REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of Regulation (EC) No 716/2007 of the European Parliament and of the Council of 20 June 2007 on Community statistics on the structure and activity of foreign affiliates
Date: 2012-05-31
Institutions: European Commission
Subjects: EU statistics, disclosure of information, economic statistics, financial statistics, foreign enterprise, subsidiary

EUROPEAN COMMISSION 

Brussels, 31.5.2012  
COM(2012) 249 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the implementation of Regulation (EC) No 716/2007 of the European Parliament and 
of the Council of 20 June 2007 on Community statistics on the structure and activity of 
foreign affiliates 

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REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the implementation of Regulation (EC) No 716/2007 of the European Parliament and 
of the Council of 20 June 2007 on Community statistics on the structure and activity of 
foreign affiliates 

1. 

INTRODUCTION 

The main objective of Regulation (EC) No 716/2007 of the European Parliament and of the 
Council  on  Community  statistics  concerning  the  structure  and  activity  of  foreign  affiliates 
(FATS Regulation) is to establish a common framework and statistical quality standards for 
the systematic production of comparable statistics on foreign affiliates. 

Article 12 of Regulation (EC) No 716/2007 states that the Commission shall submit a report 
to  the  European  Parliament  and  the  Council on  the  implementation  of  the  Regulation  by 19 
July 2012. The report is to be prepared by Eurostat and shall, in particular: 

(1) 

(2) 

(3) 

(4) 

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; 

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

Article  2  of  the  FATS  Regulation  provides  definitions  of  the  statistics  on  foreign  affiliates 
where  Inward  statistics  on  foreign  affiliates  (inward  FATS)  shall  mean  statistics  describing 
the activity of foreign affiliates resident in the compiling economy1 and Outward statistics on 
foreign  affiliates  (outward  FATS)  shall  mean  statistics  describing  the  activity  of  foreign 
affiliates abroad controlled by the compiling economy2. 

In accordance with Article 7 of Regulation (EC) No 716/2007, which contains a requirement 
to  ‘publish  a  recommendations  manual  which  contains  the  relevant  definitions  and 
supplementary  guidance  concerning  the  Community  statistics  produced  pursuant  to  this 
Regulation’,  the  first  edition  of  the  Foreign  Affiliates  Statistics  Recommendations  Manual 
(FATS  Recommendations  Manual)  was  published  in  2007  and  has  since  then  been  revised 
twice  by  Eurostat,  in  cooperation  with  Member  States’  experts3.  It  aims  at  laying  down  the 
methodology and guidelines for the collection and compilation of inward and outward foreign 
affiliates statistics in the European Union (EU). 

1 
2 
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Article 2 (f) of Regulation (EC) No 716/2007. 
Article 2 (g) of Regulation (EC) No 716/2007. 
To be found here: http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-AR-09-014/EN/KS-AR-09-
014-EN.PDF . 

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The  definition  of  ‘foreign  affiliate’  in  Article  2  of  Regulation  (EC)  No 716/2007  uses  three 
terms, namely: control, institutional unit, and residency. As these terms are of a very general 
nature, they needed to be further defined to ensure harmonised data compilation. The FATS 
Recommendations Manual contains a more specific definition of these terms and explains the 
‘ultimate controlling institutional unit’ (UCI) concept to be applied by the National Statistical 
Authorities when compiling the FATS statistics: 

Ultimate  controlling  institutional  unit  of  a  foreign  affiliate  shall  mean  the  institutional  unit, 
moving  up  a  foreign  affiliate’s  chain  of  control,  which  is  not  controlled  by  another 
institutional unit. 

EU Member States have to provide Eurostat with the information required under Regulation 
(EC)  No  716/2007,  its  implementing  and  amending  Commission  Regulations  and  the 
guidelines of the FATS Recommendations Manual. 

This  report  examines  the  most  important  aspects  of  the  implementation  of  Regulation  (EC) 
No 716/2007, as reported by Member States, and the measures taken by the Commission to 
ensure high-quality European statistics on the activities of foreign affiliates. 

2. 

