  EQUIPMENT  WITHOUT  OPERATOR  AND  OF  PERSONAL 
COMPUTER AND RELATED ACTIVITIES 
RESEARCH AND DEVELOPMENT 
OTHER BUSINESS ACTIVITIES 
Legal, account., market research, consultancy 
Legal activities 
Account., bookkeeping and audit.; tax consult. 
Market research and public opinion polling 
Business and management consultancy activities 
Management activities of holding companies 
Architectural, engineering and other tech. act. 
Advertising 
Business activities n.e.c. 
EDUCATION 
HEALTH AND SOCIAL WORK 
SEWAGE AND REFUSE DISPOSAL 
ACTIVITIES OF MEMBERSHIP ORGANIS. N.E.C. 

REC., 

CULT., 

SPORTING  RECREATIONAL, CULT., SPORTING ACTIVITIES 

Motion picture, radio, tel., other entertain. activ. 
News agency activities 
Library, archives, museums, other cultural act. 
Sporting and other recreational activities 
OTHER SERVICE ACTIVITIES 
Not allocated 

NACE Rev. 1.120
Sec C to O (excluding L)
Sec C 

Div 11 
Sec D 
Subsection DA 
Subsection DB 
Subsections DD & DE 

Div 23 
Div 24 
Div 25 

Subsection DJ 
Div 29 

Div 30 
Div 32 

Div 34 
Div 35 

Sec E 
Sec F 

Sec G 
Div 50 
Div 51 
Div 52 
Sec H 
Sec I 
Div 60, 61, 62, 63 
Div 60 
Div 61 
Div 62 
Div 63 
Div 64 
Group 641 
Group 642 
Sec J 
Div 65 
Div 66 
Div 67 
Sec K, Div 70 
Sec K, Div 71 
Sec K, Div 72 
Sec K, Div 73 
Sec K, Div 74 
Group 741 
Class 7411 
Class 7412 
Class 7413 
Class 7414 
Class 7415 
Group 742 
Group 744 
Group 743, 745, 746, 747, 748 
Sec M 
Sec N 
Sec O, Div 90 
Sec O, Div 91 
Sec O, Div 92 
Group 921, 922, 923 
Group 924 
Group 925 
Group 926, 927 
Sec O, Div 93 

20 

Council Regulation (EEC) No. 3037 of 9 October 1990 on the statistical classification of economic activities in 
the  European  Community,  and  Commission  Regulation  (EC)  No  29/2002  of  19  December  2001  amending 
Council  Regulation  (EEC)  No  3037  on  the  statistical  classification  of  economic  activities  in  the  European 
Community. 

EN 

20 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Heading 

Total activity 

Mining and quarrying 

Manufacturing 

Level 3 (NACE Rev. 1.1) 

Requested level of detail 

Sections C to K 

Section C 

Section D 

All subsections DA to DN 

All divisions 15 to 37 

Aggregates: 

High-technology (HIT) 

24.4, 30, 32, 33, 35.3 

Medium-high-technology (MHT) 

24 except 24.4, 29, 31, 34, 35.2, 35.4, 35.5 

Medium-low-technology (MLT) 

23, 25-28, 35.1 

Low-Technology (LOT)  

15-22, 36, 37 

Electricity, gas and water supply 

Section E  

Construction 

All divisions (40 and 41) 

Section F (Division 45) 

All Groups (45.1 to 45.5) 

Wholesale  and  retail  trade;  repair  of  motor 
vehicles, motorcycles and personal and household 
goods 

Section G 

All divisions (50 to 52) 

Hotels and restaurants 

Groups 50.1+50.2+50.3, 50.4, 50.5, 51.1 to 51.7 

Groups 52.1 to 52.7 

Section H (Division 55) 

