1. Statistical Business Register Enterprise Groups in Latvia Sarmite Prole Head of Business Register Section Business Statics Department Central Statistical Bureau of Latvia May 19-23, 2014

2. Content History Functions Legislation Methodology Functions Coverage Definition Control links Data sources Functionality Experience Future plans May 19-23, 2014

3. History Statistical Business Register (SBR) established in 1992 as the separate database Since 2003 used main program for data entering, processing with automatic control and validation tools – IDM SDMS (Integrated Metadata driven Statistical data management system), which contains the database of Statistical Business Register Since 2006 Enterprise Group Register is a part of SBR SBR is a part of Euro Groups Register (EGR) and since 2012 authentic store for EGR Identification Service May 19-23, 2014

4. Functions To mobilize administrative data To detect and classify statistical units To maintain the scope of economically active enterprises to provide the base for all statistical surveys To prepare statistics on economically active enterprise population and business demography To maintain information on enterprise groups and test of profiling large and complex enterprises May 19-23, 2014

5. Legislation (EU) Regulation (EC) No 223/2009 of the European Parliament and of the Council of 11 March 2009 on European statistics Regulation (EC) No. 177/2008 of the European Parliament and of the Council of 20 February 2008 establishing a common framework for business registers for statistical purposes and repealing Council Regulation (EEC) No. 2186/93 Council Regulation (EEC) No. 696/93 of 15 March 1993 on the statistical units for the observation and analysis of the production system in the Community Other related regulations May 19-23, 2014

6. Legislation (LV) May 19-23, 2014 Official Statistics Law The Cabinet Regulation No.994 “By-Laws of the Central Statistical Bureau of Latvia” The Cabinet Regulation No.1474 of the National Statistical Information Program The Cabinet Regulation No.922 “Official statistical questionnaires and standard forms for approval” Other laws and regulations governing foundation, cessation, restructuring of enterprises etc. in Latvia, tax administration, Law on Annual Reports etc.

7. Methodology EU: Business Register Recommendation Manual ESSnet EGR. Guidelines on Euro Groups Register ESSnet Profiling of large and complex Multinational Enterprise Groups. Guidelines Other methodological documents prepared by Eurostat LV: Internal rules on Quality management system, implementation and maintenance Other internal methodological instructions May 19-23, 2014

8. Coverage (1) Statistical Business Register includes all legal units without threshold by size, legal form or activity class: Legal persons registered in the Register of Enterprises and in the Taxpayer's Register Natural persons who are engaged in an economic activity in their own right Available information on statistical units accordance with Regulation 177/2008: –Legal units –Enterprises –Local Units –Enterprise groups Partially available information on statistical units for internal statistical purposes: –Kind of activity unit –Local kind of activity unit May 19-23, 2014

9. Coverage (2) Available information: Identification characteristics Demographic statistics Economic/stratification characteristics Links between units Additional information: Information from Taxpayer’s Register on legal unit level Mark for annual and active economically active enterprise population Mark which enterprises are included in the sample population (t, t-1) Mark for large and complex enterprises May 19-23, 2014

10. Enterprise group definition Regulation 696/93 An enterprise group is an association of enterprises bound together by legal and/or financial links. A group of enterprises can have more than one decision-making centre, especially for policy on production, sales and profits. It may centralize certain aspects of financial management and taxation. It constitutes an economic entity which is empowered to make choices, particularly concerning the units which it comprises. Revised definition (draft) An enterprise group is a set of legal units bound together by legal and/or financial links under the same control. Operational rules: –Control –Management and control –Consolidation and control May 19-23, 2014

11. Control links Operational rules or identifying control links: A legal unit directly owns more than 50% (direct control) A legal unit indirectly owns more than 50% (indirect control) A legal unit fully consolidates the accounts of other unit Existence of special legislation decree or regulation Administrative sources May 19-23, 2014

12. Statistical concept Statistical unit “enterprise group” group may exist if it engages at least two companies, and more than 51% of the capital is owned or controlled by other enterprise or it has more than 51% of voting rights or they are under its control. Types of enterprise groups: All resident enterprise group Multinational enterprise group: –Domestically controlled truncated group –Foreign controlled truncated group May 19-23, 2014

13. Data sources National: Administrative sources –Public sources –Private sources Statistical surveys International: Euro Groups Register European Business Register Detailed description in presentation «Data sources and data on enterprise groups» May 19-23, 2014

14. Functionality Manual or automatic data update procedures Control tools for identifying directly controlled enterprises ID number for enterprises which are included in enterprise groups ID number for responding unit in cases of complex or large enterprise Information on enterprise groups are included in separate application in the Statistical Business Register Direct link: Statistical Business Register to/from Enterprise groups Automatical data comparison with related statistical surveys May 19-23, 2014

15. Experience PHARE 2002 Data Collection Project “Improvement of Business register 2004 Creation of Enterprise Group Register” (August 2004 – July 2005) GRANT project “Inclusion of groups in the national registers and registration of complex enterprises – implementation of cross border links of multinational enterprise groups” (December 2005 – November 2006) Support of methods for the implementation of the Euro Groups Register (EGR) on the national level and improvement of the data collection methods on enterprise groups (November, 2009 - August, 2010) ESSnet on consistency of concepts and methods of business-related statistics – 2010 project on statistical units, WP1 (January, 2011 – December 2012) Profiling of large and complex multinational enterprises groups in Latvia (June, 2012 – December, 2013) Participation in WGs and projects related enterprise groups

16. Future development (EU) May 19-23, 2014 FRIBS Framework Regulation for Integrated Business Statistics Aimed to establish a cross-cutting legal framework for the systematic collection, compilation, transmission and dissemination of European statistics related with the structure, economic activity, competitiveness, global transactions and performance of the business sector. ESBRs (European System of interoperable business registers). ESBRs is an ESS project, aiming at improving business registers for the whole ESS, both at national and at European level, by delivering consistent frame populations across statistical domains and across countries to improve consistency and coherence, and to reduce production costs. The project also focusses on further improvement of the Euro Groups Register to provide better insight on globalization. The implementation period of the ESBRs project is 2013-2017. Information source: Eurostat

17. Future plans May 19-23, 2014 Re-engineering of Business Register module To carry out activities regarding data comparability with business statistic related statistical domains To improve data quality on enterprise groups To develop methodology on profiling Other activities

18. Thank you for your attention ! May 19-23, 2014 References: https://circabc.europa.eu http://www.cros-portal.eu http://egr.istat.it http://www.csb.gov.lv/en