IMPLEMENTING MEASURES 

The FATS Regulation lays down the common framework for compilation of FATS statistics. 
However, in order to produce comparable data harmonised between Member States, as well as 
to  reduce  the  risk  of  errors  in  data  transmission,  it  was  necessary  to  specify  the  technical 
format of data and the transmission procedure to be followed. In addition, derogations had to 
be granted to some Member States to allow them to perform the necessary adaptations to their 
national  statistical  systems.  Following  adoption  of  the  Regulation  on  the  revised  statistical 
classification  of  economic  activities  NACE  Revision  24,  it  was  necessary  to  also  adapt  the 
activity breakdown levels for FATS. 

To capture all those changes, the following amending Regulations have been adopted: 

(5) 

(6) 

(1) 

Commission Regulation (EC) No 364/2008 of 23 April 2008 implementing Regulation 
(EC)  No 716/2007  of  the  European  Parliament  and  of  the  Council,  as  regards  the 
technical format for the transmission of foreign affiliates statistics and the derogations 
to be granted to Member States; 

Commission  Regulation  (EC)  No 747/2008  of  30 July  2008  amending  Regulation 
(EC)  No 716/2007  of  the  European  Parliament  and  of  the  Council  on  Community 
statistics on the structure and activity of foreign affiliates, as regards the definitions of 
characteristics and the implementation of NACE Rev. 2 ; 

Commission  Regulation  (EC)  No  834/2009  of  11  September  2009  implementing 
Regulation  (EC)  No  716/2007  of  the  European  Parliament  and  of  the  Council  on 
Community statistics on the structure and activity of foreign affiliates, as regards the 
quality reports. 

4 

Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006. 

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Eurostat has also issued the aforementioned Recommendations Manual (undergoing revision 
at the time of writing this report), containing precise definitions and instructions to Member 
States on how to compile the data. 

3. 

MAIN DATA SETS CONCERNED 

Foreign affiliates statistics (FATS) are essential for an adequate assessment of the impact of 
foreign-controlled  enterprises  on  the  European  Union  economy.  FATS  also  facilitate  the 
monitoring  of  the  effectiveness  of  the  internal  market  and  the  gradual  integration  of 
economies  in  the  context  of  globalisation.  Annex  I,  Section  2  of  Regulation  (EC)  716/2007 
lays down the number of characteristics to be compiled: 

Inward FATS: 

The 11 main characteristics (variables) covered by the inward FATS statistics are: 

•  ‘Business-demography’ variables (e.g. Number of enterprises); 
•  ‘Output-related’ variables (e.g. Turnover, Value added at factor costs); 
•  ‘Input-related’ variables: labour input (e.g. Number of persons employed, Personnel costs); 

goods and services input (e.g. Total purchases of goods and services) 

Outward FATS: 

Data are to be provided for 3 mandatory and 8 voluntary variables. The mandatory variables 
are: 

•  ‘Business-demography’ variable - Number of enterprises; 
•  ‘Output-related’ variable - Turnover; 
•  ‘Input-related’ variable: labour input - Number of persons employed; 

The list of voluntary variables is set out in detail in the FATS Recommendations Manual. 

Variables  should  be  provided  broken  down  by  the  country  in  which  the  foreign  affiliate  is 
located and the activity it undertakes, as specified in Annex III of the FATS Regulation. 

4. 

QUALITY OF THE STATISTICS PRODUCED 

Member  States  are  required  to  supply  the  Commission  with  an  annual  quality  report  to  be 
used to assess the quality of the data transmitted to Eurostat5.  

Eurostat  and  National  Statistical  Authorities  work  closely  together  in  order  to  ensure  the 
timeliness, accuracy, reliability and coherence of the FATS statistics. Furthermore, the FATS 
Recommendations Manual, which is the reference document for technical details, ensures that 
the  comparability  of  data 
is  further  enhanced  and  reflects  recent  methodological 
developments. 

