## tarea2024016 ## Source details **Canonical URL:** [tarea2024016](https://www.imf.org/-/media/files/publications/tar/2024/english/tarea2024016.pdf) ## Other formats - [Markdown version](/-/media/files/publications/tar/2024/english/tarea2024016.pdf.md) - [Structured JSON version](/-/media/files/publications/tar/2024/english/tarea2024016.pdf.json) --- ### Priority recommendations and mission outcomes - IMF STA conducted a TA mission for the Andorran Statistics Department (ASD) on ESS during September 4–15, 2023. - Mission focus: assist ASD to move BOP and IIP compilation from annual to quarterly and to improve coverage and quality. - Key recommendation: introduce a new quarterly enterprise survey to provide essential quarterly source data for major enterprises. - ASD plans: - Launch the quarterly enterprise survey in April 2024 and finalize results in September 2024. - Start compiling balance of payments and IIP quarterly by the end of 2024, aiming for one-quarter timeliness (i.e., compiled by the end of the following quarter). - Improve the coverage and frequency of the household survey to support quarterly compilation. - Noted data improvements: - Net errors and omissions decreased from around €200 million to -€10 million in preliminary data for 2022. - Tourism surveys, banks, and Customs already provide quarterly data. - Quarterly survey results should be benchmarked with the new annual direct reporting system. ### Priority actions with deadlines (as presented) - March 2024 — Start compiling export of travel services quarterly. — ASD - April 2024 — Launch a quarterly enterprise survey by sending the survey forms to the largest enterprises. — ASD - December 2024 — Start compiling balance of payments and IIP quarterly with the aim to achieve the one-quarter timeliness in the following year. — ASD ### Key operational timeline for quarterly BOP and IIP (steps and target timelines) - 1 Prepare a list of large enterprises to survey quarterly and draft survey forms. — December 2023 - 2 Explain the framework of the quarterly survey and the survey forms to largest enterprises. — March 2024 - 3 Launch a quarterly enterprise survey by sending the survey forms to the largest enterprises. — April 2024 - 4 Deadline for the enterprises to answer the first quarterly survey. — June 2024 - 5 Review the results and follow up with the enterprises as needed. — July 2024 - 6 Finalize the results of the quarterly survey and consolidate with other source data (e.g., quarterly data from banks). — September 2024 - 7 Start compiling balance of payments and IIP quarterly with the aim to achieve the one-quarter timeliness in the following year. — December 2024 - Note: To compile historical data, surveys could request quarterly data for previous years if enterprises keep the record. ### Improvements and source-data developments - New direct reporting system: around 6,000 enterprises report balance sheet and profit and loss statement information annually; deadline for submission is September of the following year. - Quarterly transaction data for inward FDI are available from the Ministry of Economy (approval records) but approvals do not provide market values of FDI positions or withdrawals. - ASD plans to prepare a list of large enterprises whose FDI positions account for more than 70-80 percent of the total FDI asset and liability positions for Andorra. - Statistical Law authorizes the ASD to conduct surveys to enterprises and households in Andorra. ### High-level recommendations (verbatim extracts and priorities) - Review the source data from the new direct reporting system focusing on the data for the largest enterprises, checking consistency with the results of old business surveys and the mirror data from the IMF’s Coordinated Direct Investment Survey (high priority by December 2023). - Prepare a list of large enterprises to survey quarterly and draft survey forms (high priority by December 2023). - Launch a quarterly enterprise survey by sending the survey forms to the largest enterprises (top priority by April 2024). - Finalize the results of the new quarterly enterprise survey (high priority by September 2024). - Start compiling balance of payments and IIP quarterly with the aim to achieve the one-quarter timeliness in the following year (top priority by December 2024). - Contact the statistical offices in Spain, France, and Portugal for their data on Andorran households’ investment in the real estate in these countries (medium priority by December 2023). - Consider adding a question on investment in real estate abroad in the household survey (medium priority by March 2024). ### Selected priority actions and milestones (preserving priorities and target dates) - Contact the statistical offices in Spain, France, and Portugal for their data on Andorran households’ investment in the real estate in these countries. — December 2023 (M) - Include questions on portfolio investment transactions and positions in the new quarterly enterprise survey. — December 2023 (H) - Record other accounts receivable if banks have transactions and positions. — December 2023 (M) - Revise transaction and position data on reserve assets using the information obtained from the IMF’s website. — December 2023 (H) - Add a question on import of freight transport and insurance services for import of goods in the new enterprise survey to record them separately. — December 2023 (M) - Include major Andorran freight carriers and passenger carriers in the new quarterly enterprise survey to collect quarterly data on export of freight transport and passenger transport. — December 2023 (H) - Include questions on paid fees for financial services in the new quarterly enterprise survey. — December 2023 (H) - Add questions on construction services, telecommunications, computer, and information services, and other business services to the new quarterly enterprise survey. — December 2023 (H) - Add questions on investment income to the new quarterly enterprise survey. — December 2023 (H) - Reclassify paid renting fees reported by banks from other primary income to other business services. — December 2023 (M) - Consider allocating an additional staff member to the balance of payments and IIP compilation team to prepare for the quarterly data compilation. — December 2023 (H) - Consider adding a question on investment in real estate abroad in the household survey. — March 2024 (M) - Contact FEDA (the Andorran power company) and non-bank financial institutions to find out whether they have financial derivative transactions and positions. — March 2024 (M) - Further investigate what has been reported for other equity. If it is investment in securities, reclassify them according to the main characteristics of the securities. — March 2024 (M) - Review the information on trade credit obtained from the new direct reporting system, with a view to record them in the balance of payments and IIP annually. Explain to the data reporters the difference between trade credit and trade finance provided by banks as needed. — March 2024 (M) - Start compiling data on export of travel services quarterly. — March 2024 (PR) - Record financial services provided by investment funds and investment management advisors. — March 2024 (H) - Start compiling Financial Intermediation Services Indirectly Measured (FISIM) and adjust investment income, following the guidance provided by the mission. — March 2024 (M) - Consult with the Tax Office and the social security fund on the availability of the source data to record social contributions (debit) and benefits (credit). — March 2024 (M) - Consider adding questions on portfolio investment abroad in the household survey if they actively invest in foreign securities using nonresident financial institutions. — June 2024 (M) - Add quarterly breakdowns on households’ spending for passenger transport in the household survey or estimate it based on the information from the travel surveys. — June 2024 (M) - Start compiling data on travel spending by nonresident daily and seasonal workers in Andorra and include them in export of travel services. — June 2024 (M) - Collect information on personal transfers quarterly from households with a sufficient sample size in the household survey. — June 