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1993 SNA Update Information - Country comments for issue:
Predominant center of economic interest (as term)

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With globalization, there are an increasing number of institutional units with connections to two or more economies. The concept of “predominant” center of economic interest has been put forward to address this issue.
Country comments
Number of country comments for selected issue:61
  Date postedSourceComment
 10/10/2006SwedenAgreement with proposal
 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.
 28/07/2006LithuaniaIn general we support the recommendations.
 25/07/2006Central Bank of Costa RicaThe Central Bank of Costa Rica recognizes the need to harmonize the definition of residence in the different statistics as far as this doesn’t bring substantial consequences for the compilation of the balance of payments and the national accounts.  We agree with the adoption of the term “predominant centre of economic interest” as long as it is complemented with the one-year criterion to define residence with the existing exceptions of students and patients.  
 09/06/2006National Bank of GeorgiaThe decision to adopt "predomonant centre of economic interest" as a term is very welcome. However, it will be very important to clarify what the "predominant center" means, if dwelling, place of production or other premises of the institutional unit are located within of different countries.
 03/01/2006CubaDeben armonizarse los manuales de estadísticas internacionales en la cobertura de la residencia. El Manual de Estadísticas del Comercio Internacional de Servicios de la OMC posibilita extender el concepto de residencia, no solo por el tiempo sino también en el concepto de centro de interés, etc., introduce términos como régimen temporal de trabajo que habitualmente comprende de 2 a 5 años, plantea el concepto de trabajo no permanente en el país del consumidor, reconoce el modo de comercio internacional de servicios denominado modo 3 presencia comercial, etc. El SCN es el más rígido en esta definición.
 30/11/2005Croatian National BankWe agree with the AEG recommendation to harmonize existing definitions of the residence of households in SNA93, BPM5, as well as in demographic and tourism statistics. Also, we agree with the proposed change of terminology to "predominant center of economic interest" and the existing "1 year" criterion, including exceptions for students and patients.
 29/11/2005TadjikistanМы считаем, что добавление слова "преобладающий" к термину "центр экономического интереса" соответствует настоящей ситуации.
 30/06/2005Slovak RepublicWe agree with adopting “predominant centre of economic interest” as a term. We support top-priority importance of harmonisation of definition of residence between BPM and SNA.
 30/06/2005Serbia and MontenegroWe agree with the recommendations made at the December 2004 meeting of the AEG.
 03/06/2005Central Bank of VenezuelaWe agree with the criteria of predominant center of economic interest, thus recognizing that a unit could have multiple centers of interest. However, it would be advisable to clarify the definition of these criteria.
With respect to the time period recommended to define the residence of an individual and the exceptions applied to this guideline, opinions differed, noting that for reasons of practicality and analysis it would be advisable to eliminate some exceptions and to extend the time period to more than two years.
With respect to the treatment of exceptions, the Revision of the Fifth Edition of the Balance of Payments Manual (BPM5) contemplates treatments differently than the proposed SNA93 Revision, specifically in the definition of residence for students. Therefore, we see the need for harmonization of the two manuals in order to maintain economic coherence and consistency between the two systems.
It would be advisable to harmonize the concept of residency in all the manuals, provided this does not significantly impact statistics systems.
 23/05/2005IsraelHarmonization is important, and we agree with the decisions of the AEG on these points. However, the criteria for deciding, where the economic interest lies, should be examined in light of the globalization and the “New Economy”, especially the residence of corporations. Employees now often sit in one country, while virtually working in another country, using internet, having virtual meetings, acting as help desks, directing medical operations long-distance etc., and such features of production can only be expected to become more widespread in the future. Are the existing criteria sufficient? (see for example par. 14.22 in SNA93). Such questions should also be brought up under the issues of treatment of multi-territory, multi-national enterprises, recognition of unincorporated branches discussed by the AEG.
 19/05/2005Bank of IndonesiaBI agrees to harmonize the definition of residence of households between the SNA and the BOPM 5th edition.
 19/05/2005Swiss National BankWe favour the use of the term predominant centre of interest to determine residency. An additional one year rule should only be used as subsidary principle if the use of the predominant centre of interest would lead to ambiguous solutions.
 18/05/2005Central Bank of ChileWe agree with the proposal of the expert group to harmonize the definition of the concepts of residence of households with the definitions used for demographic and tourist statistics. However, our agreement is contingent on maintaining coherence with the core statistical framework of the National Accounts and Balance of Payments.
