REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of Regulation (EC) No 184/2005 of the European Parliament and of the Council of 12 January 2005 on Community statistics concerning balance of payments, international trade in services and foreign direct investment
Date: 2018-01-26
Institutions: European Commission, Eurostat
Subjects: EU statistics, application of EU law, balance of payments, data collection, direct investment, foreign investment, international trade, service industry, trade statistics

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 26.1.2018 COM(2018) 47 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of Regulation (EC) No 184/2005 of the European Parliament and of the Council of 12 January 2005 on Community statistics concerning balance of payments, international trade in services and foreign direct investment  
 
 
1. 

INTRODUCTION 

The main objective of Regulation (EC) No 184/2005 of the European Parliament and of the 
Council  on  Community  statistics  concerning  balance  of  payments,  international  trade  in 
services  and  foreign  direct  investment  ("the  Regulation")1  is  to  establish  a  common 
framework and statistical quality standards for the systematic production of European Union 
statistics on these subjects. 

Article  12  of  the  Regulation  states  that  the  Commission  must  submit  a  report  on  the 
implementation of the Regulation to the European Parliament and the Council by 28 February 
2018 and every 5 years after that date. The report must: 

(1) 

(2) 

(3) 

evaluate the quality of data on balance of payments, international trade in services and 
foreign direct investment; 

assess  the  benefits  accruing  to  the  European  Union,  its  Member  States  and  the 
providers and users of statistical information from the statistics produced, in relation to 
the costs; 

identify,  in  the  light  of  the  results,  any  areas  that  could  be  improved  and  any 
amendments considered necessary. 

In  accordance  with  that  Article,  this  report  examines  the  principal  aspects  of  the  Member 
States’  implementation  of  Regulation  (EC) No 184/2005  and  the  measures  which  the 
Commission has taken to ensure that EU-level statistics on balance of payments, international 
trade in services and foreign direct investment meet high quality standards. 

2. 

IMPLEMENTING MEASURES 

Since  the  adoption  of  Regulation  (EC)  No 184/2005,  the  Commission  has  adopted  the 
following amending or implementing legal acts: 

(1) 

(2) 

(3) 

(4) 

(5) 

Commission Regulation (EC) No 601/20062; 
Commission Regulation (EC) No 602/20063; 
Commission Regulation (EC) No 1055/20084; 
Commission Regulation (EC) No 707/20095; 
Commission Regulation (EU) No 555/20126; 

1 OJ L 35, 8.2.2005, p. 23. 
2  Commission Regulation  (EC)  No 601/2006  of 18 April 2006  implementing Regulation (EC)  No 184/2005 of 
the European Parliament and of the Council as regards the format and the procedure for the transmission of data 
(OJ L 106, 19.4.2006, p. 7). 
3  Commission  Regulation  (EC)  No 602/2006  of  18 April  2006  adapting  Regulation  (EC)  No 184/2005  of  the 
European Parliament  and  of  the  Council through  the  updating  of  data  requirements  (OJ  L  106, 19.4.2006, p. 
10). 
4 Commission Regulation (EC) No 1055/2008 of 27 October 2008 implementing Regulation (EC) No 184/2005 
of the European Parliament and of the Council, as regards quality criteria and quality reporting for balance of 
payments statistics (OJ L 283, 28.10.2008, p. 3). 
5 Commission Regulation (EC) No 707/2009 of 5 August 2009 amending Regulation (EC) No 184/2005 of the 
European Parliament and of the Council on Community statistics concerning balance of payments, international 
trade 
requirements  
in  services  and 
(OJ L 204, 6.8.2009, p. 3). 

the  update  of  data 

investment,  as 

foreign  direct 

regards 

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These legal acts stipulate: 

the data format required and the procedure that the Member States must follow when 
sending data to Eurostat;  

   when the Member States must deliver new data; and  

the timeline and quality criteria applicable to national quality reports.  

The  sixth  edition  of  the  International  Monetary  Fund’s  Balance  of  Payments  Manual 
(BPM 6), published in 2009, provides a conceptual framework for use by IMF Member States 
when compiling balance of payments and international investment position statistics. It lays 
down  uniform  definitions  and  classifications  designed  to  establish  a  common  basis  for 
collecting  and  compiling  data  on  external  developments  and  to  enable  data  from  different 
countries to be compared. At EU level, the requirements for balance of payments statistics are 
laid down in Regulation (EC) No 555/2012. 

3. 

