## 1. Net Errors and Omissions Before/After Improvements ## Source details **Canonical URL:** [1. Net Errors and Omissions Before/After Improvements](https://www.imf.org/-/media/files/publications/tar/2024/english/tarea2024086-print-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/tar/2024/english/tarea2024086-print-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/tar/2024/english/tarea2024086-print-pdf.pdf.json) --- ### Mission outcomes and headline results - STA TA mission for the Central Bank of Montenegro (CBM) took place during July 29–August 9, 2024, focused on reducing net errors and omissions (NEO) and preparing the Reserves Data Template (RDT). - NEO increased to more than 10 percent of Gross Domestic Product (GDP) in 2022 and remained at more than 9 percent of GDP in 2023 and the first quarter of 2024. - The mission and the CBM applied measures to 2021–2023 data and reduced the average NEO for these three years from 9 percent to 1.1 percent of GDP. - The CBM plans to implement the recommended BOP adjustments in the third quarter of 2024. - Mission provided guidance on Sections I–IV of the RDT and recommended CBM coordinate with the Ministry of Finance (MOF) and submit a final draft RDT for STA sign off. ### Major sources of large positive NEO and adjustments applied - Increased migration and new residents: - Increased numbers of Russians, Ukrainians, and Turks moved to Montenegro in recent years; their regular expenses are included as travel services exports until they become residents. - When these foreigners become residents (e.g., obtain resident permits after purchasing real estate), their assets abroad become external assets for Montenegro through other changes (not via BOP transactions). - Part of those external assets were spent and invested in Montenegro, but these transactions were not recorded in the BOP, producing positive NEO (i.e., inflows understated, outflows overstated, or both). - Economic Citizenship Program (ECP) passport holders: - Residents who received passports under the ECP brought substantial external assets that became external assets of Montenegro via other changes and were used for spending and investments in Montenegro, including financial assets and business investments beyond the required amount. - Double counting issues identified: deposits in escrow accounts required by the ECP and imputed direct investment recorded to reflect their investments. - Crypto asset use in real estate purchases: - Real estate transactions paid by crypto assets are not captured well by the International Transactions Reporting System (ITRS); anecdotal evidence indicates foreign investors may pay for real estate using crypto assets. - Montenegro lacks reliable data from the real estate registry; investment in residential properties accounted for more than 27 percent of direct investment liabilities in 2022. - Data and methodological notes: - Due to lack of source data, mission used average household spending estimates multiplied by number of households to estimate use of external assets by new residents and passport holders; spending is assumed higher in the first year (primary residence and durable goods) and lower in following years as income in Montenegro grows. - CBM plans to estimate quarterly spending based on price information from the Statistical Office of Montenegro (MONSTAT). - During the mission it was not possible to produce reliable estimates on external assets held by all immigrant/refugee types and ECP passport holders to adjust the IIP; these adjustments remain for future incorporation when additional data (e.g., planned new tax information reporting system) become available. ### Specific measures implemented or recommended (priorities and target dates) - Top-priority and high-priority measures already applied to 2021–2023 and to be implemented going forward: - Estimate spending and investments by resident permit holders and Montenegrin passport holders from the ECP and record a corresponding adjustment in the BOP (top priority; Target Date: November 2024; Responsible: CBM). - Implement BOP adjustments in third quarter of 2024 (CBM plan). - Continue improving estimations by exploring additional data sources (high priority; ongoing basis). - Conduct a survey to major realtors to obtain the ratio of real estate investments paid by crypto assets (high priority; Target Date: March 2025). - Eliminate double counting of deposits in escrow accounts required by the ECP and imputed FDI recorded for ECP investments. - Use MONSTAT price information to estimate quarterly spending by new residents. - Selected action-plan recommendations: - Record required items in the RDT following mission guidance (e.g., guarantees and market value of derivative contracts by the MOF and details of deposits and currency composition by the CBM) (high priority; Target Date: December 2024). - Submit a final draft RDT by consolidating the information for the CBM and the MOF for STA’s sign off (priority; Target Date: January 2025). - Continue to monitor and contribute to improvements in DIE financial statements to record reinvested earnings in the BOP (medium priority; ongoing