Document ID: chunk:federal_register_of_legislation:F2017L01026:body:0:p20
Version: federal_register_of_legislation:F2017L01026
Segment Type: other
Provision Reference: 
Character Range: 53898–57016

risk transfer to Japan. In ARF 731.3A, this example will look as follows:

           Immediate risk  Outward risk transfers  Inwards risk transfers  Net risk transfers
Hong Kong  10              10                                              -10
Japan                                              10                      10

Example 2
If in example 1, an Australian resident bank guarantees the claim instead, the claim should be reported as an outward risk transfer from Hong Kong and an inward risk transfer to Australia.

           Immediate risk  Outward risk transfers  Inwards risk transfers  Net risk transfers
Australia                                          10                      10
Hong Kong  10              10                                              -10

Example 3
If in example 1, the manufacturer were resident in Australia, the claim would have to be reported as an outward risk transfer from Australia and an inward risk transfer to Japan.

           Immediate risk  Outward risk transfers  Inwards risk transfers  Net risk transfers
Australia  10              10                                              -10
Japan                                              10                      10

Example 4
If in example 1, the manufacturer were resident in Japan, the claim would have to be reported as an outward risk transfer from the non-financial corporations in Japan and an inward risk transfer to the banking institutions sector in Japan.

       Immediate risk  Outward risk transfers  Inwards risk transfers  Net risk transfers
Japan                  10                      10                      0

As a result, the data in item 5.1 column 2 Claims on an ultimate risk basis should be $10 million higher than the amount in item 2 column 8 Claims on an immediate risk basis by sector. Item 5 column 8 Claims on an ultimate risk basis worksheet should be $10 million lower than the amount in item 2 column 8 for Japan.

Example 5
If in example 4, the loan were granted by a subsidiary of an Australian-owned bank in Hong Kong, the claim would have to be reported as an outward risk transfer from Hong Kong and an inward risk transfer to Japan (remembering that the loan is guaranteed by a bank in Japan).

           Immediate risk  Outward risk transfers  Inwards risk transfers  Net risk transfers
Hong Kong                  10                                              -10
Japan                                              10                      10

As a result, the data in item 5 columns 2 and 7 Claims on an ultimate risk  basis for Japan will be $10 million higher than in item 2 columns 2 or 9 Claims on an immediate risk basis by sector, depending on whether the claim was denominated in Hong Kong dollars or any other currency. In addition, the data in item 5 columns 6 and 9 Claims on an ultimate risk basis for Hong Kong would be $10 million lower than in item 2 columns 6 or 9 Claims on an immediate risk basis by sector.

Example 6
An Australian resident bank makes an AUD 10 million loan to the Wellington branch of a US bank.  The loan should be reported as