General structure of the FATS Survey  Main recommendations: 1.Manual on Statistics of International Trade in Services 2.Handbook of Economic Globalisation Indicators  Statistics compiled : 1.International trade globalisation 2.Activities of Multinational Enterprises

General structure of the FATS Survey  Groups of Multinational companies 1.Inward companies – Domestic companies controlled by foreign parents 2.Outward companies – Domestic companies controlling foreign affiliates 3.Inward-Outward companies – Domestic companies having foreign subsidiaries and also controlled by foreign parents

General structure of the FATS Survey  Majority ownership criterion 1.Direct Inward/Outward companies 2.Domestic Parent groups 3.Domestic Inward groups 4.Foreign Parent and CAs Groups (only partial)

General structure of the FATS Survey All relevant variables classified by:  Countries  Industries – ISIC – Two digits level

Population of the survey  The MBR (Multinational Business Register) A register of multinational enterprises operating in Israel was created and the survey was based on the population covered by the register

Population of the survey  The MBR includes: Direct Inward/Outward companiesDirect Inward/Outward companies Domestic companies linked upward or downward to direct Outward companies by a +50% ownership (Domestic Parent Group)Domestic companies linked upward or downward to direct Outward companies by a +50% ownership (Domestic Parent Group)

Population of the survey Domestic companies linked downward to direct Inward companies in the same way (subsidiaries of direct Inward companies)Domestic companies linked downward to direct Inward companies in the same way (subsidiaries of direct Inward companies) Affiliates abroad, directly controlled by domestic Outward companies and foreign parents of domestic Inward companiesAffiliates abroad, directly controlled by domestic Outward companies and foreign parents of domestic Inward companies It may be a lack of coverage of companies linked to direct Inward/Outward companies, specially regarding foreign enterprises

Sources of data  The Business Registry Office, where companies must register their names, main occupation and details on owners of shares  CBS Central Business Register  Israel Securities Authority  Tel-Aviv Stock Exchange  Companies engaged in business information and data bases, as D&B, BDI, etc  Press information

FATS Variables – International Trade  Total exports and imports of goods and services, by Inward and Outward domestic companies, classified by countries and industries.

FATS Variables – International Trade  International trade of Inward companies, distributed according to trade partners abroad, as follows: Foreign parent group Other affiliates abroad Other (non-affiliates) foreign residents

FATS Variables – International Trade  International trade of Outward companies, distributed according to trade partners, as follows: 1. 1.CAs abroad 2. 2.Other affiliates abroad 3. 3.Other (non-affiliates) foreign residents

FATS Variables – International Trade  Sales of goods and services by subsidiaries abroad of domestic Outward companies, classified by country of sales.

FATS Variables – AMNE  Value added  Output  Employment All these variables related to Inward and Outward companies and classified by industries

The sample  The sample was based on : 1.Industries according to ISIC two digits level 2.Size of companies according to turnover

Computation of estimates  International Trade 1.Total exports and imports of goods Reports from companies in the sampleReports from companies in the sample Annual customs’ data on a company basis of exports and imports of goods – BOP adjustedAnnual customs’ data on a company basis of exports and imports of goods – BOP adjusted

Computation of estimates 2.Total exports and imports of services Reports from companies in the sampleReports from companies in the sample Exports – Exempted VAT data revenues combined with customs’ data on exports of goods and analysis in a company level for amounts exceeding a defined thresholdExports – Exempted VAT data revenues combined with customs’ data on exports of goods and analysis in a company level for amounts exceeding a defined threshold Imports – ITRS data adjusted by preliminary total import figures of the EBOPS sample surveyImports – ITRS data adjusted by preliminary total import figures of the EBOPS sample survey End of year 2006: Results of the new EBOPS survey are expectedEnd of year 2006: Results of the new EBOPS survey are expected

Computation of estimates 3.Intra-firm trade and trade with unaffiliated foreigners Reports from the companies in the sample and grossing-up according to total exports and imports in each industry and size groupReports from the companies in the sample and grossing-up according to total exports and imports in each industry and size group 4.Sales of goods and services by CAs abroad Reports from the companies in the sample (additional request) and grossing-up by industry and turnover of parentsReports from the companies in the sample (additional request) and grossing-up by industry and turnover of parents

Main findings

Main problems in data reporting  Consolidated data excluding subsidiaries abroad  Imports by countries  Sales of goods and services by foreign subsidiaries

Recommendations for expansion in future surveys  Complementary data to FDI  If expanding of CAs abroad is heavy financed by credit in host countries, instead of FDI: FDI may not be well related to total activities of CAs abroad  Additional indicator suggested: Total assets of CAs abroad = Total assets of CAs abroad = Total foreign controlled assets by parent domestic companies Total foreign controlled assets by parent domestic companies

Recommendations for expansion in future surveys  This last variable will be closer related to the level of subsidiaries’ activities abroad independently of the financing scheme adopted by the enterprise  FDI results – Could be misleading in comparing: Countries – Periods of time – Inward and Outward FDI

Recommendations for expansion in future surveys  Additional use: Share of foreign controlled assets financed by “external” as opposed to “internal’’ funds.

Recommendations for expansion in future surveys  Outsourcing of production abroad Only Outsourcing of production that is related to activities of Inward or Outward companies are currently included

Some final remarks  Exclusion of variables that may be estimated by administrative files  Improvement in collection of data on other variables, as UBO, additional activities of subsidiaries abroad, total assets of these subsidiaries, etc.

Thank you

Computation of estimates  Activities of Multinational Enterprises 1.Output Reports from companies in the sampleReports from companies in the sample Income Tax dataIncome Tax data VAT dataVAT data Change in stocks of finished goods and work-in-progress – Industry basis – CBS Business DepartmentChange in stocks of finished goods and work-in-progress – Industry basis – CBS Business Department

Computation of estimates 2.Value Added Reports from the companies in the sample and grossing-up according to industry and turnoverReports from the companies in the sample and grossing-up according to industry and turnover Indirect taxes: On an industry basis according to averages from the CBS Business DepartmentIndirect taxes: On an industry basis according to averages from the CBS Business Department

Computation of estimates 3.Employment Reports from companies in the sampleReports from companies in the sample Data from the National Insurance InstitutionData from the National Insurance Institution