## 1uzbea2020004

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**Canonical URL:** [1uzbea2020004](https://www.imf.org/-/media/files/publications/cr/2020/english/1uzbea2020004.pdf)

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---

### Mission outcomes and priority recommendations
- Mission dates and context:
  - IMF Statistics Department (STA) mission visited Tashkent during October 15–26, 2018.
  - First TA mission under the Data for Decision Fund; second since Presidential Order of September 12, 2017.
  - Main objective: assist the Central Bank of the Republic of Uzbekistan (CBU) in improving collection of statistical data on the balance of payments (BOP), including adoption of an international transactions reporting system (ITRS), and assess progress in implementing the medium-term program for further development of external sector statistics (ESS).

- Primary mission tasks:
  - (i) Compile consistent historical BOP time series and address structural gaps.
  - (ii) Ensure consistent methodology for 2018 BOP data following international standards.
  - (iii) Assess BOP data reliability and facilitate improvements in goods, services, remittances, and selected financial account components.
  - (iv) Advise on additional data sources, including administrative, and develop statistical methods for gap-filling missing observations.
  - (v) Assess feasibility of ITRS implementation.
  - (vi) Follow up on previous mission’s recommendations, including interagency data exchange and progress in data dissemination.
  - (vii) Conduct hands-on training on BOP compilation.

- Progress noted:
  - CBU started production of ESS in accordance with BPM6.
  - Tables and analytical materials published on the CBU website on the BOP, IIP, international reserve assets (IRA), and external debt.
  - Uzbekistan joined the enhanced general data dissemination system (e-GDDS) in May 2018.

- Main shortcomings identified:
  - Errors in compiling the BOP for the first half of 2018: misclassification of selected BOP components; some errors relatively easy to rectify.
  - More serious problems: undervalued components and components valued using the wrong methodology; transactions between residents sometimes recorded in the BOP.
  - Transfer of BOP compilation from Ministry of the Economy (MOE) to the CBU and transition to BPM6 led to a data gap between BOP compiled by the two institutions.

- Mission work to address gaps:
  - Assessed quality of BOP data for first half of 2018, removed classification and scope errors.
  - Recommended improvements for goods, transportation services, travel, wages, personal transfers, households’ holding of cash and deposits, reinvested earnings, reserve assets, and other components.
  - Adjusted data collection forms and developed new reporting forms with Balance of Payments Division (BOPD) staff.
  - Assisted in ITRS preparations, analyzed MOE-prepared BOP for 2016–2017, compiled tentative BOP for 2016–2017, and validated first half 2018 BOP.
  - Integrated analytical BOP format into working file and prepared an action plan with CBU management setting principal recommendations.

### Priority recommendations and action-plan milestones (selected highlights)
- Tabled priority recommendations (as presented):
  - Target Date: June 2019 — Correct data on reinvested earnings of direct investors. Reinvested earnings are to be calculated as the difference between net income of direct investors and the dividends declared. Responsible Institutions: CBU, SSC
  - Target Date: May 2019 — Adjust methods used to calculate compensation of employees component and personal transfers per the mission’s recommendations. Responsible Institutions: CBU, SSC
  - Target Date: June 2019 — Review the list of ITRS codes per the mission’s recommendations and implement the updated version. Responsible Institutions: CBU

- Action-plan key priorities (priority scale: H – High; M – Medium; L – Low; O – Other):
  - Elimination of errors made in compiling ESS (selected H items):
    - Adjust reinvested earnings calculation: Target completion date: June 2019.
    - Calculate imports of passenger transportation services for all modes: Target completion date: April 2019.
    - Adjust business travel and personal travel components: Target completion date: April 2019.
    - Update method for compensation of employees: Target completion date: May 2019.
    - Update methodology for personal transfers: Target completion date: May 2019.
    - Update methodology for households’ currency and deposits: Target completion date: May 2019.
    - Several items (reserve position in the IMF, split reserve asset changes, dividend/PSA reclassifications, recording debt forgiveness) marked Implemented during the mission.
  - Improved information resources for ESS:
    - Review and approve ITRS codes: Target completion date: May 2019 (H).
    - Prepare plan for introducing ITRS in banking system: Target completion date: May 2019 (H).
    - Introduce a closed ITRS system: Target completion date: June 2019 (H).
    - Prepare seminars for commercial banks on ITRS: Target completion date: May 2019 (M).
  - Improvement in program for compiling ESS:
    - Update PSA survey form to capture capital expenditures prior to mineral production: Target completion date: May 2019 (H).
    - Set up collection with updated PSA form within 60 days after end of reporting quarter: Target completion date: May 2019 (H).
    - Develop mirror statistics methods for unrecorded trade: Target completion date: July 2019 (H).
    - Analyze SSC tourism methodology and separate international transport from other tourist spending: Target completion date: March 2019 (H).
    - Based on SSC data and border service information, develop methodology for travel exports/imports: Target completion date: October 2019 (H).
  - Historic BOP coordination:
    - Revise BOP for 2016 and 2017 based on MOE data: Target completion date: May 2019 (H).
  - Adequate resources:
    - Finish additional staffing of BOP office per schedule: Target completion date: May 2019 (H).
    - Nominate staff for ESS seminars regularly (O).

### Goods and services — technical assessment and recommendations
- IMTS and trade data processing:
  - SSC is official producer of IMTS; SSC receives DBCD from RUSCC based on freight customs declarations (FCD).
  - SSC uses a special trade system; mission decided CBU will rely on DBCD supplied monthly by RUSCC to calculate Goods component to make required adjustments in line with BPM6 (see BPM6, component 10.25).

- DBCD adjustments and exclusions:
  - DBCD contains info on goods under various customs regimes enabling selection of appropriate Goods component.
  - Exclusions: goods for repair/processing, diplomatic goods, temporary imports/exports (up to one year) flows, flows from customs warehouses into free circulation excluded while imports to customs warehouses added; reexports from warehouses are added.
  - CBU separates nonmonetary gold as required by BPM6.

- Further goods adjustments needed:
  - Include goods purchased by carriers in airports (primarily aircraft fueling) — info from national aviation company (NAC).
  - Include estimated shuttle trade; remove estimated migrant import/export from goods per BPM6 para. 10.22(b).
  - Convert CIF to FOB using weight, average transport cost per ton by mode and trading region.
  - Goods imports from neighboring countries by ground transport currently not included.
  - Mirror comparison method to detect unrecorded transactions recommended; previous mission recommendation not implemented.

- Services valuation and passenger transportation:
  - Some services misvalued; passenger transportation debits estimated at virtually zero value.
  - CBU used SSC data; SSC does not survey nonresident airline offices or other nonresident carriers — result: adequate credit entries but zero debit entries for passenger transportation by air and rail.
  - A rough estimate yields about USD 100 million per quarter for passenger transportation debit.
  - Recommended data sources/methods for passenger transport:
    - Use border crossing data of the Committee for State Border Protection (CSBP) and estimated cost per trip by mode.
    - Assess each transport type separately; air transport requires more rigorous assessment.
    - Add a question to NAC questionnaire on number of residents using NAC services to determine residents serviced by foreign airlines.
    - For rail: assume domestic transport by Uzbek Railways (resident) and outside Uzbekistan by nonresident. For passengers departing for Russia assume 90 percent nonresident, 10 percent resident; Kazakhstan: 80 percent nonresident; remaining countries: 50 percent nonresident.
    - Use CSBP data on border crossings by individuals broken down by countries and modes.
    - Obtain detailed info from Uzbek Railways on passenger flows by principal destinations and residency; use expert assessment until specific results obtained.
  - For road and inland water passenger transport: use expert assessment until studies — assume 50 percent of residents use nonresident transport services.
  - For individuals crossing border on foot or animal-drawn transport, recommend including approximately 20–25 percent of residents who crossed on foot in calculation of road passenger transportation (and, where appropriate, recognize under “travel”).

### Travel services and short-term workers
- SSC tourism survey adheres strictly to tourism definition; adjustments required to compile BOP “travel” component.
- Exclusions from tourism: excursionists, transit passengers, short-term workers.
- CBU overvalued spending by short-term workers abroad; model resulted in overstatement amounting to about USD 1.3 billion for the first half of 2018.
- Current CBU assumption: all citing work as travel purpose are short-term workers who live and work abroad 90 days each quarter—leading to some appearing to remain abroad more than a year.
- Recommended travel adjustments (selected):
  - Apply mirror comparison for unrecorded trade and add to Goods.
  - Remove migrant import/export estimates from Goods.
  - Estimate passenger transport debit by mode and include in BOP.
  - Prepare questionnaires for NAC and Uzbekistan Railways to identify residents using nonresident carriers.
  - Correct methodology for assessing number and spending of short-term workers per mission recommendations.
  - Reclassify estimated spending abroad of short-term workers from personal to business travel.
  - Request Ministry of Foreign Affairs info on support for Uzbekistan exterritorial bodies and estimate debit side of government services; include MOE BOP estimates until data received.

- Short-term worker return ratios (mission recommended diagram — Table 2):
  - Return in same quarter: 15
  - Return in following quarter: 20
  - Return two quarters later: 25
  - Return three quarters later: 25
  - Return four quarters later: 15

### Primary and Secondary Income — findings and contingency estimates
- Findings:
  - Credit of compensation of employees in CBU balance for first half of 2018 greatly overestimated at over USD 3.6 billion.
  - Overestimation causes: overestimation of number of short-term workers and their employment level; assumption all citing work work 90 days per quarter; many labor migrants are long-term.
  - Average employment level of a short-term worker per quarter generally no more than 2.0–2.5 months.
  - Mission recommended adding survey questions to split migrants into short-term (up to one year) and long-term (one year or more); SSC promised to implement.
  - CBU computes “net wages” (compensation minus host-country expenses and taxes) and uses net wages to calculate personal transfers.

- Expert contingency estimates recommended (until survey/agency data usable):
  - Define share of short-term workers at 50–60 percent of all those citing work as purpose of travel.
  - Define average employment level per quarter at 2–2.5 months.
  - Use the short-term worker return diagram described in Table 2.
  - Workers’ compensation calculated using this method will be 2–3 time less than in the current BOP.
  - For geographically distant or visa-complex countries (USA, Western European countries, Japan, Australia) consider all labor migrants to be long-term and exclude from COE.
  - Exclude 10–20 percent from overall flow of foreign currency (money transfers and imports of foreign currency in cash by residents) as unrelated to wages or personal transfers.
  - In countries where the income tax rate is 20 percent or more, adjust the income tax to 60–80 percent of the official amount.

### Reclassification and reinvested earnings
- Reclassify dividends paid by PSA enterprises (about USD 452 million over the first half of 2018) from ‘income from other investments’ to income from direct investments.
- PSA rent payments to the state (about USD 152 million over the first half of the year) are resident-to-resident and should be recorded in direct investments, not primary income.
- Problems in reinvested earnings calculation: CBU used net profit without deducting declared dividends; inconsistent treatments across entities.
- Mission proposed SSC amend SFEANC survey to add current year retained earnings and fields for current period net profits as of the beginning and end of the reporting quarter to compute reinvested earnings. Specialized survey provides for PSA reinvested earnings.
- Income from other investments (interest) calculated adequately; accrual method adopted for loan interest.
- DMIR did not perform SDR income calculations; mission and BOPD generated a file for calculating income from SDR holdings and allocations to include in interest income from other investments as a debit.

- Recommended actions (selected):
  - Reclassify PSA dividends from ‘income from other investments’ to DI dividends component.
  - Add rental payments from PSA to direct foreign investments and remove from ‘other primary income, rent’.
  - Calculate reinvested earnings per mission’s updated recommendations.
  - Use the mission-developed file to calculate income on SDR allocations and SDR holdings.

### Direct and portfolio investments — progress and shortcomings
- Progress:
  - CBU improved DI data collection; SSC transitioned to comprehensive reporting form for foreign economic activities and obtained Q1 and Q2 2018 results.
  - Collected data formats allow compilation of both positions and transactions.

- Shortcomings:
  - PSA reporting form omits parent company expenditure prior to mineral extraction (direct investment equity).
  - PSA debt obligations to foreign investors often recorded as other accounts payable/receivable in other investments instead of DI/debt instruments.
  - Preferred (non-voting) shares of a DTC recorded in share capital instead of debt instruments.
  - SSC DI data are not reconciled: changes in stocks not reconciled with transactions.
  - Trade credits between DI enterprises and direct investors recorded in other investments instead of DI/debt instruments.
  - Problems in reinvested earnings calculation persist.

