(Beijing, China) November 23th- 25th 2021 International Workshop on

(Beijing, China) November 23th- 25th 2021 International Workshop on the Integrated Use of International Trade Statistics and Economic Statistics TEC data production, preparation for STEC data production Maria Serena Causo ([email protected]), Mirella Morrone ([email protected]), Adele Vendetti ([email protected]) Division for Statistics on production and foreign trade - Istat, Italy

Main contents Overview Measuring trade in goods by traders – the EU approach TEC – Trade by Enterprise Characteristics STEC - Service Trade by Enterprise Characteristics 2 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Measuring trade in goods by traders in the ESS Data sources: Extra-EU trade Intra-EU trade Customs administrative data - Statistical survey (eventually joined with fiscal administrative obligations) - Estimates for missing trade (out-of-sample and 3 late responses) based on fiscal data UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Extra-EU Trade - Framework Use of customs declarations data for compilation of ExtraEU trade statistics The legal requirement and specifications for providing a customs declaration are laid down in the European customs provisions. The customs declaration has to be provided by the declarant, being the person liable for respecting the customs formalities and rules. Statistical declaration and statistical data. The statistical declaration is not foreseen under Union legislation on extra-EU trade statistics nor is there any obligation for traders to provide such a declaration. The statistical data are collected through the relevant data on the customs declaration (e.g. goods code according to the CN) or of purely statistical relevance (e.g. nature of transaction). Data collection process — standard customs declaration transmitted from Customs to NSAs. National Customs are required to provide NSAs customs declarations lodged with them at the latest the month following the month of acceptance. 4 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Extra-EU Trade – Traders’ identification EXTRASTAT REGISTER (EORI) Specific obligations for customs authorities to provide traders’ identification numbers (trader-ID) to National Statistical Administrations was introduced by Regulation (EC) No 471/2009 in 2010 Maintaining a register of extra-EU trade operators is essential to be able to contact traders and extremely useful for analytical, validation and estimation purposes Key element to compile Trade by Enterprise Characteristics based on linking trade information at trader level with the statistical business register The identification of traders for customs purposes has been harmonised at EU level and ID system, namely the Economic Operators Registration and Identification (EORI) system was introduced in mid-2009. 5 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Extra-EU Trade – Which kind of traders? Legal person Resident EU resident Natural person 3rd country resident Resident EU resident Association of persons 3rd country resident Resident EU resident 3rd country resident Trader (resident) can generally be matched with statistical business register Trader (resident) that can be matched with the statistical business register if registered for local VAT Trader (non-resident) can only be matched if registered for local VAT and included in the statistical business register based on national practice 6 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Intra-EU Trade - Framework Direct data collection from economic operators The main data source for the collection of intra-Union trade statistics is statistical survey. Member States collect monthly data from reporting units involved in intra-Union trade. EU regulation set minimum traded value coverage for the statistical (in 2021 97% for export and 93% for import, in 2022 95% for export and no minimum coverage for imports). In order to minimize statistical burden, a cut-off sample based on exemption thresholds is selected in such a way to meet the minimum coverage requirement. Missing trade, i.e. trade for traders below the exemption thresholds, is estimated from administrative data sources 7 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Intra-EU trade statistics compilation process overview Data Sources Statistical process 8 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Intra-EU Traders population Intra-EU Traders population is the set of traders who makes taxable supplies or acquisitions in a Member State - Resident traders - Non-resident traders with no place of business in the Member State Traders supplying or selling goods in Member States other than the one in which they are established must register for VAT purposes in that Member State. Non-resident traders have the same obligations as resident traders. In the case of intraUnion supplies or acquisitions, they have to provide national tax administrations with VAT returns and to submit statistical declarations. Tax groups. Two or more companies or limited liability partnerships may register as a single taxable person — or VAT group — if they meet the following criteria: - each body has its principal or registered office in the reporting Member State; - they are closely bound to one another by financial, economic and organisational links. 9 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Register of Intra-EU reporting units The essential function of the register is the maintenance of an up-to-date list of intra-Union operators with their company identification data. This information is based on fiscal data and is used: to identify companies who may be required to provide statistical declarations; to ensure the timely collection of statistical information; for quality checks and data analysis; for estimates of the trade of non-reporting units, partial and non-response; for compiling Trade by Enterprise Characteristics by linking trade information at trader level with the statistical business register. 10 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