The following analysis refers to the results of the latest available quality reports on FATS data 
for the reference year 2009, for which the full data set should be available for the first time, 

5 

Article 6(2) of Regulation (EC) No 716/2007 

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covering  all  27  Member  States.  It  can  be  deduced  that  not  all  Member  States  are  in  full 
compliance with the legislation concerning FATS: 

Quality aspects 

Timeliness 

Coverage 

Accuracy 

Coherence 

Inward FATS 

Outward FATS 

21 out of 27 

81 % 

Acceptable 

25 out of 27 

23 out of 27 

94 % 

Acceptable 

20 out of 27 

- 2 Member States produce 
inward FATS independently of 
SBS (see chapter 4.7.)  

- matching classification codes for 
FDI (see chapter 4.7.) and FATS to 
be introduced by 7 Member States 

Comparability 
across countries 

27 out of 27 

26 out of 27 

(UCI  concept  is  not  applied  by 
Greece  at  the  time  of  writing  this 
report) 

4.1. 

Timeliness  

The deadlines are set out in Section 5 of Annexes I and II of Regulation (EC) No 716/2007 
and further specified in the FATS Recommendations Manual 2009. The deadlines for sending 
inward FATS and outward FATS data to Eurostat are expressed in months after the end of the 
reference year: 

t+20 

Compliance  with  the  reporting  deadline  for  the  reference  year  2009  can  be  summarised  as 
follows: 

•  21 countries delivered their inward FATS data sets on time; 

•  23 countries delivered their outward FATS data sets on time; 

Derogations  from  the  provisions  of  the  FATS  Regulation  were  granted  to  some  Member 
States  to  allow  them  to  make  the  necessary  adaptations  to  their  national  statistical  systems. 
This  relates  in  particular  to  the  development  of  new  statistical  registers  and  the  methods  of 
data  collection.  For  outward  FATS,  a  complete  derogation  was  granted  to  France, 
Luxembourg, Spain, the United Kingdom and Norway for the reference years 2007 and 2008. 
Moreover, Luxembourg was granted a complete derogation for the reference years 2007 and 
2008 as regards the provision of inward FATS data. 

In summary, compliance with the reporting deadline for 2009 was satisfactory and punctuality 
has  improved  compared  to  data  submission  for  the  reference  year  2007,  when  for  inward 
FATS  only  18  countries,  and  for  outward  FATS  only  16  countries  delivered  data  by  the 
deadline set. A compliance-monitoring routine has been established and Eurostat is working 
together with those Member States which do not yet fully comply with the deadlines.  

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4.2. 

Accessibility of the released FATS data 

All  FATS  data,  as  well  as  comprehensive,  targeted  and  detailed  explanations  of 
methodological issues (metadata), are available free of charge on Eurostat’s website under the 
theme  ‘Industry,  trade  and  services’6  or  via  the  search  function.  FATS  statistics  are  also 
published  at  national  level,  in  the  National  Statistical  Authorities’  spheres  of  responsibility, 
which further increases the accessibility of data. 

The database ‘FATS — foreign affiliates statistics’ provides detailed information on statistical 
processes,  legal  questions,  confidentiality  rules  and  descriptions  of  national  data  collection 
methods7.  Concise  explanations  of  statistical  concepts  are  published  in  a  new  wiki-style 
online dictionary and as answers to ‘Frequently asked questions’. EU aggregates for definitive 
2009  inward  and  outward  FATS  data  will  be  calculated  on  the  basis  of  the  available  data 
provided by Member States and, in the case of missing data, on the basis of estimates. Non-
confidential  EU  aggregates  will  be  released  on  Eurostat’s  website  in  2012  and  can  be 
downloaded free of charge. 

4.3. 

Coverage of data sent to Eurostat  

Data coverage is measured as the number of data values provided as a proportion of the total 
number of values requested. 

The  delivery  of  complete  data  sets  is  crucial  for  the  production  of  EU  aggregates.  Missing 
data limit the interpretation and the informative value of FATS statistics. 

In  the  first  reporting  round  for  the  reference  year  2007,  3  EU  Member  States  were  able  to 
provide complete data sets on inward FATS, and 13 Member States on outward FATS. 