The concept of "predominant center of economic interest" would seem appropriate to more precisely define the residence of households in special cases and to the extent data permit.
With respect to the change of residence for patients undergoing medical treatment and ship crews remaining abroad for more than one year, we suggest no modification to the current treatment, since these individuals maintain a residence and long-term center of economic interest in their country of origin. In any case, it is a proposal that should be analyzed in greater depth by the international experts.
In the case of students studying abroad for more than one year, we propose to maintain the current treatment, that is to say, they are treated as residents of the country of origin. Although there could be exceptions when such students are financed by the host countries and/or intend to remain in that country permanently, any modification would be contingent on the feasibility of obtaining data.
The residence of temporary workers for one year or more is difficult to evaluate and to determine a practice, since in some circumstances, many of these workers expect to return to their countries of origin and they do not reflect a permanent economic interest in the country where they are working. We suggest maintaining the current treatment.
In general in the event of modifications to any concepts and specific cases involving residence, it is essential to consider the implications they would have for the measurements of flows and transactions in the National Accounts and Balance of Payments, including income and other factor payments, exports, and imports. In addition, the availability of data is a key factor in making these distinctions and measurements with respect to the current definitions of residence.
 16/05/2005JordanDOS agree the AEG decision on harmonization of residence concept between BPM, SNA and other statistical systems without affecting the integrity of the system.
As regard adopting the term “predominant center of economic interest” DOS is in favor of using this term.
DOS also agree on using the one year criterion keeping the exception of students and patients and to add clarification of the situation of ships’ crews.
 16/05/2005Eastern Caribbean Central BankWe agree that harmonization of residence between BPM and SNA is essential. We also support the decision that the emphasis should be on the ‘predominant’ centre of economic interest and favor the one-year criterion rather than discretionary criteria.
 13/05/2005State Bank of PakistanThe definition should be harmonized between SNA and BPM. However, clear guidance should be provided for treating the special cases where the criteria of “one year stay” and “predominant center of economic interest” are not conclusive. Similarly, sources of relevant data may be clearly identified in such cases.
 13/05/2005National Bank of KazakhstanWe agree with the adoption of “predominant center of economic interest. We consider that students and patients should be an exception from ‘one year rule” since they are mainly financed by their families or governments or other residents and the center of their economic interests remains in the country of their origin. We support the usage of “one year rule” for non-permanent workers but we think that detailed recommendations should be given on collection these data.
 13/05/2005National Bank of VietnamWe agree with the experts groups recommendations.
 12/05/2005Czech National BankWe agree with the concept of residence based on the term “predominant center of interest” and I support the idea of harmonizing a residence concept for different types of statistics.
 12/05/2005European Central BankThe decision to harmonise the definition of residency as used in the BPM5 and in the SNA93 is very welcome. This also applies to the adoption of the concept of"predominant centre of economic interest."
 12/05/2005Bank of ThailandWe agree with the proposed change of terminology to "predominant center of economic interest", and the "1-year" rule (with exception of students, patients, and ship crews)
 11/05/2005IndiaIndia agrees with the decisions of AEG.
 10/05/2005USAThe U.S. Bureau of Economic Analysis endorses the recommendations made by the AEG.
 09/05/2005AustraliaAustralia agrees with the AEG recommendations
 09/05/2005MaldivesThe key definition of residence of the household is centre of the economic interest, characterized by location and economic activity in the location. In general for household, the criterion of one year in the location and engage in economic activities during the period. It would however critical that this definition should be adopted in household surveys for consistency of SNA treatment and data sources. We wish to agree with the recommendations. However we feel that an effort to make the definition consistent with the definition adopted in population census and household surveys are vital as they are the sources of data for compilation.
 09/05/2005MalaysiaWe agree with the recommendations.
 09/05/2005United KingdomWe agree with the reasons giving rise to the change and support the recommendation made that emphasis be put on the harmonisation of the definition between the SNA and BPM as opposed to the whose range of macro-economic statistics framework; although this would be welcome if it can be achieved. We also agree to the decision that the emphasis should be on the 'predominant' centre of economic interest, and that the one year criteria rather than a discretionary one be applied in order for estimates to be comparable.