basis). - Request portfolio investment asset positions for nonbank financial and nonfinancial corporations and households from custodian banks (high priority; Target Date: October 2024). - Coordinate with the MOF to exclude residents' holdings of Eurobonds issued by the government from portfolio investment liabilities and external debt (high priority; Target Date: March 2025). - Propose items for inclusion in the planned tax information reporting framework to support ESS compilation (medium priority; Target Date: December 2024). - Transfer responsibility to compile travel data from the CBM to the government authority in charge of tourism policies and statistics and collect average spending by nationality after transfer (high priority/medium priority; Target Dates: March 2025 and June 2025 respectively). ### Direct investment, portfolio investment, and statistical source improvements - Direct Investment (FDI): - CBM started disseminating FDI position data quarterly in September 2022 (from the data for 2019). - CBM surveys around 50 largest direct investment enterprises (DIEs) which constitute 85 percent of the FDI liability position in Montenegrin enterprises; the remaining 15 percent is estimated. - Most DIEs reported negative reinvested earnings in recent years; planned tax reporting updates may improve financial statement quality. - Recommendation: Monitor and contribute to improvements in DIE financial statements to record reinvested earnings in BOP (medium priority; ongoing). - Portfolio Investment: - Recommendation: Approach three custodian banks to source portfolio investment asset positions for other sectors to obtain position data directly and avoid accumulation errors from price and foreign exchange changes (high priority; Target Date: October 2024). - CBM currently accumulates transaction data from the ITRS (from 2006 onward); mission provided the BPM6 Compilation Guide model report form for international securities. ### Additional operational and institutional actions (selected) - Prepare and submit the RDT (required for SDDS subscription); mission provided detailed guidance for Sections I–IV. - Establish institutional arrangements (e.g., Memorandum of Understanding) between CBM and MOF to permit CBM to produce the RDT monthly with a lag of one month (high priority; Target Date: December 2024). - Update the land registry and the planned tax information reporting framework to support recording investments in real estate and monitoring nonresident investments. - Conduct a survey of major realtors (or realtor association) to estimate crypto-paid real estate transactions and use that ratio to supplement ITRS-based data. - Use planned improvements to the tax information reporting system (planned in 2025) as a critical opportunity to develop additional data sources for ESS and other macroeconomic statistics. *IMF | Technical Report – Montenegro Report on External Sector Statistics Mission, 1. Net Errors and Omissions Before/After Improvements* --- ### 16. The mission recommended proposing to the Tax Office items on portfolio investment ### Portfolio investment assets — findings - Tax Office data have better coverage and quality compared to other sources (e.g., household survey), particularly for assets held by households with banks and custodians abroad. - MOF classifies all Eurobonds issued by the government of Montenegro as external liabilities, including those held by residents in Montenegro. - MFS data shows commercial banks in Montenegro hold around 20 percent of Eurobonds issued from 2018 to 2022. - Eurobonds are recorded at face value in the IIP; international statistical standards recommend recording securities at market value. - Compiling data on a security-by-security basis could improve portfolio investment data quality, help CBM with BOP and IIP reconciliation, enable comparison with mirror data, and support international securities data exchange projects. - CBM plans to learn from neighboring countries’ experiences to assess the merits and feasibility of security-by-security data compilation. ### Portfolio investment assets — recommendations - Request data on the portfolio investment asset positions for nonbank financial and nonfinancial corporations as well as households from custodian banks (high priority by October 2024). - Propose to the Tax Office items on portfolio investment assets to be included in the new tax data information reporting framework, particularly for the sectors not covered by the MFS (medium priority by December 2024). - Coordinate with the MOF to exclude residents' holdings of Eurobonds issued by the government from portfolio investment liabilities and external debt (high priority by March 2025). ### Eurobonds — operational recommendation and context - Mission reiterated the need for removing residents' holdings of Eurobonds from external liabilities; previous TA missions raised the issue but MOF has not implemented the correction, possibly due to data limitations and cost constraints. - Mission recommended acquiring information from custodians in London to exclude residents’ holdings from external liabilities, which would improve IIP quality and