## BPM7 Annex 11. Data by Partner Economy: Annotated Outline

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**Canonical URL:** [BPM7 Annex 11. Data by Partner Economy: Annotated Outline](https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-11.pdf)

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### I. Introduction — Purpose and Basic Principles
- Purpose: Update to Section F.2, Chapter 4, BPM6 on data by partner economy; structure based on BPM6 (Section F.2—Data by partner economy), BPM6 Compilation Guide (BPM6CG), and other relevant manuals/guides.
- Organization: Separate sections—an introduction covering purpose and basic principles (Section I), and compilation of cross-border transactions/positions data by partner economy focusing on specific items (Section II).
- Basic principle for partner economy attribution:
  - Primary principle: economy of residence of the counterparty to the transaction or financial position (transactor approach).
  - Alternative method: debtor/creditor (debtor/creditor approach) is possible but must be clearly specified when presenting the data to users.
  - For current account transactions (except investment income): partner economy attribution is based on the “transactor approach” (transactions are allocated to the economy of residence of the nonresident with whom the transaction is made).
  - For balance of payments transactions in financial instruments (and investment income): basic principle is the economy of residence of the counterparty (transactor approach); the alternative debtor/creditor method is possible but should be clearly specified.
  - For partner data attribution on asset/liability positions: attribution will follow the debtor-creditor approach (as in BPM6, paragraph 4.152).
  - Note: For the purpose of compiling regional aggregates, all countries should consistently apply the same principle.
- Agents, nominee accounts and custodians, and quasi-corporations:
  - Discussion of agents (paragraph 4.149), nominee accounts and custodians (4.160), and quasi-corporations (4.164) will be included as relevant background for compilation issues.
  - Example (from HSS 2015 paragraph 6.39): if a resident of Country A holds securities issued by a resident of Country B and uses a nominee account in Country C, with securities kept in custody in Country C, the custodian in Country C may not be aware that the ultimate owner is in Country A.