- Recommended corrections:
  - Update DI reporting forms and reinvested earnings methodology.
  - Add PSA form questions about pre-production foreign investor costs and record these as equity.
  - Record PSA debts to foreign investors in ‘direct investments/debt instruments’.
  - Reclassify preferred shares of a DTC appropriately: either portfolio investments long-term debt securities if owner is a financial corporation, or debt instruments in DI if owner is nonfinancial corporation.
  - Use SFEANC survey information for trade credits between related enterprises.

### Other investments, currency and deposits, households
- Other investments:
  - Deficiencies and deviations from standards found; most problematic subcomponent: “assets, other sectors, currency and deposits”.
  - CBU removed central bank deposits placed in commercial banks of Uzbekistan from “central bank, currency and deposits” and added external assets in cash/deposits denominated in non-reserve currencies or currencies not meeting reserve criteria held with non-resident banks.

- Currency and deposits measurement:
  - DTC currency and deposits calculated from commercial bank balances and exchange regulation reporting.
  - CBU counts all net changes when calculating transactions under “currency and deposits” regardless of whether bank performed transaction with resident or nonresident — yields adequate positions but distorts transaction volumes.

- Households’ currency and deposits — data gaps and decomposition recommended:
  - Greatest problem: lack of direct data on household cash at home or deposits in overseas banks.
  - CBU’s current definition includes several components mixing residents and nonresidents; mission recommends separating by residency and identifies the following components for households’ currency and deposits:
    - Net transfers of foreign currency to Uzbekistan by a resident recipient/sender;
    - Net imports of foreign cash into Uzbekistan by residents;
    - Purchase/sale of foreign cash by resident individuals through exchange offices;
    - Wages received by residents working in foreign embassies and international organizations within Uzbekistan;
    - Other flows of foreign cash between banks and resident individuals (deposit placement, withdrawal, loans, down payments, etc.);
    - Other flows of foreign cash from individuals (illegal export of foreign cash, other potential expenses with nonresidents).
  - Mission’s estimate for “other flows of foreign cash from individuals”: an estimate of 5 to 15 percent of the net inflow of money transfers would not be an exaggeration.
  - Mission does not recommend including shuttle trade expenditures in households’ currency and deposits calculation.

- Loans and trade credits:
  - Principal sources: MOF reporting on government and government-guaranteed debt; SFEANC; CBU exchange regulation reporting.
  - CBU reporting collects data on each individual loan and actual payments; within reports, information was collected on 759 borrowings as of June 30.
  - Debt forgiveness recording corrected during mission.
  - Trade credit system tracks accounts payable/receivable related to foreign trade using banking and customs statistics but cannot determine whether trade credit falls under DI or other investments; mission recommends deducting trade credits recorded under DI from trade credits reported and record remainder under “trade credits – other investments”.

### International reserve assets (IRAs) conversion methodology
- DMIR calculates IRA data in original currency per BPM6, then converts to USD and calculates exchange-rate changes.
- Initially CBU applied respective exchange rates to balances as of beginning/end of reporting period and used rate as of end for transactions.
- Mission recommended applying transaction date rate or average rate for reporting period for transactions.
- DMIR decided to apply average rates to conversion of reserve asset transactions from original currency to US dollars.
- DMIR provided updated IRA data starting with December 31, 2015, used in compiling 2016–2017 BOP.

### ITRS program — design, pilot, and quality challenges
- November 2017 mission recommended studying adoption of a closed-type ITRS; CBU decided to create system using Georgian ITRS as a prototype.
- CBU preparatory steps prior to mission:
  - Developing draft ITRS reporting form for banks and instructions; specialized ITRS codes; consulted commercial banks; defined report presentation format; developed program for processing/analyzing intermediate database.
- Pilot data collection launched in commercial banks at beginning of October 2018.
- Uzbekistan ITRS special features:
  - Banks report all transactions in internal and external correspondent accounts; only transactions passing through external correspondent accounts are sent to BOPSO.
  - Banks do not report cash transactions.
  - No threshold values; all transactions are coded and resident participant identified.
  - Files include client/initiator name and fiscal code.
  - Reporting timetables: express information submitted immediately after business day close; final and revised data forwarded one month later.
- Identified shortcomings:
  - ITRS form lacks institutional sector field — mission prepared institutional sector codes:
    - Central Bank — 1
    - Deposit organizations, other than central bank — 2
    - General government sector — 3
    - Non-banking financial institutions — 4
    - Nonfinancial enterprises — 5
  - Existing code system based on BPM5 needs revision for BPM6 transition.
  - Pilot results showed high error rates in transaction code identification and unsuitability of accumulated data for subsequent use.
- Operational recommendations for ITRS quality:
  - Develop procedures to ensure accumulated data quality before official introduction.
  - Prepare program of regular seminars for commercial banks on ITRS goals and training.
  - Develop procedures for detecting outliers and atypical deviations (logical checks).
  - Develop methods for regular reconciliation of ITRS indicators with banks’ balance sheets.
  - Priority order for introducing ITRS segments: (i) CBU segment; (ii) commercial bank segment (cash and non-cash); (iii) non-banking financial institution segment; (iv) nonfinancial corporations with current accounts abroad.
  - Recommended actions include inserting institutional sector field, updating transaction codes/instructions per mission, identify an official introduction date and provide legal support, and improve CBU data collection under ITRS.

### Compilation of BOP 2016–2017: harmonization and goods reconciliation
- Objective: analyze gap between new BOP data and historic time-series after ESS moved from MOE to CBU, and eliminate the gap.
- Causes of gap: different formats, estimation assumptions, deviations from standards, different source data, and errors.
- Mission studied MOE and CBU balances and assisted CBU in generating BOP for 2016–2017 in BPM6 format using all available historical data.
- CBU requested data from MOF, RUSCC, SSC, commercial banks for 2016–2017; prior to receiving these data, mission and CBU performed rough estimates — trial BOP should be viewed as trial version subject to change.

- Goods component reconciliation:
  - Difference between MOE and CBU balances for goods minimal; both use general trade system but apply different procedures.
  - MOE: uses SSC data and adjusts for flows to/from customs warehouses and processing; MOE adds unrecorded imports/exports by individuals estimating these goods at 20 percent of money transfers.
  - CBU: uses RUSCC data, selects flows conforming to general trade system, excludes goods for processing and repair; estimates shuttle trade via border surveys and obtains more modest exports estimate—about 40 percent of MOE’s estimation.
  - CIF-to-FOB conversion differences: MOE assumes freight and insurance 10 percent of CIF (not accounting for energy imports, lowering to 9.5 percent); CBU estimates freight based on geography and weight producing higher figures up to 13–14 percent for non-neighbor imports.
  - In trial BOP for 2016–2017, goods data taken from MOE balance and presented in two lines—nonmonetary gold and other goods.

### Trial Balance of Payments (Appendix II) — selected figures (USD millions, exact)
- Current account:
  - 2016 = 1,383.8
  - 2017 = 1,729.8
  - 2018Q1 = -202.6
  - 2018Q2 = -1,757.5
  - Credit: 2016 = 17,403.0; 2017 = 19,209.3; 2018Q1 = 5,106.5; 2018Q2 = 4,993.8
  - Debit: 2016 = 16,019.2; 2017 = 17,479.5; 2018Q1 = 5,309.2; 2018Q2 = 6,751.3

- Goods and services (balance):
  - 2016 = -2,257.1
  - 2017 = -2,472.9
  - 2018Q1 = -1,107.7
  - 2018Q2 = -2,545.6
  - Goods (balance): 2016 = -1,160.8; 2017 = -1,226.7; 2018Q1 = -620.9; 2018Q2 = -2,064.4
    - Export: 2016 = 9,460.5; 2017 = 10,421.8; 2018Q1 = 3,009.3; 2018Q2 = 2,374.1
    - Import: 2016 = 10,621.3; 2017 = 11,648.5; 2018Q1 = 3,630.2; 2018Q2 = 4,438.5
  - Services (balance): 2016 = -1,096.4; 2017 = -1,246.2; 2018Q1 = -486.8; 2018Q2 = -481.2
    - Export: 2016 = 2,924.8; 2017 = 3,098.2; 2018Q1 = 601.6; 2018Q2 = 734.3
    - Import: 2016 = 4,021.2; 2017 = 4,344.4; 2018Q1 = 1,088.3; 2018Q2 = 1,215.5

- Primary income:
  - 2016 = 1,777.9; 2017 = 2,138.6; 2018Q1 = 391.9; 2018Q2 = 194.1
  - Credit: 2016 = 2,847.1; 2017 = 3,276.8; 2018Q1 = 821.9; 2018Q2 = 1,087.1
  - Debit: 2016 = 1,069.2; 2017 = 1,138.2; 2018Q1 = 430.1; 2018Q2 = 893.0

- Secondary income:
  - 2016 = 1,863.0; 2017 = 2,064.1; 2018Q1 = 513.2; 2018Q2 = 594.0
  - Credit: 2016 = 2,170.5; 2017 = 2,412.6; 2018Q1 = 673.7; 2018Q2 = 798.3
  - Debit: 2016 = 307.5; 2017 = 348.4; 2018Q1 = 160.5; 2018Q2 = 204.3

- Capital account:
  - 2016 = 0.0; 2017 = 0.0; 2018Q1 = 28.8; 2018Q2 = 6.0

- Net lending (+) / Net borrowing (-):
  - 2016 = 1,383.8; 2017 = 1,729.8; 2018Q1 = -173.8; 2018Q2 = -1,751.5

- Financial account:
  - 2016 = 1,642.4; 2017 = 2,206.1; 2018Q1 = 284.9; 2018Q2 = -1,214.7
  - Direct investments (net): 2016 = -1,572.4; 2017 = -1,263.1; 2018Q1 = -279.0; 2018Q2 = -159.2
  - Other investments (net): 2016 = 2,662.2; 2017 = 3,725.0; 2018Q1 = 180.6; 2018Q2 = -448.4
  - Reserve assets: 2016 = 552.4; 2017 = -256.0; 2018Q1 = 384.5; 2018Q2 = -604.1
  - Net errors and omissions: 2016 = 258.6; 2017 = 476.4; 2018Q1 = 458.7; 2018Q2 = 536.8

- Note: trial BOP for 2016–2017 contains many roughly estimated components due to lack of reliable source data; BOPD will continue collecting additional data and trial balance could change greatly.

### Institutional, staffing, and operational recommendations
- Institutional changes:
  - BOPD created within Department of Foreign Exchange Regulation and Control; department renamed Department of Foreign Exchange Regulation and the Balance of Payments (DERBP).
  - BOPD staff consists of 8 positions; as of mission only 4 hired including head; CBU plans to fill remaining positions soon.
  - As of October 2018, only 2 of the 4 had completed special training courses; one BOPD staff member transferred to another CBU unit.
  - Three employees nominated for ESS seminar at the Joint Vienna Institute in February 2019.

- Mission recommendations (verbatim highlights):
  - Bring the BOPD to full strength within the shortest possible time.
  - Provide one programmer position within the new office’s staff, or assign one programmer to the BOPSO.
  - Nominate personnel for relevant IMF seminars to further study BPM6 and external debt statistics.

- Implementation status of previous mission’s recommendations (selected from Appendix III):
  - H: Amend Law on Central Bank to assign compilation/dissemination of ESS — Target completion date: October 2018 — Comments: Implemented.
  - H: Secure CBU’s right to collect confidential information from ministries, departments, corporations — Target completion date: October 2018 — Comments: Implemented.
  - H: Create legal framework for ESS data collection, processing, dissemination, and interagency sharing — Target completion date: October 2018 — Comments: Implemented (Resolution No. 263, April 3, 2018).
  - H: Assess feasibility of closed-type ITRS and prepare plan — Target completion date: September 2018 — Comments: Implemented; pilot carried out.
  - H: Create Balance of Payments Office with staff of at least 8 — Target completion date: September 2018 — Comments: Implemented; staffing not yet complete.
  - H/M: Numerous reporting forms, databases, and processing tools developed and implemented (RUSCC/DBCD processing, foreign sector survey forms, PSA data collection, foreign trade database).
  - H: Develop methods for applying mirror statistics for estimating unrecorded imports and exports — Target completion date: May 2019 — Comments: Not implemented.