reduce the government’s external debt that is currently overstated and might be affecting Montenegro’s country rating. - IMF’s Article IV mission should also emphasize this issue with the Minister of Finance given MOF has not implemented previous STA TA recommendations on the issue. ### Financial Derivatives — findings and recommendation - Findings: - Central government has financial derivative contracts to hedge foreign exchange risks related to loans received for building highways. - Transactions are recorded in the BOP but the market value of derivative contracts vis-à-vis nonresidents for the general government is not recorded in the IIP. - Recommendation: - Coordinate with the MOF to record the market value of the financial derivative contracts vis-à-vis nonresidents for the general government in the IIP (medium priority by September 2024). ### Trade Credit — findings and actions - Findings: - CBM introduced a survey for trade credit and advances and started checking the quality of reported data. - Currently only five exporters and eight importers submit the report forms to the CBM. - Mission provided guidance on identifying additional data reporters and on recording transactions and positions, including where trade credit should be included in FDI. - Mission explained difference between trade credit and trade finance provided by banks; CBM needs to explain this to data reporters to avoid misreporting. - Planned actions: - Based on guidance, CBM plans to improve coverage and quality of the data further. ### Travel Services — findings - Travel (credit) is calculated based on estimation and information from the ITRS. - Number of overnight stays from MONSTAT’s monthly survey on arrivals and overnights at hotels and other accommodations is multiplied by the average expenditure per day by region. - Number of overnight stays at unregistered accommodations is estimated as 30 percent of stays at hotels and registered accommodations and added to the total. - CBM estimates average expenditures of travelers from websites and phone contacts for major hotels and restaurants; NTO, the Ministry of Tourism, and the Hotel Association provide price information. - Data for health-related expenditures, education-related expenditures, and business travel are from the ITRS. - Example: The survey results in 2005 indicated that 50 percent of private accommodations were not registered; CBM adjusted the share to 30 percent, reflecting the impact of the government’s recent campaign to decrease the informal economy. ### Travel Services — recommendations (priorities and dates) - Transfer responsibility to compile travel data to the government authority in charge of tourism policies and statistics (high priority by March 2025). - Coordinate with the government authority in charge of tourism policies and statistics to collect data on an average spending by nationality once the responsibility is transferred to them (medium priority by June 2025). - Contact BOP compilers in other countries (possibly by the Ministry of Tourism or the National Tourism Association) to explore new data collection methods for travel services (medium priority by March 2025). - Estimate maintenance services fees paid by yacht owners outside the banking system (medium priority by December 2024). - Study experiences of other European countries on data collection methods (e.g., scraping major hotel booking websites); mission provided contact information on BOP compilers in other countries to facilitate discussion. - Review data for maintenance services provided to nonresident yacht owners collected by the ITRS to assess payments made outside the banking system (e.g., cash and crypto assets); estimate total maintenance cost by multiplying an average cost by the number of yachts at seaports and deduct ITRS-collected amounts to estimate payments not through bank accounts. ### Reserves Data Template (RDT) — findings - Montenegro is a fully euroized economy without participating in the Eurosystem; euro is considered as foreign currency for Montenegro. - Mission provided guidance on filling out items in Sections I through IV of the RDT to CBM and MOF. - Mission recommended MOF record guarantees provided to public companies in Section III and the market value of a swap contract in Section I.B and Section IV. - Central government also holds deposits and gold to be recorded in Section I.B. - Mission recommended CBM record details of its deposits (e.g., nationality of corresponding banks) in Section I.A and currency composition of reserve assets in Section IV. - Mission provided guidance to establish institutional arrangements between the CBM and the MOF to permit the CBM to produce the RDT monthly with a lag of one month; MOF should provide data within two weeks after month-end so CBM can consolidate and post the RDT on the National Summary Data Page by the end of the month. ### Reserves Data Template (RDT) — recommendations (target dates) - Record required items in the RDT following mission guidance (e.g., guarantees and the market value of derivative contracts by the MOF and details of deposits and currency composition by the CBM) (high priority by