For  the  reference  year  2009,  the  completeness  of  data  improved  considerably.  For  outward 
FATS,  the  share  of  missing  values  fell  from  21 %  to  6 %  as  missing  data  were  reported  by 
only 5 countries, whereas 22 Member States provided complete data sets. For inward FATS, 
the overall share of missing data declined from 47 % in 2007 to 19% in 2009 as 9 EU Member 
States provided 100 % of the requested data. 

Table 2: Coverage and data confidentiality, inward and outward FATS, 2009, in % 

Countries8 

Large countries 
Medium countries 
Small countries  
ALL 

Total cells sent as % of cells 
required by FATS Regulation 

inward FATS 
85 
78 
84 
81 

outward FATS 
96 
87 
100 
94 

Proportion of cells sent that 
are confidential (%) 
inward FATS  outward FATS

26 
14 
18 
17 

14 
21 
20 
20 

6 
7

8 

http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home . 

http://circa.europa.eu/Members/irc/dsis/foreignaffiliatesstatistics/library?l=/public&vm=detaile

d&sb=Title . 
CETO  flags  is  grouping  of  countries  according  to  Regulation  (EC)  No  295/2008  of  the  European 
Parliament and of the Council of 11 March 2008 concerning structural business statistics: 

Large countries: DE, FR, IT, UK 
Medium countries: BE, DK, ES, GR, IE, NL, AT, PL, PT, FI, SE, NO 
Small countries: BG, CZ, EE, CY, LV, LT, LU HU, MT, RO, SI, SK 

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4.4. 

Confidentiality  

There is a link between the percentage of confidential data and the relevance of the statistics. 
If a high percentage of the data is confidential, the statistics will not sufficiently meet users’ 
needs.  The  extent  to  which  confidentiality  has  reduced  data  availability  for  inward  and 
outward FATS is presented in Table 2 above. The overall confidentiality rates are 17 % and 
20 %, respectively. 

4.5. 

Relevance to users 

The FATS data are increasingly used for measuring globalisation aspects and effects. 

An indicator of the relevance of the FATS data to Eurostat’s users is the number of data or 
publications downloaded from Eurostat’s website up to 2011. 

The figures presented in the table below represent the data accessed by users available on the 
Eurostat’s website section on publications during the years 2010 and 2011: 

Table 3: Number of accessed data, 2010 and 2011 

Free downloaded datasets, in total 
Year 2010 
Year 2011 
For 2011, an increase of almost 25 % can be observed, bringing the number of downloads to 
4 512.  This  was  expected  as  it  is  a  new  domain  and  the  interest  shown  by  users  is  steadily 
increasing.  

8 128 
3 616 
4 512 

The  main  users  of  FATS  data  are  the  Commission  (Directorate-General  for  Trade, 
Directorate-General  Internal  Market  and  Services,  Directorate-General  Enterprise  and 
Industry), international organisations (OECD, WTO, UN), ministries, chambers of commerce, 
trade unions, journalists, researchers, embassies, federations, business-promotion entities, etc. 

4.6. 

Accuracy  

Accuracy is checked by identifying any deviations from the FATS Regulation and the FATS 
Recommendations Manual, as well as by undertaking regular quality-validation checks. 

4.6.1.  Misclassification  

Misclassification  refers  to  allocating  statistical  units  to  the  wrong  class  in  a  given 
classification, for instance classifying a business under trade instead of industry. 

The main issue identified under this heading is the correct coding of the economic activity of 
affiliates.  This  information  may  be  missing,  ambiguous  or  wrong  and  cross-checking  with 
business registers may not be possible. Plausibility checks are implemented to detect wrong 
codes. 

For  outward  FATS,  under-coverage  of  reporting  units  is  another  issue  to  be  addressed.  The 
primary  reason  for  under-coverage  comprises  the  size  thresholds  applied  by  some  Member 
States. Another reason is the legal or real impossibility of surveying natural persons. Finally, 
the time lag between the creation of a new enterprise group and its appearance in the available 
registers and other databases may cause exclusion of this reporting unit from the population 
frame. 