MAIN DATA SETS CONCERNED 

Balance  of  payments  statistics  provide  comprehensive  information  on  transactions  between 
the reporting economy and the rest of the world. Regulation (EC) No 184/2005 deals with the 
collection of the following five data sets: 

(1) monthly statistics on balance of payments; 

(2) quarterly statistics on balance of payments and international investment position; 

(3) annual statistics on international trade in services; 

(4) foreign direct investment transactions (including income); 

(5) foreign direct investment positions. 

Eurostat  collects data from the Member  States for each of  these  data sets. They are used  to 
produce  EU  aggregates  that  are  published  in  Eurostat’s  online  reference  database,  together 
with the data from individual Member States. 

Monthly  balance  of  payments  data  and  the  first  quarterly  advance  indicators  of  balance  of 
payments derived from monthly estimates are available 7 weeks after the end of the reference 
period. The first estimates of quarterly balance of payments/international investment position 
are released 14 weeks after the end of the reference period. The quarterly balance of payments 
contains  a  much  broader  range  of  information  than  the  monthly  advance  estimates  and  is 
presented  in  greater  detail.  On  the  financial  side,  the  fact  that  the  balance  of  payments 
financial  account,  the  investment  income  and  the  international  investment  position  are 
compiled at the same time and in a consistent fashion improves the quality of their estimates 
and  allows  a  more  comprehensive  analysis  of  cross-border  relationships.  The  quarterly 
balance  of  payments/international 
includes  a  geographical 
breakdown  of  the  main  economic  partners,  notably  the  main  developed  and  emerging 
economies. 

investment  position  also 

6  Commission  Regulation  (EU)  No 555/2012  of  22 June  2012  amending  Regulation  (EC)  No 184/2005  of  the 
European Parliament and of the Council on Community statistics concerning balance of payments, international 
trade  in  services  and  foreign  direct  investment,  as  regards  the  update  of  data  requirements  and  definitions 
(OJ L 166, 27.6.2012, p. 22). 

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Eurostat also published more detailed annual statistics on international trade in services and 
foreign  direct  investment  (FDI).  Annual  FDI  data,  which  draw  on  firms’  annual  financial 
statements, provide more information than quarterly FDI data. This enables more information 
to  be  provided  and  more  comprehensive  quality  checks  to  be  conducted  on  FDI  stocks,  the 
different components of their variations, and FDI income. Annual data on international trade 
in services are broken down into a comprehensive list of service items, with a geographical 
breakdown  of  level  Geo  57.  The  Member  States  supply  data  9  months  after  the  end  of  the 
reference  period,  and  Eurostat  publishes  them  between  2  and  3  months  later.  Annual  FDI 
statistics  include  data  on  flows  and  stocks,  broken  down  by  type  of  instrument,  partner 
country  and  economic  activity.  Member  States  are  also  requested  to  provide  separate  FDI 
statistics  for  resident  special  purpose  entities.  Member  States  send  Eurostat  their  data 
9 months after the end of the reference period and Eurostat publishes the data some 3 months 
later after data validation and processing. 

4. 

QUALITY OF THE STATISTICS PRODUCED 

Under  Article  4(2)  of  Regulation  (EC)  No 184/2005,  Member  States  must  provide  the 
Commission  with  a report on the quality of the data supplied. Moreover, Article 4(4)  states 
that the quality of the data sent to Eurostat is to be assessed on the basis of quality reports, 
with the assistance of the European Statistical System Committee. The analysis below refers 
to  the  results  of  the  latest  available  quality  reports  issued  by  the  Member  States  in  2016. 
Quality  is  assessed  on  the  basis  of  the  main  criteria  defined  by  Regulation  (EC) 
No 1055/2008. 

4.1.  Methodological soundness dimension and statistical procedures 

The methodological soundness dimension and statistical procedures, concepts, definitions and 
practices used to compile statistics on balance of payments, international trade in services and 
foreign direct investment are broadly in line with the principles and guidelines outlined in the 
BPM 6. They take account of the particular rules agreed at EU level on compiling euro area 
and EU aggregates. 

4.2. 

Timeliness und punctuality 

Data  on  monthly  and  quarterly  balance  of  payments,  the  quarterly  international  investment 
position, foreign direct investment and annual statistics on the international trade in services, 
were  provided far  more punctually than for the previous quality report covering 2015. Four 
Member States supplied their data sets before or by the deadline. 

4.3. 

Data availability 

4.3.1.  Completeness 

Data completeness improved slightly compared with the previous quality report, the clearest 
improvements being in the quarterly balance of payments and foreign direct investment. All 
28 Member States complied fully with the monthly and quarterly balance of payments and the 
quarterly  international  investment  position  for  the  reference  months  in  2016.  Data  on 

7  Geographical  breakdown  level  5  includes  the  following  countries  or  group  of  countries  as  laid  down  in 
"Table 6 Geographical breakdown" of Commission Regulation (EU) No 555/2012. 