Groups 55.1 to 55.5  

Transport, storage and communication 

Section I 

All divisions 

Groups 60.1, 60.2, 60.3, 63.1+63.2, 63.3, 64.1, 64.2 

Financial intermediation 

Section J 

All divisions 

Real estate, renting and business activities 

Section K  

Division 70  

Division 71, groups 71.1+71.2, 71.3 and 71.4 

Division 72, groups 72.1 to 72.6 

Division 73  

Division 74, the aggregates 74.1 to 74.4 and 74.5 to 74.8 

EN 

21 

   EN 

 
 
 
 
 
 
 
 
 
LEGISLATIVE FINANCIAL STATEMENT 

Policy area(s): Statistics, Internal Market, Trade, Competition 

Activit(y/ies): Structural Business Statistics, Balance of Payments Statistics 

TITLE  OF  ACTION:  PROPOSAL  FOR  A  REGULATION  OF  THE  EUROPEAN  PARLIAMENT  AND  OF 
THE  COUNCIL  (EC)  NO  ../..  ON  COMMUNITY  STATISTICS  AND  ACTIVITY  OF  FOREIGN 
AFFILIATES 

1. 

BUDGET LINE(S) + HEADING(S) 

29 02 01 Statistical Information Policy 

2. 

OVERALL FIGURES  

2.1. 

Total allocation for action (Part B): € 2.150 million for the period 2005-2007 

2.2. 

Period of application: 

Yearly data collection and compilation starting from the year after entry into force of 
the regulation. 

2.3. 

Overall multiannual estimate of expenditure: 

(a) 

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) (see point 6.1.1) 

(financial 

€ million (to three decimal places) 

2005 
0.450 

2006 
2007 
0.850 0.850 

Total 
2.150 

Commitments 

Payments 

(b) 

Technical and administrative assistance and support expenditure is 0. 

Subtotal a+b 

2005 

2006 

2007 

Total 

Commitments 

0.450 

0.850 

0.850 

2.150 

Payments 

(c) 

Overall  financial  impact  of  human  resources  and  other  administrative  expenditure 
(see points 7.2 and 7.3) 

TOTAL a+b+c 

2005 

2006 

2007 

Total 

Commitments 

0.450 

0.850 

0.850 

2.150 

Payments 

EN 

22 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.4. 

Compatibility with financial programming and financial perspective 

Proposal is compatible with existing financial programming. 

2.5. 

Financial impact on revenue:21 

Proposal  has  no  financial  implications  (involves  technical  aspects  regarding 

implementation of a measure) 

3. 

BUDGET CHARACTERISTICS 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
form applicant 
countries 

Heading in 
financial 
perspective 

Non-comp 

Diff/ 
Non-diff 

NO 

YES 

YES 

No 3 

Internal 
Policies 

4. 

– 

– 

LEGAL BASIS  

Council Regulation (EC) No. 322/97 on Community Statistics. 

Decision No. 2367/2002/EC of the European Parliament and of the Council of the 16 
December 2002 on the Community Statistical Programme 2003 to 2007. 

5. 

DESCRIPTION AND GROUNDS 

5.1. 

Need for Community intervention 22 

5.1.1.  Objectives pursued 

This  Council  Regulation  aims  to  make  available  harmonised  statistical  information  on 
foreign-controlled  affiliates  in  the  reporting  country  (inward  FATS).  The  feasibility  of 
collecting harmonised statistical information on foreign affiliates controlled by the reporting 
country (outward FATS) will be tested in pilot studies. The information is needed for drawing 
up,  monitoring  and  evaluating  Community  policies,  in  particular  concerning  the  internal 
market as well as economic, trade, employment, research and development, competition and 
enterprise  policies.  Furthermore,  international  treaties  such  as  that  instituting  the  General 
Agreements on Trade in Services (GATS) require harmonised statistics in this area. 

5.1.2.  Measures taken in connection with ex ante evaluation  

The feasibility of collecting the data, taking into account the benefits of the availability of the 
data  in  relation  to  the  costs  of  collection  and  the  burden  of  businesses  was  tested  for  the 
inward FATS part since reference year 1996 in yearly pilot studies on a voluntary basis. 