December 2024). - Establish an arrangement (sign a Memorandum of Understanding) that permits the CBM to produce the RDT monthly with a lag of one month between the CBM and the MOF (high priority by December 2024). - Submit a final draft RDT by consolidating the information for the CBM and the MOF for STA’s sign off (top priority by January 2025). ### Institutional issues and resources — findings - Montenegro plans to improve its tax information reporting framework in 2025, offering an opportunity to collect comprehensive information not currently obtainable. - Proposing items to the Tax Office for inclusion in the new tax information reporting framework would enable CBM to compile BOP and IIP beyond ITRS information and align with EU integration requirements. - Confidentiality is manageable because data can be anonymized and used only for statistical purposes. - Most data for deposit-taking corporations and nonbank financial corporations could also be collected from MFS and supervisory information. - Compilation of BOP and IIP relies on CBM staff expertise; continuous training and experience are required and frequent staff changes should be avoided. - Montenegro is currently indicated as “non-compliant” by the European Commission for requirements to disseminate BOP data by partner country monthly and FDI data by activity cross-classified by partner country. ### Institutional issues and resources — recommendations (priorities and dates) - Propose to the Tax Office that certain items be included in the new tax information reporting framework to compile key indicators for BOP and IIP (medium priority by December 2024). - Allocate additional IT resources and support to the BOP Division to automate data collection and dissemination processes for ESS (high priority by March 2025). - Keep attending training courses conducted by the IMF and other international organizations (high priority ongoing basis). - Allocate an additional three staff members in total to the CBM’s BOP Division and External Debt and IIP Division to: - (i) disseminate the RDT monthly, - (ii) disseminate BOP data by partner country monthly, and - (iii) disseminate FDI data by activity cross-classified by partner country. - Note: These last two dissemination items will be required by the European Union once Montenegro joins the EU; the European Commission assesses implementation status annually. *IMF | Technical Report – Montenegro Report on External Sector Statistics Mission* ### 1. Net Errors and Omissions Before/After Improvements .................................................................. ### 1. Net Errors and Omissions Before/After Improvements .................................................................. ### Mission outcomes and headline results - A Statistics Department (STA) TA mission for the Central Bank of Montenegro (CBM) took place during July 29–August 9, 2024, focusing on reducing net errors and omissions (NEO) and preparing the Reserves Data Template (RDT). - NEO had increased to more than 10 percent of Gross Domestic Product (GDP) in 2022 and remained at more than 9 percent of GDP in 2023 and the first quarter of 2024. - The mission and the CBM applied measures to 2021–2023 data and reduced the average NEO for these three years from 9 percent to 1.1 percent of GDP. - The CBM plans to implement the recommended BOP adjustments in the third quarter of 2024. - The mission provided guidance on Sections I–IV of the RDT and recommended the CBM coordinate with the Ministry of Finance (MOF) and submit a final draft RDT for STA sign off. ### Identified major sources of large positive NEO and adjustments applied - Increased migration and new residents: - An increased number of Russians, Ukrainians, and Turks moved to Montenegro in recent years; their regular expenses are included as travel services exports until they become residents. - When these foreigners become residents (e.g., obtain resident permits after purchasing real estate), their assets abroad become external assets for Montenegro through other changes (not via BOP transactions). - Part of those external assets were spent and invested in Montenegro, but these transactions were not recorded in the BOP, producing positive NEO (i.e., inflows understated, outflows overstated, or both). - Economic Citizenship Program (ECP) passport holders: - Residents who received passports under the ECP brought substantial external assets that became external assets of Montenegro via other changes and were used for spending and investments in Montenegro, including financial assets and business investments beyond the required amount. - Double counting issues identified: deposits in escrow accounts required by the ECP and imputed direct investment recorded to reflect their investments. - Crypto asset use in real estate purchases: - Transactions in real estate paid by crypto assets are not captured well by the International Transactions Reporting System (ITRS). Advertisements and anecdotal evidence indicate foreign investors may pay for real estate using crypto assets. - Montenegro lacks reliable data from the real estate registry; investment in residential properties