2024 (H) - Start compiling data on import of travel services quarterly by either adding quarterly breakdowns in the annual household survey, increasing the size of the quarterly sample, or estimating them using the information from the travel surveys. — September 2024 (H) - Consider adding questions on non-life insurance premium payments and claim receipts to the new quarterly enterprise survey and the household survey. — September 2024 (M) - Keep monitoring transactions and positions of crypto assets with the AFA. — September 2024 (M) - Consult with the Tax Office on the availability of primary income data. If not available, explore with the Tax Office the possibility to collect the information in the tax reporting framework. — September 2024 (M) - Develop source data to record tax payments by Andorran residents to foreign governments (e.g., by adding a question in the household survey). — September 2024 (M) - Keep attending training courses conducted by the IMF and other international organizations. — Ongoing basis (H) ### Portfolio investment, financial derivatives, and custody services - AFA provides quarterly data from Andorran banks and OFCs to the ASD. - Banks provide custody services for NFCs, households, and the Retirement Reserve Fund; banks can provide data for own investments and on behalf of clients using the integrated IIP statement framework (including valuation and FX changes). - Investment funds almost entirely invest abroad; investment fund assets are kept with Andorran banks that provide custody services. AFA provides transaction and position data to ASD. Nonresidents’ investment in Andorran investment funds is reported. - AFA will investigate a sharp decrease in liabilities for investment fund shares in 2022 and inform ASD. Recommendations (portfolio investment): - Include questions on portfolio investment transactions and positions in the new quarterly enterprise survey (high priority by December 2023). - Consider adding questions on portfolio investment abroad to the household survey if households actively invest in foreign securities using nonresident financial institutions (medium priority by June 2024). - Contact nonresident custodians to identify Andorran residents’ holdings of Andorran government securities issued abroad (medium priority by December 2023). - Contact Andorran banks to investigate nonresidents’ purchases of Andorran government securities issued in the domestic market to record them as portfolio investment liabilities (medium priority by March 2024). Recommendation (financial derivatives): - Contact FEDA and non-bank financial institutions to find out whether they have financial derivative transactions and positions (medium priority by March 2024). ### Currency in circulation, deposits, loans, and mirror data - Euros circulating in Andorra are part of Andorra’s external assets and should be included in the IIP (assets in currency and deposits). - ASD estimated ratios of currency in circulation to deposits in four neighboring euro area countries; ratios ranged from 5 to 15 percent. ASD applies the average ratio among the neighboring countries to deposits in Andorra to estimate euros circulating in Andorra. - The estimated amount of euros circulating in Andorra is around 600 million euros. - ASD estimated around 900 million euros as annual cash payments by tourists (total spending minus the use of credit cards), supporting plausibility of the estimated cash level. - Balance of payments data for currency in circulation are not estimated, given likely stability of cash circulating. Recommendation (currency in circulation): - Investigate the amount of cash deposited by Andorran banks with nonresident banks to check consistency with the estimated amount of euros circulating in Andorra and the travel survey results (medium priority by June 2024). Deposits and loans: - Quarterly deposit and loan transaction and position data available from AFA for banks and OFCs. - Mirror data from Locational Banking Statistics (LBS) by BIS can be used to compile deposits and loans for NFCs and households to capture deposits and loans not going through Andorran banks; LBS provides quarterly position data and changes adjusted by exchange rates. - LBS separately identifies banks, OFCs, NFCs, general government, and households. - New direct reporting provides annual data on deposits and loans for consistency checks; household survey results can also check consistency. - Loan assets are recorded only for banks; AFA explained OFCs in Andorra did not have loan assets. Recommendation (deposits and loans): - Review mirror data on deposits and loans from BIS using information from the new direct reporting system (medium priority by March 2024). ### Insurance technical reserves, trade credit, accounts, and other equity - AFA provides quarterly source data to record insurance technical reserves. Andorra has 13 insurance companies. - Andorra does not have private pension funds or standardized guarantee schemes. - Insurance companies’ assets in technical reserves are held with nonresident reinsurance companies and increased in 2022. Recommendation (insurance technical reserves): - Revise data on insurance technical reserves (assets) as discussed with the mission (medium priority by March 2024). Trade credit and accounts: - ASD can start compiling trade credit annually using new direct reporting; if relevant, add questions in quarterly enterprise survey. - Mission explained differences between trade credit and trade finance provided by banks; ASD needs to explain to reporters to avoid misreporting. - Banks do not report accounts receivable transactions and positions while they report accounts payable; mission recommended checking with banks whether they have accounts receivable. - New direct reporting will provide information on these items for enterprises. - Guidance provided on reporting other equity to Andorran banks; AFA mentioned a bank may have reported positions on structured securities; mission advised recording securities by main characteristics and treating structured securities as debt securities if appropriate. Recommendations (trade credit, accounts, other equity): - Review information on trade credit from new direct reporting with a view to recording them in BOP and IIP annually; explain trade credit vs. trade finance to reporters (medium priority by March 2024). - Record other accounts receivable if banks have transactions and positions (medium priority by December 2023). - Further investigate what has been reported for other equity; if it is investment in securities, reclassify according to the main characteristics of the securities (medium priority by March 2024). ### Reserve assets - Quarterly data for reserve assets are available from the IMF’s website. - Mission recommended revising reserve asset data by recording both reserve position in the IMF and SDR holdings based on IMF website information. Recommendation (reserve assets): - Revise transaction and position data on reserve assets using information obtained from the IMF’s website (high priority by December 2023). ### Current account — Goods - Source data on exports and imports available from Customs daily; households’ online purchases are declared when goods cross the border. - Customs can provide data by type of goods, quantity, and prices. Export data available on an FOB basis; import data available on both FOB and CIF bases, although freight and insurance data are combined and not separately available. - Source data for export and import of nonmonetary gold are available. - Merchanting is recorded; source data will be available from new direct reporting annually. If merchanting increases, include it in the quarterly enterprise survey. - Crypto transactions are not recorded yet. AFA approval is required for Andorran banks to handle Bitcoin-type crypto assets; no banks have requested approval. Recommendations (goods): - Add a question on import of freight transport and insurance services for import of goods in the new enterprise survey to record them separately (medium priority by December 2023). - Consider adding questions on merchanting to the quarterly enterprise survey (medium priority by September 2024). - Keep monitoring transactions and positions of