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G.  Regional aggregation

15.118.        Section G is mainly for compilers of regional and international organizations, but also provides more insight as to the reason that outward FATS data are also needed for a UCI concept (i.e., for outward FATS, only data where the parent entity is not itself controlled from abroad), as opposed to a national concept (where all outward FATS are considered whether or not the mother company is a UCI). Indeed, in that context, data will be compared from one country to another and, in certain cases, it will be necessary to compute regional or world aggregates. If all countries apply international guidelines in the same way, in principle, and if UCIs are detected in a consistent way, inward FATS data compiled by countries will be free of duplication. That will not be the case for outward FATS, as the main recommendation is to compile data on foreign affiliates of all controlling entities established in the compiling economy, whether UCIs or units that are themselves controlled from abroad. However, following international recommendations, compilers should also compile information focusing on affiliates of UCIs of the compiling economy. That information should be used by regional or international organizations when constructing aggregates for outward FATS.

15.119.        In producing such aggregates, it is important for common rules for collecting and compiling FATS to be adopted by the countries participating in the group (i.e., beyond the internationally agreed definitions). An important aspect to consider when producing such aggregates is the possibility of distinguishing intraregional FATS from FATS with the rest of the world. To do this, it is necessary for countries to compile information according to agreed intra- and extraregional definitions and/or have the necessary partner country detail. For outward FATS, it is important to use data compiled by countries referring only to the affiliates of UCIs of the compiling economy (i.e., foreign affiliates of resident units not themselves controlled by non-residents). A set of guidelines should be established on the basis of international recommendations and the level of detail provided. Finally, it is necessary to ensure that the confidentiality of information is still ensured when computing regional aggregates (see the description of the European Union experience, below).

European Union experience

15.120.        The legal framework for the provision of FATS in the European Economic Area (EEA) is regulation No. 716/2007 of 20 June 2007. In addition, Eurostat publishes the FATS Recommendations Manual, which provides a common methodological framework for definitions and concepts for national compilers in order to produce a harmonized set of FATS data across the Member States. Having a comparable set of FATS data is a precondition for compiling meaningful, reliable and high-quality European aggregates.

15.121.        Inward FATS and outward FATS data are collected from the member states of the European Union and the European Free Trade Association (EFTA) countries on an annual basis.  Data collection has been mandatory since 2007, the reference year. One of the most important concepts when looking at the European statistics is that FATS should be compiled according to the UCI concept. The UCI is the institutional unit (enterprise, branch) proceeding up a foreign affiliate’s chain of control that is not controlled by another institutional unit (enterprise, branch).

 

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