21 
22 

For further information, see separate explanatory note. 
For further information, see separate explanatory note. 

EN 

23 

   EN 

 
                                                 
The legal basis for the pilot studies was Annex 1 Section 10 of Council Regulation No 58/97 
of  20  December  1996  concerning  structural  business  statistics,  also  known  as  the  SBS 
Regulation.23 Up to now, 12 Member States participated and are participating in the project, 
providing  data  for  several  reference  years  (up  to  2001).  The  scope  of  the  pilot  studies  was 
extended  over  the  years  while  introducing  additional  variables  and  increasing  the  level  of 
country detail.  

The  pilot  studies  for  inward  FATS  have  proven  that  a  breakdown  of  structural  business 
statistics by ultimate controlling institutional unit of a foreign affiliate is possible. It has been 
shown  convincingly  that  the  data  can  be  collected,  that  the  statistics  can  be  produced  in  a 
cost-effective  way,  and  that  the  results  are  of  great  interest  to  users  inside  and  outside  the 
European Commission. It has been shown that it is possible accurately to compare the impact 
on foreign controlled affiliates not only with their nationally controlled counterparts, but also 
with the FATS of other countries. 

Several publications presenting the results of the data collection so far have been produced. A 
publication  and  several  Statistics  in  Focus  on  foreign-controlled  enterprises  have  been 
published so far. Data are also available in Eurostat’s reference database, New Cronos, Theme 
4, SBS Domain, FATS Collection. 

The  main  limitation  is  the  lack  of  coverage  of  all  Member  States.  To  evaluate  the 
implementation of the GATS and the functioning of the Internal Market it is essential to have 
data for all EU Member States. 

The benefits of the availability of the data have been measured against the costs of collection 
and the burden on businesses for the pilot studies. The burden on businesses was difficult to 
quantify, because there are not data existing in the Member States quantifying it. But it can be 
appreciated that it is not very heavy, because existing data are generally used for processing 
the  FATS  data  sets  and  the  data  collection  is  based  on  already  existing  data  collections. 
Therefore, the additional costs of FATS to business outside normal national statistics activity 
is  restricted  to  occasional  contact  for  clarification  of  ownership  and  control,  or  to  a  few 
additional questions on that theme in ongoing surveys. 

The  costs  to  the  Member  States  of  data  collection  and  processing  are  also  not  very  high, 
because existing registers are used and most of the data used to calculate FATS are available 
as  part  of  the  regular  surveys.  The  only  additional  data  collection  necessary  is  for  the 
allocation  of  control.  Therefore,  the  costs  to  the  Member  States  are  restricted  mainly  to 
administrative and computer services expenses. 

The  implementation  of  new  statistics  always  involves  set-up  costs  as  well  as  costs  for  the 
research  and  development  of  the  data  process in the implementation phase. If FATS can be 
produced  automatically  as  part  of  an  inquiry  results  process,  for  example,  the  costs  will  be 
restricted  to  register  and  inquiry  analysis  time.  For  the  pilot  studies  the  Commission 
contributed financial support to help cover the costs of the Member States. 

The benefits of FATS are also difficult to quantify in figures. However, in the past few years 
the Member States and Eurostat have registered a growth in the number of requests for FATS-

23 

Council Regulation (EC, EURATOM) No. 58/97 of 20 December 1996 concerning structural business 
statistics (OJ No. L 14, 17.1.97) 

EN 

24 

   EN 

 
                                                 
type statistics on both the services and manufacturing sectors from international organisations 
such  as  the  OECD  and  UNCTAD  as  well  as  from  economists,  banks,  foreign  embassies, 
academics and other statistical offices.  

5.1.3.  Measures taken following ex post evaluation 

According  to  article  12  of  the  proposed  regulation  it  is  envisaged  that  a  report  on  the 
implementation of this regulation will be submitted within five years of the entry into force of 
the regulation, to the European Parliament and the Council. In particular, the report shall also 
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. 

