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1993 SNA Update Information - AEG recommendations for issue:
Treatment of multi-territory enterprises

Subissue description
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The 1993 SNA follows the Balance of Payments Manual in allowing for a single enterprise run as a seamless entity with substantial operations in two or more economic territories to be regarded as having a centre of economic interest in each of the countries where it is recognized by the tax and licensing authorities, but only when the activity is operating mobile equipment such as ships, aircraft and railways. In these cases, the possibility is for all the enterprise’s transactions to be allocated to the countries of registry in proportion to the financial capital that the countries have contributed or their share of equity in the enterprise. Should this treatment be extended to other activities, for example hydro-electric schemes on border rivers and pipelines? Should reference be made to joint sovereignty zones and zones of joint jurisdiction?
AEG recommendations
Number of AEG recommendations for selected issue:1
  Corresponding meetingDate postedRecommendation
 July 200512/09/2005The AEG accepted the recommendation of the prorating of multi-territory enterprises and enterprises in joint sovereignty and joint jurisdiction zones, but did not make suggestions on additional possible criteria.
 December 200411/01/2005The treatment of multi-territory enterprises in BPM5 should be extended to all kinds of activities, when formal separation is not possible.
Units operating in zones of joint sovereignty or jurisdiction should be split between these in ways that still need to be specified.
The broader question of multinational enterprises should be addressed by a task force, taking account of IASB recommendations and work in hand for the next ISI meeting.
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