 09/05/2005Central Bank of IranWe agree with the recommendations of the AEG.
 09/05/2005ItalyWe do not support the supplementary presentation of non-permanent workers because total estimates of employment are obtained on the basis of the employed recorded by the companies.
 06/05/2005TurkeyWe agree with the recommendations made by the Advisory Expert Group on National Accounts at its second meeting in December 2004.
 06/05/2005Commonwealth of Independent States We consider adding the word “predominant” to the term “center of economic interest” as corresponding to the present situation.
 06/05/2005Macao, SAR ChinaWe agree with the recommendations.
 06/05/2005VietnamWe support the necessity to precise the definition of residence. If according to definition of 1993 SNA is difficult to execute in practice, especially, number of institutional units connecting to two or more economics. However, it would be needful and useful to have clear criteria for determining resident units between national economy and domestic economy, between regional and domestic economy.
 05/05/2005SwedenStatistics Sweden supports the recommendations of the AEG especially the harmonization of definitions and concepts between the Balance of Payments and the SNA.
 04/05/2005Denmark- Denmark supports that harmonization of the definition of residence between BPM and SNA is essential and that harmonization with other statistical systems is desirable.
- Denmark supports the use of ”predominant centre of economic interest” as a term.
- Denmark supports the use of the one-year criterion, but with no exceptions for students and patients. The one-year criterion should be used in all cases. Denmark also supports the clarification of the situation for ships’ crews.
- Denmark supports the supplementary voluntary presentation on non-permanent workers.
 29/04/2005NorwayStatistics Norway supports the views of the AEG.
 29/04/2005Central Bank of Colombia(i) Does the AEG agree with the approach to harmonization of residence concepts? See 1(i) above.
El Banco de la República de Colombia esta de acuerdo con la armonización del concepto de residencia aplicado en las definiciones de uso demográfico siempre que no disminuya la calidad de las estadísticas macroeconómicas o dificulte las practicas de compilación.
(ii) Does the AEG agree that “predominant center of interest” be adopted? See 1(ii) above.
El Banco de la República de Colombia esta de acuerdo con la adopción de este concepto porque facilita las practicas de compilación.
(iii) Does the AEG prefer the continuation of the existing exceptions for students, patients and ship’s crew? Does the AEG prefer a one-year criterion or a discretionary approach in other cases? See 1(iii) above.
El Banco de la República de Colombia esta de acuerdo con la existencia de excepciones para estudiantes, pacientes y tripulación de naves. Igualmente, preferimos el concepto de un año en otros casos. La aplicación de estos conceptos mejora las prácticas de compilación y la comparación de la estadística entre países.
(iv) Does the AEG agree with the supplementary presentation approach proposed in the Annotated Outline and bilateral cooperation to enhance consistency of treatments.? Does it have any other specific proposals? See 1(iv) above.
La cooperación bilateral sería muy útil, pues ella permite mejorar las estadísticas y facilitar la comparación entre países.
 28/04/2005Trinidad and TobagoWe agree with the recommendations of the AEG.
 26/04/2005Central Bank of NicaraguaThe Central Bank of Nicaragua (BCN) supports “the one year rule” to determine the residence of households, but agree to keep the exception for students. In the case of individuals that have strong links to more than one country, BCN agree with the adoption of the term “predominant center of interest”, which recognizes that individuals may have multiple centers of interest but should be classified to the country in which they have the strongest connection.
 25/04/2005Bank of Sierra LeoneWith reference to the above subject we agree with the recommendations of the Expert Group on National Accounts (AEG) especially where there is harmonization of definitions and other concepts between the Balance of Payments (BOP) and system of National Accounts (SNA).
 19/04/2005SingaporeWe support the introduction of “predominant center of interest” to elaborate the concept of residence and welcome the harmonization of the residency of students and patients in both SNA and Tourist Statistics.
 13/04/2005Bank of KoreaWe are generally in agreement with the recommendation of Advisory Export Group(AEG).
(1) It is very desirable that the definition of residence in SNA would be in harmonization with other statistics, but not to the point of undermining the framework of SNA.
(2) We agree to adopt " predominant center of economic interest" as a term.
(3) We have been treating patients, ship`s crews and students who are staying abroad more than one year as residents, and we prefer the one-year criterion with the present exceptions for them.
