## D.9 Reconciling BPM-Based Direct Investment and AMNE Statistics

## Source details

**Canonical URL:** [D.9 Reconciling BPM-Based Direct Investment and AMNE Statistics](https://www.imf.org/-/media/files/data/statistics/bpm6/ditt/d-9-reconciling-bpm-based-direct-investment-amne-statistics.pdf)

## Other formats

- [Markdown version](/-/media/files/data/statistics/bpm6/ditt/d-9-reconciling-bpm-based-direct-investment-amne-statistics.pdf.md)
- [Structured JSON version](/-/media/files/data/statistics/bpm6/ditt/d-9-reconciling-bpm-based-direct-investment-amne-statistics.pdf.json)

---

### Background and context
- The Direct Investment Task Team (DITT) guidance note discusses challenges that multinational enterprises (MNEs) pose for macroeconomic statistics and the potential benefits of reconciling direct investment (DI) and Activities of Multinational Enterprise (AMNE) statistics.
- DI statistics are compiled under the System of National Accounts 2008 (2008 SNA) and the Balance of Payments and International Investment Position Manual, sixth edition (BPM6), using the residency approach.
- AMNE statistics use a nationality approach focused on the location of the entity that ultimately controls the units, and they are classified by ultimate partner country.
- The Framework of Direct Investment Relationships (FDIR) underpins DI concepts; the Globalization Task Team (GZTT) is exploring sectoral breakdowns by foreign-controlled corporations, domestic MNEs, and other corporations in institutional sector accounts.
- AMNE statistics provide economic measures (number of affiliates, turnover, employment) while DI statistics measure financing through transactions between resident companies and nonresident affiliates or parent company.
- Key definitional and population differences:
  - AMNE uses the Ultimate Controlling Investor (UCI) concept; DI typically reports on Immediate Controlling Parent (ICP).
  - AMNE limits the population to majority-owned (or controlled) affiliates, typically with more than 50 percent equity ownership in each affiliate.
  - DI includes influence relationships of 10 percent or more.
  - Under DI an 80 percent control relationship assigns profit proportionally (80 percent) to the investor; AMNE assigns 100 percent to the UCI.
  - AMNE statistics are sometimes collected on a fiscal or accounting year basis; DI statistics are collected on a calendar-year basis.
- The OECD WGIIS Final Report (2013) proposed an analytical framework to reconcile financial and economic measures of MNEs without modifying BD4, BPM6, or the 2008 SNA.

### Measurement and data challenges
- Required affiliate-level information to reconcile AMNE and DI:
  - Transactions of each affiliate with other affiliates and with the UCI, including intra-country and fellow-affiliate links.
  - Consolidated assets and liabilities to avoid double-counting intra-MNE transactions and positions.
- Practical obstacles and data-collection realities:
  - AMNE and DI often sit with different agencies; institutional barriers and limited data-sharing agreements impede linkage.
  - Legal Entity Identifier (LEI) could aid microdata linkage but is not globally available or mandatory.
  - In a 2013 voluntary OECD WGIIS survey:
    - 40 countries were invited to participate.
    - 20 countries completed the survey.
    - The majority could provide at least some information on resident affiliates, investors, and affiliates abroad.
    - More countries collected economic indicators of MNEs than balance sheet information.
    - In more than half of respondents, different agencies were responsible for DI and AMNE data collection.
- Full affiliate-level reconciliation may be infeasible for many compilers due to responder burden, data collection costs, and uncertain user demand.

### Framework elements and practical steps (issues for discussion)
- Possible stages and options toward reconciling DI and AMNE statistics:
  - Explore existing sources on economic activities of MNEs that could be linked to DI.
  - Use ownership information from business registers to link DI and AMNE datasets.
  - Collect consolidated assets and liabilities of MNE groups.
  - Expand AMNE-type collections to include: sales/turnover/output; employment; value added; imports and exports of goods and services; and number of enterprises.
  - Expand data collection on intra-company activities and obtain detailed local enterprise level data to enable full reconciliation.
- Potential alternative presentations enabled by reconciled DI-AMNE information:
  - Sectorization on the basis of foreign ownership and company size to identify primary income related to foreign affiliates and detail re-invested earnings and dividends by type and size of ownership.
- Complementarities with other initiatives:
  - A reconciled DI-AMNE dataset could complement Country by Country (CbC) reporting within the BEPS initiative by providing additional context without additional responder burden.
- Recommended practical linkage steps:
  - Explore linking DI microdata with pre-existing datasets to investigate MNE economic activities; linkage would be aided by a common identifier such as the LEI and by expanded public information sources (e.g., OECD ADIMA, private sources like EGR and Moody’s Orbis).
  - At minimum, assess the extent to which AMNE-type information currently exists and identify gaps.
  - Encourage countries to include aspects of reconciled DI-AMNE statistics in ongoing statistical development.

