## 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/final-annotated-outlines/bpm7-annex-11-data-by-partner-economy-annotated-outline.pdf)

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### I. Introduction: purpose and basic principles
- Purpose: update Section F.2, Chapter 4, BPM6 on data by partner economy, drawing on BPM6 paragraphs 4.146–148 and 14.23–24; BPM6CG A5.2–5.7, and other manuals/guides.
- Core principle: attribution is based on the economy of residence of the counterparty to the transaction or financial position to avoid bilateral asymmetries.
- Current account transactions (except investment income): partner attribution based on the “transactor approach” (transactions allocated to the economy of residence of the nonresident with whom the transaction is made).
- Financial instruments and investment income: basic principle should be the economy of residence of the counterparty (transactor approach), but the alternative debtor/creditor method is possible if clearly specified when presenting data.
- Positions: partner data attribution on asset/liability positions will follow the debtor-creditor approach (as in BPM6 paragraphs 4.152 and 4.154).
- Agents, nominee accounts, custodians, and quasi-corporations will be discussed; example from Handbook on Securities Statistics 2015 paragraph 6.39 to illustrate nominee/custodian issues (resident of Country A holds securities issued by resident of Country B via nominee and custodian in Country C; custodian may not know ultimate owner).

### II. Compilation of cross-border transactions and positions data by partner economy (item-specific guidance)
- Basis: will follow BPM6 paragraphs 4.150–4.164 with updated cross-references to other BPM chapters.
- Goods
  - Paragraph 4.150 (second sentence) updated to mention other relevant criteria (e.g., economy of shipment and consumption).
  - Footnotes to be added defining criteria other than economy of origin based on IMTS 2010.
  - Merchanting and goods for processing within factory-less global production arrangements (GN C.4 and G.7) addressed, including where source data exhibiting physical cross-border flow of goods requires adjustments to a change of economic ownership basis and corresponding partner-economy adjustments.
  - Additional examples will be provided.
  - “Inverse merchanting” and adjustments required for correct partner attribution will reference BPM7 Chapter 10 (Goods Account).
- Services
  - Freight and Insurance: no significant changes.
  - Other Services: discussion of partner attribution for intellectual property (GN G.5), including 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 paid to miners/validators without corresponding liability will be noted; related compilation guidance to be included in updated BPM6CG.
  - Intermediated purchases: example where resident of compiling economy X purchases hotel or transport services from non-resident economy Y using a digital intermediation platform (DIP)/tour operator based in non-resident economy Z:
    - For economy Z (tour operators/DIPs) only the relevant service fee should be recorded, not the total amount (based on recommendations of GNs C.4 and C.7).
    - The remaining amount should be recorded to the end service-providing economy Y (hotel/transport).
- Remittances
  - Remittances often closely related to migration; flows by partner economies are analytically useful.
  - Data by partner economies need not include all partners; focus on major remittance corridors (pairs of economies with large flows).
  - For most economies, a small number of corridors cover most remittance flows.
  - BPM6 paragraph A5.30: remittance flows to and from major partner economies may be provided on a supplementary basis, especially for major corridors.
  - Relevant references from BPM7 Annex 4 (Remittances) will be provided.
- Financial transactions and positions (other than direct investment)
  - Financial instruments (BPM6 paragraphs 4.152–154): no significant changes.
  - Securities, stripped securities, securities repurchase agreements, and depository receipts:
    - Brief updates based on CPIS Guide, third edition, Chapter 3 covering:
      - 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;
      - depository receipts: clarification example added to end of paragraph 4.161 noting that, 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 based on the economy of the immediate debtor/creditor rather than that of the counterpart transactor (as in BPM6 paragraph 4.156).
  - Footnote: Benchmark Definition of Foreign Direct Investment, fourth edition (BD4 or its update) strongly recommends the use of debtor/creditor principle for compilation of direct investment transactions and positions by partner economy.
  - Supplementary data on ultimate investing economy (UIE) and the ultimate host economy (UHE) and identification of pass-through funds: reference to BPM7 Annex 6 “Selected Issues on Direct Investment.”
  - CDIS Guide 2015 and BD4 provide recommendations for compiling FDI data on a directional basis by partner economies.
  - Main reasons for bilateral asymmetries of CDIS data reported by an economy and its main counterpart economies from CDIS Guide 2015 Box 6.5 and other documents will be referenced.

### 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 (list of manuals, guides, and papers to be used as background and citation sources)

### References to guidance and manuals (to be used within annex)
- GNs C.4, C.7, G.4, G.5, and G.7.
- 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/final-annotated-outlines/bpm7-annex-11-data-by-partner-economy-annotated-outline.pdf_