5.2. 

Action envisaged and budget intervention arrangements 

The  proposed  Regulation  describes  the  legal  framework  within  which  Member  States’ 
National Statistical Offices or Central Banks will provide the FATS data. Both this regulation 
and future implementing regulations will be output measures, defining the statistical variables 
to  be  provided,  but  leaving  Member  States  full flexibility in how to obtain the variables. In 
practice, many Member States will use existing data sources to obtain the results required.  

The  contribution  from  the  Commission  budget  with  respect  to  the  work  by  the  national 
statistical  institutes  or  other  national  authorities  responsible  for  Commission  statistics 
represents only part of the total of the statistical work undertaken by the national authorities. 
In principle production and transmission of regular statistics, which form an integral part of 
the statistical programme, will be based on the subsidiarity principle, and the operational and 
administrative costs are borne by the national authorities. The regular data collection is based 
on  existing  administrative  sources,  but  for  pilot  studies  co-financing  would  be  necessary  to 
test  the  feasibility  of  the  collection  of  the  data  requested  by  our  main  users  but  difficult  to 
collect. 

The  Commission  contribution  will  take  the  form  of  grants  awarded  on  the  basis  of  grant 
applications  submitted  by  Member  States  in  advance,  which  will  include  estimated  cost 
statements.  The  pilot  studies  will  be  funded  via  the  existing  Community  Statistical 
Programme 2003 to 2007. There will be no Community funding on the basis of the proposed 
Regulation after the year 2007. This funding only concerns co-financing of pilot studies. The 
population who should get budgetary help are the national authorities. According to Article 2 
of  Council  Regulation  (CE)  No  322/97  on  Community  Statistics24  national  authorities  shall 
mean  national  statistical  institutes  and  other  bodies  responsible  in  each  Member  State  for 
producing  Community  statistics.  They  should  directly  be  given  to  the  data  processing 
institutes, namely statistical institutes and central banks.  

Work  by  Eurostat  to  develop  and  document  the  Community  methodology  and  to  process, 
analyse  and  disseminate  data  will  be  covered  in  full.  Additional  costs  are  expected  to  be 
marginal. 

Data  will  be  provided  annually.  Eurostat  will  maintain  a  database  for  the  data,  and  will 
publish FATS annually. 

24 

OJ L 52, 22.02.1997. 

EN 

25 

   EN 

 
                                                 
5.3.  Methods of implementation 

Management of the grants procedure and all data handling will be carried out by permanent 
Commission staff, with no externalisation. 

6. 

FINANCIAL IMPACT 

6.1. 

Total financial impact on Part B - (over the entire programming period) 

(The method of calculating the total amounts set out in the table below must be explained by 
the breakdown in Table 6.2. ) 

6.1.1.  Financial intervention 

Commitments (in € million to three decimal places) 

Breakdown 

2005 

2006 

2007 

Total 

Grants to national authorities 

0.450 

0.850 

0.850 

2.150 

for pilot studies 

TOTAL  0.450 

0.850 

0.850 

2.150 

7. 

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE  

7.1. 

Impact on human resources 

Staff to be assigned to management of the 
action using existing resources 

Description of tasks deriving from the 
action 

Types of post 

Total 

Number of 
permanent posts 

Number of 
temporary posts 

1 

2 

3 

5 

A-grades for implementation of the 
Regulation and methodological work, 
B-grades for data treatment and the 
maintenance of the informatics system. 

2 

4 

6 

Officials 
temporary staff 

or 

A 

B 

C 

Other human resources 

Total 

7.2. 

Overall financial impact of human resources 

Type of human resources 

Amount (€) 

Method of calculation *  

Officials 

Temporary staff 

Other human resources 

648.000 

6x108.000 

(specify budget line) 

Total  648.000 

Existing human resources will be reallocated for the management and the needs of the 
programme, no other resources are necessary. 

EN 

26 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
7.3. 