*Source: 1. Priority Recommendations, IMF technical assistance mission report (content unit: 1uzbea2020004).*

### 1. Priority Recommendations _____________________________________________________________________ 5

### 1. Priority Recommendations

### Summary of mission outcomes and priority recommendations
- Mission dates and context:
  - IMF Statistics Department (STA) mission visited Tashkent during October 15–26, 2018.
  - First TA mission under the Data for Decision Fund; second since Presidential Order of September 12, 2017, “On Measures to Ensure the Accessibility and Openness of Economic and Financial Data for the Republic of Uzbekistan.”
  - Main objective: assist the Central Bank of the Republic of Uzbekistan (CBU) in improving collection of statistical data on the balance of payments (BOP), including adoption of an international transactions reporting system (ITRS), and assess progress in implementing the medium-term program for further development of external sector statistics (ESS).

- Primary mission tasks:
  - (i) Assist in compiling consistent historical BOP time series and addressing structural gaps.
  - (ii) For compilation of 2018 BOP data, ensure application of consistent methodology following international standards.
  - (iii) Assess BOP data reliability and facilitate improvements in goods, services, remittances, and selected financial account components.
  - (iv) Advise on additional data sources, including administrative, and develop statistical methods for gap-filling missing observations.
  - (v) Assess feasibility of ITRS implementation.
  - (vi) Follow up on previous mission’s recommendations, including interagency data exchange and progress in data dissemination.
  - (vii) Conduct hands-on training on BOP compilation.

- Progress noted:
  - CBU started production of ESS in accordance with the Balance of Payments and International Investment Position Manual, sixth edition (BPM6).
  - Tables and analytical materials published on the CBU website on the BOP, IIP, international reserve assets (IRA), and external debt.
  - Uzbekistan joined the enhanced general data dissemination system (e-GDDS) in May 2018.

- Main shortcomings identified:
  - Errors in compiling the BOP for the first half of 2018, primarily related to misclassification of selected BOP components; some are relatively easy to rectify.
  - More serious problems: undervalued components and components valued using the wrong methodology; transactions between residents sometimes recorded in the BOP.
  - Transfer of BOP compilation from Ministry of the Economy (ME) to the CBU and transition to BPM6 led to a data gap between BOP compiled by the two institutions.

- Mission work to address gaps:
  - Assessed quality of BOP data for first half of 2018, discovered and removed classification and scope errors, and recommended improvements for goods, transportation services, travel, wages, personal transfers, households’ holding of cash and deposits, reinvested earnings, reserve assets, and other components.
  - Adjusted data collection forms for ESS and developed new reporting forms with Balance of Payments Division (BOPD) staff.
  - Provided assistance in preparations for adopting the ITRS.
  - Analyzed MOE-prepared BOP for 2016–2017; compiled a tentative BOP for 2016–2017 with BOPD staff and validated first half 2018 BOP.
  - Integrated analytical BOP format used by the MCD mission into the working file for BOP and IIP output tables.
  - Prepared and agreed an action plan with CBU management setting principal recommendations.

- Table 1. Priority Recommendations (as presented):
  - Target Date: June 2019 — Correct data on reinvested earnings of direct investors. Reinvested earnings are to be calculated as the difference between net income of direct investors and the dividends declared. Responsible Institutions: CBU, SSC
  - Target Date: May 2019 — Adjust methods used to calculate compensation of employees component and personal transfers per the mission’s recommendations. Responsible Institutions: CBU, SSC
  - Target Date: June 2019 — Review the list of ITRS codes per the mission’s recommendations and implement the updated version. Responsible Institutions: CBU

### Action Plan — key priorities and milestones
- Priority scale: H – High; M – Medium; L – Low; O – Other.

- Outcome: Elimination of errors made in compiling external sector statistics
  - H: Adjust data on reinvested earnings of direct investors. Reinvested earnings are to be calculated as the difference between new income of direct investors and the dividends received (declared). Target completion date: June 2019.
  - H: Calculate imports of passenger transportation services for all modes of transportation and incorporate results in the BOP. Target completion date: April 2019.
  - H: Adjust the ‘business travel’ and ‘personal travel’ components per the mission’s recommendations. Target completion date: April 2019.
  - H: Remove CBU deposits in resident banks from the “assets, currency and deposits, central bank” component but add foreign assets in the form of currency and deposits in non-reserve currencies held with non-resident banks. Target completion date: Implemented during the mission.
  - H: Update the method for calculating the compensation of employees component per the mission’s recommendations. Target completion date: May 2019.
  - H: Update the methodology for calculating the ‘personal transfers’ component per the mission’s recommendations. Target completion date: May 2019.
  - H: Dividends paid out by enterprises to foreign investors under production-sharing agreements (PSA) are to be reclassified from ‘income from other investments’ to the ‘income on equity and investment fund share dividends and withdrawals from income of quasi-corporations’ component. Target completion date: Implemented during the mission.
  - H: Remove payments for use of natural resources by PSA enterprises from ‘other primary income’ and include them in direct investments. Target completion date: Implemented during the mission.
  - L: Record debt forgiveness under BOP transactions. Target completion date: Implemented during the mission.
  - M: Include the reserve position in the IMF in reserve assets component. Target completion date: Implemented during the mission.
  - H: Split data on reserve asset into transactions and exchange-rate changes per the mission’s recommendations. Target completion date: Implemented during the mission.
  - L: Record income from allocated special drawing rights (SDR) and SDR holdings in primary income on a gross basis. Target completion date: Implemented during the mission.
  - H: Update the methodology for calculating the currency and deposits of households component per the mission’s recommendations, taking into account all possible inflows and outflows of foreign currency in cash by individuals. Target completion date: May 2019.

- Outcome: Improved information resources for ESS
  - H: Review the list of ITRS codes per the mission’s recommendations and approve the updated version. Target completion date: May 2019.
  - M: Prepare a program of regular seminars for commercial banks to explain the purpose of data collection and provide instruction in compiling ITRS reports. Target completion date: May 2019.
  - H: Prepare a plan for introducing ITRS in the Uzbekistan banking system. Target completion date: May 2019.
  - H: Introduce a closed ITRS system. Target completion date: June 2019.
  - M: Continually update the list of nonfinancial enterprises engaged in foreign economic activities for their inclusion in a survey of the foreign economic activities in the nonfinancial sector. Target completion date: Regularly, Quarterly; Carried forward from previous mission’s schedule.
  - M: Prepare proposals for the Cost of Living Statistics Department concerning additions to the questionnaire for the household survey. Target completion date: Implemented during the mission.
  - M: Develop reporting forms for the Agency for External Labor Migration of the Ministry of Employment and Labor Relations of the Republic of Uzbekistan on the collection of information on legal labor migrants and their average wages. Target completion date: Implemented during the mission.
  - M: Make changes to the reporting form for collecting information on government and government-guaranteed debt. In particular, divide government-guaranteed debt serviced by the borrower into two subcategories: debts of commercial banks and nonfinancial corporations. Target completion date: July 2019. Responsible entities: MOF and CBU.

- Outcome: Improvement in the program for compiling external sector statistics
  - H: Update the survey form for enterprises working under PSA, adding a component concerning capital expenditures of foreign investors, incurred prior to commencing mineral production. Target completion date: May 2019.
  - H: Set up collection with the updated form for enterprises working under PSA for 60 days after the end of the reporting quarter. Use the results to supplement data on direct foreign investments (DFI) in Uzbekistan. Target completion date: May 2019.
  - H: Develop methods for applying mirror statistics when assessing transactions involving unrecorded imports and exports. Target completion date: July 2019. Carried forward from previous mission’s schedule.
  - H: Analyze the methodology of the State Statistics Committee (SSC) for calculating tourism services. Ensure separation of international transportation services from other tourist spending, for both outbound and inbound tourism. Target completion date: March 2019. Responsible institutions: SSC and CBU.
  - H: Based on SSC data on tourism services and information from the border service, develop a methodology for calculating the exports and imports of travel component. Target completion date: October 2019.
  - H: Update calculation methods and the questionnaire for studying shuttle trade. Target completion date: Implemented during the mission.

- Outcome: Coordination of historic BOP data with 2018 data; dynamic arrays are generated, beginning with the first quarter of 2016
  - M: Identify a format for the aggregated analytical BOP and integrate it into the BOP/IIP working file. Target completion date: April 2019.
  - H: Based on existing information and the BOP generated at the Ministry of the Economy, revise the BOP for 2016 and 2017. Target completion date: May 2019.

- Outcome: Adequate resources to produce ESS
  - H: Finish additional staffing of the balance of payments office according to the staffing schedule, hiring personnel with work experience in banking reporting. Target completion date: May 2019.
  - O: Refer personnel responsible for compiling BOP statistics, the IIP, and foreign debt to ESS seminars organized by the IMF, other international financial institutions, and central banks of other countries. Target completion date: Regularly.

### B. Goods and Services — detailed technical assessment and recommendations
- IMTS and trade data processing:
  - SSC is the official producer of international merchandise trade statistics (IMTS) in Uzbekistan.
  - SSC receives a database of customs declarations (DBCD) from the Republic of Uzbekistan State Customs Committee (RUSCC), generated on the basis of freight customs declarations (FCD). Aggregated data are published without adjustments, broken down by country and commodity group.
  - IMTS recommends using a general trade system, but SSC adheres to a special trade system that requires additional BOP compiler adjustments (see BPM6, component 10.25).
  - To make required adjustments, the decision was made to rely on the DBCD, which the CBU receives each month from the RUSCC, in calculating the Goods component.

- DBCD adjustments and exclusions:
  - DBCD contains information about all goods crossing Uzbekistan’s border with various customs regimes enabling selection of appropriate Goods component.
  - Excluded from the overall flow: goods associated with repair or processing of goods, diplomatic goods, imports/exports of goods on a temporary basis (up to one year), flows of goods from customs warehouses and temporary storage locations into free circulation are excluded, while imports of goods to customs warehouses and temporary storage locations are added. Goods reexported from customs warehouses and temporary storage locations are also added.
  - CBU sets apart imports/exports of nonmonetary gold, as required by BPM6 standard presentation.

- Further adjustments to goods:
  - (i) goods purchased by carriers in airports (primarily aircraft fueling) — information provided by national aviation company (NAC);
  - (ii) estimated data on shuttle trade;
  - (iii) conversion of CIF prices to FOB prices — conversion takes into account goods’ weight, average cost to transport one ton of freight depending on mode of transport and region of trading country.
  - Goods imports from neighboring countries by ground transport are not included in the calculation.
  - Goods adjustments lack an assessment of unrecorded import/export transactions (understated prices or volumes in customs declarations). This can be detected and assessed using mirror comparison method — recommendation from previous mission has not been implemented.
  - Estimated data on import/export of migrants should be removed from the goods component (BPM6, para. 10.22(b)); this recommendation of the previous mission has also not been implemented.

- Services valuation and passenger transportation:
  - Some services were not properly evaluated. Example: debit for passenger transportation estimated at virtually zero value.
  - CBU used SSC data when estimating transportation service by passengers, but SSC does not survey offices of nonresident airlines represented in Uzbekistan nor other nonresident carriers. Result: SSC data for credit entries adequate, but zero values obtained for debit entries on passenger transportation by air and rail.
  - A rough estimate of this component yields about USD 100 million per quarter.
  - To assess passenger transport, recommended data sources and methods:
    - Use border crossing data of the Committee for State Border Protection (CSBP) and the estimated cost of one trip by mode of transport. CSBP furnishes data to the CBU on border crossings by residents and by mode of transport, including: air, rail, motor vehicle, inland water, and animal-drawn transport, as well as pedestrian movement.
    - Each type of transportation must be assessed separately; air transport accounts for the largest share of transportation costs and must be assessed more rigorously.
    - Add a question to the NAC questionnaire regarding the number of residents who have used the NAC’s services to determine residents serviced by foreign airlines.
    - For rail transport, assume passenger transportation within Uzbekistan is performed by a resident (Uzbek Railways), and outside Uzbekistan by a nonresident. For passengers departing for Russia, assume that 90 percent of transportation services are provided by a nonresident and only 10 percent by the national railway. For Kazakhstan, use 80 percent as the nonresident share, and 50 percent for the remaining countries.
    - Estimate number of residents by principal destinations using CSBP data on border crossings by individuals with a breakdown by countries and modes of transportation. CSBP currently provides separate breakdown by countries and by modes of transport.
    - Obtain detailed information from Uzbek Railways on passenger flows (number and cost) by principal destinations with a breakdown by residency. Use expert assessment until specific results are obtained.