### Outcomes of DITT discussion and consensus points
- General agreements and suggestions:
  - DITT members generally agreed that linked DI and AMNE statistics would be well received, conditional on consistency between datasets.
  - Members suggested developing statistical definitions and primary breakdowns closer to accounting standards and economic/financial variables (income statement, employment data, balance sheet).
  - Institutional barriers were noted where AMNE statistics are outside the BPM framework and collected by different agencies.
  - Members observed that focusing reconciliation on control relationships would be more feasible for compilers.
  - Members recommended aligning any reconciliation guidance with the GZTT’s work on MNEs.
- Recommended changes to existing manuals:
  - No change to Appendix 4 in the BPM6 is recommended.

### Recommendations from the guidance note (DITT)
- Develop a framework for reconciling DI and AMNE statistics that:
  - Identifies additional breakdowns of DI or AMNE statistics, new supplemental presentations, and possibly additional variables to enable joint use.
  - Considers, for example, separately identifying control relationships within DI statistics to better align with AMNE.
  - Encourages compilers to explore feasibility of producing reconciled statistics via direct AMNE collection or linking to existing information.
  - Invites compilers that do not currently collect AMNE information to explore options to begin collecting these data and to learn from countries that do.
- Minimum and exploratory actions for compilers:
  - At minimum, assess the extent to which AMNE-type information currently exists and identify gaps.
  - Explore linking DI microdata with pre-existing datasets using common identifiers such as the LEI.
  - Consider collecting consolidated assets and liabilities of MNE groups.
  - Consider expanding AMNE collections to include sales/turnover/output; employment; value added; imports and exports of goods and services; and number of enterprises.

### Rejected alternative and rationale
- Requiring full reconciliation of DI and AMNE statistics using detailed affiliate-level results was rejected because:
  - A fully reconciled MNE dataset with affiliate-level transactions would often be infeasible due to extensive data collection, responder burden, and cost.
  - Compilers must be confident of user demand and that companies can provide the required level of detail.
  - Nevertheless, countries that wish to pursue full reconciliation should not be discouraged.

### Questions for discussion posed by DITT
- Should a framework for reconciliation between DI and AMNE statistics be included in BPM7 even though it goes beyond the existing BPM framework?
- If yes, should a study/survey be conducted to take the pulse of the community regarding such a framework to support DITT in developing proposed data compilation guidance?
- Should the focus be on reconciling with AMNE statistics, or is it more important to align with the GZTT’s work on MNEs?
- Do members support additional DI breakdowns, such as an “of which for control relationships”, to better align with the MNE concept used in AMNE and likely by the GZTT?

### Supplementary information: references and MNE framework highlights
- References cited:
  - OECD (2013), Harmonisation and Integration of Financial and Economic Measures of Multinational Enterprises, Final WGIIS report endorsed by the OECD Investment Committee in January 2013 (reference: “DAF/INV/STAT(2011)10/FINAL”).
  - OECD (2016), Harmonisation and Integration of Financial and Economic Measures of MNEs: Feasibility of and Priorities for Compilation, presented at the WGIIS March 2016 meeting (reference “DAF/INV/STAT(2015)2/REV1”), Paris.
- Diagram note:
  - Diagram labeled "Direct Investment Activities of Multinational Enterprise" includes labels: Majority-owned affiliates and UCIs (FATS); Affiliates with no cross-border links; Minority-owned foreign affiliates; and includes the numeric marker: 10.
- Extract from OECD (2013) — quoted highlights of the proposed MNE framework:
  “The highlights of the new MNE Framework developed by the OECD WGIIS are to:
  (1) measure total assets/liabilities and selected details as well as total economic activities of MNEs according to a common data reporting framework (i.e. going beyond, but also including FDI);
  (2) cover both cross-border and domestic (local) financing;
  (3) include direct and indirect control relationships (more than 50 percent ownership of voting equity);
  (4) use stock data from balance sheets of direct investment enterprises as a matter of principle and to consider use of flow data, and data on the acquisition of equity by type (M&A, green field, etc.) as a supplement;
  (5) allocate to ultimate investor (ultimate controlling parent) and to ultimate host;
  (6) consolidate statistically for the group to eliminate double counting due to funds in transit or round-tripping; and
  (7) provide a set of meaningful indicators to analyze MNEs.”