TEC data compilation The use of TEC data for the analysis and assessment of Member States' economies is increasing every year. It is necessary to meet the users needs by providing accessible, relevant and timely information. Scope The main objective of the Trade in goods statistics by Enterprise Characteristics (TEC) is to bridge two major statistical domains which have traditionally been compiled and used separately, business statistics and international trade in goods statistics (ITGS). The SBRs play an important role in the compilation process of business statistics. 11 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Key facts about SBR 12 Business registers for statistical purposes allow: The detection and construction of statistical units. The units used for statistical observation or analysis may represent real economic structures but do not always correspond to legal or administrative units. The role of the SBRs is to function as a bridge between administrative and statistical units The preparation and coordination of surveys and for grossing-up survey results. The most obvious use for SBRs is to supply sample and population data necessary for conducting surveys Providing statistics and analysis of business population and its demography. Number of enterprises, employment, turnover and business demography changes of the enterprises (births, deaths, survival and growth), breakdown according to institutional sectors are provided within SBR Providing tool for using administrative data for statistical purposes. The use of administrative data in the production of statistics has gained relevance to decrease burden on enterprises Integration of statistical data from different statistical authorities. UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Methodological aspects about Trade – SBRs data integration VAT code represents the key between Foreign Trade Register and SBRs Each trader VAT code (Legal Unit) can be associated to a Business Unit code (Statistical Unit) Link between VAT [ID] BU [ID] based on: The Statistical Business Register system Historical Revenue Agency Register Integration process: step 1 The traders VAT Register [VAT and EORI numbers] is linked with SBRs system (through the complete VAT Register) Link with the enterprise demography dataset units (business register of the legal unit events) Complex Units: Analysis of enterprises that are suspected to be Special Purpose Entities (VAT that are not relevant “statistical unit”, but with high values and belonging to a group) 13 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

Methodological aspects and integration issues Linking trade values with enterprise characteristics: step 2 The trade data of each trader are linked with the enterprise characteristics recorded in the SBRs Trade register Business register Legal unit ID number Enterprise Economic activity Number of employees Type of ownership Turnover Trade operator ID number Trade value by Product code Partner country Type of trade 14 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

Classifying type of traders 15 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

Further refinements: Treatment of VAT GROUPS VAT groups are a fiscal simplification for enterprises VAT reporting. The TEC compilers can establish a link between the VAT group and its legal units using fiscal VAT groups registers and adopt suitable methodologies to allocate VAT group trade transactions by enterprises belonging to the group. 16 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

ISTAT RECENT IMPROVEMENTS AND FORTHCOMING DEVELOPMENTS Recent improvements Improved coverage using additional registers: farm register, register of public institutions, register of nonprofit institutions Forthcoming developments Deploying the new statistical unit "ENT" from reference year 2021 Increasing timeliness: with the implementation of the European Business Statistics (EBS) Regulation, the TEC data will have to be compiled and provided to Eurostat earlier (at T 12 months). This deadline will be applicable from 2023 (2022 data) Assuring consistency with Structural Business Statistics (SBS) data, with particular focus on enterprises for which export value turnover; 17 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

STEC Statistics: Scope and definition Scope: measuring the changing of the economy Increasing demand of harmonized, reliable and timely services sector statistics, which are able to: measuring the structure and dynamics of production and international trade of services according to the nature of services traders in the European Union better analyzing emerging phenomena by using data across statistical domains (e.g. GVC) while developing more sophisticated economic analyses 18 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

STEC Statistics: Scope and definition Definition No simple definition of services: cover a heterogeneous range of intangible products and activities, often are used abstract concepts rather than identifying any specific physical attribute or physical function. “Services are the result of a production activity that changes the conditions of the consuming units or facilitate the exchange of products or financial assets” (SNA 2008) 19 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

STEC Statistics: Legal framework EU Regulatory Framework: European Business Statistics (EBS) Regulation (EU) 2019/2152 of the European parliament and of the Council on European business statistics repealing 10 legal acts in the field of business statistics Commission Implementing Regulation (EU) 2020/1197 laying down technical specifications and arrangements pursuant to Regulation (EU) 2019/2152 New EBS regulatory framework entails the inclusion of statistics on foreign trade in services within the business statistics changing the observation angle of the phenomenon from product-based to the companies involved in the international trade in services and the ways in which these services are provided. 20 UN workshop with China on Trade in Goods and Services (Beijing, China) November 23th- 25th 2021

STEC tables to be reported and transmission deadline Statistical value of imports and exports of services by enterprises Breakdown 1, 2, 3 First reference year 2022 Data transmission deadline T 18 months June 2024 (1) STEC by activity and size class of number of employees and self-employed persons [World; Intra-Union; Extra-Union] (2) STEC by activity, type of product and additional geographical breakdown (3) STEC by activity and type of control [World; Intra-Union; Extra-Union] Activity Statistical Classification of Economic Activities in the European Community (NACE) Product Extended Balance of Payments Services Classification (EBOPS 2010) 21 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

Production of International trade in services statistics in Italy Statistics on international trade in services (ITSS) are produced from the transactions recorded under a country’s Balance of Payments (BoP), which capture all transactions that take place between an economy’s residents and non-residents, namely monetary value of import and export of services by type of service and by partner country. Bank of Italy is responsible for the production of ITSS Country-level business statistics on trade in services by enterprise characteristics (STEC) will be produced under the EBS Regulation by breaking down traditional services trade statistics according to specific enterprise characteristics namely activity sector, size class and type of ownership of the enterprise. Istat - the National Institute of Statistics is responsible for the production of STEC 22 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