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4.6.2.  Non-response  

Unit  non-response  occurs  when  not  all  the  reporting  units  in  the  sample  participate  in  the 
survey. 

Almost all Member States underlined that large enterprises, which contribute to a large extent 
to the final results, are in general much better motivated to respond to the survey than smaller 
enterprises. Therefore, even if the non-weighted non-response rate may in some cases be high, 
the actual missing part in the statistics is far less significant. 

Several methods of reducing  non-response were  applied. Most of the countries used written 
and/or  telephone  reminders  to  non-respondents.  Legal  measures  (e.g.  fines)  are  available  to 
those  data  compilers  that  have  a  legal  basis  for  the  survey  and  where  completing  the 
questionnaire  is  compulsory.  However,  such  measures  are  considered  only  the  last  resort, 
since good contacts to businesses are important for all future data requests, including for other 
statistical domains. 

4.7. 

Coherence and comparability 

4.7.1.  Coherence 

Coherence  of  two  or  more  statistical  outputs  refers  to  the  degree  to  which  the  statistical 
processes by which they were generated used the same concepts - classifications, definitions, 
target populations, and harmonised methods9. 

The target population is the conceptual population of units at which the survey is aimed and 
for which statistics should be produced. In the context of outward FATS, there is a difference 
between the target population of statistical units (on which data are collected) and the target 
population  of  reporting  units  (from  which  data  are  collected).  For  inward  FATS,  the 
population of statistical units is in most cases equal to the population of reporting units. 

Structural  Business  Statistics  (SBS),  Foreign  Direct  Investment  (FDI)  and  Research  and 
Development  (R&D)  statistics  measure  elements  of  the  same  phenomenon  as  FATS  —  the 
internationalisation  of  businesses  —  and  are  closely-related  statistical  domains.  This 
similarity in substance is also expressed in compilation practice and data are often compiled 
using  the  same  survey.  Therefore,  it  is  important  that  results  do  not  diverge  too  much  from 
each other. 

Inward FATS 

As  the  definitions  for  economic  characteristics  and  activity  breakdown  for  inward  FATS 
population are consistent with the Structural Business Statistics (SBS) population (Regulation 
No 716/2007, Annex I, Section 2), the data should also be consistent. 

Inward FATS, as a subset of SBS statistics, should use all data available in SBS. However, 2 
countries produce inward FATS independently of SBS and populations cannot be compared. 
In 3 countries, the inward FATS population is smaller than the relevant part of the SBS survey 
population,  and  6  countries  confirmed  that  the  inward  FATS  population  has  been  extended 
beyond the relevant part of the SBS survey population. The fact that the populations are not 

9 

p. 42 of the FATS Recommendation Manual, version 2009. 

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fully  consistent  does  not  necessarily  mean  that  the  data  are  not  coherent.  On  the  contrary, 
adjusting the SBS population to serve the purposes of FATS should improve the data quality. 

Outward FATS 

For outward FATS, in most cases the yearly Foreign Direct Investments (FDI) stock survey or 
a  specific  FATS  survey  is  used  as  a  starting  point.  Data  is  collected  by  surveying  resident 
enterprises. The  data  collection  is  usually  based  on  census  surveys.  Most  of  the  countries 
confirmed  that  they  had  used  the  same  non-resident  activity  codes  for  both  foreign  direct 
investment  stocks  abroad  and  for  outward  FATS;  7  countries  replied  that  they  had  applied 
different codes.  

4.7.2.  Comparability 

a) Comparability across countries 

The  thorough  data  analysis  by  Eurostat  ensures a continuous improvement of comparability 
across countries. With common definitions and classifications in place, the comparability of 
data across countries is fairly high. 

Differences  between  countries  become  more  and  more  explainable.  Some  problems  remain 
since one country has not used the UCI concept. This does, however, not significantly affect 
the quality of the total aggregates. From the reference year  2010 onwards, the  UCI concept 
will have been applied in all EU Member States. 

b) Comparability over time 

Inconsistencies  over  time  occur  when  data  collected  for  a  specific  reference  period  are  not 
fully compatible with the data of the following periods due to a number of peculiarities in a 
certain time period. In such cases one speaks of a break in the time series. 