*Prepared by Lee Mallett (UK Office of National Statistics), Andrew Jowett (UK Office of National Statistics), Astrit Sulstarova (UNCTAD), Emilie Kothe (OECD), Cyril Rebillard (IMF), and Maria Borga (IMF) for the Direct Investment Task Team (DITT).*

### Section 1

### D.9 Reconciling BPM-Based Direct Investment and AMNE Statistics

### Background and context
- The Direct Investment Task Team (DITT) guidance note discusses challenges that multinational enterprises (MNEs) pose for macroeconomic statistics and the potential benefits of reconciling direct investment (DI) and Activities of Multinational Enterprise (AMNE) statistics.
- DI statistics are compiled under the System of National Accounts 2008 (2008 SNA) and the Balance of Payments and International Investment Position Manual, sixth edition (BPM6), using the residency approach.
- AMNE statistics use a nationality approach focused on the location of the entity that ultimately controls the units, and they are classified by ultimate partner country.
- The Framework of Direct Investment Relationships (FDIR) underpins DI concepts; the Globalization Task Team (GZTT) is exploring sectoral breakdowns by foreign-controlled corporations, domestic MNEs, and other corporations in institutional sector accounts.
- AMNE statistics provide economic measures (number of affiliates, turnover, employment) while DI statistics measure financing through transactions between resident companies and nonresident affiliates or parent company.
- Key definitional and population differences:
  - AMNE uses the Ultimate Controlling Investor (UCI) concept; DI typically reports on Immediate Controlling Parent (ICP).
  - AMNE limits the population to majority-owned (or controlled) affiliates, typically with more than 50 percent equity ownership in each affiliate.
  - DI includes influence relationships of 10 percent or more.
  - Under DI an 80 percent control relationship assigns profit proportionally (80 percent) to the investor; AMNE assigns 100 percent to the UCI.
  - AMNE statistics are sometimes collected on a fiscal or accounting year basis; DI statistics are collected on a calendar-year basis.
- The OECD WGIIS Final Report (2013) proposed an analytical framework to reconcile financial and economic measures of MNEs without modifying BD4, BPM6, or the 2008 SNA.

### Measurement and data challenges
- Reconciling AMNE and DI requires detailed affiliate-level information on:
  - Transactions of each affiliate with other affiliates and with the UCI, including intra-country and fellow-affiliate links.
  - Consolidated assets and liabilities to avoid double-counting intra-MNE transactions and positions.
- Practical obstacles:
  - AMNE and DI often sit with different agencies; institutional barriers and limited data-sharing agreements impede linkage.
  - Legal Entity Identifier (LEI) could aid microdata linkage but is not globally available or mandatory.
  - Not all countries collect AMNE information. In a 2013 voluntary OECD WGIIS survey:
    - 40 countries were invited to participate.
    - 20 countries completed the survey.
    - The majority could provide at least some information on resident affiliates, investors, and affiliates abroad.
    - More countries collected economic indicators of MNEs than balance sheet information.
    - In more than half of respondents, different agencies were responsible for DI and AMNE data collection.
- Full affiliate-level reconciliation may be infeasible for many compilers due to responder burden, data collection costs, and uncertain user demand.

### Issues for discussion (framework elements and practical steps)
- Possible stages and options toward reconciling DI and AMNE statistics include:
  - Exploring existing sources on economic activities of MNEs that could be linked to DI.
  - Using ownership information from business registers to link DI and AMNE datasets.
  - Collecting consolidated assets and liabilities of MNE groups.
  - Expanding AMNE-type collections to include: sales/turnover/output; employment; value added; imports and exports of goods and services; and number of enterprises.
  - Expanding data collection on intra-company activities and obtaining detailed local enterprise level data to enable full reconciliation.
- Reconciled DI-AMNE information could support alternative presentations of national accounts, for example:
  - Sectorization on the basis of foreign ownership and company size to identify primary income related to foreign affiliates and detail re-invested earnings and dividends by type and size of ownership.
- Potential complementarities with other initiatives:
  - A reconciled DI-AMNE dataset could complement Country by Country (CbC) reporting within the BEPS initiative by providing additional context without additional responder burden.