Production of International trade in services statistics in Italy Close Cooperation Cooperation between between Bank Bank of of Italy Italy and and Istat Istat in in the the data data production production process process in in order order Close to ensure ensure data data quality quality and and information information consistency consistency between between ITSS ITSS and and STEC STEC to permanent Committee Committee ensures ensures coordination coordination on on statistical statistical matters matters between between BI BI and and Istat Istat AA permanent The production system implies a large combination of statistical information stemming from different data sources, that entails: intensification of micro-data exchanges between the two Institutes sharing of methodological and technical skills further development on data sources (statistical and administrative data) Guarantee the sustainability of the system: legal framework and technical arrangements between the two institutions involved (e.g. suitable IT tools, etc.) 23 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

Development of STEC in Italy: an integrated approach - MDL STEC data will be compiled by linking existing official data sources at enterprise level: trade in services micro-data collected as part of the ITSS Bank of Italy data profiling the businesses derived from the Statistical Business Register (SBRs) and other SBS Istat ITS ITS survey survey Fiscal [ID] Statistical Statistical Business Business Registers Registers ** 24 Administrative Administrative sources sources (e.g. (e.g. Intrastat Intrastat Fiscal [ID] Services, Services, VAT VAT declaration, declaration, VIES) VIES) VAT [ID] VAT [ID] BU [ID] Services import/ export by EBOPS and partner country Inward/Outward Inward/Outward FATS, FATS, SBS SBS Economic activity; size class (n. of employees); Type of ownership; Turnover; Purchase BU [ID] *Business Register (BR) (Industry & Services), Enterprises Register & Groups Register, Farm Register, Registers of public institutions and of nonprofit Institutions UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

STEC breakdowns to be implemented Product breakdown by EBOPS 2010 main components 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Manufacturing services on physical inputs owned by others Maintenance and repair services, not included elsewhere Transport Travel Construction Insurance and pension services Financial services Charges for the use of intellectual property, not included elsewhere Telecommunications, computer and information services Other business services Personal, cultural and recreational services Government goods and services, not included elsewhere ITSS 25 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

STEC breakdowns to be implemented Activity breakdown according to NACE classification NACE Sections: C, F, G, H, J, K, M, N Aggregates of NACE Sections: (A B, D E, I L O P Q R S T U) Breakdown of Size class of the enterprise according to Number of employees - Small: 0 49 further disaggregated into - 0 9 - 10 49 - Medium: 50 249 - Large: 250 or more Breakdown of type of control - Domestically controlled enterprises further disaggregated into: - Domestically controlled enterprises without own affiliates abroad - Domestically controlled enterprises with own affiliates abroad - Foreign-controlled enterprises UCI country Business Register Farm Register Enterprises Register Inward/Outward FATS Enterprise Groups Register 26 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

Development of STEC in Italy: an integrated approach Currently ITS sample design is built to satisfy BoP requirements, no STEC characteristics (i.e. activity, size and type of control) are taken into account nor it is based on SBR The collection and compilation system adopted in Italy is a multi-source system. Most of the ITSS data are collected through enterprise surveys and administrative records for the main EBOPS 2010 items. In addition, statistical models are used for some services items (e.g. manufacturing services on physical inputs owned by others; transport; travel; insurance and pension services and financial services). Travel also uses persons and households surveys. The representative sample includes non-financial companies and insurance companies. Stratification of the sample is based on entities involved in cross-border transactions and according their turnover. Enterprises are selected according to a cut-off approach. 27 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

Development of STEC in Italy: an integrated approach - MDL Total Total ITS ITS ITS survey Yes Mismatches mainly due to: Intra-annual business demography changes Large and complex businesses Incomplete business register Valid Fiscal ID linked with BR Not linkable trade (e.g. Travel, FISIM, Gross up figures, etc.) No Unknown trade No Unclassified trade Yes Total trade successfully matched with SBR Total Total STEC STEC 28 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

Development of STEC in Italy: an integrated approach - Future steps Improve the quality and the coverage of STEC statistics Re-Design ITS sample to satisfy both BoP and STEC requirements by: Increasing sample size Changing sample stratification’s criteria: taking into account also STEC characteristics (activity and size) Making better use of administrative data (e.g. Intra Services data, VAT declarations, VIES) to improve the estimates both: to better design the sample according information derived from administrative sources (in particular data on Intra-UE services’ transactions) to distribute the gross up trade on STEC dimensions The better integrated the approach; the more decreased the unknown trade 29 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021

Thank you! 30 UN workshop with China on Trade in Goods and Services Beijing, China, November 23th- 25th 2021