Inward FATS 

For the reference years up until 2006, data are available only for countries that sent them on a 
voluntary  basis.  Starting  with  the  reference  year  2007,  data  collection  has  been  mandatory. 
Furthermore, some countries started to apply the agreed common methodology, including the 
UCI concept. This important change in methodology resulted in a structural break in data for 
all countries. 

Another structural break came with the data for 2008, the first reference year for which data 
was compiled according to the revised activity classification (Regulation (EC) No 1893/2006 
that  establishes  the  statistical  classification  of  economic  activities  NACE  Revision  2).  As  a 
consequence, the 2008 inward FATS data cannot be directly compared with earlier reference 
years. 

For this reason, a separate table for Inward FATS was created in Eurostat’s online database as 
from  the  reference  year  2008.  Direct  comparison  is  possible  only  on  the  total  activity  level 
and for NACE sections and divisions where there were no changes. 

Outward FATS 

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In outward FATS, some countries voluntarily compiled data series starting from 2004. For the 
reference  year  2007,  outward  FATS  data  compilation  and  transmission  became  obligatory. 
The  implementation  of  the  FATS  Regulation  resulted  in  a  structural  break  in  the  available 
time series, mainly due to the introduction of an important methodological change — the UCI 
concept.  This  is  also  the  main  explanation  why  data  before  2007  and  the  data  from  2007 
onwards cannot be compared for most of the countries. In order to reflect this fact, outward 
FATS data in Eurostat’s online database are split into separate tables containing data before 
and after 2007. 

As regards the implementation of Regulation (EC) No 1893/2006 establishing the statistical 
classification of economic activities NACE Revision 2, Member States have to apply the new 
activity classification from the reference year 2010 for outward FATS data. This will result in 
another structural break from 2010 onwards. 

In summary, the quality of data submitted by Member States shows widespread compliance 
and constant improvement over previous years. The methodological framework established by 
the  Regulation  is  constantly  being  developed  through  mutual  consultations  and  dedicated, 
thematically-focused  meetings.  Eurostat  also  works  together  with  other  international 
organisations in order to increase the comparability of data and methods beyond the European 
Union. 

5. 

COSTS AND BURDEN OF FOREIGN AFFILIATES STATISTICS 

Most  Member  States  do  not  measure  the  burden  in  quantitative  terms  and  can  therefore 
provide  only  qualitative  assessments.  Therefore,  any  estimation  of  the  costs  involved  in  the 
collection and dissemination of foreign affiliates statistics is not easily quantifiable. There is a 
wide range of FATS data sources that are also used for the production of other statistics, or 
linked to reporting by financial institutions and enterprises to regulatory authorities. Hence, it 
is difficult to separate the specific costs of collecting and producing the foreign affiliates’ data 
from  the  total  cost  incurred  for  collecting  data  often  used  for  other  purposes.  Moreover,  in 
certain  Member  States,  data  may  be  collected  by  two  different  institutions,  i.e.  the  national 
central  bank  and  the  national  statistical  office,  rendering  reliable  estimates  even  more 
complicated. 

Inward FATS 

The  largest  part  of  the  labour  input  and  respondent  burden  required  for  the  production  of 
inward FATS statistics can be attributed to the resources required for the production of a large 
set  of  statistics  related  to  Structural  Business  Statistics  (Regulation  (EC)  No  295/2008 
concerning structural business statistics). Looking at the summary of the estimates provided 
by Member States, it can be concluded that extra activities related to the implementation of 
Regulation (EC) No 716/2007 for inward FATS necessitated only a rather modest additional 
labour input. 

Outward FATS 

Foreign Direct Investment (FDI) and outward FATS are closely related statistical domains as 
both measure elements of the internationalisation of businesses. This similarity in substance is 
also expressed in compilation practice and FATS data are often compiled with the help of the 
same FDI survey. Therefore, it is difficult to determine the additional costs attributed to the 
production of the outward FATS statistics. 