crypto assets with the AFA (medium priority by September 2024). ### Current account — Services (freight, passenger, maintenance, manufacturing) - Import of maintenance services recorded based on Customs; values of goods sent abroad for maintenance are reported and ASD records the difference between sent and received values. Import of maintenance by households not recorded when services are provided in Andorra; ASD plans to add a household survey question. - Manufacturing services are insignificant in Andorra. - Import of freight transport recorded from Customs (difference between FOB and CIF for imported goods handled by nonresident carriers); Customs aggregates transport and insurance and cannot separate them. Export freight annual data will be available from new direct reporting. Major Andorran freight carriers should be included in the quarterly enterprise survey for quarterly export data. - Annual import of passenger transport sourced from household survey; annual export of passenger transport sourced from new direct reporting. To acquire quarterly data, household survey could include quarterly breakdowns or quarters could be estimated using travel surveys. New quarterly enterprise survey should include major passenger carriers (e.g., tourist bus operators). - A small new airport near Andorra in Spain has started operating; ASD will investigate residency of airline(s) using the airport to record transport services accordingly. Recommendations (freight & passenger): - Include major Andorran freight carriers in the new quarterly enterprise survey to collect quarterly export data (high priority by December 2023). - Add quarterly breakdowns on households’ spending for passenger transport in the household survey or estimate based on travel surveys (medium priority by June 2024). - Include major Andorran passenger carriers in the new quarterly enterprise survey to collect quarterly export data (high priority by December 2023). - Investigate the residency of airline(s) that use the new airport near Andorra in Spain and record transport services accordingly (medium priority by March 2024). ### Current account — Travel (exports and imports) - Export of travel services estimated using seven travel surveys for tourists visiting Andorra; border cameras count vehicles entering Andorra (cannot differentiate vehicle types); other surveys collect type information. Surveys include border, bus stations, hotels, major sightseeing spots, and online. - Monthly survey operations: seven staff members involved; monthly samples include 2,000 passenger cars with foreign plates and 1,000 buses surveyed monthly. - Travel surveys ask detailed questions including bus occupation rates, residency of passengers, spending by day and overnight travelers, and 18 types of spending (e.g., accommodation, restaurants/food). Travel on health and education estimated from social security fund and other administrative data. - 2022 survey results on average spending of nonresident travelers seemed too low relative to 2021 and mirror data from Spain (mirror data higher by more than 100 percent). ASD applied the average ratio between cash and credit card spending (on average, 58.5 percent was paid by credit card in the previous four years) to total credit card spending in 2022 to avoid underestimation. - Import of travel services recorded based on the household survey. Quarterly household survey sample size is 230 households and may be too small. Alternatives: add quarterly breakdowns to annual household survey with larger sample, or estimate quarterly data preliminarily (e.g., seasonal averages from the previous year). - Number of Andorran tourists returning from Spain or France can be counted using the same surveys for export of travel services; export of travel could be estimated by applying average spending of Andorran tourists abroad. Recommendations (travel): - Start compiling data on export of travel services quarterly (top priority by March 2024). - Start compiling data on travel spending by nonresident daily and seasonal workers in Andorra and include them in export of travel services (medium priority by June 2024). - Improve travel survey questions and estimation method (e.g., the ratio for credit card payments to total spending) as discussed with the mission (high priority by March 2024). - Start compiling data on import of travel services quarterly by either adding quarterly breakdowns in the annual household survey, increasing the size of the quarterly sample, or estimating them using travel surveys (high priority by September 2024). ### Services: construction, insurance, financial, telecom, ICT, other business services, and FISIM - Import of construction services can be sourced from government record, the new quarterly enterprise survey, and the household survey; government record and new quarterly enterprise survey are/will be available quarterly. - Export of insurance services source data can be obtained from AFA; methodology explained to estimate insurance services from premiums and investment income received from nonresidents. - Import of insurance services can be sourced from household survey, new quarterly enterprise survey, and government record. Fourteen nonresident insurance companies have presence in Andorra acting as agents for nonresident insurers; AFA plans to collect premium receipts and claim payments for ASD. - AFA provides data for explicit fees banks charge for financial services quarterly. Mission recommended recording financial services provided by investment funds and investment management advisors to nonresidents; AFA plans to change report forms to collect source data. Questions can be added in the new quarterly business survey to collect data on financial service fees paid by resident enterprises to nonresidents. - Andorra Telecom can provide source data for export of telecommunications services (e.g., roaming for nonresident tourists); ASD plans to approach Andorra Telecom for quarterly data. - Computer and information services can be sourced from quarterly business survey (credit and debit) and household survey (debit). New quarterly enterprise survey should include questions on computer services as industry may grow fast. - Other business services and cultural/recreational services can be sourced from the new quarterly enterprise survey and new direct reporting system. Personal, cultural, and recreational services could be sourced from quarterly enterprise survey, new direct reporting, household survey, and government record. Charges for use of intellectual property and government goods and services are limited in Andorra. FISIM: - Export and import of FISIM can be compiled/estimated quarterly based on AFA information. - Once FISIM is estimated, investment income should be adjusted by the amount of FISIM. - Table 6 formulas (as provided): - Export of FISIM = (a + b) - a) On loans = (Actual interest revenues from loans provided to nonresidents) - (Pure interest—interest at reference rate) - b) On deposits = (Pure interest—interest at reference rate) - (Actual interest payments for deposits received from nonresidents) - Import of FISIM = (c + d) - c) On loans = (Actual interest payments for loans received from nonresident banks) - (Pure interest—interest at reference rate) - d) On deposits = (Pure interest—interest at reference rate) - (Actual interest receipts from deposit with nonresident banks) Recommendations (services and FISIM): - Improve estimation of insurance services following guidance provided by the mission (high priority by March 2024). - Record financial services provided by investment funds and investment management advisors (high priority by March 2024). - Include questions on paid fees for financial services in the new quarterly enterprise survey (high priority by December 2023). - Start compiling FISIM and adjust investment income, following mission guidance (medium priority by March 2024). - Add questions on construction services, telecommunications, computer, and information services, and other business services to the new quarterly enterprise survey (high priority by December 2023). ### Primary income (compensation, investment income, rents) - Compensation of employees (credit): can be compiled from quarterly labor