- Other transport modes and provisional assumptions:
  - For remaining modes of transport (road transport and inland water transport – passengers), use expert assessment until studies are conducted: 50 percent of residents use transportation services of nonresidents.
  - Recognize that a very large share of individuals cross the border by animal-drawn transport or on foot, with a subsequent transfer to a bus or other motor vehicle transport. To include this phenomenon, mission recommends that approximately 20–25 percent of residents who have crossed the border on foot be included in the calculation of road passenger transportation (and, in specific cases, recognizing them under the “travel” component).

*Source: 1. Priority Recommendations, IMF technical assistance mission report (content unit: 1uzbea2020004).*

### 15. Another major services component in need of adjustment by the CBU is travel,

### Another major services component in need of adjustment by the CBU is travel

### Travel services: assessment issues and proposed adjustments
- SSC tourism survey adheres strictly to the definition of tourism; adjustments are required to compile the BOP component “travel”.
- Exclusions from tourism services: spending by excursionists (persons not overnighting in the host country), transit passengers, and short-term workers.
- Inclusions in tourism services: transportation expenditures for round-trip travel from one’s own country to the visited country (international transportation services); spending to purchase valuables is included in goods in the BOP (BPM6, component 10.20).
- The CBU currently overvalued spending by short-term workers abroad; model resulted in an overstatement of both numbers and spending, amounting to about USD 1.3 billion for the first half of 2018.
- Current CBU assumption: all who cite work as travel purpose are short-term workers who live and work abroad 90 days each quarter; this leads to some short-term workers appearing to remain abroad more than a year.

Recommended adjustments and methodology changes (travel)
- apply the mirror comparison method to estimate unrecorded transactions involving imports and exports of goods, and add the data obtained to the Goods component;
- remove estimated data on imports/exports carried out by migrants from ‘goods’;
- estimate debit of passenger transportation services for each mode of transport, and incorporate in the BOP;
- prepare appropriate questionnaires and forward them to the NAC and Uzbekistan Railways to identify the number of residents who received passenger transport services from nonresident transportation companies;
- correct the methodology for assessing the number of short-term workers located abroad and their spending, per the mission’s recommendations;
- reclassify estimated spending abroad of short-term workers from personal to business travel;
- request information from the Ministry of Foreign Affairs concerning support for Uzbekistan exterritorial bodies and estimate debit side of the government services component. Include estimated data in the CBU database from the MOE BOP until relevant information is received.

Short-term worker return ratios (mission recommended diagram — Table 2)
- Return in same quarter: 15
- Return in following quarter: 20
- Return two quarters later: 25
- Return three quarters later: 25
- Return four quarters later: 15

### Primary and Secondary Income: main problems and corrective measures
Findings
- The credit of compensation of employees component in the CBU balance sheet for the first half of 2018 is greatly overestimated at over USD 3.6 billion.
- Overestimation root causes: overestimation of the number of short-term workers and their employment level; assumption that all citing work are short-term and work 90 days each quarter; many labor migrants are long-term.
- Average employment level of a short-term worker per quarter is generally no more than 2.0–2.5 months.
- The mission recommended adding questions to the household budget survey to divide labor migrants into short-term (up to one year) and long-term (one year or more) and to divide funds incoming from short-term and long-term workers; SSC has promised to implement these survey changes.
- The mission visited the MZT’s Agency on External Labor Migration; a reporting form was developed and an official letter sent to the Agency.
- Until usable agency/survey data are available, the mission recommends expert estimates (see below).
- The CBU estimates workers’ compensations of Uzbekistan residents working in embassies and consulates of foreign states and international organizations located within Uzbekistan and adds the result to the compensation of employees component.
- The CBU computes “net wages” (compensation of employees minus workers’ expenses in the host country and taxes paid). Net wages are used to calculate personal transfers by combining money transfers through electronic money transfer systems and imports of foreign currency in cash by residents, then deducting short-term workers’ net wages.
- The mission notes some inflows of foreign currency are likely payment for exported goods or services or transfers among nonresidents; ESS Q2 2018 enabled separation by residency status in electronic money transfer system data, allowing future refinements.

Expert contingency estimates recommended (until survey/agency data usable)
- define the share of short-term workers at 50–60 percent of all those citing work as their purpose of travel;
- define the average employment level per quarter at 2–2.5 months;
- use the short-term worker return diagram described in Table 2;
- workers’ compensation calculated using this method will be 2–3 time less than in the current BOP;
- for countries that are located at a substantial distance or have complex procedures for obtaining a visa (such as the USA, Western European countries, Japan, and Australia)—consider all labor migrants to be long-term and exclude from COE;
- exclude 10–20 percent from the overall flow of foreign currency (money transfers to residents and imports of foreign currency in cash by residents), considering these flows unrelated to wages or personal transfers;
- in countries where the income tax rate is 20 percent or more, adjust the income tax to 60–80 percent of the official amount.

### Reclassification and reinvested earnings issues in primary income
- Reclassify dividends paid out by PSA enterprises (about USD 452 million over the first half of 2018) from ‘income from other investments’ to income from direct investments.
- Some PSA enterprises pay rent to the state for use of natural resources; these payments amounted to about USD 152 million over the first half of the year. As PSA enterprises are residents, these rental payments are between residents and should not be recorded under ‘primary income’ but rather in direct investments.
- Problems in reinvested earnings calculation: CBU used net profit for the reporting year without deducting declared dividends; inconsistent treatments across entities.
- Chart of accounts presents retained earnings as:
  - Prior years’ retained earnings
  - Current year retained earnings
- Mission proposed SSC amend the SFEANC survey to add a line for current year retained earnings and create fields for current period net profits as of the beginning and end of the reporting quarter. Total transactions involving changes to prior year retained earnings and current year retained earnings during the reporting quarter will be reinvested earnings. Specialized survey provides for PSA reinvested earnings.

Income from other investments and SDR income
- Income from other investments (mainly interest on loans) is calculated adequately; accrual method adopted for loan interest.
- For private debt, banking system compiles data on each debt in original currency with requisite parameters for principal and accrued interest.
- Income on reserve assets is reported by DMIR to BOPSO; DMIR did not perform calculations of income from SDR allocations or SDR holdings. Mission and BOPD generated a file for calculating income from SDR holdings and allocations; this will be included in interest income from other investments as a debit.

Recommended Actions (primary/secondary income and reinvested earnings)
- until suitable amounts are obtained identifying the proportion of short-term and long-term workers, use the contingency estimate: define the share of short-term workers at 50–60 percent of the number of individuals who have left Uzbekistan for employment opportunities;
- for geographically distant or visa-complex countries (USA, Western European countries, Japan, Australia) consider labor migrants long-term and exclude from COE;
- define the average employment level per quarter at 2–2.5 months;
- exclude 10–20 percent from overall foreign currency inflows as unrelated to wages or personal transfers;
- in countries where the income tax rate is 20 percent or more, adjust the income tax to 60–80 percent of the official amount;
- dividends paid by PSA enterprises are to be reclassified from ‘income from other investments’ to the ‘income on equity and investment fund share dividends and withdrawals from income of quasi-corporations’ component;
- add rental payments from PSA to direct foreign investments and remove existing data under the ‘other primary income, rent’ component;
- calculate reinvested earnings according to the mission’s updated recommendations;
- use the file developed by the mission to calculate income on SDR allocations and SDR holdings.

### Direct and Portfolio Investments: progress and remaining shortcomings
Findings and progress
- CBU improved DI data collection; SSC transitioned to a comprehensive reporting form for foreign economic activities of enterprises and obtained first results for Q1 and Q2 2018.
- Information collected from deposit corporations other than the central bank (DTC) and from nonbank financial corporations; existing form used to compile PSA data; investments abroad (assets) are negligible.
- Collected data formats allow compilation of both positions and transactions.

Shortcomings identified
- PSA reporting form fails to collect parent company expenditure prior to mineral extraction — these are direct investments (equity) but are not recorded as such.
- PSA debt obligations to foreign investors often recorded as other accounts payable/receivable in other investments instead of direct investments/debt instruments.
- Preferred (non-voting) shares of a DTC are recorded in share capital instead of debt instruments.
- SSC DI data are not reconciled: changes in stocks are not reconciled with transactions during the reporting period.
- Trade credits between direct investment enterprises and direct investors were recorded in other investments instead of direct investments/debt instruments.
- Problems in data collection and reinvested earnings calculation (described previously).

Recommended corrections for DI and portfolio investments
- update DI reporting forms and methodology for calculating reinvested earnings per the mission’s recommendations;
- add questions to the PSA reporting form about the foreign investor’s costs before beginning mineral production and sales, recording these data in equity;
- update the ‘direct investments/debt instruments’ component per the mission’s recommendations;
- withdraw preferred shares in a DTC from equity and record them in either portfolio investments long-term debt securities if the owner is a financial corporation or add them to debt instruments in the form of direct investments if the owner is a nonfinancial corporation;
- record PSA debts to foreign investors in ‘direct investments/debt instruments’;
- use SFEANC survey information for trade credits between related enterprises.

Other operational notes
- CBU performs estimates of real estate investments using exchange regulation reports and plans to use ITRS (introduction planned in the second half of 2019).
- For other capital in the form of direct investments, CBU uses SFEANC survey and banking system data for foreign loans; new reporting form separates inter-company lending and ordinary loans and collects principal and accrued interest.

*Source: IMF staff report chapter on Uzbekistan — travel, primary/secondary income, direct and portfolio investments (excerpts).*

### 33. Despite certain successes in the collection and methods of processing data for the

### 1uzbea2020004 - 33. Despite certain successes in the collection and methods of processing data for the

### Other investments: data quality and classification issues
- Mission found deficiencies and deviations from accepted standards in the ‘other investments’ component; some were rectified during the mission.
- Most problematic subcomponent: “assets, other sectors, currency and deposits”.
- Central Bank (CBU) initially recorded central bank deposits placed in commercial banks of Uzbekistan in the “central bank, currency and deposits” component, assets; on mission recommendation these data were removed from that component and external assets in the form of cash and deposits denominated in non-reserve currencies or currencies not meeting other criteria for reserve assets were added.

### Currency and deposits: measurement approach and transaction distortion
- Currency and deposits of DTC are calculated based on banking information: balances of commercial banks and information collected by the CBU in the context of exchange regulation.
- When calculating transactions under the “currency and deposits” components (liabilities and assets), all net changes are counted regardless of whether a commercial bank performed a transaction with a resident or nonresident.
  - This approach yields adequate estimates of asset and liability positions, but partially distorts transaction volume.

### Households’ currency and deposits: data gaps and proposed decomposition
- Greatest problem: estimation of households’ position and transactions due to lack of direct data and sampling complexity for cash kept at home or deposits in overseas banks.
- CBU methodology for foreign currency cash holdings and households’ deposits fails to encompass all possible flows for this instrument.
- Existing classification of currency and deposits in BOP transactions includes some transactions among residents; this distorts transactions of specific institutional sectors.
- CBU currently defines households’ currency and deposits components as:
  - net transfer of foreign currency into Uzbekistan (inflow/outflow, through electronic money transfer systems);
  - net import of foreign currency in cash into Uzbekistan (import/export of foreign currency in cash);
  - sales of foreign currency by individuals through exchange offices;
  - wages received by residents working in foreign embassies and international organizations in Uzbekistan;
  - shuttle imports/exports.
- Mission notes that both residents and nonresidents participate in most of these components and found it possible to separate components by residency.
- CBU intends to recalculate previous-period data for currency and deposits factoring in residency of the recipient.
- Mission recommends identifying households’ currency and deposits based on these components:
  - Net transfers of foreign currency to Uzbekistan by a recipient/sender who is a resident;
  - Net imports of foreign cash into Uzbekistan by residents;
  - Purchase/sale of foreign cash by resident individuals through exchange offices;
  - Wages received by residents working in foreign embassies and international organizations within Uzbekistan (residents receive wages in a foreign currency);
  - Other flows of foreign cash between banks and individual residents (includes deposit placement, withdrawal from a deposit account, obtaining/repaying a bank loan, down payment in foreign cash to exercise non-cash payment from the bank account, etc.);
  - Other flows of foreign cash from individuals (illegal export of foreign cash by individuals, other potential expenses of individuals with nonresidents).
- Mission’s estimate for the “other flows of foreign cash from individuals” component: an estimate of 5 to 15 percent of the net inflow of money transfers would not be an exaggeration.
- Mission does not recommend including expenditures on shuttle imports/exports in households’ currency and deposits calculation, since these transactions are carried out either by exported cash or by remitting funds through money transfer systems; part of these costs are considered in the components listed above.