Other administrative expenditure deriving from the action 

No or only marginal increase in other administrative expenditure is foreseen. Expenditure on 
working groups and missions etc. are expected to continue at the current level. 

8. 

FOLLOW-UP AND EVALUATION 

8.1. 

Follow-up arrangements 

The implementation of this Regulation will be treated in a comitology procedure. As specified 
in article 9 of this Regulation, Commission Regulations will be developed in relation to 

– 

– 

– 

– 

– 

– 

the  adjustment  to  economic  and  technical  developments  in  the  collection  and 
statistical processing of data, as well as the processing and transmission of results, 

the  adjustment  of  the  definitions,  if  necessary,  according  to  economic  and 
methodological developments, 

for  adaptation  of  the  level  of  detail  listed  in  Annexes  I,  II  and  III  of  the  proposed 
Regulation, 

for  the  definition  of  the  proper  common  quality  standards  and  the  contents  of  the 
quality reports, 

to setting out the appropriate format and procedure for the transmission of results by 
Member States 

and to the implementation of the results of the pilot studies.  

8.2. 

Arrangements and schedule for the planned evaluation 

Each  Member  State  will  take  all  measures  necessary  to  ensure  the  quality  of  the  data 
transmitted  according  to  common  quality  standards.  Member  States  will  supply  the 
Commission  with  a  report  on  the  quality  of  the  data  transmitted.  The  common  quality 
standards as well as the content of the quality reports will be specified by the Commission by 
comitology. The Commission shall assess the quality of the data transmitted on the basis of 
the  quality  reports  transmitted  by  Member  States,  and  shall  define  the  periodicity  of  such 
exercise.  

The  Commission  will,  within  five  years  of  the  entry  into  force  of  this  Regulation,  submit  a 
report to the European Parliament and the Council on the implementation of this Regulation. 
In particular, this report will assess the quality of the statistics produced, 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, assess the progress of the pilot 
studies  and  their  implementation  and  identify  areas  for  potential  improvement  and 
amendments considered necessary in light of the results obtained and the costs involved. 

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9. 

ANTI-FRAUD MEASURES 

A  revised  system  of  internal  management  and  control  was  put  in  place  following  the 
Commission’s Reform initiative on financial management. This system included a reinforced 
internal audit capacity. 

Annual  monitoring  of  progress  with  implementation  of  the  Commission’s  Internal  Control 
Standards  is  designed  to  give  assurance  on  the  existence  and  functioning  of  procedures  for 
prevention and detection of fraud and irregularities. 

New  rules  and  procedures  have  been  adopted  for  the  principal  budgetary  process:  calls  for 
tenders,  grants,  commitments,  contracts  and  payments.  The  manual  of  procedures  are  made 
available  to  all  those  intervening  in  financial  acts  with  a  view  to  clarify  responsibilities, 
simplify  workflows  and  indicate  key  control  points.  Training  on  their  use  is  provided.  The 
manuals are subject to regular review and updating. 

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IMPACT ASSESSMENT FORM 

THE IMPACT OF THE PROPOSAL ON BUSINESS WITH SPECIAL REFERENCE 
TO SMALL AND MEDIUM-SIZED ENTERPRISES( SMEs) 

TITLE OF PROPOSAL 

Proposal  for  a  regulation  of  the  European  Parliament  and  the  Council  on  Community 
Statistics on the Structure and Activity of Foreign Affiliates. 

DOCUMENT REFERENCE NUMBER 

THE PROPOSAL 

1. 

Taking  account  of  the  principle  of  subsidiarity,  why  is  Community  legislation 
necessary in this area and what are its main aims? 

Community legislation on statistics on the structure and activity of foreign affiliates 
is  needed  to  set  common  statistical  standards  for  data,  with  a  high  degree  of 
comparability between data colleted in different Member States. Such comparability 
is  requested  by  all  users,  not  only  at  Community  level,  but  also  within  Member 
States. 