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Nevertheless, a survey on cost-effectiveness was undertaken in 2007 and results show that a 
large majority of Member States can produce outward FATS at low or medium cost. 

For both inward and outward FATS, National Statistical Authorities confirmed that they were 
going to introduce some measures at national level in order to reduce the burden, in particular 
by  using  administrative  data  to  a  larger  extent,  by  organising  web  data  collections  and  by 
improving the existing electronic questionnaires.  

6. 

PROGRESS AND IMPLEMENTATION OF PILOT STUDIES 

Pilot studies for inward and outward FATS are called for in Article 5 of Regulation (EC) No 
716/2007 in order to assess the relevance and feasibility of collecting additional variables. 

Paragraph  4  of  this  Article  indicates  that  the  pilot  studies  are  the  basis  for  any  further 
decisions on implementing measures, including decisions on the scope of data compilation for 
inward and outward FATS. This reflects the importance attached to the pilot studies for the 
future design of FATS data compilation within the EU. 

The first round of pilot studies was launched in 2006. The second round took place in 2007. 
Participating  countries  tested  the  feasibility  of  implementing  additional  variables  and 
subsequently delivered the compiled data to Eurostat. 

For inward FATS, the collection of data for M, N and O sections as well as for R&D variables 
for NACE Rev.1.1 sections G, H, I, K, M, N and O (and for the corresponding classification 
in the NACE Rev.2) seems feasible with relatively little effort on the part of either enterprises 
or National Statistical Authorities. If the feasibility is confirmed by all Member States and the 
user  needs  are  reconfirmed,  the  inward  FATS  data  collection  will  be  extended  to  regularly 
cover these variables. 

Looking  at  outward  FATS,  at  least  three  of  the  pilot  variables  could  be  called  feasible: 
Personnel costs, Value added at factor costs and Gross investment in tangible goods. A great 
majority  of  participating  Member  States  concluded  that  these  three  variables  could  be 
obtained  quite  easily  from  the  businesses,  as  they  are  directly,  or  almost  directly,  derivable 
from accounting systems. On the other hand, the collection of trade-related variables, which 
are important in the analysis of globalisation, seems to be less feasible, at least for the time 
being. They would be particularly costly and less easy to obtain from those enterprise groups 
which are important to FATS, i.e. the largest groups. 

In conclusion, several pilot studies were implemented by participating Member States. Their 
results  gave  an  insight  into  the  scope  for  compiling  additional  variables  in  inward  and 
outward FATS that were defined as non-mandatory in the FATS Regulation. The Commission 
has reservations about proposing that any of the piloted variables be made mandatory, as this 
seems  to  increase  the  burden  for  National  Statistical  Authorities  and  for  respondents. 
Nevertheless, the Commission confirms the strong demand by users for this information. 

7. 

AREAS FOR POTENTIAL IMPROVEMENTS AND AMENDMENTS 

For  the  near  future,  Eurostat  plans  to  further  improve  the  quality  of  the  FATS  data  by 
developing and harmonising methodology with a view to: 

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- implementing a smooth transition of the NACE Rev. 2 classification for the outward FATS, 
which would lead to better international comparability, 

-  calculating  EU  aggregates  from  the  2009  reference  year  onwards  for  both  inward  and 
outward FATS data. 

In  the  medium  term,  when  compiling  the  FATS  statistics,  Member  States  could  use  the 
EuroGroups  Register  (EGR)  as  a  common  tool.  The  EGR  is  under  development  and  will 
contain data on enterprise groups and their constituent units and characteristics. This makes it 
possible  to  align  the  country  code  of  the  UCI  to  which  the  enterprises  belong  and  will  thus 
enhance the quality of the FATS statistics. 

Eurostat  is  also  currently  working  on  the  Framework  Regulation  Integrating  Business 
Statistics  (FRIBS)  to  establish  a  common  legal  framework  for  the  systematic  collection, 
compilation,  transmission  and  dissemination  of  European  statistics  related  to  the  economic 
activity,  structure  and  performance  of  the  business  sector.  The  FATS  requirements  will  be 
reassessed in the context of FRIBS.  

EN 

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   EN