### Loans, loan reporting, and trade credits
- Principal sources for loans component:
  - Ministry of Finance (MOF) reporting on government and government-guaranteed debt;
  - SFEANC conducted by the SSC;
  - CBU reporting in the context of exchange regulation.
- CBU reporting collects data on each individual loan, general information on loan positions at end of reporting period, and actual payments.
- Asset side for the loans component is negligible.
- MOF reports present data in original currency, separately for principal and for accrued interest, and separately for direct government debt and government-guaranteed debt serviced by creditor; however, CBU aggregated them and recorded in the BOP under the government sector.
- Liabilities on private-sector loans are estimated from banking system information; CBU updated reporting format to prepare statistics for both the BOP and the IIP.
  - Within reports, information was collected on 759 borrowings as of June 30.
  - CBU calculates transactions and balances by principal, accrued interest, past-due principal, and past-due interest; interest income is calculated separately for primary income.
  - Debt forgiveness had been recorded only in capital transfers in the BOP sheet and the loan was reduced in the IIP by other changes; this was corrected during the mission.
- Trade credits:
  - CBU calculates trade credits of other investments using a system tracking accounts payable/receivable related to foreign trade transactions, using banking and customs statistics.
  - System cannot determine whether a specific trade credit falls under direct or other investments; CBU includes everything from this system in trade credits of other investments.
  - Mission recommends deducting trade credits recorded under direct investments from the trade credits received using the banking system and recording only the remaining amount under “trade credits – other investments”.

### International reserve assets (IRAs) conversion methodology
- DMIR calculates IRA data first in original currency in accordance with BPM6, then converts into USD and calculates exchange-rate changes.
- When converting to USD, CBU applied respective exchange rates to balances as of the beginning and the end of the reporting period, and applied the rate as of the end of the reporting period for the transaction.
- Mission recommended applying either the rate as of the transaction date or the average rate for the reporting period for transactions.
- After consultation, DMIR decided to apply average rates to conversion of reserve asset transactions from original currency to US dollars.
- DMIR provided updated data on IRAs starting with December 31, 2015, which were used in compiling the 2016–2017 BOP.

### Mission recommendations on data processing and debt classification
- Initial data from the MOF should be processed using the methodology proposed by the mission, using the working files developed with the mission.
- Guaranteed debts on which the government has assumed repayment obligations should be recorded among government-sector debts; debts serviced by the debtor itself should be recorded in the appropriate sector depending on the borrower; memorandum items should clearly state the amount of government guaranteed debt and debt service.
- A list of enterprises that had foreign economic transactions during the reporting period should be provided to the SSC for inclusion in the list of respondents for the new survey.
- Data on trade credits of other investments component should be adjusted per the mission’s recommendations.

### Program to develop and introduce an ITRS: design, pilot, and quality challenges
- November 2017 mission recommended studying adoption of an ITRS for the external sector; CBU expressed interest and decided to create a system using the Georgian ITRS as a prototype.
- CBU preparatory steps prior to current mission:
  - developing a draft ITRS reporting form for banks and instructions;
  - developing a specialized system of ITRS codes for banks;
  - consulting commercial banks and coordinating form and code system;
  - defining a report presentation format that does not allow for consolidated BOP transactions to be performed;
  - developing a program for processing, analyzing, and assessing the intermediate database.
- Pilot data collection launched in commercial banks at the beginning of October 2018.
- Uzbekistan ITRS special features:
  - banks report on all transactions, in both internal and external correspondent accounts; internal transactions use a different code system;
  - only transactions that pass through external correspondent accounts are sent to the BOPSO;
  - banks do not report cash transactions;
  - threshold values are not used, all transactions are coded, and a resident transaction participant is identified for all transactions.
- Files sent to the CBU include name of the client/transaction initiator and their fiscal code.
- Reporting timetables:
  - express information submitted immediately following the closing of the business day;
  - final and revised data forwarded to the CBU one month later; commercial banks must send revised data for the reporting month.
- Identified shortcomings and needed improvements:
  - ITRS form lacks a field for the institutional sector, restricting usability; mission prepared institutional sector codes (Table 3):
    - Central Bank — 1
    - Deposit organizations, other than central bank — 2
    - General government sector — 3
    - Non-banking financial institutions — 4
    - Nonfinancial enterprises — 5
  - Existing ITRS code system based on BPM5 needs revision for BPM6 transition (updated code system cited in Appendix I).
  - Adoption of ITRS codes by operators enables timely data but increases risk of erroneous transaction code identification; training a large number of operators is difficult.
  - Analysis of first pilot results showed a high number of errors in identification of transaction codes and unsuitability of accumulated data for subsequent use.
- Mission’s operational recommendations for ITRS quality:
  - develop procedures to ensure accumulated data are of suitable quality prior to official introduction;
  - prepare a program of regular seminars for commercial banks to explain goals and train staff in ITRS reporting;
  - develop procedures for detecting outliers and atypical deviations in banks’ reports (logical checks);
  - develop methods and procedures for regular reconciliation of individual ITRS indicators with banks’ balance sheets (reconciliation of balance-sheet positions and flows, broken down by certain financial instruments).
- Priority order for introducing 4 major ITRS segments:
  - (i) CBU segment;
  - (ii) commercial bank segment (transactions in cash and non-cash);
  - (iii) non-banking financial institution segment;
  - (iv) segment of nonfinancial corporations with current accounts abroad.
- Recommended actions:
  - insert an additional field for the institutional sector in the reporting form;
  - update the system of transaction codes and the instruction on their application per the mission’s recommendations;
  - identify a date for the official introduction of the ITRS and provide legal support;
  - provide for regular seminars for commercial banks to explain goals and train staff in compiling reports under the system;
  - improve data collection for the CBU under the ITRS and study the advisability of extending the ITRS to the remaining segments.

### Compilation of Balance of Payments, 2016–2017: harmonization efforts and goods reconciliation
- Objective: assist CBU in analyzing the gap between new BOP data and historic time-series after ESS production moved from MOE to CBU, and assist in eliminating the gap.
- Causes of the gap: different formats, different estimation assumptions, deviations from accepted standards, indicators estimated on different source data, and errors.
- Mission studied MOE and CBU balances and assisted CBU in generating the BOP for 2016–2017 using all available historical data in BPM6 format, including MOE BOP data.
- CBU requested data from MOF, RUSCC, SSC, commercial banks, and others for 2016–2017; prior to receiving these data, mission and CBU performed rough estimates of missing data. The trial BOP for 2016–2017 prepared during the mission should be viewed as a trial version that could change significantly after real data are obtained.
- Mission assisted CBU in integrating analytical BOP format into the working file to enable automatic updates of analytical presentation when generating new balances or reviewing time series.
- Goods component reconciliation:
  - Difference between MOE and CBU balances for goods is minimal; both use the general trade system but apply different procedures.
  - MOE uses SSC data and requests RUSCC data on flows to/from customs warehouses in free circulation; MOE adjusts by removing goods leaving customs warehouses and adding goods entering warehouses; MOE removes flows associated with processing of goods.
  - CBU uses RUSCC data and selects flows conforming to the general trade system, excluding goods for processing and repair; RUSCC does not perform data adjustments.
  - MOE adds unrecorded import/export transactions conducted by individuals to goods, estimating these goods at 20 percent of money transfers.
  - CBU estimates shuttle trade based on surveys at border crossing points; CBU estimates are more modest for exports—about 40 percent of MOE’s estimation.
  - CBU asks the National Air Company (NAC) about goods purchased by carriers in ports and airports and adds them to goods; these goods are recorded by the SSC and in the MOE BOP among services.
  - Difference in conversion from CIF price to FOB price:
    - MOE assumes cost of freight and insurance at 10 percent of the CIF price but does not take energy imports into account, which lowers the cost of freight and insurance to 9.5 percent.
    - CBU estimates freight based on geography and physical volume (weight) of goods using average transportation cost per ton; imports from neighboring countries with shared border are not taken into account, resulting in higher figures—up to 13–14 percent.
  - In the trial BOP for 2016–2017, data for goods were taken from the MOE balance and presented in two lines—nonmonetary gold and other goods.

*Source: IMF mission report excerpt (1uzbea2020004).*

### 56. Services. In the CBU estimates there was no debit on passenger transportation

### 56. Services. In the CBU estimates there was no debit on passenger transportation

### Services: compilation and adjustments (paragraphs 56–57)
- CBU estimated passenger transportation services for all modes of transport based on information about border crossings by individuals; in the CBU estimates there was no debit on passenger transportation services for any mode of transport.
- Data for 2016–2017 were taken from the BOP of the MOE; the overall figure for all modes of transport was distributed among individual modes according to passenger flows.
- During the last days of the mission, the CBU obtained data on international trade in services from the SSC for 2016–2017; the MOE did not adjust services exports, and a decision was made to derive services exports for the trial BOP from the newly obtained data.
- In imports of services, a portion of insignificant components that are not adjusted in the BOP of the MOE are calculated based on SSC information.
- The debit entry on the government services component—absent from the SSC data—was taken from the MOE balance.
- Freight was estimated using the CBU methodology (considered more suitable than using 10 percent from imports); results were slightly greater than in the MOE’s BOP.
- The MOE’s BOP lacked travel services incurred by short-term workers; these were added in the trial balance and, for 2016–2018 trial balance, expenses of short-term workers have been added to business travel.
- All remaining minor service components are recorded in a single component—"other business services"—and the data were harmonized with MOE BOP data.

### Primary and secondary income: compensation, reinvested earnings, transfers (paragraphs 58–61)
- Compensation of employees:
  - Compensation of employees was overestimated in the CBU BOP and was adjusted during the mission.
  - In the MOE balance this component was underestimated; MOE data reflect only net funds transfers, not all compensation of employees (some of which are spent within the host country).
  - In the CBU BOP for 2016–2017, compensation of employees component is estimated according to the BPM6 criteria (it includes total earnings, not only the portion that was transferred to Uzbekistan).
  - Data for the first half of 2018 were adjusted; the new data provide an adequate time-series and are comparable with the MOE’s BOP data, with the provision that the latter do not reflect all earnings but only the portion transferred to Uzbekistan.
- Reinvested earnings within direct investment income:
  - The MOE lacks reinvested earnings within the DI income component in its published balance; they exist in working files but are understated and in the final line were multiplied by zero (excluded).
  - Reinvested earnings obtained using the new reporting forms are fairly large, amounting to USD 400 million over the first half of the year.
  - In the trial balance, dividends and interest income were taken from the MOE balance, while reinvested earnings were calculated by: taking an estimated position as of the beginning of 2016, defining the average corporate yield at 5 percent, and calculating enterprise profit deducting paid-out dividends.
  - The data obtained were recorded both in DI reinvested and under DI.
- Interest income from other investments:
  - Only data on interest payments were available and were recorded in the experimental balance.
  - As soon as relevant data are available (from the MOF and from commercial banks), paid interest will be replaced by accrued interest.
- Reserve assets and other income items:
  - Updated DIMR data were reflected in income from reserve assets.
  - Personal transfers were identified at 54 percent of money transfers; this component will be reviewed later.
- Migrant transfers and capital transfers:
  - Transfers of migrants are recorded in capital transfers in the BOP of the MOE, which is not allowed according to BPM6; these transfers were removed in the experimental balance.
  - Debt forgiveness appeared in debt of other sectors in the first half of 2018 and is recorded as a capital transfer; potential instances for 2016–2017 remain to be checked.

### Direct investment, portfolio and other financial accounts (paragraphs 61–64)
- Direct investment (DI):
  - The mission adjusted DI. MOE uses only equity capital and debt capital in DI calculations; reinvested earnings in MOE working files are not used in DI calculation.
  - CBU received equity and debt capital data for 2016–2017 from the MOE balance, except debt capital for Q4 2017.
  - For Q4 2017, the MOE lacked information on loans attracted from direct investors; the CBU repeated data from Q4 2016 in the amount of USD+326 million.
  - As of compilation of the CBU trial BOP, the real size of DI debt capital was known; it comprised USD -175 million.
  - Direct investments abroad are negligible; for the trial BOP for 2016–2017, these data were taken from the MOE working file.
- Portfolio investments and financial derivatives are quite negligible in Uzbekistan and are not set apart in the MOE balance.
- Other investments:
  - Presented in the MOE balance in a limited form: loans are represented only in liabilities and broken down into government and government-guaranteed versus unsecured loans.
  - The mission and CBU jointly decided to record data from the MOE balance in public sector borrowing despite slight differences from MOF data.
  - Loans of DTC and other sectors must be taken from commercial bank reports.
- Currency and deposits:
  - Data on currency and deposits in the MOE balance have little credibility; imports/exports of Uzbek Sum are recorded in liabilities for this instrument.
  - Uncertainty whether nonresidents hold substantial Uzbekistan Sum; if so, it would be a CBU liability.
  - In assets, sizable amounts are in the central bank sector in all quarters of 2016–2017, but DMIR representatives asserted the CBU has no external assets in non-reserve currencies.
  - All deposits in non-reserve currencies are in resident banks; deposits of the DTC sector were estimated based on bank statements.
  - For deposits of other sectors (large share to households), expert assessments were done based on imports/exports of foreign currency into Uzbekistan and estimates of household inflows and outflows of foreign currency were accounted for.
- Reserve assets and non-reserve external assets:
  - To compile the 2016–2017 BOP, the mission obtained data on reserve assets and external assets in non-reserve currencies from the DIMR.
  - Major transactions are performed under the currency and deposits subcomponent.
  - Transactions involving monetary gold are not carried out; all changes in monetary gold are assigned to other changes and were recorded in the trial BOP.