### II. Compilation of Cross-Border Transactions and Positions Data by Partner Economy — Item-Specific Guidance and Updates
- Scope: Coverage of compilation by partner economy for goods, services, remittances, financial instruments, securities, gold, SDRs, and direct investment, based on BPM6 paragraphs 4.150–4.164 with updates and cross-references to other BPM chapters.
- Goods:
  - Paragraph 4.150 (second sentence) will be updated to mention other relevant criteria (e.g., economy of shipment and consumption).
  - Footnotes will define criteria other than economy of origin based on International Merchandise Trade Statistics: Concepts and Definitions 2010 (IMTS 2010).
  - Merchanting and goods for processing (GN C.4 and G.7): guidance drawing from BPM6CG and UNECE Guide to Measuring Global Production; notes that adjustments to source data showing physical cross-border flows may be required to reflect change of economic ownership and partner economy attribution.
  - Additional explanation on merchanting of goods by partner economies based on BPM6CG paragraphs A5.31–32; BPM6CG Table A5.3 will be added and expanded to illustrate recording in IMTS and BPM.
  - Reference to “inverse merchanting” and required adjustments for correct partner economy attribution from BPM7 Chapter 10 (Goods Account).
- Services:
  - Freight and Insurance: no significant changes.
  - Other services: discussion on partner economy attribution for intellectual property (GN G.5), attribution when intellectual property product is owned by a Special Purpose Entity (GN G.4), transport, and other service categories.
  - Conceptual difficulty: partner economy attribution of crypto assets received by miners/validators without a corresponding liability — related compilation guidance to be included in the updated BPM6CG.
  - Intermediated purchases example: when a resident of compiling economy X purchases hotel or transport services from non-resident economy Y using a digital intermediation platform/tour operator based in non-resident economy Z:
    - For tour operators/DIPs (Z) only the relevant service fee should be recorded (based on recommendations of GNs C.4 and C.7).
    - The remaining amount should be recorded to the end service-providing economy (Y) of hotel/transport.
- Remittances:
  - Analytical utility: remittances by partner economies are useful given links to migration.
  - Coverage: remittances data by partners need not include all partners; focus on major remittance corridors (pairs of economies with large flows).
  - Estimation needs: compiling remittances by partner often requires estimations even when aggregate data exist (e.g., money transfer operator data) because channels may report international settlement centers rather than ultimate partner economies.
  - Recommended practice: compilers should adjust data, basing bilateral flow estimates partly on demographic indicators (International Transactions in Remittances: Guide for Compilers and Users).
  - Supplementary reporting: remittance flows to and from major partner economies may be provided on a supplementary basis, especially for major corridors (BPM6 paragraph A5.30); relevant references from BPM7 Annex 4 (Remittances) will be provided.
- Financial transactions/positions (other than direct investment): presented first, followed by direct investment.
- Financial instruments (BPM6, paragraphs 4.152–154): no significant changes.
- Securities, stripped securities, securities repurchase agreements (repos), and depository receipts:
  - Updates based on CPIS Guide (third edition, Chapter 3):
    - Use of International Securities Identification Number (ISIN) in identifying geographical attribution of securities.
    - Residence attribution of securities issued/held by international organizations and regional central banks.
    - Repos: implementing the proposal to treat securities under repo as owned by the security lending economy may not be straightforward in economies where accounting/statistical practices differ or where there is asymmetry in recording repos vs reverse repos; custodians may not identify securities on repo for repo or reverse-repo parties.
    - Links to Boxes 3.4, 3.5, and 3.6 in the CPIS Guide will be provided.
  - Depository receipts: clarification example added — for example, American depository receipts (ADR) are liabilities of the non-U.S. institutional units whose securities underlie the ADR, not of the U.S. financial institutions issuing the ADR.
- Gold bullion included in monetary gold (BPM6, paragraph 4.162): no significant changes.
- Special drawing rights (BPM6, paragraph 4.163): no significant changes.
- Direct Investment:
  - Partner allocation: as in BPM6 (paragraph 4.156), partner allocation is based on the economy of the debtor rather than that of the counterpart transactor.
  - Footnote: BD4 (Benchmark Definition of Foreign Direct Investment, fourth edition) strongly recommends use of debtor/creditor principle for compiling direct investment transactions and positions by partner economy.
  - Supplementary data: references to BPM7 Annex 6 “Selected Issues on Direct Investment” for supplementary data on ultimate investing economy (UIE) and ultimate host economy (UHE) and identification of pass-through funds.
  - Directional reporting: CDIS Guide 2015 and BD4 provide recommendations for compiling FDI data on a directional basis by partner economies.
  - Bilateral asymmetries: main reasons for bilateral asymmetries in CDIS data reported by an economy and its counterpart economies discussed in CDIS Guide 2015 Box 6.5 and other documents; these are relevant for partner economy discussion.

### Schematic Overview (Structure of the Annex)
- I Introduction
  - Agents
  - Nominee Accounts and Custodians
  - Quasi-Corporations
- II Compilation of Cross-Border Transactions and Positions Data by Partner Economy
  - Goods
  - Services
  - Remittances
  - Financial Instruments
  - Securities
  - Stripped Securities
  - Securities Repurchase Agreements
  - Depository Receipts
  - Gold Bullion Included in Monetary Gold
  - Special Drawing Rights
  - Direct Investment
- References (listed in source document)

### References and Guidance Documents Cited (as listed in the annex)
- GNs C.4, C.7, G.4, G.5, and G.7 (guidance notes posted at Update of the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) (imf.org))
- Balance of Payments and International Investment Position Manual, sixth edition, Chapter 4
- BPM6 Compilation Guide, Appendix 5
- Benchmark Definition of Foreign Direct Investment, fourth edition
- Coordination Direct Investment Survey Guide 2015
- Coordinated Portfolio Investment Survey Guide, third edition
- Handbook on Securities Statistics 2015
- International Merchandise Trade Statistics: Concepts and Definitions 2010
- International Transactions in Remittances: Guide for Compilers and Users
- IMF working paper WP/17/261 Asymmetries in the Coordinated Direct Investment Survey: What lies Behind?

### Key Stakeholders Consulted
- System of National Accounts Lead Editor
- IMF Statistics Department Financial Institutions Division and Government Finance Division

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_Source: https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-11.pdf_