force survey covering around 1,000 households quarterly; results available after 10 weeks from end of previous quarter. - Compensation of employees (debit): sourced from social security fund (Caixa Andorrana de la Seguretat Social) quarterly; the fund collects mandatory contributions from workers including daily and seasonal workers. - Investment income quarterly compilation: new quarterly enterprise survey should include questions on FDI income since new direct reporting provides information only annually. AFA can provide investment income data quarterly for banks and OFCs and for NFCs and households for whom banks provide custody services. - Renting fees reported by banks should be reclassified to services; mission explained distinction between rent in primary income and renting fees in services. - Tax Office may provide information on investment income for NFCs and households including income not going through Andorran banks. Household survey can provide source data though income often underreported. - If no source data available, interest payments for loans and interest receipts from deposits could be estimated from position data and average interest rates. Recommendations (primary income): - Add questions on investment income to the new quarterly enterprise survey (high priority by December 2023). - Reclassify paid renting fees reported by banks from other primary income to other business services (medium priority by December 2023). - Consult with the Tax Office on availability of primary income data and explore tax reporting collection if not available (medium priority by September 2024). - Consider adding questions on investment income to the household survey (medium priority by March 2024). - Consider estimating other investment income for NFCs and households if source data cannot be collected (medium priority by June 2024). ### Secondary income and capital account (taxes, social transfers, personal transfers, insurance, international transfers) - Taxes: Tax Office provides monthly data on tax received by Andorran government. Tax payments by Andorran residents to foreign governments are not recorded; if significant, source data can be developed by adding household survey questions or estimating from compensation and investment income. - Social contributions and benefits: social contributions (credit) and benefits (debit) sourced from social security fund quarterly. Social contributions (debit) and benefits (credit) are not recorded except pension benefits received from France (French embassy provides information). Tax Office and social security fund may have some information. - Personal transfers (debit): recorded from household survey; to record quarterly, data should be collected quarterly from households with sufficient sample size. - Non-life insurance: receipts of net non-life insurance premiums recorded based on AFA information. Questions on non-life insurance premium payments and claim receipts can be added to new quarterly enterprise survey and household survey. - Contributions to international organizations: contributions by AFA should be recorded in secondary income account; mission explained recording of current and capital transfers. Recommendations (secondary income and capital account): - Develop source data to record tax payments by Andorran residents to foreign governments (e.g., by adding a question in the household survey) (medium priority by September 2024). - Consult with the Tax Office and the social security fund on availability of source data to record social contributions (debit) and benefits (credit) (medium priority by March 2024). - Collect information on personal transfers quarterly from households with a sufficient sample size in the household survey (high priority by June 2024). - Consider adding questions on non-life insurance premium payments and claim receipts to the new quarterly enterprise survey and the household survey (medium priority by September 2024). - Reclassify contributions by the AFA to international organizations from the capital account to current transfers (medium priority by December 2023). ### Institutional framework, resources, and capacity - Quarterly compilation requires additional resources for ASD and source-data providers. - Mission recommended allocating an additional staff member for compilation work (increase compilation team from three to four). - ASD needs to make source-data providers understand importance of quarterly BOP and IIP for assessing the Andorran economy, policy decisions, and transparency. - Better statistics will support Andorran enterprises in conducting business with nonresidents (e.g., better loan and FDI conditions). - Staff expertise and training: - Compilation relies on ASD staff expertise, which must be fostered through continuous training and experience. - Staff should keep attending IMF and other international organizations’ training; frequent staff changes should be avoided. Recommendations (institutional framework and capacity): - Consider allocating an additional staff member to the balance of payments and IIP compilation team to prepare for the quarterly data compilation (high priority by December 2023). - Keep attending training courses conducted by the IMF and other international organizations (high priority ongoing basis). *IMF | Technical Report – Andorra Report on External Sector Statistics Mission* ### 1. Priority Recommendations ___________________________________________________________ 3 ### 1. Priority Recommendations ### Summary of Mission Outcomes and Priority Recommendations - 1. The International Monetary Fund (IMF)’s Statistics Department (STA) conducted a technical assistance (TA) mission for the Andorran Statistics Department (ASD) on the compilation of external sector statistics (ESS) during September 4–15, 2023. The mission focused on assisting the ASD in preparing plans to improve the frequency of producing balance of payments statistics and international investment position (IIP) from annual to quarterly and to improve the coverage and quality of the balance of payments and IIP data. - 2. Andorra has prepared plans to compile balance of payments quarterly. Among the recommendations provided by the mission, the key recommendation was the introduction of a new quarterly enterprise survey, which will provide essential source data for cross-border transactions and positions for Andorran major enterprises quarterly. The ASD plans to launch the quarterly enterprise survey in April 2024 and finalize the results in September 2024. - 3. Based on the plans, Andorra will start compiling balance of payments and IIP quarterly by the end of next year (2024). Quarterly balance of payments and IIP should be compiled with a lag of one quarter (i.e., by the end of the following quarter). To start the quarterly compilation, Andorra plans to improve the coverage and frequency of the household survey in addition to the new quarterly enterprise survey. The data from the tourism surveys, banks, and the Customs are already available quarterly. The results of the quarterly surveys should be benchmarked with the information from the new annual direct reporting system, which provides comprehensive financial information of Andorran enterprises. - 4. The coverage and the quality of the balance of payments and IIP data were also improved. The mission provided recommendations to fill remaining data gaps and improve the quality of the data (e.g., travel services). Net errors and omissions decreased significantly (from around €200 million to -€10 million) in the preliminary data for 2022. - 5. Further details on the recommendations can be found in the action plan under Detailed Technical Assessment and Recommendations. The mission expresses its gratitude to the staff of the ASD for their cooperation. ### Table 1. Andorra: Priority Recommendations (as presented) - March 2024 — Start compiling export of travel services quarterly. — ASD - April 2024 — Launch a quarterly enterprise survey by sending the survey forms to the largest enterprises. — ASD - December 2024 — Start compiling balance of payments and IIP quarterly with the aim to achieve the one-quarter timeliness in the following year. — ASD ### Key operational timeline for quarterly BOP and