### Trial BOP for 2016–2017 and data gaps (paragraph 65)
- A table for the trial BOP beginning with 2016 is provided in Appendix II.
- Many components are roughly estimated for lack of reliable source data.
- The BOPD will continue efforts to collect additional data for 2016–2017 to update the 2016–2017 trial balance, for which reason the latter could change greatly.

### Other issues — Human resources, training, and institutional arrangements (paragraph 66 and mission recommendations)
- Institutional changes and staffing:
  - At the beginning of 2018, a BOPD was created within the Department of Foreign Exchange Regulation and Control; the department was renamed the Department of Foreign Exchange Regulation and the Balance of Payments (DERBP).
  - At present the BOPD staff consists of 8 employees; in reality only 4 have been hired, including the head of the office.
  - The CBU is selecting candidates and plans to fill the remaining open positions in the very near future.
  - As of October 2018, only 2 staff members of the 4 had completed special training courses; one BOPD staff member was transferred to another CBU unit.
  - Three employees were nominated for a seminar on ESS at the Joint Vienna Institute in February of 2019.
- Mission recommendations (verbatim):
  - bringing the BOPD to full strength within the shortest possible time;
  - provide one position within the new office’s staff for a programmer, or assign one programmer to the BOPSO;
  - nominate personnel for relevant IMF seminars to further study the BPM6 and external debt statistics.

*Source: 1uzbea2020004 - 56. Services. In the CBU estimates there was no debit on passenger transportation*

### 1.1 Revenues from goods

### 1.1 Revenues from goods

### I. Goods — Revenues and Payments
- 41011 / 51011 — Payment for goods (exports / imports)
  - Receipt of funds for goods exports, except exports of the goods cited in components 1.2 – 1.4.
  - Payments for imports of goods, other than those cited in components 1.2 – 1.4.
- 41021 / 51021 — Nonmonetary gold
  - Marketable gold (other than components made from it).
- 41031 / 51031 — Funds transfer under a production sharing agreement (PSA)
  - Receipt and transfer of funds to beneficiaries for goods (natural gas, etc.) sold under production sharing agreements.
- 41041 / 51041 — Payment for purchased goods in foreign ports by resident transportation organizations
  - Fuel, food products, and ancillary materials purchased in ports by transportation organizations.
  - This component does not include ancillary services (technical servicing of vehicles, pilotage services, etc.).

### II. Services — Categories and Transaction Codes
- General: Services are classified by mode (processing/repair, transport, travel, insurance, financial, telecom/computer/information, other business, and government/construction).
- 2.1 Services involving processing or repair of goods
  - 42011 / 52011 — Processing of goods within Uzbekistan / Processing of goods abroad
    - Payment for processing of goods within the Republic of Uzbekistan with subsequent return to the customer’s country; payment for processing of goods abroad with subsequent return to the Republic of Uzbekistan.
  - 42012 / 52012 — Repair of goods within Uzbekistan / Repair of goods abroad
    - Costs for repairs of portable equipment and other goods performed by or for a nonresident.
    - Excludes repair of buildings and structures (construction services), repair of computer equipment (computer and information services), and maintenance of vehicles in seaports and airports (other transportation services).
- 2.2 Maritime transport
  - 42021 / 52021 — Passenger
    - Passenger travel; wet-lease of vessels for passenger travel.
  - 42022 / 52022 — Freight
    - Freight transport; wet-lease of vessels for freight transport.
  - 42023 / 52023 — Ancillary services for maritime transport
    - Ancillary services, including storage, loading/unloading, ship maintenance, pilotage services, fees, and agency services related to maritime passenger and freight carriage.
- 2.3 Air transportation
  - 42031 / 52031 — Passenger
    - Passenger travel; wet-lease of aircraft for passenger travel.
  - 42032 / 52032 — Freight
    - Freight carriage; wet-lease of aircraft for freight carriage.
  - 42033 / 52033 — Ancillary services for air transport
    - Ancillary services, including storage, loading/unloading, aircraft maintenance, navigational support for carriers, fees, and agency services related to passenger and freight transport by air.
- 2.4 Motor vehicle transport
  - 42041 / 52041 — Passenger
    - Passenger travel: lease of vehicles with crew for passenger travel.
  - 42042 / 52042 — Freight
    - Freight carriage; lease of vehicles with crew for freight carriage.
  - 42043 / 52043 — Ancillary services for motor vehicle transport
    - Ancillary services, including storage, loading/unloading, vehicle maintenance, fees, and agency services related to motor vehicle passenger and freight carriage.
- 2.5 Rail transport
  - 42051 / 52051 — Passenger
    - Passenger travel: lease of vehicles with crew for passenger travel.
  - 42052 / 52052 — Freight
    - Freight carriage; lease of vehicles with crew for freight carriage.
  - 42053 / 52053 — Ancillary services for motor rail transport
    - Ancillary services, including storage, loading/unloading, vehicle maintenance, fees, and agency services related to passenger and freight transport by rail.
- 2.6 Pipeline transport and electric power transmission lines
  - 42061 / 52061 — Services involved in transport by pipelines and electric power transmission lines
    - Services entailed in pipeline transport of natural gas, crude oil, and petroleum products, servicing of pipelines, and electric power transmission.
- 2.7 Travel — All types of goods and services purchased by guests in a host country
  - 42071 / 52071 — Payments and clearing transactions performed using MPK (international payment cards)
    - Coverage using payment cards of international payment systems (Visa International, American Express, Mastercard, etc.).
  - 42072 / 52072 — For training
    - Payments to cover costs of training.
  - 42073 / 52073 — For medical treatment
    - Payments to cover costs of medical treatment.
  - 42074 / 52074 — Tourism services provided by nonresidents within Uzbekistan—other
    - Tourism services.
- 2.8 Postal and courier services
  - 42063 / 52063 — Postal and courier communications services
    - Collection, transportation, and delivery of letters, newspapers, periodical publications, brochures, other printed materials, packages and parcels, services of post offices and leasing of post office boxes, sales of postage stamps, preparation of money transfers, telegraph services, etc.
- 2.9 Insurance services
  - 42091 / 52091 — Payments of insurance contributions for various types of insurance and reinsurance
    - Payments of insurance contributions (insurance premiums) for various types of insurance and reinsurance (for example, cargo insurance in overseas trade).
  - 42092 / 52092 — Compensation under insurance policies
    - Compensation paid out by insurance companies under insurance policies—e.g., due to losses or damage to goods during transport.
- 2.10 Financial services; Telecommunications, computer, and information services
  - 42101 / 52101 — Services of financial intermediaries
    - Fees on transactions involving letters of credit, banker’s acceptances, bank fees, financial leasing; fees for transactions with foreign currency or securities, asset management, servicing of correspondent accounts, transfers of funds on money orders, and similar services.
  - 42081 / 52081 — Telecommunications services
    - Broadcast or transmission of sounds, images, data, or other information by telephone, telex, telegraph, radio or television cable, or simulcast transmission, by electronic mail, telefax, etc.; business network and teleconferencing services and support services.
  - 42082 / 52082 — Computer services
    - Creation and introduction of software, including development and programming of a client’s specific systems; management of computing systems; consulting services for computerization issues; technical support, operation and maintenance of computing technology.
  - 42083 / 52083 — Information services
    - Services of information agencies; database processing/creation of database concepts; internet search sites; direct individual subscriptions to newspapers and magazines; other services involving provision of content in an interactive mode and library and archive services.
  - 42103 / 52103 — Royalties and licensing fees
    - Payments for use of nonfinancial, intangible assets and ownership rights (patents, copyright, trademarks, etc.) and for use based on licensing agreements of reproduced originals.
  - 42104 / 52104 — Operational leasing
    - Operational leasing of equipment without personnel.
- 2.11 Other Services
  - 42111 / 52111 — Government services
    - All types of goods purchased or services provided to embassies, consulates, official trade, military, and other missions; payments related to support for multilateral resolutions or stationing of peacekeeping units.
  - 42112 / 52112 — Construction services, more than 1 year in duration
    - Funds received for project construction, installation of equipment, repair of buildings and structures outside the Republic of Uzbekistan (credit) of more than 1 year; payment for construction work by nonresident construction companies within Uzbekistan (debit) of more than 1 year.
  - 42113 / 52113 — Construction services, less than 1 year
    - Funds received for project construction, installation of equipment, and repair of buildings and structures outside the Republic of Uzbekistan (credit), lasting less than 1 year; payment for construction work by nonresident construction companies within Uzbekistan (debit), lasting less than 1 year.
  - 42114 / 52114 — Other business services
    - Legal, consulting, and auditing services, advertising, marketing, scientific research and design development, architectural, engineering, and other technical services, agricultural services and on-site processing of product, services provided to private parties, and cultural and recreation services.

### III. Primary Income
- 43010 / 53011 — Compensation of employees
  - Transfers of wages and other payments to individuals, received by workers outside the country of which they are residents (including transfers to Uzbekistan of wages of seasonal workers and other categories of workers working abroad less than one year).
- Income from direct investments
  - 43021 / 53021 — Paid dividends and withdrawals from income of quasi-corporations
    - Income from share participation in corporate capital (stock dividends and distributed profits of overseas divisions).
  - 43023 / 53023 — Interest received on loans issued to overseas branches and direct investment (subsidiary) enterprises
    - Interest on debt obligations between a direct investor and direct investment enterprise, including interest on subordinated loans and reimbursable financial assistance from the direct investor.
- Income from portfolio investments
  - 43031 / 53031 — Income from equity (Paid dividends)
    - Securities income granting eligibility for capital participation (shares; certificates of participation, equity securities; all types of capital investments in fiduciary companies and investment funds).
  - 43032 / 53032 — Interest received on long-term debt securities / Interest paid on long-term debt securities
    - Interest received on long-term debt securities.
  - 43033 / 53033 — Interest received on short-term debt securities / Interest paid on short-term debt securities
    - Interest received on short-term debt securities.
- Income from other investments
  - 43041 / 53041 — Interest on inter-bank deposits
    - Interest on inter-bank deposits; interest on use of remaining balances in correspondent account, etc.
  - 43042 / 53042 — Receipt of accrued interest on residents’ deposits in nonresident banks / Payment of accrued interest on nonresidents’ deposits in Uzbekistan banks.
  - 43043 / 53043 — Receipt of accrued interest on interbank deposits in nonresident banks / Transfer of accrued interest on interbank deposits to nonresident banks.
  - 43044 / 53044 — Interest received on loans landed by the Government of Uzbekistan / Payment of interest—on loans guaranteed by the Government of Uzbekistan.
  - 43045 / 53045 — Interest received on loans issued by private creditors without guarantees of the Government of Uzbekistan / Payment of interest on loans issued by private creditors without guarantees of the Government of Uzbekistan.
  - 43046 / 53046 — Interest received on other external assets / Interest received on other external obligations.

### IV. Secondary Income
- 44011 / 54011 — Transfers in the form of humanitarian aid and grants received by government agencies of Uzbekistan / Transfers in the form of humanitarian aid and grants provided by government agencies of Uzbekistan
  - Humanitarian aid and grants received (provided) by government agencies of Uzbekistan; contributions of government agencies of Uzbekistan to funds of international organizations; taxes and penalties paid by nonresidents to government agencies of Uzbekistan or by government agencies of Uzbekistan to nonresidents.
- 44012 / 54012 — Transfers received by individuals and non-governmental organizations of Uzbekistan / Transfers provided by individuals and non-governmental organizations of Uzbekistan
  - Donations, inheritance, or humanitarian aid; child support; pensions, stipends, and other payments within the framework of social welfare programs; private transfers; periodic contributions to charitable, religious, scientific, and cultural organizations; payment of duty and fines by NGOs or nonresidents as specified.
- 44013 / 54013 — Money transfers received / Money transfers sent
  - Money transfers of individuals and clearing transactions on money transfers.
- 44016 / 54016 — Receipts incoming to bank accounts of nonresident individuals / Outbound transfer sent from bank accounts of nonresident individuals
  - Free money transfers (receipt/transfer).