The aim of the proposed regulation is to establish common rules for the production 
of  Community  statistics  on  the  structure  and  activity  of  foreign  affiliates.  The 
regulation defines a set of relevant statistical data, together with the most important 
definitions needed to ensure the comparability of the statistics. This is essential, for 
the calculation of EU aggregates, which are in great demand by users. 

THE IMPACT ON BUSINESS 

2. 

Who will be affected by the proposal? 

–  which sectors of business 

NACE section C to K 

–  which  sizes  of  business  (what  is  the  concentration  of  small  and  medium-sized 

firms) 

As foreign control is exerted in general in big enterprises, the impact on small and 
medium-sized firms will be relatively small. 

–  are there particular geographical areas of the Community where these businesses 

are found 

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No. 

3. 

What will business have to do to comply with the proposal? 

In  general,  data  for  inward  FATS  can  be  collected  from  existing  administrative 
sources,  e.g.  Structural  Business  Statistics,  or  statistical  business  registers  in  the 
Member States. Therefore the additional burden for businesses should be small. 

For  outward  FATS,  resident  owners  should  supply  information  on  the  activity  of 
their affiliates located in extra-EU countries. Additional variables should be supplied 
with respect to FDI surveys, although FATS only consider controlled affiliates while 
FDI considers affiliates with more than 10% of equity capital. 

4. 

What economic effects is the proposal likely to have? 

–  on employment 

None. 

–  on investment and the creation of new businesses 

The statistics which will become available via this Regulation will assist enterprises 
in  finding  attractive  destinations  for  setting-up  foreign  affiliates.  This  Regulation 
may therefore help businesses in investment decisions. 

–  on the competitiveness of businesses 

The statistics which will become available via this Regulation will assist enterprises 
who  wish  to  benchmark  their  operations  against  the  industry  average.  This 
Regulation may therefore help to promote the competitiveness of businesses. 

5. 

Does the proposal contain measures to take account of the specific situation of small 
and medium-sized firms (reduced or different requirements etc)? 

Pilot studies have shown that foreign-controlled affiliates are rather big enterprises. 
Thus, small and medium-sized firms are less concerned by the data collection. 

CONSULTATION 

6. 

List the organisations which have been consulted about the proposal and outline their 
main views. 

The  National  Statistical  Offices,  the  National  Central  Banks  and  other  competent 
national  authorities  responsible  for  data  collections  have  been  consulted  on  many 
occasions during the preparation of this text. A draft of a legal act was first presented 
to a FATS Task Force in September 2002 and was then presented and discussed at 
the meetings of the FATS Joint Working Group in January 2003, where both groups 
of  data  providers,  National  Statistical  Institutes  and  Central  Banks,  were  present. 
Based  on  the  discussions  in  this  working  group  meeting,  a  revised  version  was 
drafted  and sent for  written  consultation to the FATS contacts in March 2003. The 
draft proposal was amended on the basis of written consultation and a revised version 

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was presented to the BSDG and the CMFB in June 2003. There was general support 
in both groups for the regulation. The draft Regulation was discussed at the meeting 
of the SPC on 17 September 2003. Several delegations supported the proposal. The 
main  areas  of  concern  for  some  delegations  were  especially  outward  FATS, 
exchange  of  individual  data  and  the  level  of  detail  requested.  A  series  of 
consultations  with  Member  States  were  conducted;  specifically,  discussions  in  the 
SBS Steering Group in November 2003 and in the CMFB in January 2004 and three 
written  consultations  of  the  members  of  the  FATS  Joint  Working  Group  in 
November  2003,  January  and  March  2004  and  one  written  consultation.  These 
resulted in revisions of the act, and finally the agreed text of the present proposal. In 
particular, the article on exchange of individual data has been deleted, outward FATS 
are  now  planned  as  pilot  studies  and  the  level  of  detail  of  inward  FATS  has  been 
reduced.  The  draft  Regulation  was  presented  to  the  SPC  for  opinion  in  May  2004. 
The members of the SPC generally supported the proposal.  

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