1. François RENARD MESDTAT STE Prague 4-6 December 2012
Module 7 EXERCISES
François RENARD
MESDTAT STE
Prague 4-6 December 2012

2. Module 1 Trade in services overview

3. Exercise 1A-The GATS modes of supply
Please, fill-in the blanks of the table below
Mode number
Mode of supply
Consumer
Supplier
International accounts coverage
In territory of residence
In territory of consumer
Not in territory of residence
Outside territory of consumer

4. Exercise 1 B- In what modes are the following services supplied?
An architect from A designs a construction project and delivers it to its client in B through the Internet, but makes occasional visits to B at the implementation phase.
Mode Mode Mode 1 and 4
In which mode the services consumed by a business traveller of country A while travelling abroad are they recorded?
Which one of the following BOP services sectors may involve mode 3 components?
Construction Maintenance and repair services Financial services

5. Exercise 1B- In what modes are the following services supplied?
Examples
Exercise 1B- In what modes are the following services supplied?
4. A computer specialist from C employed by a computer services company of B is sent to work in a branch located in A.
5. Provision of medical advice by an expert team in country A to physicians carrying out by-pass surgery in country B.
6. An airline company from A has its plane repaired while stationed in country B. The crew stays in a hotel in B while the plane is being repaired.
7. Establishment of a branch in country B of an insurance company from country A.
© WTO/OMC

6. Module 2 Classifications

7. Exercise 2A-Classifications
What product classification is used to report and publish detailed balance of payments services data?
What is the meaning of EBOPS?
What are the 12 main components of EBOPS classification?
To what extent do you use the EBOPS classification in your country?

8. Exercise 2B-Tour de table
Which are the important services industries in the country?
How are the services produced by these industries provided to consumers?

9. Module 3 BOP services

10. Exercise 3A- Residence
How is residence defined in the balance of payments framework?

11. Exercise 3B- Residence True or false:
An affiliate of a non-resident direct investor in the compiling economy is non-resident.
French border workers in Luxembourg (commuters) need to be considered as resident in Luxembourg.
Italian seasonal workers entering in France for harvesting a crop need to be considered as non-resident in France.
A branch of a non-resident direct investor in the compiling economy is a non-resident.
Patients undergoing medical care abroad for a duration exceeding one year (in the compiling economy) are considered as resident.

12. Exercise 3B- Residence True or false:
A French diplomat staying in a French embassy in UK is considered as resident in UK.
A Swedish national permanently employed at United Nations headquarters in New York is considered to be a resident of the United States.
Commercial agencies transacting on behalf of non-resident principals should be treated as resident producers in the economies in which they are located.
Crew members of aircrafts are considered as residents of economies in which they are stopping.
An enterprise engaged in construction project with a contract implemented over a two-year period is to be considered as resident in the country of the construction

13. Exercise 3C- EBOPS
Which of the following have been reclassified from goods to services under the revised version of EBOPS?
Goods for processing
Audiovisual media such as CDs or videos
Merchanting
Materials purchased in the compiling economy and exported as part of construction service abroad
A citizen from country A has an health treatment in country B. In which services item would the transaction be recorded?
Travel/personal/health related
Travel/business/ other
Other personal, cultural and recreational services/health services

14. Exercise 3C- EBOPS
To what 2 digit EBOPS heading would you classify the following services?
Broadband connection services
Technical assistance
Personal expenditure on going abroad for medical treatment
Payments for medical treatment abroad
Non-customised softwares on storage devices with a perpetual right to use
News agency services
Data recovery services

15. Exercise 3C- EBOPS
To what 2 digit EBOPS heading would you classify the following services?
8. Trade-related services
9. Operating leasing of dwellings
10. Waste treatment and de-pollution
11. Charges related to financial assets management
12. Merchanting
13. Claims received by an insurance company
14. Repairs of a computer
15. Repairs of an airplane

16. EBOPS Version 2 (First 2 digits)
1. Manufacturing services on physical inputs owned by others
2. Maintenance and repair services nie.
3. Transport
3.1 Sea transport (passenger, freight, other supporting and auxiliary transport services)
3.2 Air transport (passenger, freight, other)
3.3 Other transport: space, rail, road...
3.4 Postal and courier services
4. Travel
4.1 Business travel
4.2 Personal travel

17. EBOPS Version 2 (Continued)
5. Construction 5.1 Construction abroad 5.2 Construction in the reporting economy 6. Insurance and pension services 6.1 Direct insurance 6.2 Reinsurance 6.3 Auxiliary insurance services 6.4 Pension and standardized guarantee services 7. Financial services 7.1 Explicitly charged and other financial services 7.2 Financial intermediation service charges indirectly measured (FISIM)

18. EBOPS Version 2 8. Charges for the use of intellectual property
8.1 Franchises and trademarks licensing fees
8.2 Licenses for the use of outcomes of research and development
8.3 Licenses to reproduce and/or distribute computer software
8.4 Licenses to reproduce and/or distribute audiovisual and related products
9. Telecommunications, computer and information services
9.1 Telecommunications services
9.2 Computer services
9.3 Information services
10. Other business services
10.1 R&D services
10.2 Professional and management consultancy services
10.3 Technical, trade-related and other business services

19. EBOPS Version 2 12.1 Embassies and consulates
11. Personal, cultural and recreational services
11.1 Audiovisual and related services
11.2 Other personal, cultural, and recreational services
12. Government goods and services nie
12.1 Embassies and consulates
12.2 Military units and agencies
12.3 Other government goods and services n.i.e.