IIP (Table 3 steps and target timelines) - 1 Prepare a list of large enterprises to survey quarterly and draft survey forms. — December 2023 - 2 Explain the framework of the quarterly survey and the survey forms to largest enterprises. — March 2024 - 3 Launch a quarterly enterprise survey by sending the survey forms to the largest enterprises. — April 2024 - 4 Deadline for the enterprises to answer the first quarterly survey. — June 2024 - 5 Review the results and follow up with the enterprises as needed. — July 2024 - 6 Finalize the results of the quarterly survey and consolidate with other source data (e.g., quarterly data from banks). — September 2024 - 7 Start compiling balance of payments and IIP quarterly with the aim to achieve the one-quarter timeliness in the following year. — December 2024 - Note: To compile historical data, the surveys could also request quarterly data for previous years if enterprises keep the record. The ASD plans to check the data availability with large enterprises when it explains the framework of the new survey in early 2024. ### Improvements and data developments highlighted by the mission - New direct reporting system: around 6,000 enterprises report balance sheet and profit and loss statement information annually; deadline for submission is September of the following year. - Quarterly transaction data for inward FDI are available from the Ministry of Economy (approval records), but approval records do not provide market values of FDI positions or withdrawals. - ASD plans to prepare a list of large enterprises whose FDI positions account for more than 70-80 percent of the total FDI asset and liability positions for Andorra. - Statistical Law authorizes the ASD to conduct surveys to enterprises and households in Andorra. ### High-level recommendations (extracted and preserved verbatim where provided) - Review the source data from the new direct reporting system focusing on the data for the largest enterprises, checking consistency with the results of old business surveys and the mirror data from the IMF’s Coordinated Direct Investment Survey (e.g., the level of investment and the counterpart countries) (high priority by December 2023). - Prepare a list of large enterprises to survey quarterly and draft survey forms (high priority by December 2023). - Launch a quarterly enterprise survey by sending the survey forms to the largest enterprises (top priority by April 2024). - Finalize the results of the new quarterly enterprise survey (high priority by September 2024). - Start compiling balance of payments and IIP quarterly with the aim to achieve the one-quarter timeliness in the following year (top priority by December 2024). - Contact the statistical offices in Spain, France, and Portugal for their data on Andorran households’ investment in the real estate in these countries (medium priority by December 2023). - Consider adding a question on investment in real estate abroad in the household survey (medium priority by March 2024). ### Selected priority actions and milestones summarized from Table 2 (preserving priorities and target completion dates) - Contact the statistical offices in Spain, France, and Portugal for their data on Andorran households’ investment in the real estate in these countries. — December 2023 (M) - Include questions on portfolio investment transactions and positions in the new quarterly enterprise survey. — December 2023 (H) - Record other accounts receivable if banks have transactions and positions. — December 2023 (M) - Revise transaction and position data on reserve assets using the information obtained from the IMF’s website. — December 2023 (H) - Add a question on import of freight transport and insurance services for import of goods in the new enterprise survey to record them separately. — December 2023 (M) - Include major Andorran freight carriers and passenger carriers in the new quarterly enterprise survey to collect quarterly data on export of freight transport and passenger transport. — December 2023 (H) - Include questions on paid fees for financial services in the new quarterly enterprise survey. — December 2023 (H) - Add questions on construction services, telecommunications, computer, and information services, and other business services to the new quarterly enterprise survey. — December 2023 (H) - Add questions on investment income to the new quarterly enterprise survey. — December 2023 (H) - Reclassify paid renting fees reported by banks from other primary income to other business services. — December 2023 (M) - Consider allocating an additional staff member to the balance of payments and IIP compilation team to prepare for the quarterly data compilation. — December 2023 (H) - Consider adding a question on investment in real estate abroad in the household survey. — March 2024 (M) - Contact FEDA (the Andorran power company) and non-bank financial institutions to find out whether they have financial derivative transactions and positions. — March 2024 (M) - Further investigate what has been reported for other equity. If it is investment in securities, reclassify them according to the main characteristics of the securities. — March 2024 (M) - Review the information on trade credit obtained from the new direct reporting system, with a view to record them in the balance of payments and IIP annually. Explain to the data reporters the difference between trade credit and trade finance provided by banks as needed. — March 2024 (M) - Start compiling data on export of travel services quarterly. — March 2024 (PR) - Record financial services provided by investment funds and investment management advisors. — March 2024 (H) - Start compiling Financial Intermediation Services Indirectly Measured (FISIM) and adjust investment income, following the guidance provided by the mission. — March 2024 (M) - Consult with the Tax Office and the social security fund on the availability of the source data to record social contributions (debit) and benefits (credit). — March 2024 (M) - Consider adding questions on portfolio investment abroad in the household survey if they actively invest in foreign securities using nonresident financial institutions. — June 2024 (M) - Add quarterly breakdowns on households’ spending for passenger transport in the household survey or estimate it based on the information from the travel surveys. — June 2024 (M) - Start compiling data on travel spending by nonresident daily and seasonal workers in Andorra and include them in export of travel services. — June 2024 (M) - Collect information on personal transfers quarterly from households with a sufficient sample size in the household survey. — June 2024 (H) - Start compiling data on import of travel services quarterly by either adding quarterly breakdowns in the annual household survey, increasing the size of the quarterly sample, or estimating them using the information from the travel surveys. — September 2024 (H) - Consider adding questions on non-life insurance premium payments and claim receipts to the new quarterly enterprise survey and the household survey. — September 2024 (M) - Keep monitoring transactions and positions of crypto assets with the AFA. — September 2024 (M) - Consult with the Tax Office on the availability of primary income data. If not available, explore with the Tax Office the possibility to collect the information in the tax reporting framework. — September 2024 (M) - Develop source data to record tax payments by Andorran residents to foreign governments (e.g., by adding a question in the household survey). — September 2024 (M) - Keep attending training courses conducted by the IMF and other international organizations. — Ongoing basis (H) _Imf | Technical Report – Andorra Report on External Sector Statistics Mission_ ### 14. Quarterly data on most portfolio investment transactions and positions are available from ### tarea2024016 - 14. Quarterly data on most portfolio investment transactions and positions are available from ### Portfolio investment — source, coverage, and issues - Andorran banks and other financial corporations (OFCs) provide quarterly data to the Andorran Financial Authority (AFA), which provides them to the ASD. - Banks provide custody services to clients including