## DITT Second Meeting (November 23, 2020) — Summary of Discussions

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### Introduction
- Meeting held on November 23, 2020 via WebEx; co-chaired by Ms. Maria Borga (Deputy Chief, Balance of Payments Division, IMF’s Statistics Department) and Mr. Krzysztof Makowski (chair of the OECD Working Group on Investment Statistics (WGIIS)).
- Objectives:
  - Discuss the process underlying preparation of the Guidance Notes (GNs) during the first round.
  - Present the Summary of Discussions (SOD) of the Committee meeting (October 26–29, 2020).
  - Agree on DITT’s follow-up work until the February 2021 Committee meeting.
- Changes noted:
  - New DITT members, including representatives with Government Finance Statistics experience.
  - Change in DITT co-secretariat from the OECD: Ms. Francesca Spinelli replaces Ms. Maria Borga at the OECD and will support the secretariat.
  - Thanks expressed to Ms. Emilie Kothe for support during the transitory period.

### Drafting and Review Process
- Overview of the first-round drafting and review process, Committee SOD (October 26–29, 2020), and timeline for remaining GNs and coordination with other Task Teams (TTs).
- Drafting
  - First-round drafting met a tight deadline; quality of GNs and efforts by assigned teams were noted as remarkable.
  - Consultation within DITT was timely.
  - Secretariat consolidated comments (including IMF staff) and drafting teams revised GNs to include a summary of DITT discussion, explicitly noting preferences, opinions, and diverging views.
  - Co-chairs provided direction where consensus was difficult (example GN D.1).
- BPTT Review
  - GNs moved to BPTT and WGIIS review simultaneously.
  - Secretariat edited GNs before BPTT: added an abstract, moved reference parts to annexes, and re-edited questions to respect page limits.
  - BPTT review focuses mostly on substantive issues and appropriateness of questions posed to the Committee (example: for D17, BPTT suggested further consultation with FITT and AEG).
  - BPTT flags strong objections to recommendations and confirms suitability for Committee consideration.
- WGIIS Review
  - First WGIIS consultation occurred simultaneously with BPTT; no strong objections to content, discussion, and recommendations.
  - Comments provided thorough responses to questions, preferences, and requests for clarification.
  - Second WGIIS consultation occurred during public consultation; WGIIS Secretariat organized a webinar and an online questionnaire to assess feasibility and support for recommendations, including those affecting the Benchmark Definition.
  - WGIIS consultation outcomes were transmitted to Committee members for the October 2020 discussions.
- Public Consultation
  - Three of the five GNs produced in this round went for public consultation with a four-week deadline.
  - An online questionnaire accompanied the GNs; IMF and OECD raised awareness to ensure adequate response.
  - Secretariat prepared a summary of responses for Committee consideration.
- Summary of reactions:
  - Members generally agreeable with the first-round process; no major changes proposed.
  - Secretariat will continue to support drafting teams by editing and reviewing GN format before BPTT and WGIIS review.

### Ultimate Investing Economy/Ultimate Host Economy and Identifying Pass-Through Capital (D.6)
- Public consultation outcomes:
  - Major preference for supplemental presentation of DI statistics by UIE, UHE, and separate identification of pass-through funds.
  - Need to streamline number of concepts for ultimate investor.
  - Practical concerns: difficulties obtaining ownership information for UHE allocation and supplemental presentation of DI flows and income.
- Committee agreed:
  - a. Usefulness of data on UIE, UHE, and pass-through funds.
  - b. Develop supplemental presentations of DI statistics by ultimate partner economy and identify pass-through funds.
  - c. Support identification of different approaches to reallocate DI position from immediate to UIE, and strongly encourage a single recommended/preferred method for cross-country comparability.
  - d. Provide a ranking of further acceptable approaches.
- Preferred methods for practical reasons:
  - Winner takes all (control) approach.
  - First operating unit for UHE.
- Next Steps:
  - Drafting team to revise GN in light of Committee discussions and decisions.
  - Consult with other TTs, especially the GZTT.
  - Revised GN will be considered by the Committee through written procedure.
- Note:
  - Further specificity on streamlining ultimate investor concepts may follow consultation with GZTT.