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international  trade  in  services  were,  on  average,  98 %  complete.  The  average  completeness 
rate for the EU as a whole was estimated at 98 % for FDI flows and 99 % for FDI stocks. 

4.3.2.  Accessibility and clarity 

A  wide  range  of  users  are  interested  in  data  on  the  balance  of  payments,  the  international 
investment position, international trade in services and foreign direct investment. These data 
are  used  extensively  in  EU  policymaking,  in  macroeconomic  analysis  by  business  and 
academic users, and by the general public. 

In  its  public  database,  Eurostat  publishes  monthly  and  quarterly  balance  of  payments, 
quarterly  international  investment  positions  and  revaluations,  annual  statistics  on  the 
international trade in services, and foreign direct investment data. Data are also available on 
national websites, accompanied by the relevant metadata. However, there are some limitations 
arising from national policies on the dissemination of these data. 

The  amount  of  data  made  available  to  final  users  is  satisfactory;  18 Member  States  allow 
100 % of the main items in the quarterly balance of payments to be published. However, some 
countries  continue  to  flag  their  national  data  as  ‘non-publishable’  or  ‘confidential’  to  an 
excessive  extent,  in  some cases  because  of quality reservations.  This  limits the value  of  the 
statistical  information  provided  regularly  to  users.  Moreover,  it  hinders  appropriate  policy 
analysis  based  on  EU-wide  statistics.  Use  of  ‘confidential’  flagging  has  increased  owing  to 
the  finer  level  of  detail,  particularly  in  annual  data,  that  has  followed  EU-wide 
implementation of the BPM 6. 

4.4. 

Accuracy and reliability 

In  the  goods,  services  and  secondary  income  accounts,  relatively  small  revisions  were 
recorded  for  both  the  monthly  and  the  quarterly  balance  of  payments.  There  were  more 
revisions  of  the  primary  income  account  than  in  previous  reporting  periods,  mainly  due  to 
income from direct investment. This is partly because information on direct investment and its 
income components is more complete on an annual basis when companies’ annual financial 
statements  become  available.  Mean  values  of  revisions  were  generally  higher  for  financial 
account  items  than  for  current  account  items,  while  revisions  affecting  main  international 
investment position items were much less significant than for balance of payments. 

4.5. 

Internal consistency 

Overall, consistency with integrity rules is satisfactory. There are almost no discrepancies in 
quarterly and annual data on international trade in services and foreign direct investment. The 
Member  States  have  made  significant  efforts  to  reduce  errors  and  omissions,  resulting  in 
fewer  errors  and  omissions  relating  to  the  current  account  and  the  international  investment 
position. However, substantial errors and omissions remain in some other areas. 

4.6. 

External consistency 

Across  the  EU,  balance  of  payments  data  and  statistics  on  the  international  trade  in  goods 
remain  generally  very  consistent.  Discrepancies  are  usually  explainable  by  methodological 
differences  which  are  justified  according  to  the  methodological  standards  applied.  For  a 

4 

 
 
 
 
number  of  Member  States,  the  current  account  of  the  balance  of  payments  was  entirely  or 
highly consistent with national accounts, while other countries showed disparities between the 
two, sometimes substantial ones. 

4.7. 

Asymmetries 

Asymmetries within the EU remain an issue. Asymmetries in the components of the current 
account  are  fairly  stable  over  time,  but  have  even  increased  slightly  for  direct  investment 
flows. The recently created Eurostat Task Force on Services by Modes of Supply might over 
time  generate  additional  insights  on  the  sectors/Modes  of  Supply  that  generate  errors  and 
inconsistencies. 

5. 

BENEFITS FOR USERS AND RELEVANCE OF BALANCE OF PAYMENTS STATISTICS 

Regulation (EC) No 184/2005 is a response to the needs of data users. 

Balance of payments statistics are used intensively in policymaking by the relevant national 
and  international  institutions,  including  the  Commission,  the  Council,  the  European  Central 
Bank, the IMF, the Bank for International Settlements, the OECD, the G7 and the G20. 

Balance  of  payments  and  international  investment  position  statistics  are  used  in  monetary 
policy. In combination with other indicators, statistics on the exchange of goods and services 
are used to assess the inflationary pressures of external demand on the economies concerned 
and to quantify the contribution made by net exports to gross domestic product. Data on the 
balance  of  payments  and  the  international  investment  position  are  used  to  assess  the 
sustainability  of  the  external  balance  of  national  economies  (both  those  with  their  own 
currency and those belonging to a currency union such as the euro area) and the pressures that 
may be exerted on the exchange rate. Data on the balance of payments and the international 
investment position are used extensively in the Macroeconomic Imbalances Procedure. 

