M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Working Group for Chapter 18 – Statistics Bilateral screening: Chapter 18 PRESENTATION OF MONTENEGRO Luxembourg, June 2013

BALANCE OF PAYMENTS Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics Mira Radunović Head of Balance of Payments Division Central bank of Montenegro

 Law on Central bank of Montenegro (“Official Gazette of Montenegro”, no 40/10, 46/10, 6/13)  Law on Official Statistics and Statistical System (“Official Gazette of Montenegro”, no 18/12)  Law on Current and Capital Operations with Abroad (“Official Gazette of the Republic of Montenegro”, no. 45/05, and “Official Gazette of Montenegro”, no 62/08, 40/11)  Decision on statistical data to be submitted to the Central bank of Montenegro for the purpose of compiling the Balance of payments of Montenegro (“Official Gazette of Montenegro”, no 61/12);  Decision on keeping separate records on foreign current and capital transactions and their reporting to the Central bank of Montenegro (“Official Gazette of Montenegro” no 38/10);  Decision on the amount of cash that may be brought into or leave Montenegro without declaring (“Official Gazette of Montenegro” no 38/10). M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics LEGAL FRAMEWORK

 The Central bank of Montenegro (CBM) is responsible for the compilation of the balance of payments statistics according to the Law.  Balance of payments statistics are compiled in line with the BPM5 methodology (Balance of payments Manual, fifth edition).  The concept and definitions used to compile BOP are in broad conformity with those used in BPM5.  The data are compiled on a montly basis and published on quarterly and annual basis, in thousands of euro, at the website of the Central bank of Montenegro. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics OVERVIEW

 The compilation system relies mainly on data obtained through the International Transactions Reporting System (ITRS), which is a closed system.  ITRS provides in principle complete information in full detail, with breakdown on a country by country level.  Apart from ITRS, several other sources are used as the CBM, Monstat, estimation model (personal travel credits and compensation of employees credits), direct reporting (FDI, cross-border loans, accounts held abroad), CDA, media as a supplementary source. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics OVERVIEW

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics CLASSIFICATION CURRENT ACCOUNT The data provided by Monstat Coverage adjustments according to BPM5 CBM compiles comprehensive data on services The main sources: ITRS, estimation model for tourism revenues INCOME Sources: ITRS, CBM, estimation No data on reinvested earnings CURRENT TRANSFERS The main source is ITRS There are no details on government sectors data GOODS SERVICES

FINANCIAL ACCOUNT  Clasified according to the standard components of BPM5 by financial flows: FDI, portfolio investment, other investment and reserve assets.  Based on Asset/Liabilities principles, except for the Reserve Assets.  Sectoral and maturity breakdown is available.  Maturity: short-term (up to 1 year) and long-term. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics CLASSIFICATION

Foreign Direct Investment- flows  The Central bank compiles FDI statistics -flows using information from ITRS. -Data on reinvested earnings are missing for the time being.  The data are cross-checked by using information from various sources as enterprises, media, ect.  In accordance to BPM6 the data on transactions between fellow enterprises are included, while loans between financial institutions are excluded from 2006 onwards.  In 2010 CBM launched direct reporting system by companies for FDI stock data. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics CLASSIFICATION (cont.)

Portfolio investment  The main source of data is ITRS and the CBM for banking sector.  Clasified on assets/liabilities principle according to instruments and sectors.  Instruments: equity and debt securities. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics CLASSIFICATION (cont.) General Government Other sectors Banks Monetary authority Sectors classification

Other investments  Several different data sources are used depending on the institutional sector: 1. Monetary authorities - CBM 2. Government sector - data are collected from the Financial and Banking Operations Department of the CBM and ITRS; cross check with data obtained from Ministry of Finance 3. Banking sector –CBM, Division for Monetary Policy and Research 4. Other sectors - data are mainly collected from the ITRS; the main issue- estimation of currency in circulation-assets - the main issue- estimation of currency in circulation-assets Reserve assets Reserve assets –source is the balance sheet of the CBM. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics CLASSIFICATION (cont.)

BOP VADEMECUM  Q1 – Quarterly balance of payments  Y1 – International trade in services and remittances  Y5 – Direct investment flows by activity  Y6 – Direct investment broken down by geographical area  Y7 – Direct investment position by activity  Y8 – Direct investment positions by geographical area M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics EU REQUIREMENTS AND BOP QUESTIONAIRES

 The data are published within the time limits set by the Regulation.  In principle the items requested in Q1 questionnaire can be delivered in required component detail for partner world, with some exceptions (income sub-components and sub-components of transfers, partially trade credits, reinvested earnings).  Geographical breakdown in most of cases is possible thanks to ITRS, with some exceptions.  The main issue is in services account – estimation of travel revenues and currency in circulation-assets  BOP Division will need IT expert help to prepare tables in format prescribed by BOP Vademecum (Gesmes). M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics Q1 - QUARTERLY BALANCE OF PAYMENTS

 The data are published within the time limits set by the Regulation.  Y1 is available for partner world in required detail, with some exceptions (business travel sub-components, insurance services sub-components).  Geographical breakdown- the main issue is in travel account as data are estimated on total amount. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics Y1 - ANNAUL INTERNATIONAL TRADE IN SERVICES B. Services 1. Transportation 1. Transportation 2. Travel 2. Travel 3. Communications services 3. Communications services 4. Construction services 4. Construction services 5. Insurance services 5. Insurance services 6. Financial services 6. Financial services 7. Computer and information services 7. Computer and information services 8. Royalties and license fees 8. Royalties and license fees 9. Other business services 9. Other business services 10. Personal, cultural and recreational services 10. Personal, cultural and recreational services 11. Government services. 11. Government services.

 Geographical breakdown is already available for equity and other capital (intercompany debt).  CBM will make aditional effort to estimate data on reinvested earnings based on direct reporting – the work is in progress.  Activity breakdown – the plan is to provide data starting with data for M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics ANNAUL FOREIGN DIRECT INVESTMENTS-FLOWS (Y5, Y6)

 The CBM have introduced a FDI survey covering both inwards and outwards direct investment in  Geographical breakdown is available.  Included data on reinvested earnings.  Also available data on transactions between fellow enterprises (mainly intercompany debt). M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics ANNAUL FOREIGN DIRECT INVESTMENTS-STOCKS (Y7, Y8)

 Further harmonization with EU acquis and improvement of quality of the balance of payments statistics.  Implementation of Balance of Payments Manual, sixth edition. -Estimation of FISIM as a new dataset according to BPM6  Compilation and dissemination of IIP statistics. - Estimation of currency in circulation for other sectors-assets M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 18: STATISTICS M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics THE MAIN CHALLENGES AND TASKS IN FUTURE

Thank you for your attention! QUESTIONS ?