nonfinancial corporations (NFCs), households, and the Andorran public pension fund (Retirement Reserve Fund). Banks can provide data for their own investments and on behalf of their clients using the integrated IIP statement framework, including valuation and foreign exchange rate changes. - Investment funds in Andorra mostly invest in assets abroad; almost all investment fund assets are kept with Andorran banks that provide custody services. The AFA provides transaction and position data to the ASD. Nonresidents’ investment in Andorran investment funds is reported. - The AFA will investigate a sharp decrease in liabilities for investment fund shares in 2022 and inform the ASD. Recommendations (portfolio investment): - Include questions on portfolio investment transactions and positions in the new quarterly enterprise survey (high priority by December 2023). - Consider adding questions on portfolio investment abroad to the household survey if households actively invest in foreign securities using nonresident financial institutions (medium priority by June 2024). - Contact the nonresident custodians to identify Andorran residents’ holdings of Andorran government securities issued abroad (medium priority by December 2023). - Contact Andorran banks to investigate nonresidents’ purchases of Andorran government securities issued in the domestic market, in order to record them as portfolio investment liabilities (medium priority by March 2024). Key statistics / data-source mapping (excerpted): - Table indicates source responsibilities by sector for Equity and Debt securities (assets and liabilities), with AFA, Pension fund, new direct reporting, household survey, Tax Office, and MOF noted as providers or potential providers. ### Financial derivatives - The ASD started compiling financial derivative transactions and positions for Andorran banks. - The mission noted the possibility of the Andorran power company (FEDA) engaging in electricity forwards transactions; other institutions (e.g., investment funds) could also be engaged. Recommendation (financial derivatives): - Contact FEDA and non-bank financial institutions to find out whether they have financial derivative transactions and positions (medium priority by March 2024). ### Currency in circulation - Euros circulating in Andorra are part of Andorra’s external assets and should be included in the IIP (assets in currency and deposits). - The ASD estimated ratios of currency in circulation to deposits in four neighboring euro area countries; the ratios ranged from 5 to 15 percent. The ASD applies the average ratio among the neighboring countries to deposits in Andorra to estimate euros circulating in Andorra. - The estimated amount of euros circulating in Andorra is around 600 million euros. - The ASD estimated around 900 million euros as annual cash payments by tourists (the total spending minus the use of credit cards), which supports plausibility of the estimated level of cash circulating in Andorra. - Balance of payments data for currency in circulation are not estimated, given that the amount of euros circulating in Andorra is likely to be stable. Recommendation (currency in circulation): - Investigate the amount of cash deposited by Andorran banks with nonresident banks to check consistency with the estimated amount of euros circulating in Andorra as well as the results of the travel survey (medium priority by June 2024). ### Deposits and loans - Quarterly deposit and loan transaction and position data are available from the AFA for banks and OFCs. - Mirror data from the Locational Banking Statistics (LBS) by the Bank for International Settlements (BIS) can be used to compile deposits and loans for NFCs and households to capture deposits and loans without going through Andorran banks. LBS provides quarterly position data and changes in positions during the quarter adjusted by exchange rates; these changes can be used as proxies for transactions in quarterly BOP. - The LBS separately identifies data for banks, OFCs, NFCs, general government, and households. - The new direct reporting provides annual data on deposits and loans, usable to check consistency with mirror LBS data for NFCs; household survey results can also check consistency. - Data on loan assets are recorded only for banks; AFA explained OFCs in Andorra did not have loan assets. Recommendation (deposits and loans): - Review the mirror data on deposits and loans from the BIS using the information from the new direct reporting system (medium priority by March 2024). Key data-source mapping (excerpted): - Table indicates AFA, LBS mirror data, MOF, Pension fund, and potential new sources as providers by sector for deposits and loans. ### Insurance, pension, and standardized guarantee schemes - The AFA provides source data to record insurance technical reserves quarterly. Andorra has 13 insurance companies. - Andorra does not have private pension funds or standardized guarantee schemes. - Andorran insurance companies’ assets in technical reserves are those held with nonresident reinsurance companies and increased in 2022. Recommendation (insurance technical reserves): - Revise the data on insurance technical reserves (assets) as discussed with the mission (medium priority by March 2024). ### Trade credit, accounts receivable/payable, and other equity - The ASD can start compiling trade credit annually using the new direct reporting; if trade credit is relevant, add questions to the new quarterly enterprise survey. - The mission explained differences between trade credit and trade finance provided by banks; ASD needs to explain this to reporters to avoid misreporting. - Banks do not report accounts receivable transactions and positions while they report accounts payable; mission recommended checking with banks whether they have accounts receivable. - The new direct reporting system will provide information on these items for enterprises. - Guidance was provided on reporting other equity to Andorran banks. AFA mentioned a bank may have reported positions on structured securities; the mission advised recording securities by main characteristics and treating structured securities as debt securities if appropriate. Recommendations (trade credit, accounts, other equity): - Review information on trade credit from new direct reporting with a view to recording them in the BOP and IIP annually; explain trade credit vs. trade finance to reporters (medium priority by March 2024). - Record other accounts receivable if banks have transactions and positions (medium priority by December 2023). - Further investigate what has been reported for other equity; if it is investment in securities, reclassify according to the main characteristics of the securities (medium priority by March 2024). ### Reserve assets - Quarterly data for reserve assets are available from the IMF’s website. - Mission recommended revising reserve asset data by recording both reserve position in the IMF and SDR holdings based on IMF website information. Recommendation (reserve assets): - Revise transaction and position data on reserve assets using information obtained from the IMF’s website (high priority by December 2023). ### Current account — Goods - Source data on export and import of goods are available from Customs daily; enterprises and households must report export and import to Customs. Households’ online purchases are declared when goods cross the border. - Customs can provide data by type of goods, quantity, and prices. Export data are available on a free on board (FOB) basis; import data are available on both FOB and cost, insurance, and freight (CIF) bases, although freight and insurance data are combined and not separately available. - Source data for export and import of nonmonetary gold are available. - Merchanting is already recorded; source data will be available from new direct reporting annually. If merchanting increases, include questions in the quarterly enterprise survey. - Transactions of crypto assets are not recorded yet. AFA approval is required for Andorran banks to handle Bitcoin-type crypto assets; no banks have requested approval. Recommendations (goods): - Add a question on import of freight transport and insurance services for import of