### Sectoral Breakdown of Direct Investment (D.7)
- Public consultation outcomes:
  - Majority favored adopting sectoral breakdown of DI as standard components of the balance of payments and the IIP, and moving directional breakdowns to memorandum items.
  - Minority view: sectoral breakdown may have less analytical value; moving current components to memorandum items could risk countries ceasing to report details.
- Committee strongly supported:
  - a. Introducing the sectoral breakdown for DI as a standard component in the balance of payments and the IIP.
  - b. Including the directional breakdowns as memorandum items to the standard presentation.
  - c. Reviewing current classification of DI to avoid numerous components under a single functional category.
- Additional support:
  - Most Committee members supported incorporating sectoral classification of DI into currency composition, external debt statistics, and related items in the primary income account of the balance of payments.
- Next Steps:
  - Drafting team to revise GN to state final recommendation, incorporating sectoral classification into the standard table and in external debt statistics; current components will be presented as memorandum items.
  - Simplify presentation of DI in the primary income account.
  - Revised GN will be considered by the Committee through written procedure.

### Reconciling BPM-based Direct Investment and AMNE Statistics (D.9)
- Public consultation outcomes:
  - General favor for a framework to reconcile DI and AMNE statistics and its inclusion in BPM7, with emphasis on control relationships despite going beyond existing balance of payments framework.
  - Practical concerns: coordination, allocation of responsibilities among data-producing institutions, and possible additional respondent burden.
- Committee expressed strong support for:
  - a. Developing a framework for reconciling DI and AMNE statistics for possible inclusion in BPM7 and launching a survey to gather feedback from compilers on such framework.
  - b. Including a definition of MNE in the GN.
  - c. Fully coordinating and aligning with GZTT work on MNEs.
  - d. Introducing additional breakdowns of DI statistics to better align with the concept of MNEs used in AMNE, coordinated with GZTT recommendations.
- Next Steps:
  - Consult with other TTs, especially the GZTT, and add a definition of MNE.
  - Reconcile not only with AMNE/FATS but with GZTT work; suggest breakdowns of DI statistics usable in reconciliation methods.
  - Launch a stocktaking survey with IMF and OECD WGIIS.
  - Revised GN will be considered by the Committee through written procedure.

### Preparation of Remaining GNs
- Timeline and scheduling:
  - Upcoming Committee meetings in 2021: Feb. 22–24, June 21–24, and Oct. 26–28.
  - Current plans of various TTs:
    - Seven GNs will be prepared for the February 2021 meeting, including two re-scheduled.
    - Four GNs for the June 2021 meeting.
    - Three GNs for the October 2021 meeting.
  - Flexibility is available in the process.
- Deadline for next round circulation:
  - GNs intended for discussion in the February 2021 Committee meeting should be circulated for BPTT and WGIIS review by December 15, 2020.
- Coordination among TTs:
  - AEG consultation, when needed, will be simultaneous with BPTT.
  - For this round, consultation with GZTT, if needed, will be exceptionally undertaken simultaneous with DITT.
  - Committee emphasized reconciling various proposed supplemental breakdowns across GNs at the end of the process.
  - Suggestion: drafting of GN D15 can be coordinated with GN C8 in CATT due to related topics.
  - Support for a holistic, comprehensive framework for all supplemental presentations for compilers’ benefit.
- Specific queries and clarifications:
  - GN C2 (approved by the Committee and includes a breakdown for direct investment income) will be reconciled with GN D6 at the end of the process.
  - Requests for country examples for GN D13 and IMF contributor names for drafting teams were raised.

### Actions
- DITT Secretariat to:
  - Circulate the next round of GNs for review within DITT, aiming to attain BPTT and WGIIS review by December 15.
  - Communicate the names of IMF staff for the remaining GNs to the drafting teams.
  - Prepare and circulate the notes of meeting before posting and circulate the presentation on the DITT website.
- DITT co-chair to:
  - Undertake internal research within the IMF on the issue in GN D13 and communicate findings to the drafting team.

### Attendees
- IMF: Maria Borga (co-chair), Padma Hurree-Gobin (co-secretariat), Artak Harutyunyan, Thomas Elkjaer
- OECD: Krzysztof Makowski WGIIS chair (co-chair), Francesca Spinelli (co-secretariat), Emilie Kothe
- ECB: Carmen Picón Aguilar
- Eurostat: Irene Madsen and Philippe de Rougemont
- Country Representatives: Michael Abbondante (Australia), Fernando Lemos (Brazil), Eric Simard (Canada), Mirco Lattwein (Germany), Mei Ling Tjung (Indonesia), Stefano Federico (Italy), Paul Feuvrier (Luxembourg), Fedor Kharlashin (Russia), Piet Swart (South Africa), Fernando Nieto (Spain), Lee Mallet (United Kingdom), Raymond Mataloni (USA), and Wilson Phiri (Zambia)
- Excused: Emma Angulo (IMF), Fadhila Alfaraj (IMF), Astrit Sulstarova (UNCTAD), Sakiko Ohtsuka (Japan)
- Absent: Bruno Rocha (IMF), Yang Can (China)

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_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/ditt/ditt-second-meeting-minutes-november-23-2020.pdf_