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Document 52012DC0249
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
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
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
/* COM/2012/0249 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 /* COM/2012/0249 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 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)
assess the quality of the statistics produced; (2)
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; (3)
assess the progress of the pilot studies and
their implementation; (4)
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 economy[1] and Outward statistics
on foreign affiliates (outward FATS) shall mean statistics describing the
activity of foreign affiliates abroad controlled by the compiling economy[2]. 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’ experts[3]. 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). 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 2[4], 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)
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; (6)
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 ; (1)
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. 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 Eurostat[5]. 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,
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 || Inward FATS || Outward FATS Timeliness || 21 out of 27 || 23 out of 27 Coverage || 81 % || 94 % Accuracy || Acceptable || Acceptable Coherence || 25 out of 27 - 2 Member States produce inward FATS independently of SBS (see chapter 4.7.) || 20 out of 27 - 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. 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 methods[7]. 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 % Countries[8] || Total cells sent as % of cells required by FATS Regulation || Proportion of cells sent that are confidential (%) || inward FATS || outward FATS || inward FATS || outward FATS Large countries || 85 || 96 || 26 || 14 Medium countries || 78 || 87 || 14 || 21 Small countries || 84 || 100 || 18 || 20 ALL || 81 || 94 || 17 || 20 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 || 8 128 Year 2010 || 3 616 Year 2011 || 4 512 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. 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. 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 methods[9]. 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 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 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. 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: - 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. [1] Article 2 (f) of Regulation (EC) No 716/2007. [2] Article 2 (g) of Regulation (EC) No 716/2007. [3] To be found here: http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-AR-09-014/EN/KS-AR-09-014-EN.PDF
. [4] Regulation (EC) No 1893/2006 of the European
Parliament and of the Council of 20 December 2006. [5] Article 6(2) of Regulation (EC) No 716/2007 [6] http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home
. [7] http://circa.europa.eu/Members/irc/dsis/foreignaffiliatesstatistics/library?l=/public&vm=detailed&sb=Title
. [8] 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 [9] p. 42 of the FATS Recommendation Manual, version 2009.