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21.8.        The customs declaration and accompanying documentation. Information on whether a trade transaction takes place between related parties is usually not available on the customs declaration (see Table VIII.2). Further, the examination of accompanying information might not provide sufficient indications of trade between related parties. However, countries can require traders to provide such information on the declaration (see the example from the United States provided in para. 21.13 below). In this case, the information technology systems (such as ASYCUDA, NIPASS, SISCOMEX, TRIM, etc.) used in different customs administrations worldwide would have to be adapted to allow regular compilation of this information. At this time, concerns in most countries about the response burden, the feasibility of obtaining reliable information, etc., appear to outweigh arguments emphasizing the need for this information. A common concern in respect of obtaining this information is that the traders or brokers that complete the transactions might not know the nature of the relationship between the parties for which the trade takes place, and that even the trading enterprises might not be aware of their relationship, in particular if there are frequent changes in the ownership structure. Further, statistical offices and customs may believe that the reasons advanced for obtaining this information at a detailed level are not sufficiently strong or not view this as a priority. 

21.9.        Supplementary enterprise surveys and studies. In many countries, the trade transactions in a specific economic sector are concentrated among a few large multinational enterprises. Given their effect on domestic value added and employment, these enterprises should be well covered in the existing business statistics and identified by statistics compilers. These enterprises could be the subject of special surveys, and could be requested to provide information on their trade with their foreign affiliates or parent enterprise(s), at either the aggregate or the detailed level of the customs declaration. Such information could be collected on a regular basis (surveys) or for adhoc purposes (specific studies). 

21.10.    Foreign affiliates statistic (FATS). Figures on total and intra-group exports and imports of goods and services by foreign affiliates are currently produced by a limited number of countries. However, more countries are expected to begin the compilation of such data following the recommendations on FATS adopted by the United Nations Statistical Commission and published in Manual on Statistics of International Trade in Services 2010 (MSITS 2010, chapt. IV).[4] For example, EU member States plan to improve their FATS in the near future under the EU-level FATS Regulation.[5] Regarding the identification of trade between related parties, it would be good practice to disaggregate exports and imports into a few broad categories where trade with related enterprises could be distinguished from trade with unrelated parties (MSITS 2010, para. 4.60), as such data would be highly useful in the analysis of globalization issues. However, FATS do not include statistics on the parent enterprise, and it appears to be difficult to obtain detailed information on total and intra-group trade at the product level. The practice ofItaly, developed under the framework of the FATS EU Regulation, shows that some interesting figures on total trade by foreign affiliates at the product level can be obtained by merging, at the company level, the list of foreign affiliates with the list of foreign trade operators. 

21.11.    Linking customs declarations with transnational enterprise registers. Although currently, this is mostly a theoretical possibility, linking customs declarations with a transnational enterprise register may become feasible in the future. If countries adopted the model of a seamless integrated data pipeline, it would allow the linkage of export declarations with their corresponding import declarations (see para. 8.8). Further, if the declarations were linked to a transnational business register, it would be possible to identify the exporting and importing enterprise of a trade transaction. The transnational business register would contain the information about the relationships of its entities and thereby allow the identification of intra-firm trade. However, countries will first need to agree and establish a functioning transnational enterprise register, such as the European Union EuroGroups Register.[6] 

21.12.    Conclusions. The objectives of identifying trade between related parties are in general supported by countries.[7] However, there are significant challenges in respect of compilation, which would make obtaining this information in the near term a difficult or unrealistic undertaking for many countries. Requesting an indication of intra-firm trade on the customs declaration, if possible, can be considered best practice (see the example from theUnited States below). Overall, the implementation of this encouragement to identify intra-firm trade might depend on national needs and priorities.

 


[4] United Nations publication, Sales No. E.10.XVII.14.

[5] Regulation (EC) No. 716/2007 of the European Parliament and of the Council of 10 June 2007 on Community statistics on the structure and activity of foreign affiliates.

[6] Addigional information is available from  http://epp.eurostat.ec.europa.eu/portal/page/portal/european_business/special_sbs_topics/eurogroups_register.

[7] See United Nations Statistics Division, “Report on the results of the first round of worldwide consultation”, October 2008, p. 9. Available from http://unstats.un.org/unsd/trade/imts/sc/trade_09.htm.