accounted for more than 27 percent of direct investment liabilities in 2022. - Data and methodological notes: - Due to lack of source data, the mission used average household spending estimates multiplied by number of households to estimate use of external assets by new residents and passport holders; spending is assumed higher in the first year (primary residence and durable goods) and lower in following years as income in Montenegro grows. - CBM plans to estimate quarterly spending based on price information from the Statistical Office of Montenegro (MONSTAT). - During the mission it was not possible to produce reliable estimates on external assets held by all immigrant/refugee types and ECP passport holders to adjust the IIP; these adjustments remain for future incorporation when additional data (e.g., planned new tax information reporting system) become available. ### Specific measures implemented or recommended (with priority and target dates where given) - Top-priority and high-priority measures already applied to 2021–2023 and to be implemented going forward: - Estimate spending and investments by resident permit holders and Montenegrin passport holders from the ECP and record a corresponding adjustment in the BOP (top priority; Target Date: November 2024; Responsible: CBM). - Implement BOP adjustments in third quarter of 2024 (CBM plan). - Continue improving estimations by exploring additional data sources (high priority; ongoing basis). - Conduct a survey to major realtors to obtain the ratio of real estate investments paid by crypto assets (high priority; Target Date: March 2025). - Eliminate double counting of deposits in escrow accounts required by the ECP and imputed FDI recorded for ECP investments. - Use MONSTAT price information to estimate quarterly spending by new residents. - Related recommendations in the mission’s action plan (selected items): - Record required items in the RDT following mission guidance (e.g., guarantees and market value of derivative contracts by the MOF and details of deposits and currency composition by the CBM) (high priority; Target Date: December 2024). - Submit a final draft RDT by consolidating the information for the CBM and the MOF for STA’s sign off (priority; Target Date: January 2025). - Continue to monitor and contribute to improvements in DIE financial statements to record reinvested earnings in the BOP (medium priority; ongoing basis). - Request portfolio investment asset positions for nonbank financial and nonfinancial corporations and households from custodian banks (high priority; Target Date: October 2024). - Coordinate with the MOF to exclude residents' holdings of Eurobonds issued by the government from portfolio investment liabilities and external debt (high priority; Target Date: March 2025). - Propose items for inclusion in the planned tax information reporting framework to support ESS compilation (medium priority; Target Date: December 2024). - Transfer responsibility to compile travel data from the CBM to the government authority in charge of tourism policies and statistics and collect average spending by nationality after transfer (high priority/medium priority; Target Dates: March 2025 and June 2025 respectively). ### Direct investment, portfolio investment, and statistical source improvements - Direct Investment (FDI): - CBM started disseminating FDI position data quarterly in September 2022 (from the data for 2019). - CBM surveys around 50 largest direct investment enterprises (DIEs) which constitute 85 percent of the FDI liability position in Montenegrin enterprises; the remaining 15 percent is estimated. - Most DIEs reported negative reinvested earnings in recent years; planned tax reporting updates may improve financial statement quality. - Recommendation: Monitor and contribute to improvements in DIE financial statements to record reinvested earnings in BOP (medium priority; ongoing). - Portfolio Investment: - Recommendation: Approach three custodian banks to source portfolio investment asset positions for other sectors to obtain position data directly and avoid accumulation errors from price and foreign exchange changes (high priority; Target Date: October 2024). - CBM currently accumulates transaction data from the ITRS (from 2006 onward); mission provided the BPM6 Compilation Guide model report form for international securities. ### Additional operational and institutional actions (selected) - Prepare and submit the RDT (required for SDDS subscription); mission provided detailed guidance for Sections I–IV. - Establish institutional arrangements (e.g., Memorandum of Understanding) between CBM and MOF to permit CBM to produce the RDT monthly with a lag of one month (high priority; Target Date: December 2024). - Update the land registry and the planned tax information reporting framework to support recording investments in real estate and monitoring nonresident investments. - Conduct a survey of major realtors (or realtor association) to estimate crypto-paid real estate transactions and use that ratio to supplement ITRS-based data. - Use planned improvements to the tax information reporting system (planned in 2025) as a critical opportunity to develop additional data sources for ESS and other macroeconomic statistics. *Source: IMF | Technical Report – Montenegro Report on External Sector Statistics Mission, 1. Net Errors and Omissions Before/After Improvements.