## Direct Investment Task Team (DITT) — November 23, 2020

## Source details

**Canonical URL:** [Direct Investment Task Team (DITT) — November 23, 2020](https://www.imf.org/-/media/files/data/statistics/bpm6/ditt/ditt-second-meeting-presentation-november-23-2020.pdf)

## Other formats

- [Markdown version](/-/media/files/data/statistics/bpm6/ditt/ditt-second-meeting-presentation-november-23-2020.pdf.md)
- [Structured JSON version](/-/media/files/data/statistics/bpm6/ditt/ditt-second-meeting-presentation-november-23-2020.pdf.json)

---

### DITT membership and coordination
- Membership changes:
  - Mr. Eric Simard replaced Ms. Jennifer Withington.
  - Mr. Michael Abbondante replaced Mr. Paul Roberts.
  - Mr. Stefano Federico (Banca d’Italia) joined the DITT team.
  - Ms. Francesca Spinelli replaced Maria Borga at the OECD.
- New members added to coordinate with government finance statistics (GFS):
  - Ms. Mei Ling Tjung (Ministry of Finance of Indonesia)
  - Mr. Philippe de Rougement (Eurostat)
  - Mr. Bruno Rocha (Government Finance Division, IMF Statistics Department)
- DITT is co-chaired and secretariat-shared by the IMF and OECD; work started in June 2020.
- Coordination with other Task Teams emphasized, including GZTT, FITT, BPTT, AEG, and communication of draft guidance notes to other TTs for comment.

### Planned guidance notes (GN) and committee meeting schedule
- Planned preparation of 18 guidance notes covering methodological and measurement issues associated with direct investment.
- Guidance notes and scheduling highlights:
  - D.1 Greenfield and extensions of capital — October 2020 (moved to February 2021)
  - D.6 Ultimate investing country/ultimate host country and removing pass-through capital — October 2020
  - D.7 Sectoral breakdown of DI — (October 2020 listed)
  - D.17 Identifying super dividends and the borderline between dividends and withdrawals of equity — October 2020 (moved to February 2021)
  - D.3 Treatment of collective investment institutions — February 2021
  - D.4 Corporate Inversions; D.5 Eliminating imputations for entities owned or controlled by general government for fiscal purposes; D.12 Including intra-concern derivatives in DI; D.14 Financial conduits — scheduled February 2021
  - D.8 Public private partnerships — June 2021
  - D.2 Valuation of unlisted equity; D.15 Treatment of payments made by non-resident affiliates on behalf of DI enterprises; D.16 Treatment of retained earnings — October 2021
  - Additional GNs listed for June 2021 and later include D.10, D.13, D.18, among others.

### Drafting process, review stages, and public consultation
- Drafting and review workflow:
  - Collaborative drafting within assigned teams; draft submitted to chairs for review.
  - DITT Secretariat shares drafts with the Task Team; DITT comments circulated to whole group during consultation; final revised version includes summary of DITT preferences and is reviewed by co-chairs.
  - If no consensus, co-chairs provide a sense of direction (example: GN D.1).
  - BPTT/WGIIS review: comments requested only in case of strong objection; confirm whether GN is fine to move to BOPCOM.
  - Public consultation: four-week time span, administered by questionnaire online; practical feasibility questions included.
- WGIIS coordination:
  - Close cooperation because GNs will inform the BD4 update; two rounds of consultation planned.
  - Simultaneous review of DITT GNs by BPTT and WGIIS (1 week).
  - WGIIS organized a webinar on October 13, 2020, to discuss GNs D6, D7, D9, and D17; webinar included presentations, online questionnaire outcome, and discussions.
  - WGIIS/BPTT review for February 2021 GNs tentatively planned for the week of December 7–14, 2020; WGIIS webinar tentatively planned during the first week of February 2021; next WGIIS meeting: March 23–25, 2021.

### Outcomes from public consultation and BOPCOM — D.7 Sectoral breakdown of FDI
- Public consultation outcome:
  - Majority favored the sectoral breakdown as closing a significant gap for analyses such as balance sheet analysis.
  - Dissenting opinions: sectoral breakdown has lower analytical value for DI; moving current components to memorandum items risks countries not reporting them.
  - 9 positive responses out of 13, representing 69%.
  - Some respondents preferred maintaining standard components and adding sectoral breakdown as memorandum item.
  - Preference to keep reinvested earnings as a standard component in both the financial account and the primary income account.
- BOPCOM outcome and requests:
  - D.7 recommended including the sectoral breakdown of DI in the standard components and moving current components needed to convert the A/L presentation to the directional presentation to memorandum items of the standard table.
  - Committee strongly supported the recommendation.
  - Committee asked drafting team to finalize GN by:
    - Revising GN to state final recommendation, incorporating sectoral classification into the standard table and external debt statistics.
    - Including current components as memorandum items.
    - Simplifying presentation of DI in the primary income account.
  - Revised GN to be considered by the Committee through written procedure.