goods in the new enterprise survey to record them separately (medium priority by December 2023). - Consider adding questions on merchanting to the quarterly enterprise survey (medium priority by September 2024). - Keep monitoring transactions and positions of crypto assets with the AFA (medium priority by September 2024). ### Current account — Services (maintenance, freight, passenger) - Import of maintenance services is recorded based on Customs; values of goods sent abroad for maintenance are reported and the ASD records the difference between sent and received values. When nonresidents visit Andorra to undertake maintenance, Tax Office information is used. Import of maintenance services by households is not recorded when services are provided in Andorra; ASD plans to add a household survey question. - Manufacturing services are insignificant in Andorra. - Import of freight transport is recorded from Customs (difference between FOB and CIF prices for imported goods handled by nonresident carriers); Customs aggregates transport and insurance and cannot separate them. Export of freight transport annual data will be available from new direct reporting. Major Andorran freight carriers should be included in the new quarterly enterprise survey for quarterly export data. - Annual import of passenger transport is sourced from the household survey; annual export of passenger transport will be sourced from new direct reporting. To acquire quarterly data, household survey could include quarterly breakdowns or quarters could be estimated using travel surveys. New quarterly enterprise survey should include major passenger carriers (e.g., tourist bus operators). - A small new airport near Andorra in Spain has started operating; ASD will investigate residency of airline(s) using the airport to record transport services accordingly. Recommendations (services — freight & passenger): - Include major Andorran freight carriers in the new quarterly enterprise survey to collect quarterly export data (high priority by December 2023). - Add quarterly breakdowns on households’ spending for passenger transport in the household survey or estimate based on travel surveys (medium priority by June 2024). - Include major Andorran passenger carriers in the new quarterly enterprise survey to collect quarterly export data (high priority by December 2023). - Investigate the residency of airline(s) that use the new airport near Andorra in Spain and record transport services accordingly (medium priority by March 2024). ### Current account — Travel (exports and imports) - Export of travel services is estimated using seven travel surveys for tourists visiting Andorra. ASD has cameras at borders to count vehicles entering Andorra (cannot differentiate vehicle types); other surveys collect type information. Surveys include border, bus stations, hotels, major sightseeing spots, and online. - Monthly survey operations: seven staff members involved; monthly samples include 2,000 passenger cars with foreign plates and 1,000 buses surveyed monthly. - Travel surveys ask detailed questions including bus occupation rates, residency of passengers, spending by day and overnight travelers, and 18 types of spending (e.g., accommodation, restaurants/food). Travel on health and education is estimated from social security fund and other administrative data. - The 2022 survey results on average spending of nonresident travelers seemed too low relative to 2021 and mirror data from Spain (mirror data higher by more than 100 percent). To avoid underestimating travel exports, ASD applied the average ratio between cash and credit card spending (on average, 58.5 percent was paid by credit card in the previous four years) to total credit card spending in 2022. - Import of travel services is recorded based on the household survey. The quarterly household survey sample size is 230 households and may be too small. Alternatives: add quarterly breakdowns to the annual household survey with larger sample, or estimate quarterly data preliminarily (e.g., seasonal averages from the previous year) until latest annual household survey data are available. - The number of Andorran tourists returning from Spain or France can be counted using the same surveys for export of travel services; export of travel could be estimated by applying average spending of Andorran tourists abroad. Recommendations (travel): - Start compiling data on export of travel services quarterly (top priority by March 2024). - Start compiling data on travel spending by nonresident daily and seasonal workers in Andorra and include them in export of travel services (medium priority by June 2024). - Improve the travel survey questions and the estimation method (e.g., the ratio for credit card payments to total spending) as discussed with the mission (high priority by March 2024). - Start compiling data on import of travel services quarterly by either adding quarterly breakdowns in the annual household survey, increasing the size of the quarterly sample, or estimating them using the travel surveys (high priority by September 2024). *IMF | Technical Report – Andorra Report on External Sector Statistics Mission* ### 39. Import of construction services can be sourced from the government record, the new ### tarea2024016 - 39. Import of construction services can be sourced from the government record, the new ### Services: construction, insurance, financial, telecommunications, and other business services - Import of construction services: - Can be sourced from the government record, the new quarterly enterprise survey, and the household survey. - The government record and the new quarterly enterprise survey are/will be available quarterly. - Import of construction services by households is not significant. - Insurance services: - Source data for export of insurance services can be obtained from the AFA. - Methodology explained to estimate insurance services from the premiums and investment income received from nonresidents. - Import of insurance services can be sourced from the household survey, the new quarterly enterprise survey, and the government record. - Fourteen nonresident insurance companies have presence in Andorra; they do not maintain their accounts independently in Andorra (they are acting as an agent for nonresident insurance companies). - The AFA plans to collect information on their premium receipts and claim payments to the ASD. - Financial services and fees: - The AFA provides data for the explicit fees banks charge for financial services quarterly. - Recommendation to record financial services provided by investment funds and investment management advisors to nonresidents. - The AFA plans to change report forms to collect source data. - Questions can be added in the new quarterly business survey to collect data on financial service fees paid by resident enterprises to nonresidents. - Telecommunications, computer, and information services: - Andorra Telecom can provide source data for export of telecommunications services (e.g., roaming services for nonresident tourists). - The ASD plans to approach Andorra Telecom for quarterly data. - Import of telecommunications services can be sourced from the household surveys and the government record. - Computer and information services can be sourced from the quarterly business survey (for credit and debit) and the household survey (for debit). - As the computer services industry may grow fast with the government’s promotion policies in Andorra, the new quarterly enterprise survey should include questions on this item. - Other business services and cultural/recreational services: - Can be sourced from the new quarterly enterprise survey and the new direct reporting system. - Personal, cultural, and recreational services could be sourced from the new quarterly enterprise survey, the new direct reporting system, the household survey, and the government record. - Charges for the use of intellectual property and government goods and services are limited in Andorra. ### FISIM (Financial Intermediation Services Indirectly Measured) - Export and import of FISIM can be compiled/estimated quarterly based on information from the AFA. - Once FISIM is estimated, investment income should be adjusted