(4) We agree that there is some need to adopt the principle that long-term workers are treated as residents of their countries of origin in some cases. But, the influence of each treatment on SNA should be investigated more deeply.
 12/04/2005GreeceWe agree with the recommendations of the AEG on the issues for which a decision has been taken, at the December 2004 meeting of the group.
 12/04/2005Central Bank of HondurasAlrededor a este tema, las recomendaciones presentadas al Comité de Balanza de Pagos por el Grupo Técnico de Expertos en Balanza de Pagos son razonables, pues hay que considerarlo en el marco de las estadísticas macroeconómicas, realizando investigaciones para analizar la armonización de los conceptos de residencia con las definiciones utilizadas en las estadísticas demográficas, de turismo y de migración. El SCN 93 y el V Manual de Balanza de Pagos definen en los mismos términos el concepto de residencia de los hogares.
 12/04/2005Central Bank of Cote d`IvoireLa notion de résidence des ménages étant utilisée dans l`élaboration des statistiques macro-économiques (notamment les comptes nationaux et la balance des paiements), elle mérite d`être clarifiée et harmonisée. Plus particulièrement, la définition du terme “centre d`intérêt économique predominant” devrait être plus explicite.
 11/04/2005The NetherlandsWe agree with the recommendations made at the December 2004 meeting of the Advisory Expert Group on National Accounts.
 11/04/2005Bank of Tanzania/National Bureau of StatisticsWe concur with AEG recommendation.
 11/04/2005Hong Kong, ChinaWe agree to adopt the term “predominant centre of economic interest” as the elaboration of the concept of residence. To enhance international comparability of statistics, the application of the one-year criterion without discretion is supported.
 11/04/2005Germany m2(c)de39b;
 11/04/2005MalawiI fully endorse the recommendations of the Expert Group on National Accounts.
 11/04/2005Central Bank of The NetherlandsWith respect to these issues we agree with the decisions taken by the AEG. They correspond fully with the proposals made by BOPTEG and BOPCOM.
 11/04/2005Philippines -The present exceptions for students, patients, and ship`s crew should be retained. The one year residence rule is difficult to implement in the case of the long-term overseas workers whose primary interest in working abroad is to provide for their families in their home country and maintains close family ties. Though they may have engage in economic activities in the host country still most of their incomes are spent in their country of origin.
-The supplementary presentations in the BPM annotated outline on non-permanent workers allows flexibility to countries with overseas workers whose contract extend beyond one year. In the case of the Philippines, the concept of non-permanent workers would be more suitable.
-The concept of “predominant” center of economic interest may clarify this area but it should be clearly defined and should provide a specific set of criterion giving due consideration to countries that deploy large number of overseas workers and contribute significantly to national income. On the other hand, the criterion should also be clear to the host countries to achieve consistency in the treatment of this type of workers.
Some factors to consider in deterniming “predominant” center of economic interest are:
* Has a permanent place of residence or dwelling unit maintained by the worker in his home country
* Spouses and dependant family members live in his home country
* Most of his income are flowed back to his home country for purposes of providing for his family, having saving and or investment in his home country
* No intention of changing his citizenship or status in host country other than for work.
* A member of a social security scheme in his home country
 11/04/2005Central Bank of the Republic of TurkeyCentral Bank of the Republic of Turkey (CBRT) supports that the principle of predominant center of interest should be adopted to determine the residence of households and that the use of one-year rule is appropriate with the continuation of the existing exceptions for students, patients and ship’s crew. CBRT also agrees that maintaining the coherence and analytical relevance of economic statistics compiled within the SNA/BPM framework is more important than alignment with tourism and population statistics, but that work should proceed with relevant standard setters to encourage changes to these standards to achieve greater alignment.
 11/04/2005Russian FederationWe agree with the recommendations made by the AEG on National Accounts.
 11/04/2005South African Reserve BankWe accept the recommendations of the AEG.
 11/04/2005South AfricaSouth Africa agrees with the recommendations.
 01/04/2005PolandWe support the necessity to precise the definition of residence. It is essential from the point of view of DNI calculation. In the scope of Rest of the World primary income, especially wages and salaries, the adoption of the one-year criterion (according to existing definition in ESA`95) is difficult to execute in practice.
 18/03/2005Palestinian Central Bureau of StatisticsPCBS supports that the residence of households must be compiled according to the status of the head of the household and not only with the place of living.
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