- Capital transfers
  - 44021 / 54021 — Capital transfers to the general sector of Uzbekistan / Capital transfers by the general sector of Uzbekistan to nonresidents
    - Capital transfers made by nonresidents to government bodies of Uzbekistan, intended to fully or partially cover the costs of fixed capital formation (for example, financing of large-scale construction projects); debt forgiveness by a creditor; capital transfers provided by government bodies of Uzbekistan to nonresidents.
  - 44021 / 54022 — Capital transfers in other sectors
    - Capital transfers, free transfer of ownership of fixed capital; investment subsidies; free financial assistance to economic entities and grants for reconstruction and production growth; departure transfers.
  - 44023 / 54023 — Sale of non-produced nonfinancial assets / Purchase of non-produced nonfinancial assets
    - Purchase (sale) of industrial and intellectual property and other similar rights: inventions, industrial samples, brand marks, trademarks, patents, licenses, know-how; purchase/sale of land lots by foreign embassies.

### V. Financial Account — Investments
- 5.1 Direct investments — Assets (INFLOW – decrease in Uzbekistan’s overseas assets; OUTFLOW – increase in Uzbekistan’s overseas assets)
  - 45011 / 55011 — Equity capital (repatriation by a resident investor of funds invested in the authorized capital of a nonresident legal entity, amounting to at least 10 percent of such capital, and repurchase of a portion of authorized capital or a sale of common (voting) shares) / Equity capital (contribution by a resident investor of funds in the authorized capital of a nonresident legal entity, amounting to at least 10 percent of such capital, and repurchase of a portion of authorized capital or a purchase of common (voting) shares)
    - Contribution by a resident investor of funds in the authorized capital of a nonresident legal entity, amounting to at least 10 percent of such capital; purchase by a resident of a shareholding in a nonresident legal entity (less than 10 percent except where specified).
  - 45012 / 55012 — Other capital in the form of direct investments / Other capital in the form of direct investments
    - Transactions involving attraction/issuance of lending resources between a direct investor and direct investment enterprises; subordinated debt; repayable financial assistance.
  - 45013 / 55013 — Real estate sales by a resident / Real estate purchases by a resident
    - Transactions of residents involving the purchase or sale of real estate located abroad.
  - 45014 / 55014 — Equity capital Reverse investments
    - Reverse investments: repurchase of a portion of authorized capital or equity capital from an overseas direct investor by a direct investment enterprise; sale by a direct investment enterprise of a previously purchased portion of the authorized capital or equity capital of an overseas direct investor.
- 5.2 Direct investments — Liabilities (INFLOW – increase in Uzbekistan’s liabilities to foreign countries; OUTFLOW – decrease in Uzbekistan’s liabilities to foreign countries)
  - 45021 / 55021 — Equity capital (contribution by a nonresident investor of funds in the authorized capital of a resident legal entity, amounting to at least 10 percent of such capital, or a purchase of ordinary (voting) shares) / Equity capital (repatriation of investment)
    - Contribution by a nonresident investor of funds in the authorized capital of a resident legal entity, amounting to 10 percent or more; repatriation/sale by nonresident investor as applicable.
  - 45022 / 55022 — Other capital in the form of direct investments / Other capital in the form of direct investments
    - Transactions involving attraction of lending resources between a direct investor and direct investment enterprises; subordinated debt; repayable financial assistance.
  - 45023 / 55023 — Real estate purchases by a nonresident / Real estate sales by a nonresident
    - Transactions of nonresidents involving the purchase or sale of real estate located within the territory of the Republic of Uzbekistan.
  - 45024 / 55024 — Equity capital Reverse investments
    - Reverse investment transactions (repurchase/sale of portions of authorized capital or common (voting) shares; purchase/sale of domestic securities).

- 5.3 Portfolio investments — Assets (foreign securities) (INFLOW – decrease in assets of residents of Uzbekistan; OUTFLOW – increase in assets of residents of Uzbekistan)
  - 45031 / 55031 — Sales of equities (equity share less than 10 percent) / Purchases of equities (equity share less than 10 percent)
    - Securities issued by nonresidents that qualify for capital participation (equity share less than 10 percent).
  - 45032 / 55032 — Sales of long-term and perpetual debt securities issued by nonresidents / Purchases of long-term and perpetual debt securities issued by nonresidents
    - Bonds and preferred shares that entitle the holder to an income stipulated in advance and a fixed amount upon redemption; long-term savings certificates; outstanding certificates of participation in a loan provided to a nonresident by a resident of Uzbekistan.
  - 45033 / 55033 — Sales of money market instruments (short-term debt securities) by residents / Purchases of money market instruments (short-term debt securities) by residents
    - Short-term debt securities issued by nonresidents; Treasury notes; short-term savings certificates; banker’s acceptances.
- 5.4 Portfolio investments — Liabilities (domestic securities) (INFLOW – increase in liabilities to nonresidents; OUTFLOW – decrease in liabilities to nonresidents)
  - 45041 / 55041 — Purchases by nonresidents of securities issued by residents (equity share less than 10 percent) / Sales by nonresidents of securities issued by residents (equity share less than 10 percent)
    - Securities issued by residents that qualify for capital participation (equity share less than 10 percent).
  - 45042 / 55042 — Purchases by nonresidents of long-term and undated debt securities / Sales by nonresidents of long-term and undated debt securities
    - Bonds and preferred shares that entitle the holder to an income stipulated in advance and a fixed amount upon redemption; long-term savings certificates.
  - 45043 / 55043 — Purchases by nonresidents of money market instruments issued by residents / Sales by nonresidents of money market instruments issued by residents
    - Treasury notes issued by residents; short-term savings certificates; banker’s acceptances.

### VI. Other investments
- VI.I Other investments — Assets (INFLOW – decrease in overseas assets of residents of Uzbekistan; OUTFLOW – increase in overseas assets of residents of Uzbekistan)
  - 46011 / 56011 — Repayment of long-term loans issued to nonresidents by the government / Long-term loans issued by the government
    - Long-term credit (loan, lease) issued to nonresidents by the Government of Uzbekistan for a period of more than 1 year, and its repayment.
  - 46012 / 56012 — Repayment of short-term loans issued to nonresidents by the government / Short-term loans issued by the government
    - Short-term credit issued to nonresidents by the Government of Uzbekistan for a period of up to 1 year, and its repayment.
  - 46013 / 56013 — Repayment of long-term loans issued to nonresidents by private creditors / Long-term loans issued by private creditors
    - Long-term credit issued to nonresidents by residents of Uzbekistan for a period of more than 1 year, and its repayment.
  - 46014 / 56014 — Repayment of long-term loans issued to nonresidents by private creditors / Short-term loans issued by private creditors
    - Short-term credit issued to nonresidents by residents of Uzbekistan for a period of up to 1 year, and its repayment.
  - 46021 / 56021 — Return of long-term deposits placed in overseas banks / Long-term deposits placed in overseas banks
    - Long-term deposits placed by residents in nonresident banks (including deposits placed by banks) and their return.
  - 46022 / 56022 — Return of short-term deposits placed in overseas banks / Short-term deposits placed in overseas banks
    - Short-term deposits placed by residents in nonresident banks and their return, except components 6.2.3 and 6.2.4.
  - 46023 / 56023 — Return of security deposits placed by banks in overseas banks / Security deposits placed by banks in overseas banks
    - Security deposits made using money transfer and trade finance systems or other financial services systems that require collateral.
  - 46024 / 56024 — Return of money transfer system operator’s deposit / Receipt of deposit from money transfer system operator
    - Receipt/Return of money transfer system operator’s deposit (Western Union, MoneyGram, etc.).
  - 46031 / 56031 — Other assets
    - Other transactions not included in components 6.1-6.2 of “Other investments – assets”, e.g., funds transfers from Uzbekistan to a nonresident under a guarantee or surety agreement in which a resident is guarantor; commitment of funds during transfers from special accounts; capital subscriptions of international organizations that are not monetary institutions.
- VI.II Other investments — Liabilities (INFLOW – increase in external obligations of residents of Uzbekistan; OUTFLOW – decrease in external obligations of residents of Uzbekistan)
  - 46041 / 56041 — Long-term loans received from nonresidents under guarantee of the Government of Uzbekistan / Repayment of long-term loans received by the government from nonresidents
    - Long-term credit received from nonresidents under guarantee of the Government of Uzbekistan for a period of more than 1 year, and its repayment.
  - 46042 / 56042 — Short-term loans received from nonresidents under guarantee of the Government of Uzbekistan / Repayment of short-term loans received by the government from nonresidents
    - Short-term credit received from nonresidents under guarantee of the Government of Uzbekistan for a period of up to 1 year, and repayment thereof.
  - 46043 / 56043 — Long-term loans received by private creditors from nonresidents without guarantees of the Government of Uzbekistan / Repayment by private creditors of long-term loans received from nonresidents
    - Long-term credit received by private creditors from nonresidents without government guarantees for a period of more than 1 year, and repayment thereof.
  - 46044 / 56044 — Short-term loans received by private creditors from nonresidents without guarantees of the Government of Uzbekistan / Repayment by private creditors of long-term loans received from nonresidents
    - Short-term credit received by private creditors from nonresidents without government guarantees for a period of up to 1 year, and repayment thereof.
  - 46051 / 56051 — Long-term deposits placed by nonresidents in banks of Uzbekistan / Return to nonresidents of long-term deposits in banks of Uzbekistan
    - Long-term deposits placed by nonresidents in resident banks (including deposits placed by banks), and the return thereof.
  - 46052 / 56052 — Short-term deposits placed by nonresidents in banks of Uzbekistan / Return to nonresidents of short-term deposits in banks of Uzbekistan
    - Short-term deposits placed by nonresidents in resident banks and the return thereof, except components 6.5.3 and 6.5.4.
  - 46053 / 56053 — Security deposits placed by nonresidents in banks of Uzbekistan / Return to nonresidents of security deposits placed in banks of Uzbekistan
    - Security deposits made using money transfer and trade finance systems and other financial services systems requiring collateral.
  - 46054 / 56054 — Receipt of money transfer system operator’s deposit / Return of money transfer system operator’s deposit
    - Receipt/Return of deposits of money transfer system operators (Western Union, MoneyGram, etc.).
  - 46061 / 56061 — Other liabilities
    - Other transactions not included in components 6.4-6.4 of “Other investments – liabilities”, e.g., funds of a nonresident entering Uzbekistan under a guarantee or surety agreement under which a nonresident is guarantor; commitment of funds by a nonresident during transfers from special accounts.