Balance  of  payments  statistics  are  also  included  in  the  convergence  reports  drawn  up  and 
published  by  the  Commission  and  the  European  Central Bank  on  individual  Member  States 
that do not yet participate in the economic and monetary union. 

Articles 143 and 144 of the Treaty on the Functioning of the European Union refer explicitly 
to  the  balance  of  payments.  They  require  the  Commission  to  keep  the  Council  regularly 
informed  of  developments  in  the  balance  of  payments  situation  in  Member  States  not 
participating in the economic and monetary union. 

Current  account  developments  in  individual  Member  States  are  analysed  in  relation  to  each 
country’s competitiveness, while direct and portfolio investment statistics are used to analyse 
Member States’ attractiveness to international investors. 

Balance  of  payments  statistics  should  be  consistent  with  other  key  statistics  collected  in 
related statistical domains with EU relevance, such as: 

(1) gross  domestic  product  (incorporating  cross-border  transactions  in  goods  and  services) 
including flash estimates, for which monthly balance of payments indicators are needed; 

5 

 
 
(2) gross national income (incorporating cross-border transactions in goods and services, and 

income); 

(3) the  rest  of  the  world  account  in  the  EU  and  in  the  euro  area  quarterly  sector  accounts, 

including financial accounts. 

Apart from the main aggregates, specific items have particular relevance for some users: 

   detailed  information  on  international  trade  in  services  published  annually  by  Eurostat  is 

important for trade negotiations and defining customs policies; 

the  geographical  breakdown  of  balance  of  payments  statistics  helps  in  monitoring 
interactions between the Member States and other countries; 

the composition of financial flows and stocks (in terms of direct investment, portfolio and 
other investment) is valuable for assessing financial stability; 

   detailed  information  on  FDI  flows  is  important  to  measure  the  degree  of  openness  of 
certain markets, or to assess the overall profitability of direct investment capital invested. 

The  Balance  of  Payments  Working  Group  acknowledges  that  the  implementation  of 
Regulation  (EC)  No 184/2005  has  triggered  several  improvements  in  balance  of  payments 
statistics. To gauge how this implementation has benefited national data compilers and users, 
the  Working  Group  was  asked  to  allocate  scores  in  the  range  1-5.  A  score  of  1  means  that 
Regulation (EC) No 184/2005 has brought very few benefits, while a score of 5 means it has 
brought maximum benefits. 

-  The  average  score  for  availability  to  data  users  of  more  detailed  data  on  balance  of 

payments, international trade in services and foreign direct investment is 4.0. 

-  The  average  score  for  availability  to  data  users  of  more  timely  and  punctual  data  on 
balance of payments, international trade in services and foreign direct investment is 3.9. 

   The  average  score  for  improved  consistency  between  balance  of  payments  data  and 

national accounts data is 4.0. 

It  was  further  noted  that  the  methodological  changes  and  new  standards  of  the  BPM 6 
introduced in 2014 by Commission Regulation (EU) No 555/2012, together with the increased 
attention  paid  to  international  investment  position  data,  brought  clarity  and  important 
additional  information  to  users  of  statistical  data  involved  in  macroeconomic  policymaking 
and economic research. Another acknowledged benefit is that Regulation (EC) No 184/2005 
has improved the comparability and consistency of the data across Member States. 

6. 

COSTS AND BURDEN OF BALANCE OF PAYMENTS STATISTICS 

National compilers have stated that they use data from primary statistics to compile statistics 
on  balance  of  payments,  international trade  in  services,  and  foreign  direct investment.  They 
draw on a range of sources of primary statistics, including customs data, data from the survey 
on intra-Union trade in goods, data from business registers, tax administration, real estate data 
and  tourism  statistics.  It  is  hard  for  Member  States  to  disentangle  the  specific  costs  of 
collecting  and  producing  the  data  required  by  Regulation  (EC)  No 184/2005  from  the  total 
cost incurred in collecting data for other purposes. 

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The  Balance  of  Payments  Working  Group  estimates  the  direct  labour  input  required  to 
produce and disseminate balance of payments statistics in the EU at approximately 772 full-
time equivalents (based on 24 Member States8). These resources are spread across the various 
balance of payments domains. The data set which absorbs most input is the quarterly balance 
of payments, which takes 48.1 % of resources. This is followed by statistics on the monthly 
balance  of  payments  (20.2 %),  foreign  direct  investment  (16.1 %)  and  international  trade  in 
services (15.7 %). 