* ### 16. The mission recommended proposing to the Tax Office items on portfolio investment ### 16. The mission recommended proposing to the Tax Office items on portfolio investment assets to be included in the new tax information reporting framework ### Portfolio investment assets — findings - Data from the Tax Office have better coverage and quality compared to other sources (e.g., household survey), particularly for assets held by households with banks and custodians abroad. - The MOF classifies all Eurobonds issued by the government of Montenegro as external liabilities, including those held by the residents in Montenegro. - MFS data shows that commercial banks in Montenegro hold around 20 percent of Eurobonds issued from 2018 to 2022. - Eurobonds are recorded at face value in the IIP; international statistical standards recommend recording securities at market value. - Compiling data on a security-by-security basis could improve portfolio investment data quality, help CBM with BOP and IIP reconciliation, enable comparison with mirror data, and support international securities data exchange projects. - The CBM plans to learn from neighboring countries’ experiences to assess the merits and feasibility of security-by-security data compilation. ### Portfolio investment assets — recommendations - Request data on the portfolio investment asset positions for nonbank financial and nonfinancial corporations as well as households from custodian banks (high priority by October 2024). - Propose to the Tax Office items on portfolio investment assets to be included in the new tax data information reporting framework, particularly for the sectors not covered by the MFS (medium priority by December 2024). - Coordinate with the MOF to exclude residents' holdings of Eurobonds issued by the government from portfolio investment liabilities and external debt (high priority by March 2025). ### Eurobonds — operational recommendation and context - The mission reiterated the need for removing residents' holdings of Eurobonds from external liabilities; previous TA missions raised the issue but MOF has not implemented the correction, possibly due to data limitations and cost constraints. - The mission recommended acquiring information from custodians in London to exclude residents’ holdings from external liabilities, which would improve IIP quality and reduce the government’s external debt that is currently overstated and might be affecting Montenegro’s country rating. - The IMF’s Article IV mission should also emphasize this issue with the Minister of Finance given MOF has not implemented previous STA TA recommendations on the issue. ### Financial Derivatives — findings - The central government has financial derivative contracts to hedge foreign exchange risks related to loans received for building highways. - Transactions are recorded in the BOP but the market value of derivative contracts vis-à-vis nonresidents for the general government is not recorded in the IIP. ### Financial Derivatives — recommendation - Coordinate with the MOF to record the market value of the financial derivative contracts vis-à-vis nonresidents for the general government in the IIP (medium priority by September 2024). ### Trade Credit — findings - The CBM introduced a survey for trade credit and advances and started checking the quality of reported data. - Currently only five exporters and eight importers submit the report forms to the CBM. - The mission provided guidance on identifying additional data reporters and on recording transactions and positions, including where trade credit should be included in FDI. - The mission explained the difference between trade credit and trade finance provided by banks; CBM needs to explain this to data reporters to avoid misreporting. - Based on guidance, the CBM plans to improve coverage and quality of the data further. ### Travel Services — findings - Travel (credit) is calculated based on estimation and information from the ITRS. - The number of overnight stays from MONSTAT’s monthly survey on arrivals and overnights at hotels and other accommodations is multiplied by the average expenditure per day by region. - The number of overnight stays at unregistered accommodations is estimated as 30 percent of stays at hotels and registered accommodations and added to the total. - CBM estimates average expenditures of travelers from websites and phone contacts for major hotels and restaurants; NTO, the Ministry of Tourism, and the Hotel Association provide price information. - Data for health-related expenditures, education-related expenditures, and business travel are from the ITRS. - Example: The survey results in 2005 indicated that 50 percent of private accommodations were not registered; the CBM adjusted the share to 30 percent, reflecting the impact of the government’s recent campaign to decrease the informal economy. ### Travel Services — recommendations - CBM to transfer the responsibility to compile travel data to the government authority in charge of tourism policies and statistics (high priority by March 2025). - Coordinate with the government authority in charge of tourism policies and statistics to collect data on an average spending by nationality once the responsibility is transferred to them (medium priority by June 2025). - Contact BOP compilers in other countries (possibly by the Ministry of Tourism or the National Tourism Association) to explore new data collection methods for travel services (medium priority by March 2025). - Estimate maintenance services fees paid by yacht owners outside the banking system (medium priority by December 2024). - The mission recommended studying experiences of other European countries on data collection methods (e.g., scraping major hotel booking websites) and provided contact information on BOP compilers in other countries to facilitate discussion. - Review data for maintenance services provided to nonresident yacht owners collected by the ITRS to assess payments made outside the banking system (e.g., cash and crypto assets); estimate total maintenance cost by multiplying an average cost by the number of yachts at seaports and deduct ITRS-collected amounts to estimate payments not through bank accounts. ### Reserves Data Template (RDT) — findings - Montenegro is a fully euroized economy without participating in the Eurosystem; euro is considered as foreign currency for Montenegro. - The mission provided guidance on filling out items in Sections I through IV of the RDT to CBM and MOF. - The mission recommended MOF record guarantees provided to public companies in Section III and the market value of a swap contract in Section I.B and Section IV. - The central government also holds deposits and gold to be recorded in Section I.B. - The mission recommended CBM record details of its deposits (e.g., nationality of corresponding banks) in Section I.A and currency composition of reserve assets in Section IV. - The mission provided guidance to establish institutional arrangements between the CBM and the MOF to permit the CBM to produce the RDT monthly with a lag of one month; MOF should provide data within two weeks after month-end so CBM can consolidate and post the RDT on the National Summary Data Page by the end of the month. ### Reserves Data Template (RDT) — recommendations - Record required items in the RDT following mission guidance (e.g., guarantees and the market value of derivative contracts by the MOF and details of deposits and currency composition by the CBM) (high priority by December 2024). - Establish an arrangement (sign a Memorandum of Understanding) that permits the CBM to produce the RDT monthly with a lag of one month between the CBM and the MOF (high priority by December 2024). - Submit a final draft RDT by consolidating the information for the CBM and the MOF for STA’s sign off (top priority by January 2025). ### Institutional issues and resources — findings - Montenegro plans to improve its tax information reporting framework in 2025, offering an opportunity to collect comprehensive information not currently obtainable. - Proposing items to the Tax Office for inclusion in the new tax information reporting framework would enable CBM to compile BOP and IIP beyond ITRS information and align with EU integration requirements. - Confidentiality is manageable because data can be anonymized and used only for statistical purposes. - Most data for deposit-taking corporations and nonbank financial corporations could also be collected from MFS and supervisory information. - Compilation of BOP and IIP relies on CBM staff expertise; continuous training and experience are required and frequent staff changes should be avoided. - Montenegro is currently indicated as “non-compliant” by the European Commission for requirements to disseminate BOP data by partner country monthly and FDI data by activity cross-classified by partner country. ### Institutional issues and resources — recommendations - Propose to the Tax Office that certain items be included in the new tax information reporting framework to compile key indicators for BOP and IIP (medium priority by December 2024). - Allocate additional IT resources and support to the BOP Division to automate data collection and dissemination processes for ESS (high priority by March 2025). - Keep attending training courses conducted by the IMF and other international organizations (high priority ongoing basis). - Allocate an additional three staff members in total to the CBM’s BOP Division and External Debt and IIP Division to: - (i) disseminate the RDT monthly, - (ii) disseminate BOP data by partner country monthly, and - (iii) disseminate FDI data by activity cross-classified by partner country. - These last two dissemination items will be required by the European Union once Montenegro joins the EU; the European Commission assesses implementation status annually. *IMF | Technical Report – Montenegro Report on External Sector Statistics Mission* --- _Source: https://www.imf.org/-/media/files/publications/tar/2024/english/tarea2024086-print-pdf.pdf_