### Outcomes of DITT discussion and consensus points
- DITT members generally agreed that linked DI and AMNE statistics would be well received, conditional on consistency between datasets.
- Members suggested developing statistical definitions and primary breakdowns closer to accounting standards and economic/financial variables (income statement, employment data, balance sheet).
- Institutional barriers were noted where AMNE statistics are outside the BPM framework and collected by different agencies.
- Members observed that focusing reconciliation on control relationships would be more feasible for compilers.
- Members recommended aligning any reconciliation guidance with the GZTT’s work on MNEs.

### Recommendations from the guidance note (DITT)
- Develop a framework for reconciling DI and AMNE statistics that:
  - Identifies additional breakdowns of DI or AMNE statistics, new supplemental presentations, and possibly additional variables to enable joint use.
  - Considers, for example, separately identifying control relationships within DI statistics to better align with AMNE.
  - Encourages compilers to explore feasibility of producing reconciled statistics via direct AMNE collection or linking to existing information.
  - Invites compilers that do not currently collect AMNE information to explore options to begin collecting these data and to learn from countries that do.
- Recommended practical steps:
  - Explore linking DI microdata with pre-existing datasets to investigate MNE economic activities; linkage would be aided by a common identifier such as the LEI and by expanded public information sources (e.g., OECD ADIMA, private sources like EGR and Moody’s Orbis).
  - At minimum, assess the extent to which AMNE-type information currently exists and identify gaps.
  - Encourage countries to include aspects of reconciled DI-AMNE statistics in ongoing statistical development.
- Maintain current guidance:
  - No change to Appendix 4 in the BPM6 is recommended.

### Rejected alternative
- Requiring full reconciliation of DI and AMNE statistics using detailed affiliate-level results was rejected on the grounds that:
  - A fully reconciled MNE dataset with affiliate-level transactions would often be infeasible due to extensive data collection, responder burden, and cost.
  - Compilers must be confident of user demand and that companies can provide the required level of detail.
  - Nevertheless, countries that wish to pursue full reconciliation should not be discouraged.

### Questions for discussion posed by DITT
- Should a framework for reconciliation between DI and AMNE statistics be included in BPM7 even though it goes beyond the existing BPM framework?
- If yes, should a study/survey be conducted to take the pulse of the community regarding such a framework to support DITT in developing proposed data compilation guidance?
- Should the focus be on reconciling with AMNE statistics, or is it more important to align with the GZTT’s work on MNEs?
- Do members support additional DI breakdowns, such as an “of which for control relationships”, to better align with the MNE concept used in AMNE and likely by the GZTT?

*Prepared by Lee Mallett (UK Office of National Statistics), Andrew Jowett (UK Office of National Statistics), Astrit Sulstarova (UNCTAD), Emilie Kothe (OECD), Cyril Rebillard (IMF), and Maria Borga (IMF) for the Direct Investment Task Team (DITT).*

### Section 2

### Supplementary Information: References and MNE Framework Highlights

### References
- OECD (2013), Harmonisation and Integration of Financial and Economic Measures of Multinational Enterprises, Final WGIIS report endorsed by the OECD Investment Committee in January 2013 (reference: “DAF/INV/STAT(2011)10/FINAL”).
- OECD (2016), Harmonisation and Integration of Financial and Economic Measures of MNEs: Feasibility of and Priorities for Compilation, presented at the WGIIS March 2016 meeting (reference “DAF/INV/STAT(2015)2/REV1”), Paris.

### Diagram 1: DI and AMNE statistical populations
- Title shown: Direct Investment Activities of Multinational Enterprise
- Diagram labels preserved:
  - Majority-owned affiliates and UCIs (FATS)
  - Affiliates with no cross-border links
  - Minority-owned foreign affiliates
- Diagram includes the numeric marker: 10

### Extract from OECD (2013) — Highlights of the proposed MNE framework
- Quoted text:
  “The highlights of the new MNE Framework developed by the OECD WGIIS are to:
  (1) measure total assets/liabilities and selected details as well as total economic activities of MNEs according to a common data reporting framework (i.e. going beyond, but also including FDI);
  (2) cover both cross-border and domestic (local) financing;
  (3) include direct and indirect control relationships (more than 50 percent ownership of voting equity);
  (4) use stock data from balance sheets of direct investment enterprises as a matter of principle and to consider use of flow data, and data on the acquisition of equity by type (M&A, green field, etc.) as a supplement;
  (5) allocate to ultimate investor (ultimate controlling parent) and to ultimate host;
  (6) consolidate statistically for the group to eliminate double counting due to funds in transit or round-tripping; and
  (7) provide a set of meaningful indicators to analyze MNEs.”

---


_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/ditt/d-9-reconciling-bpm-based-direct-investment-amne-statistics.pdf_