The Member States estimate that any savings attributable to the fact that no data were sent to 
Eurostat before the adoption of Regulation (EC) No 184/2005 account for 10.4 % of the full-
time  equivalents.  Balance  of  payments  data  are  needed  for  national  purposes  too,  and  the 
Member States were already collecting them before the Regulation was adopted. This means 
that only limited additional resources are required to comply with its requirements. It should 
also  be  borne  in  mind  that  there  is  a  significant  overlap  between  the  requirements  of 
Regulation (EC) No 184/2005 and requests for data made by other national and international 
organisations,  particularly  the  European  Central  Bank  and  the  IMF.  Data  produced  by 
Member  States 
(EC)  No 184/2005  are 
indistinguishable from those produced in compliance with other data requirements. 

the  specific  purposes  of  Regulation 

for 

Member  States  have  very  little  information  about  the  burden  on  respondents  created  by  the 
need to collect data on balance of payments, international trade in services and foreign direct 
investment, and what they have does not allow any estimates to be made. 

7. 

AREAS FOR POSSIBLE IMPROVEMENTS AND AMENDMENTS 

Article  5(3)  of  Regulation  (EC)  No 184/2005  states  that  by  20 July  2018  the  Commission 
(Eurostat)  is  to  institute  pilot  studies  conducted  by  the  Member  States,  relating  to  annual 
foreign direct investment statistics based on the ultimate ownership concept and foreign direct 
investment  statistics  that  distinguish  greenfield  foreign  direct  investment  transactions  from 
takeovers.  The  purpose  of  these  studies  is  to  establish  the  conditions,  including  the 
methodological  framework,  under  which these  new  data  collections  are to  be introduced; to 
assess their costs and the statistical quality, and to enable Eurostat to compare data collections 
among countries. 

Secondly, by 20 July 2019, the Commission (Eurostat) must draw up a report on the findings 
of  these  studies,  send  it  to  the  European  Parliament  and  the  Council  and,  if  appropriate, 
identify  the  remaining  conditions  to  be  met  to  develop  the  methodology  for  these  data 
collections. 12 months after issuing this report, depending on the assessment of the results of 
the  pilot  studies,  the  Commission  must  make  a  proposal  to  amend  Regulation  (EC) 
No 184/2005 in order to define the methodological and data requirements for annual foreign 
direct  investment  statistics  on  the  ultimate  ownership  concept  and  for  annual  foreign  direct 
investment  statistics  distinguishing  greenfield  foreign  direct  investment  transactions  from 
takeovers. 

8  Eurostat  launched  a  general  consultation  from  6  July  2017  until  4  August  2017  on  the  draft  of  this  Report.  
24 Member States responded to Eurostat's questionnaire. 

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The Balance of Payments Working Group takes the view that the data requirements based on 
Regulation  (EC)  No 184/2008  should  preferably  remain  stable  over  a  reasonable  period  of 
time  so  that  the  remaining  quality  issues  can  be  tackled  and  the  quality  of  the  statistics 
improved  further.  The  outstanding  quality  issues  are  those  referred  to  in  the  annual  quality 
reports  on  balance  of  payments,  international  investment  position,  international  trade  in 
services and foreign direct investment statistics (available on the Eurostat website). 

The  Working  Group  also  prioritises  quarterly  balance  of  payments  statistics  over  monthly 
data.  The  quarterly  balance  of  payments  provides  finer  detail  and  higher  quality  (e.g. 
international  trade  in  services,  foreign  direct  investment  equity,  investment  income, 
compensation  of  employees)  than  monthly  balance  of  payments  statistics.  The  Working 
Group  therefore  would  prefer  that  monthly  data  requirements  be  simplified,  if  this  is 
considered appropriate. 

8. 

CONCLUSIONS 

Regulation (EC) No 184/2005 has helped to further harmonise EU-wide statistics on balance 
of  payments,  international  investment  position,  international  trade  in  services  and  foreign 
direct investment. It has also helped ensure that data are available at the appropriate time and 
that users have access to more detailed data. Data quality is closely monitored on the basis of 
quality  criteria  which  are  harmonised  across  the  various  statistical  domains  concerned.  This 
has  helped  to  improve  the  consistency  of  quality  assessment  between  the  various  statistical 
areas. 

The  findings  of  this  report  will  be  considered  when  the  Commission,  where  appropriate, 
makes a proposal for amendments of Regulation (EC) No 184/2005 as referred to in point 7 
above. 

If  requirements  in  some  areas  were  to  be  made  more  stringent,  data  requirements  in  other 
areas  or  on  other  aspects  could  be  simplified  in  order  to  avoid  cost  increases.  This  applies 
particularly to monthly data requirements. 

8