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1993 SNA Update Information - Country comments for issue:
Illegal and underground activities

Issue description
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Since the publication of the 1993 SNA, the handbook Measuring the Non-observed Economy has considered in detail and provided recommendations on the recording of illegal activities such as bribery, extortion and money laundering in addition to theft and fencing. The review should consider to what extent the recommendations included in the Handbook on the recording of production and redistribution of income from such activities should be included in the updated SNA.
Country comments
Number of country comments for selected issue:36
  Date postedSourceComment
 27/11/2006AustraliaWe agree with the recommendations made by AEG
 11/10/2006ArmeniaThe National Statistical Service of the Republic of Armenia agrees with the most recent AEG recommendations.
 10/10/2006SwedenAgreement with proposal
 29/09/2006Bank of KoreaWe agree with the recommendations of the AEG.
 15/09/2006United KingdomWe agree with all the recommendations made by the AEG.
 15/09/2006LatviaAfter deep discussions and expert consultations we basically support the 1993 SNA Update Issues.
 12/09/2006Central Bank of Western African States m4bceao33;
 25/08/2006Central Bank of EcuadorRespecto a este tema, el Ecuador no ha realizado estudios de impacto de las actividades ilegales, es un tema que se debe profundizar en las investigaciones de la economía nacional.
 21/08/2006Central Bank of El SalvadorSe debe clarificar y discutir más sobre estos puntos. El soborno y robo no son transacciones por lo tanto, son difíciles de contabilizar.

These points need to be clarified and discussed further. Because bribery and theft are not transactions, it is difficult for them to be reflected in the accounts.
 18/08/2006NetherlandsWe do not agree with the AEG-recommendation to treat bribery different from the recording as recommended in the Handbook on the Non-observed Economy. In our opinion, bribery should be registered as part of output and value added in the case of market production, and, if the bribery is accepted as a standard prac-tice, also in the case of non-market production. Although bribery may be disput-able from a more moralistic point of view, in economic practice it is part of the price actually paid (and mutually agreed upon) for the service provided.
 18/08/2006ItalyWe agree with the proposal of incorporating some examples on illegal activities in the new SNA as the NOE Handbook does, with the exception of extortion which doesn’t respect the mutual consent.
Theft and resale of stolen goods should be considered if relevant in the country. Sale of stolen goods (fencing) should be recorded similar to the recording of sales of second-hand goods – that is, recording the value added and trade margins of distribution activities.
 18/08/2006USAWe agree with the recommendations of the AEG not to treat theft as a transaction and not to treat bribery as compensation of employees.
 02/08/2006European Central BankThe ECB generally supports the recommendations made by the AEG.
 01/08/2006National Bank/ National Bureau for Statistics MoldovaGiving the fact that illegal and underground activities are often difficult to be separately identified, and also that it is very difficult to obtain reliable information on these transactions, we welcome providing an extensive guidance of their treatment accompanied by description of best county practices.
 01/08/2006Reserve Bank of South AfricaWe carefully worked through all the issues and would like to give our general support to the recommendations made by the AEG.
 01/08/2006Central Bank of TurkmenistanB Руководстве по измерению ненаблюдаемой экономики воровствo к взятки рекомендуется включать в производство продукции. Однако воровство и взятки носят перераспределителыный характер и не входят в границы сферы пpoизвoдcтвa, поэтому их нe следовало бы учитывать в объемах ВВП и добавленной стоимости.
B Системе национальных счетов 1993 года нет четких указаний по оценке некоторых видов услуг в постоянных ценах, особенно нерыночных (услуги по финансовому посредничеству, услуги здравоохранения, образования, государственного управления и обороны). В обновленной СНС рекомендуется расширить описание методов оцeнки валового внутреннего продукта в постоянных ценах, в том числе альтернативых.
 31/07/2006IsraelWe agree with the recommendations of the AEG on this issue.
 31/07/2006Macao SARStatistics and Census Service of Macao SAR agrees to the AEG recommendations and has no further comments.
 31/07/2006SpainDesde un punto de vista teórico, el INE está de acuerdo con las recomendaciones del AEG.
Sin embargo, los enormes problemas y dificultades prácticas para estimar estas actividades de una forma precisa, con suficiente calidad y sin riesgos de doble contabilización (en muchos casos no están perfectamente separadas de otras actividades legales), determinan que su inclusión en el núcleo central del Sistema de Cuentas Nacionales debería ser evitada. Asimismo, para una realización más fiable y precisa del equilibrio contable, sería necesario conocer los flujos de tráfico de mercancías y servicios entre países debidos a este tipo de actividades (drogas y estupefacientes, contrabando, etc.).
La no inclusión de este tipo de actividades ilegales en el marco central del Sistema debería extenderse, especialmente, a aquellos ámbitos de uso de los agregados de las cuentas nacionales que tengan objetivos presupuestarios, en los que la comparabilidad entre las estimaciones de los distintos países debe ser un principio fundamental.
 31/07/2006Bosnia and HerzegovinaWe agree with AEG recommendations on the update of the 1993 SNA and do not have any further comments.
