## Balance of Payments Task Team (BPTT): Progress and Next Steps — Fourth (virtual) Meeting, November 30, 2021

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**Canonical URL:** [Balance of Payments Task Team (BPTT): Progress and Next Steps — Fourth (virtual) Meeting, November 30, 2021](https://www.imf.org/-/media/files/data/statistics/bpm6/bptt/bptt-fourth-meeting-presentation-november-30-2021.pdf)

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### Meeting overview and membership
- Event: Fourth (virtual) Meeting, November 30, 2021.
- Welcoming remarks and agenda items included: Outcome of the October 2021 Committee meeting and Joint AEG meeting; Forthcoming Guidance Notes (GNs) and the Timeline; Related Topics and Concluding Remarks.
- New BPTT members: Ms. Annabelle Mourougane (OECD); Mr. Jannick Damgaard (IMF); Mr. Cyril Rebillard (IMF).
- BPTT Chair: Mr. Carlos Sánchez-Muñoz (IMF). Secretariat: Ms. Padma Hurree Gobin (IMF); Mr. Venkat Josyula (IMF).
- Listed membership included representatives from international organizations and countries (full membership list provided in the meeting materials).

### Outcomes of the October 2021 Committee and Joint AEG/Committee meetings
- Committee meeting (October 27-28, and November 1, 2021) and Joint AEG/Committee (October 26, 29, and November 1, 2021).
- Aim: align SNA and BPM update work and resolve research issues of common interest.

Findings and approvals from the Committee meeting:
- One Note and Eight Guidance Notes (GNs) were presented.
- Note on the Holistic Review of Research Priorities for the BPM6 Update was presented.
- BPTT: 1 GN — B.6 to be part of the proposed annotated outline of BPM7 (with suggested modifications and after final Committee review).
- Presented for preliminary discussion (inputs to be integrated before global consultation): GZTT (2 GNs — G.5 and G.9); IFTT — Consolidated Guidance Note on Islamic Finance (covering six research topics); IETT — Overarching Guidance Note on Informal Economy; CMTT (3 GNs — CM.1, CM.2, CM.3).

Joint AEG/Committee meeting outcomes:
- Seven GNs were presented across task teams.
- GZTT: Valuation of Imports and Exports of Goods in the International Standards CIF to FOB adjustment (G.1); Treatment of MNE and Intra-MNE Flows (G.2).
- CATT (C.4): Merchanting and Factoryless Producers; Clarifying Negative Exports in Merchanting; Merchanting of Services.
- DITT: Valuation of Unlisted Equity (D.2); Treatment of Retained Earnings (D.16).
- FITT: Valuation of Loans (Fair Value) (F.9); Covering Hybrid Insurance and Pension Products (F.12).

### Guidance Note decisions and recommended options
- G.1 Valuation of Imports and Exports of Goods (CIF to FOB adjustment)
  - Committee/AEG members supported Option 2 to be recommended on account of limited testing results; Option 3 to be acknowledged as conceptually sound.
  - Text should mention adoption of transaction prices will be part of the next update and that economies should gear collecting this information and testing ahead of that standard change.
  - Explore collection of invoice value through International Merchandise Trade Statistics (IMTS).
  - Updated GN to be circulated to the Committee and AEG for final approval via written procedure.

- G.2 Treatment of MNE and Intra-MNE Flows
  - Committee/AEG members supported addressing comments on the decision tree.
  - Recommendations to go into both BPM7 and SNA: emphasis on net indicators, supplemental granular information, definition of MNE, control aspect, and decision tree.
  - Updated GN (stating agreed proposals) to be recirculated to the Committee and AEG for final approval via written procedure.

- C.4 Merchanting and Factoryless Producers; Clarifying Negative Exports in Merchanting; Merchanting of Services
  - All Committee/AEG members supported recommendations on Issues A, B, and C.
  - Improvements requested to the decision tree and further clarification on FGPs except for bundled services.
  - Updated GN (excluding unbundled services) to be circulated for final decision and posting on the BPM6/2008 SNA Update websites.
  - Issue of bundled services to be further researched and tested as part of GN C.7 (Treatment of Travel Packages, Health-Related Travel, and Taxes and Fees on Passengers’ Tickets) aiming for discussion in the February 2022 Committee/AEG meeting.

- D.2 Valuation of Unlisted Equity
  - Committee/AEG members supported proposals to identify some preferred estimation methods: Own Funds at Book Value; Transaction Prices; Market Capitalization for valuation of unlisted equity in updated BPM6 and 2008 SNA.
  - Updated version to be circulated to Committee and AEG for final approval via written procedure.
  - Separate discussion on negative equity and provision for losses in consultation with experts from relevant task teams/domains.

- D.16 Treatment of Retained Earnings
  - Committee/AEG members supported including all comments and widening scope to include national accounts perspective.
  - Updated GN (stating agreed proposals) to be recirculated for final approval via written procedure.