by the amount of FISIM. - Table 6. Calculation of FISIM (formulas as provided): - Export of FISIM = (a + b) - a) On loans = (Actual interest revenues from loans provided to nonresidents) - (Pure interest—interest at reference rate) - b) On deposits = (Pure interest—interest at reference rate) - (Actual interest payments for deposits received from nonresidents) - Import of FISIM = (c + d) - c) On loans = (Actual interest payments for loans received from nonresident banks) - (Pure interest—interest at reference rate) - d) On deposits = (Pure interest—interest at reference rate) - (Actual interest receipts from deposit with nonresident banks) ### Recommendations: services and FISIM (with priorities and dates) - Improve the estimation of insurance services following the guidance provided by the mission (high priority by March 2024). - Record financial services provided by investment funds and investment management advisors (high priority by March 2024). - Include questions on paid fees for financial services in the new quarterly enterprise survey (high priority by December 2023). - Start compiling FISIM and adjust investment income, following the guidance provided by the mission (medium priority by March 2024). - Add questions on construction services, telecommunications, computer, and information services, and other business services to the new quarterly enterprise survey (high priority by December 2023). ### Primary income: compensation, investment income, and rents - Compensation of employees (credit): - Can be compiled based on information from the quarterly labor force survey. - The survey covers around 1,000 households quarterly, and the results become available after 10 weeks from the end of the previous quarter. - Compensation of employees (debit): - Sourced from the social security fund (Caixa Andorrana de la Seguretat Social) quarterly. - The social security fund is responsible for both pension and health insurance and collects mandatory contributions from workers including daily and seasonal workers in Andorra. - Workers are required to make contributions regardless of the length of their stay in Andorra. - Investment income (quarterly compilation): - The new quarterly enterprise survey should include questions on FDI income, given that the new direct reporting provides the information only annually. - The AFA can provide investment income data quarterly for banks and OFCs as well as for NFCs and households to whom the banks provide custody services. - Renting fees: - Renting fees reported by banks should be reclassified to services. - The mission explained the distinction between rent recorded in the primary income and renting fees recorded in services. - Tax Office and household survey sources: - The Tax Office may be able to provide information on investment income for NFCs and households including income not going through Andorran banks. - The household survey can provide source data, although income data are often underreported in the household survey. - If no source data are available, interest payments for loans and interest receipts from deposits could be estimated from the position data for loans and deposits and average interest rates for them. - The mission explained examples of estimation methods to the ASD. ### Recommendations: primary income (with priorities and dates) - Add questions on investment income to the new quarterly enterprise survey (high priority by December 2023). - Reclassify paid renting fees reported by banks from other primary income to other business services (medium priority by December 2023). - Consult with the Tax Office on the availability of primary income data. If not available, explore with the Tax Office the possibility to collect the information in the tax reporting framework (medium priority by September 2024). - Consider adding questions on investment income to the household survey (medium priority by March 2024). - Consider estimating other investment income for NFCs and households in case source data cannot be collected (medium priority by June 2024). ### Secondary income and capital account: taxes, social transfers, personal transfers, insurance, and transfers to international organizations - Taxes: - The Tax Office provides data on the tax received by the Andorran government monthly. - Tax payments by Andorran residents to foreign governments are not recorded. If believed significant, source data can be developed by adding questions in the household survey or estimating from compensation of employees and investment income. - Social contributions and benefits: - Social contributions (credit) and benefits (debit) are sourced from the social security fund quarterly. - Social contributions (debit) and benefits (credit) are not recorded except pension benefits received from France (the French embassy provides the information). - The Tax Office and the social security fund may have some information on social contributions (debit) and benefits (credit). - Personal transfers (debit): - Recorded from the household survey. - To record this item quarterly, the data should be collected quarterly from households with a sufficient sample size. - Non-life insurance: - Receipts of net non-life insurance premiums are recorded based on information from the AFA. - Questions on non-life insurance premium payments and claim receipts can be added to the new quarterly enterprise survey and the household survey. - Contributions to international organizations: - Contributions by the AFA should be recorded in the secondary income account. - The mission explained the recording of current and capital transfers. ### Recommendations: secondary income and capital account (with priorities and dates) - Develop source data to record tax payments by Andorran residents to foreign governments (e.g., by adding a question in the household survey) (medium priority by September 2024). - Consult with the Tax Office and the social security fund on the availability of the source data to record social contributions (debit) and benefits (credit) (medium priority by March 2024). - Collect information on personal transfers quarterly from households with a sufficient sample size in the household survey (high priority by June 2024). - Consider adding questions on non-life insurance premium payments and claim receipts to the new quarterly enterprise survey and the household survey (medium priority by September 2024). - Reclassify contributions by the AFA to international organizations from the capital account to current transfers (medium priority by December 2023). ### Institutional framework, resources, and capacity - Quarterly compilation of balance of payments and IIP requires additional resources for the ASD and source data providers. - The mission recommended allocating an additional staff member for compilation work (i.e., increasing the compilation team from three to four). - The ASD needs to make source data providers understand the importance of compiling balance of payments and IIP quarterly (e.g., crucial information to assess the Andorran economy, make data-based policy decisions, and to improve the transparency of the Andorran economy). - Better statistics will also help Andorran enterprises conduct business with nonresidents (e.g., better conditions on loans and FDI from nonresidents). - Staff expertise and training: - Compilation is relying on the expertise of the staff of the ASD. - Expertise can be fostered only through continuous training and experience. - Staff should keep attending training courses conducted by the IMF and other international organizations and keep compiling the data for a sufficient period. - Frequent staff changes should be avoided. ### Recommendations: institutional framework and capacity (with priorities and dates) - Consider allocating an additional staff member to the balance of payments and IIP compilation team to prepare for the quarterly data compilation (high priority by December 2023). - Keep attending training courses conducted by the IMF and other international organizations (high priority ongoing basis). *IMF | Technical Report – Andorra Report on External Sector Statistics Mission* --- _Source: https://www.imf.org/-/media/files/publications/tar/2024/english/tarea2024016.pdf_