 31/07/2006Central Bank of NicaraguaEn términos generales estamos de acuerdo en que las actividades ilegales deben ser incluidas dentro de la frontera de la producción, tal y como lo establece el SCN93 (párrafo 6.30). Sin embargo, el SCN93 debería de ampliar su explicación sobre lo que se considera actividades ilegales y establecer claramente la metodología de cálculo de las mismas.
Consideramos necesario establecer parámetros que permitan delimitar qué son “robos de significativo valor” y cuáles serían los “no significativos”. Por ejemplo un determinado porcentaje del valor del stock de productos terminados o de materias primas, según sea el caso. Asimismo, establecer un parámetro de frecuencia para establecer lo que se considera “recurrente” si son pérdidas cada año, cada trimestre, etc.
Respecto al robo de los servicios de agua y electricidad por parte de los hogares, se debe de considerar no solo el hecho de que éstos sean significativos y recurrentes, sino también el porcentaje de hogares respecto al total, que realizan este tipo de actividad.
En cuanto al registro consideramos que esta partida no forma parte del gasto de consumo final de los hogares porque en estricto rigor los hogares no realizan ningún gasto ni desembolso, en todo caso, formaría parte del consumo final efectivo.
 28/07/2006VietnamWe absolutely agree with the outcomes of AEG in this aspect. The theft should not be treated as a transaction. For instance: we can not consider the value of theft by employee as compensation in kind of employee. Because according to the SNA 93, compensation of employee is a two party transaction (one is employee and another one is employer). If possible, this value may be treated as current transfer in kind.
- However, theft of water and electricity by household may be treated as current transfer in kind.
- I also agree that the sale of stolen good should be treated as sale of second hand good and the value added will be recorded in trade activity.
- We should not go further on the bribery, because in the reality, information on the bribery may be never been captured.
 28/07/2006FranceL’INSEE accueille favorablement les conclusions de la réunion de Francfort.
 28/07/2006National Bank of SlovakiaConcerning the results of the most recent AEG meeting, we fully support the conclusions and recommendations made by the AEG.
 28/07/2006LithuaniaIn general we support the recommendations.
 28/07/2006Bank of PortugalBanco de Portugal would like to express general support for the recommendations made in the Frankfurt meeting of the Advisory Expert Group on National Accounts (AEG).
 28/07/2006Bank of PolandPlease find our general support for the AEG recommendations made during its recent meeting in Frankfurt.
 27/07/2006Bank of Sierra LeoneWe agree with the recommendations made by the AEG.
 27/07/2006EgyptIllegal criminal activities practically are very different to estimate. They may represent a significant part of the economy. The problems of duplication may affect GDP estimates.
 25/07/2006Bank of ItalyWe broadly support the conclusions.
 24/07/2006GermanyFirst of all we have the pleasure to agree with the above mentiond recommendations of the AEG.
In addition we would like to comment on illegal-criminal activities, which in many countries represent only a small share of the total economic activities. Consequently, in most countries the impact of illegal-criminal activities on the GDP-level and particularly on the GDP-growth rate is of minor importance. In addition, the measurement problems are enor-mous. For instance, a particular feature of illegal-criminal activities is to disguise them as legal activity. This feature creates a high risk of double-counting when adding estimates on illegal-criminal activities to the existing accounts.
We would like to propose that these considerations are explicitly mentioned in the future SNA-93rev1 by giving a more precise wording:
a) Please add at the end of par. 6.32:
“Estimates on the value added from illegal productive activities may be added, if these activities - after correction for double-counting - represent a significant share of the economy.”
b) In addition, the double counting problem could be highlighted a little bit by adding at the end of par. 6.31:
“On the other hand, double-counting has to be avoided when increasing value added due to illegal activities. Such double-counting may occur, firstly because the in-termediate consumption and GFCF relating to the illegal activities is already in-cluded in the accounts, e.g. as private consumption expenditure. In addition, ficti-tious business transactions often are used to disguise the revenue from illegal transactions; these fictitious transactions usually are covered by the existing sta-tistical data.”
We would be grateful, if the proposed amendments could be considered during the ongo-ing update of the SNA-93.
 24/07/2006National Bank of the Republic of AzerbaijanWe have analyzed the “Comment on the recommendations of the most recent Advisory Expert Group on National Accounts (AEG) meeting (January 30 – February 8, 2006) in Frankfurt” within the scope of our responsibilities and I am pleased to inform you that we are in agreement with the AEG recommendations.
 10/07/2006DenmarkAgreement
 03/01/2006CubaLa frontera de producción incluye por definición las producciones informales, ilegales y/o subterráneas aunque violen las normas vigentes; muchas de las actividades ocultas pueden medirse mediante el fluir de bienes, encuestas e investigaciones específicas, por lo que apoyamos la propuesta de la subsectorización en formal e informal para aquellas economías que así lo requieran de tal forma que puedan lograr sus equilibrios.
 29/11/2005CambodiaIllegal activities are very difficult in gathering information and data sources such tax evasion, smuggling, faking to produce the products and etc. So far such illegal activity should not be estimated to include the GDP estimates of a country.
 06/05/2005VietnamAccording to the rule and regulations of Vietnam statistics, illegal activities such as sale of drug, prostitution, gambling are excluded from production concepts, so it is not allowed to include in GDP and actually, illegal activities are very difficult to collect information.
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