Manual on Statistics of International Trade in Services

K. Summary of recommendations 
3.160. 
The main recommendations of the present 
chapter for compiling statistics on transactions between 
residents and non-residents of an economy can be 
summarized as follows: 
1. The BPM5 recommendations on the principles of 
recording (residence, valuation, time of recording, 
currency of recording and conversion) should be 
followed. 
2. Data on services transactions between residents 
and non-residents of an economy should be 
compiled according to EBOPS. Of highest priority 
is the compilation of data at the level of BPM5; 
this should be followed by the introduction of the 
EBOPS level of detail, but taking into account the 
data requirements in individual compiling 
economies. Of less immediate priority is the 
compilation of data on EBOPS memorandum 
items. 
3. Data should be compiled on an individual trading 
partner basis, at least at the level of the 11 major 
components of BPM5 (see para. 2.52 above). 
4. Data for total services transactions should be 
compiled separately for transactions with related 
and with unrelated parties. 
5. Each EBOPS component should be allocated either 
to one dominant mode or, where there is no single 
dominant mode, to the most significant modes of 
supply. This is accorded a low priority. 

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54 
IV. 
Foreign affiliates trade in services statistics
A. Introduction 
4.1. For both goods and services, international sales may 
be effected not only through the transactions between 
residents and non-residents that are recorded in balance 
of payments accounts as specified by BPM5 (and in the 
1993 SNA’s external account for goods and services), 
but also through direct investment enterprises or 
affiliates established in the countries of foreign 
customers.
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For services, this method of serving 
foreign markets is particularly important because it is 
often the only method that permits the close and 
continuing contact between service providers and their 
customers necessary to compete effectively with 
indigenous firms.
4.2. In the present 
Manual
, statistics describing the 
overall operations of affiliates are termed “foreign 
affiliates trade in services statistics”, or “FATS 
statistics”. Consonant with the 
Manual
’s theme and 
purpose, its recommendations for compiling these 
statistics have been designed and presented with services 
in mind. However, except for the particular activity and 
product breakdowns suggested, most of the 
recommendations are equally applicable to goods or 
services and may be considered in developing a 
generalized framework for statistics on affiliate 
operations.
4.3. The most pertinent information on the operations of 
affiliates may be considered to be that on their sales.
Services delivered through transactions between 
residents and non-residents are measured in terms of 
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Here, “affiliate” is used synonymously with “direct 
investment enterprise”, which, following BPM5, is an 
incorporated or unincorporated enterprise in which a direct 
investor who is resident in another economy owns 10 per cent 
or more of the ordinary shares or voting power (for an 
incorporated enterprise) or the equivalent (for an 
unincorporated enterprise). As will be explained below, most 
of the present chapter is concerned with only those affiliates 
in which the direct investor has a majority ownership interest.
These may be termed “majority-owned affiliates”; however, 
in what follows, these affiliates may––for ease in exposition––
also be referred to simply as “affiliates”, where the limitation 
to the majority-owned subset of affiliates is clear within the 
context of the discussion. 
sales (apart from any services that may have been 
donated), and a comparable measure must be available 
for affiliates in order to measure services delivered 
through them on a parallel basis. Although, as discussed 
below, the present 
Manual
recommends a broader 
programme of data collection, it recognizes that some 
countries may, at least initially, limit themselves to the 
collection of statistics on sales because these most 
directly support the monitoring of commitments under 
GATS. 
4.4. While sales may thus be considered to be the most 
important information to collect for FATS, additional 
information is generally required for an adequate 
assessment of the economic effects of affiliate 
operations and of measures to liberalize the delivery of 
services through the commercial presence mode of 
supply. For example, information on value added allows 
output originating within the affiliate to be distinguished 
from output originating in the firms that supply it with 
intermediate inputs. Similarly, information on 
employment is required to assess the impact of affiliates 
on labour markets. Accordingly, the 
Manual
recommends multiple indicators, or variables, for FATS, 
rather than only sales. 
4.5. FATS statistics may be developed for both foreign-
owned affiliates