### Outcomes from public consultation and BOPCOM — D.6 Ultimate investor/host economy (UIE/UHE) and pass-through funds
- Public consultation findings:
  - Overall majority support supplemental presentations by UIE/UHE and pass-through funds, though practical concerns were expressed for FDI flows and income.
  - For UIE allocation methods, a majority agreed to have all three proposed methods as alternatives; many favored the WTA (winner takes all) method.
  - For UHE allocation, a majority agreed to have all four proposed methods as alternatives; slightly more respondents preferred the First operating unit method.
  - Full consensus on the need to streamline the number of concepts for the Ultimate investor.
  - Breakdown by residency of the ultimate investor was considered a good indicator for pass-through funds.
- BOPCOM outcome and requests:
  - D.6 recommended a supplemental presentation of FDI positions, flows and income by UIE/UHE and an indicator of pass-through using the residency of the ultimate investor.
  - Committee strongly supported the recommendation.
  - Committee strongly encouraged identifying a single recommended/preferred method for cross-country comparability and ranking other acceptable methods.
  - For practical reasons, most preferred methods were winner takes all (control) approach and first operating unit for UHE.
  - Committee asked drafting team to finalize GN by:
    - Revising GN to state final recommendation, including selection of a single recommended method and possible ranking of other methods.
    - Consulting with other TTs, especially the GZTT.
  - Revised GN to be considered by the Committee through written procedure.

### Outcomes from public consultation and BOPCOM — D.9 Reconciling AMNE/FATS statistics with FDI statistics
- Public consultation findings:
  - General support to include a supplemental framework reconciling DI and AMNE statistics in BPM7 even though it goes beyond the existing BPM framework.
  - Focus on control aspect and linkage with Globalization Task Team (GZTT) work to foster SNA-BPM consistency.
  - Recommendation to conduct a survey to collect needs, suggestions, operational and implementation issues to support DITT in developing the framework.
  - Practical challenges identified:
    - Reconciliation of DI and MNE populations: DI>10%; MNE>50%.
    - Ultimate partner country for MNE differs from DI immediate partner country; consistent definitions for MNE, ultimate investing economy, ultimate hosting economy important.
    - Data sharing arrangements between national institutions.
    - Advancement on LEI can be of added value.
- BOPCOM outcome and requests:
  - D.9 recommended developing a framework to reconcile DI and statistics on MNEs, including identifying specific breakdowns, new supplemental presentations, and additional variables to enable the two sets of statistics to be used together.
  - Committee strongly supported developing such a framework.
  - Committee agreed to carry out a stock-taking survey clear on ideas to be tested and aspects of reconciliation.
  - Committee asked drafting team to finalize GN by:
    - Consulting with other TTs, especially GZTT (which is examining how to better capture activities of MNEs, including breaking down institutional sector accounts and gross value added (GVA) into foreign-controlled corporations, domestic MNEs, and other corporations).
    - Launching stocktaking survey with IMF and OECD WGIIS.
    - Preparing a final GN by adding a definition of MNE and suggesting breakdowns of DI statistics to be used in reconciliation methods.
  - Revised GN to be considered by the Committee through written procedure.

### Other BOPCOM observations and acknowledgements
- Committee appreciation:
  - Quality of the DITT guidance notes and team efforts.
  - Consultation with WGIIS organized by the OECD.
- Committee observations:
  - Many overlapping issues and recommendations across GNs.
  - Many supplemental presentations being recommended.
  - Need to assess recommendations/proposals holistically at the end of the process to ensure a comprehensive, coherent, and feasible framework for the updated manual.
- Acknowledgements from DITT:
  - Collaborative efforts within tight drafting timelines.
  - Team efforts in producing high-quality GNs.
  - Effort to adhere to GN page limits and to use annexes.
  - Importance of presenting proposals and outcomes neutrally and consulting with WGIIS.

### Process questions, timelines, and next steps
- Questions posed for participants:
  - Solicit thoughts and experiences on the current process and proposals to ease the process.
- 2021 tentative BOPCOM meeting schedule:
  - February 22–24
  - June 21–24
  - October 26–28 or October 25–28 if virtual
- Next set of GNs and committee meeting allocations:
  - February 2021: D.1; D.3; D.4; D.5; D.12; D.14; D.17
  - June 2021: D.8; D.10; D.13; D.18
- Coordination timeline: For June and October 2021 rounds, specific timeline allocated for consultation with other Task Teams.

---


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