- F.9 Valuation of Loans (Fair Value)
  - Committee/AEG members approved Option 1b: retain recommendation to measure loans at nominal value and improve and clarify updated SNA and BPM guidance within existing framework limits, allowing for value reset beyond cases of bankruptcy and liquidation when there is public evidence of loan deterioration.
  - Include practical guidance on implementing Option 1b in the updated BPM6 Compilation Guide.

- F.12 Covering Hybrid Insurance and Pension Products
  - Committee/AEG members supported Proposed Option 2 for Hybrid Insurance Products and Option 3 for Employer-Independent Pensions (with suggested improvements and clarifications).
  - Updated GN to be circulated via written procedure for final decision.

### Task teams work plan and GN inventory
- BPTT: Originally 12 GNs, of which 4 dropped. One GN (B.2) to come to BPTT. Three remaining GNs (B.2, B.3, B.12) to be discussed with the Committee via written procedure (WP).
- CATT: Originally 9 GNs; one GN dropped and another split in two. Only 2 GNs left (C.5.2 and C.7) — one for discussion at the March Committee meeting and the other via WP.
- DITT: Originally 17 GNs, of which two dropped and one added. Completed its work program. Only 1 GN left (D.10), currently under global consultation to be discussed via WP.
- FITT: Originally 14 GNs, of which one dropped and four added. Seven GNs (F.1, F.7, F.13, F.14, F.15, F.17, F.18) to come to BPTT. Seven GNs remaining: 4 to be discussed at Committee meeting and 3 via WP.

Forthcoming BPTT review (high level):
- Timeline note: March 7-9 (Committee meeting). Aftermath March 2022 until March 2025.
- Forthcoming GNs for discussion to BPTT and Committee via written procedure: BPTT*: 1; FITT*: 7; GZTT: 1.
- BPTT to maintain operation: provide advice to the Committee on the Annotated Outline and thereafter on draft chapters of BPM7.

Forthcoming GNs listed for BPTT review:
- BPTT and FITT GNs: B.2: Standardized definition of net international reserves; F.1: More disaggregated definition of the financial sector and financial instruments; F.7: Impact of FINTECH and other financial innovations; F.13: Measurement of margins on buying and selling of financial instruments; F.14: Treatment of factoring transactions; F.15: Debt concessionality; F.17: Master risk participation agreements; F.18: Crypto Assets.
- GZTT, IFTT, IETT, and CMTT GNs: G.5: Economic Ownership and IPPs; G.9: Payments for non-produced Knowledge-based capital; G.7: Global value chains and trade in value-added; IFTT: Consolidated GN on Islamic Finance; IETT: Overarching GN on Informal Economy; CM.2: Terminology and Branding of the International Economic Statistical Standards; CM.3: Taxonomy for Communicating Economic statistics, products and product updates.

### Timeline and key dates toward March 2022 Committee meeting
- Proposed Timeline for the March 2022 Committee Meeting (action durations and dates):
  - Review of the BPTT GN B.2: Up to 3 weeks starting Dec 17, 2021; end date to provide comments No later than Jan 7, 2022.
  - Review of GNs from other TTs: 1 week starting Jan 3, 2022; end date No later than Jan 21, 2022.
  - Posting for global consultation: 4 weeks starting Jan 21, 2022; end date No later than Feb 25, 2022.
  - GN final version including recommendations completed and sent to the Committee/AEG (including global consultation summary): Feb 25, 2022; end date to share with Committee members No later than Mar 4, 2022.
  - Committee Meeting: March 7-9, 2022.
- Note: FITT GNs listed for WP will be sent for BPTT review during end-Jan/Feb 2022.

### Holistic review of the BPM6 Update — guiding principles, prioritization, and next steps
Guiding principles for the holistic review:
- Assessment of the expected global costs and benefits of implementing the changes.
- Total package of amendments should be ambitious but also realistic and carefully consider trade-offs between initiatives.
- Consideration that implementation capacity varies significantly across the Fund’s membership.
- Introduction of supplemental data series (which countries may freely choose only if important for the economy) as one way to address implementation capacity variations.

Proposed prioritization process (to be discussed after the March 2022 Committee meeting):
- Summary of all amendments.
- Preliminary assessment of all proposed GN recommendations into three buckets:
  - To be included in BPM7.
  - To remain on the Committee’s research agenda for future work (and be mentioned as such in BPM7).
  - Not to be included in BPM7, be removed from the research agenda, and possibly request inclusion in other relevant manuals.
- Amendments to be included in the compilation guide.

Outcome from Committee Meeting on prioritization:
- Strong support for the initiative; an extensive paper to be prepared and circulated to members in advance.
- Guiding principles and buckets were supported; some members suggested distinguishing mandatory from supplementary requirements.
- User needs to be evaluated via a survey.
- Process: hold discussions in a separate ad-hoc meeting after the March 2022 Committee meeting.

Actions assigned to the IMF:
- Incorporate proposed changes and recirculate to Committee members via written procedure.
- Launch survey on user needs (questionnaire to be reviewed by Committee members).
- Prepare a summary paper with main changes to be incorporated into BPM7 (including main survey results) for decision at the ad-hoc meeting.

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_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/bptt/bptt-fourth-meeting-presentation-november-30-2021.pdf_