### VII. Special codes — Neutral transactions
- 47011 / 57011 — Receipt of transit funds in correspondent accounts / Receipt of transit funds in correspondent accounts
  - Transactions between two Uzbekistan banks; movement of funds through nostro accounts of resident banks through an overseas bank; settlements between residents. When using this code, indicate the name of the bank into whose account funds are to be transferred.
- 47012 / 57012 — Movement of funds between two nonresidents through the banking system of Uzbekistan / Movement of funds between two nonresidents through the banking system of Uzbekistan
  - Receipt of funds from a nonresident into a correspondent account of an Uzbekistan bank, for such funds to be transferred to a nonresident (transaction between two nonresidents through the banking system of Uzbekistan). When using this code, indicate the name of the bank into whose account funds are to be transferred.
- 47013 / 57013 — Foreign currency purchases (sales) by banks / Foreign currency purchases (sales) by banks
  - Purchase (sale) of non-cash funds in foreign currency for non-cash funds in the national currency of Uzbekistan; debiting of funds from nostro correspondent accounts to purchase foreign currency in cash from a resident legal entity; deposit of funds to a nostro correspondent account for foreign currency in cash that is sold to a resident legal entity; replenishment of a correspondent account; replenishment of cash in hand.
- 47021 / 57021 — Receipts in suspense accounts / Debits from suspense accounts

### Balances of funds in accounts (specified codes)
- Balance at beginning of period:
  - Nostro account 81011
  - Loro account 81012
- Balance at end of period:
  - Nostro account 81013
  - Loro account 81014

*Republic of Uzbekistan — International Monetary Fund (excerpt of classification and transaction codes).*

### Appendix II. Trial Balance of Payments of the Republic of

### Appendix II. Trial Balance of Payments of the Republic of Uzbekistan for 2016–2018

### Trial balance: summary figures (USD millions)
- Current account: 2016 = 1,383.8; 2017 = 1,729.8; 2018Q1 = -202.6; 2018Q2 = -1,757.5
  - Credit: 2016 = 17,403.0; 2017 = 19,209.3; 2018Q1 = 5,106.5; 2018Q2 = 4,993.8
  - Debit: 2016 = 16,019.2; 2017 = 17,479.5; 2018Q1 = 5,309.2; 2018Q2 = 6,751.3

- Goods and services (balance): 2016 = -2,257.1; 2017 = -2,472.9; 2018Q1 = -1,107.7; 2018Q2 = -2,545.6
  - Credit: 2016 = 12,385.3; 2017 = 13,520.0; 2018Q1 = 3,610.9; 2018Q2 = 3,108.4
  - Debit: 2016 = 14,642.4; 2017 = 15,992.9; 2018Q1 = 4,718.6; 2018Q2 = 5,654.0

- Goods (balance): 2016 = -1,160.8; 2017 = -1,226.7; 2018Q1 = -620.9; 2018Q2 = -2,064.4
  - Export: 2016 = 9,460.5; 2017 = 10,421.8; 2018Q1 = 3,009.3; 2018Q2 = 2,374.1
  - Import: 2016 = 10,621.3; 2017 = 11,648.5; 2018Q1 = 3,630.2; 2018Q2 = 4,438.5

- Services (balance): 2016 = -1,096.4; 2017 = -1,246.2; 2018Q1 = -486.8; 2018Q2 = -481.2
  - Export: 2016 = 2,924.8; 2017 = 3,098.2; 2018Q1 = 601.6; 2018Q2 = 734.3
  - Import: 2016 = 4,021.2; 2017 = 4,344.4; 2018Q1 = 1,088.3; 2018Q2 = 1,215.5

- Primary income: 2016 = 1,777.9; 2017 = 2,138.6; 2018Q1 = 391.9; 2018Q2 = 194.1
  - Credit: 2016 = 2,847.1; 2017 = 3,276.8; 2018Q1 = 821.9; 2018Q2 = 1,087.1
  - Debit: 2016 = 1,069.2; 2017 = 1,138.2; 2018Q1 = 430.1; 2018Q2 = 893.0

- Secondary income: 2016 = 1,863.0; 2017 = 2,064.1; 2018Q1 = 513.2; 2018Q2 = 594.0
  - Credit: 2016 = 2,170.5; 2017 = 2,412.6; 2018Q1 = 673.7; 2018Q2 = 798.3
  - Debit: 2016 = 307.5; 2017 = 348.4; 2018Q1 = 160.5; 2018Q2 = 204.3

- Capital account: 2016 = 0.0; 2017 = 0.0; 2018Q1 = 28.8; 2018Q2 = 6.0
  - Credit: same as capital account credits above
  - Debit: 2016 = 0.0; 2017 = 0.0; 2018Q1 = 0.0; 2018Q2 = 0.0

- Net lending (+) / Net borrowing (-): 2016 = 1,383.8; 2017 = 1,729.8; 2018Q1 = -173.8; 2018Q2 = -1,751.5

### Financial account and components (USD millions)
- Financial account: 2016 = 1,642.4; 2017 = 2,206.1; 2018Q1 = 284.9; 2018Q2 = -1,214.7

- Direct investments (net): 2016 = -1,572.4; 2017 = -1,263.1; 2018Q1 = -279.0; 2018Q2 = -159.2
  - Credit: 2016 = 3.3; 2017 = 3.1; 2018Q1 = 0.1; 2018Q2 = 0.5
  - Debit: 2016 = 1,575.8; 2017 = 1,266.2; 2018Q1 = 279.2; 2018Q2 = 159.7

- Portfolio investments (net): 2016 = 0.2; 2017 = 0.3; 2018Q1 = -1.2; 2018Q2 = -3.1
  - Credit: 2016 = 0.2; 2017 = 0.3; 2018Q1 = 0.0; 2018Q2 = 0.0
  - Debit: 2016 = 0.0; 2017 = 0.0; 2018Q1 = 1.2; 2018Q2 = 3.1

- Derivative financial instruments and stock options for employees: all entries = 0.0

- Other investments (net): 2016 = 2,662.2; 2017 = 3,725.0; 2018Q1 = 180.6; 2018Q2 = -448.4
  - Credit: 2016 = 4,086.5; 2017 = 4,632.8; 2018Q1 = 150.6; 2018Q2 = 283.7
  - Debit: 2016 = 1,424.3; 2017 = 907.8; 2018Q1 = -30.0; 2018Q2 = 732.1

- Reserve assets: 2016 = 552.4; 2017 = -256.0; 2018Q1 = 384.5; 2018Q2 = -604.1

- Net errors and omissions: 2016 = 258.6; 2017 = 476.4; 2018Q1 = 458.7; 2018Q2 = 536.8

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### Appendix III. Implementation of Previous Mission’s Recommendations (November 20–December 1, 2017)

### Outcome: Legal/institutional environment predetermines the compilation and dissemination of a full set of external sector statistics
- H: Amend the Law on the Central Bank to assign to the CBU the compilation and dissemination of monetary statistics and external sector statistics (balance of payments, international investment position, gross external debt, official reserve assets, and exchange rates).
  - Target completion date: October 2018
  - Comments: Implemented. A proposal to amend the law on the Central Bank, as recommended by the mission, has been prepared and submitted to the cabinet of ministers for approval

- H: Secure by statute the CBU’s right to collect information (including confidential information) from ministries, departments, corporations, and other legal entities.
  - Target completion date: October 2018
  - Comments: Implemented. The CBU is entitled to obtain information without hindrance (including confidential information) without obstruction from ministries, departments, corporations, and other legal entities.

- H: Create a legal framework defining responsibility for the collection, processing, and dissemination of ESS data, as well as interagency data sharing.
  - Target completion date: October 2018
  - Comments: Implemented, with the adoption of Resolution of the Cabinet of Ministers of the Republic of Uzbekistan “On Measures to Support the External Sector of the Republic of Uzbekistan” (No. 263, dated April 3, 2018).

- H: Assess feasibility of introducing a closed-type international transactions reporting system (ITRS) based on bank payments. If a positive conclusion is reached, prepare a plan for introducing an ITRS in the Uzbek banking system.
  - Target completion date: September 2018
  - Comments: Implemented. The CBU has prepared a plan for introduced an ITRS and has carried out a pilot introduction.

### Outcome: Institutional setup and staffing
- H: Create a Balance of Payments Office with a staff of at least 8.
  - Target completion date: September 2018
  - Comments: Implemented.

- H: Complete the staffing of the Balance of Payments Office in accordance with the staffing schedule, selecting employees with work experience in bank reporting.
  - Target completion date: December 2018
  - Comments: Partially implemented. Of the 8 staff positions, 4 remain unfilled.

- O: Nominate employees responsible for compiling BOP statistics, IIP, and external debt to ESS training organized by the IMF, other international organizations, and central banks of other countries.
  - Target completion date: Regularly
  - Comments: Implemented.

### Outcome: A program is created for compiling external sector statistics
- H: Measure positions, transactions, and other flows for direct, portfolio, and other investments, in the banking sector based on the CBU’s bank supervision information and information collected in the course of exchange regulation.
  - Target completion date: September 2018
  - Comments: Implemented. Balance sheets of commercial banks were used instead of bank supervision information.

- H: Develop a report form for collecting information on government and government-guaranteed debt and share it with the MOF.
  - Target completion date: October 2018
  - Comments: Implemented.

- H: Compile quarterly positions, transactions, and other flows for government and government-guaranteed debt for 2017.
  - Target completion date: 60th day after end of reporting quarter
  - Comments: Partially implemented. CBU collects and disseminates information on government and government-guaranteed debt within the e-GDDS, but the BOP is recorded in summary form.

- H: Review and approve the new statistical form proposed by the mission “Report on Foreign Economic Activities of Nonfinancial Corporations” (Appendix XVIII).
  - Target completion date: December 2018
  - Comments: Implemented.

- H: Develop software and a data portal on the SSC server for receiving and monitoring data from the private sector survey on foreign economic activity.
  - Target completion date: December 2018
  - Comments: Implemented.

- H: Support receipt of data in the framework of the survey of private sector foreign economic activity starting with report for Q1 2018, and transmission of data to the CBU.
  - Target completion date: September 2018
  - Comments: Implemented.

- H: Process data collected through the aforementioned survey and provide to the CBU according to the methodology and format agreed with the mission.
  - Target completion date: 70th day after end of reporting quarter
  - Comments: Implemented. However, the quality of information on debt service obligations leaves something to be desired.

- H: Calculate positions and transactions for nonfinancial enterprises’ assets and liabilities on the basis of data collected by the SSC using the new report forms developed with the mission’s assistance.
  - Target completion date: September 2018, beginning with the report for the first quarter of 2018
  - Comments: Implemented. Debt service obligations were calculated based on data received obtained from banks’ reports using the updated form.

- H: Set up data collection from production sharing agreement (PSA) enterprises using the existing form. Supplement results obtained with data on direct investment in Uzbekistan.
  - Target completion date: 60th day after end of reporting quarter
  - Comments: Implemented.

- M: Regularly update the list of nonfinancial enterprises involved in foreign economic activity, in order to include them in a survey of the nonfinancial sector’s foreign economic activity.
  - Target completion date: Regularly
  - Comments: Implemented. As of October 1, 2018, the list was sent to the SSC immediately upon the mission’s conclusion.

- H: Develop a comprehensive report form for the RUSCC at the level of detail that would allow proper validation of data.
  - Target completion date: February 2019
  - Comments: Implemented.

- H: On the basis of the RUSCC information, adjust SSC data on merchandise imports/ exports in accordance with BPM6 requirements.
  - Target completion date: April 2019
  - Comments: Implemented.

- H: On the basis of data obtained from the RUSCC, create a foreign trade database and update it regularly.
  - Target completion date: April 2019
  - Comments: Implemented. The Database was created using the BI Oracle software platform.

- H: Develop methods for applying mirror statistics for estimating unrecorded imports and exports.
  - Target completion date: May 2019
  - Comments: Not implemented.

- H: Develop a method for calculating reserve assets (balances and flows) in accordance with the BPM6 standard.
  - Target completion date: September 2018
  - Comments: Implemented.

- M: Develop report forms for the SISIMOF [State Insurance Supervision Inspectorate of the Ministry of Finance] for data collection on insurance services and the assets and liabilities of insurance companies.
  - Target completion date: February 2019
  - Comments: Implemented.

- M: Develop a form for surveying other nonbank financial corporations (microfinance institutions, pawnshops, etc.).
  - Target completion date: March 2019
  - Comments: Implemented.

- H: Compile positions and transactions for assets and liabilities of insurance companies and other nonbank financial corporations.
  - Target completion date: June 2019
  - Comments: Implemented.

- H: Obtain SSC data on foreign trade in services by type, and on the basis of those data compile the services components in the balance of payments.
  - Target completion date: June 2019
  - Comments: Implemented.

- M: Prepare proposals for the office of living standard statistics regarding additions to the questionnaire for the household survey.
  - Target completion date: February 2019
  - Comments: Partially implemented. Per a decision of the Board of the State Statistics Committee, only the questions recommended by the mission were added.

- H: Prepare a report form for the state border service according to the mission’s recommendations.
  - Target completion date: December 2018
  - Comments: Implemented.

- H: Set up data provision procedures for the quarterly collection of information on crossings of Uzbekistan’s border by individuals, broken down by border crossing stations and the citizenship of individuals.
  - Target completion date: 30th day following the end of the reporting quarter
  - Comments: Partially implemented. Information submitted by the Committee for State Border Protection was not broken down by border crossing stations, but there is a breakdown by modes of transportation.

- H: Set up an Excel workbook allowing for simultaneous compilation of BOP and IIP data in a format suitable for submission to the IMF through the ICS.
  - Target completion date: February 2019
  - Comments: Implemented.

- M: Compile a trial version of BOP, IIP and GED for all institutional sectors.
  - Target completion date: June 2018
  - Comments: Implemented.

Priority scale: PR – Priority recommendation, H – High, M – Medium, O – Other

*Republic of Uzbekistan — International Monetary Fund*

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_Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1uzbea2020004.pdf_