20. Module 4 SITS data collection

21. Exercise 4A: indirect bank reporting
Mark each of the following sentences as true or false for a bank based ITRS reporting system without supplementary reports.
Cash and non-cash transactions in SITS are covered by banks settlements.
Indirect bank reporting is often a by-product of exchange control.
Recording is always on a gross basis.
ITS transactions performed through non resident-banks are monitored.
Classification conforms to the classification required by international organisations.
Indirect bank reporting is self-sufficient in a context of a deregulated market.
The timing of settlements fits with the timing of transactions.
Indirect bank reporting uses individual transactions for recording operations.

22. Exercise 4B: surveys
Surveys are often preferred to ITRS data collection systems for the following reasons:
Easing of exchange control measures
More timely
Catching non-cash transactions
Capturing transactions settled through an account held in a non-resident bank
More accurate data compilation
Information provided by enterprises for fulfilling ITS surveys forms is extracted from:
Business settlements
Business accounting

23. Exercise 4C: Registers
Auxiliary variable are used for which of the following in a survey based on a trade in services register?
Trade in services population targeting.
Stratification.
Updating the register.
As a proxy of trade in services data.
Grossing-up of the survey results.

24. Exercise 4D: Legal Framework
The legal framework for trade in services data collection and compilation is intended for which of the following?
Getting access to administrative source, including tax records.
The obligation to report from respondents and the maximisation of the response rate.
Cooperation arrangements between agencies.
Data exchanges by statistical agencies.
Guaranteeing confidentiality.
Identification of respondents.

25. Module 5 Special cases

26. Exercise 5A- Transportation
What is covered under transport
How should transport transactions be classified?
How are freight services (+related insurance) treated in the balance of payments?
How to treat the rental of carriers with crew? And without crew?

27. Exercise 5B- Insurance A life insurance in country X:
Receives premiums from a policy holder in country Y (8 000).
Pays a claim to Y (5 000).
The national domestic insurance ratio of service output to gross premiums is 0.50.
Please, record in the country X and country Y BOP using the following table:

28. Exercise 5B- Insurance

29. Exercise 5C- Construction Recording
How can we consider if a construction company is trading construction services (i.e. in the BoP)?
Should construction services in the BoP be recorded on a net or gross basis?
How should the goods and services purchased within the economy where construction is taking place be recorded?

30. Exercise 5C- Construction Recording
An enterprise in country A undertakes a construction project in country B. The project is a short term project (less than one year).
The total value of the project is 20,000 and the following costs are incurred by the construction enterprise:
Materials purchased in country A: 5,000
Materials, and services and purchased in country B: 10,000
Compensation of employees: 1,000
Profit: 4,000
Please, record these transactions in country A and country B balance of payments using the following table.

31. Exercise 5C- Construction recording

32. Exercise 5D- Merchanting
A merchant in country A purchases goods from an enterprise in country B for an amount of 80 and resells them to a buyer in country C for an amount of 100. Please record this transaction, applying the BPM5 and the BPM6 treatment using the following table.
Physical movement of goods
Ownership of goods
Cash flow
Source of this example : Hidetoshi Takeda-     »Merchanting. Update of the SNA 1993 »
Country B
Country C
Country A

33. Exercise 5D - Merchanting table

34. Exercise 5E- Manufacturing services
Tour de table
Is the processing of goods for non-resident owners important in your country? And if so how could it be identified?
How could the information on the manufacturing fee be collected?
Are there free zones in operation in your country? Are goods entering/leaving the free zones recorded in the merchandises trade statistics?
How could adjustments be made in the BOP to exclude goods crossing the frontier but not changing ownership?

35. Module 6 FATS statistics

36. General questions on FATS
The services produced for the local market by a branch of a foreign service supplier are considered in GATS as delivered through Mode 3 by the foreign owner.
- Why are these services not measured in BOP statistics?
- Which statistical framework would permit to measure the value of these services?
What are the core variables to be used for FATS measuring?

37. Exercise 6A- inward FATS
The following diagram describes a FDI relationship with companies located in USA, in Netherlands and in France.
Please, list the population of French companies which would have to be surveyed for inward FATS. Define their immediate parent and their ultimate controlling unit.

38. Exercise 6A- inward FATS
USA
60%
40% 8% B C D
Netherlands
10%
60%
10%
30%
60% E F I G H
France

39. Exercise 6B- Multinational companies
A multinational entreprise is:
An enterprise which makes exports?
An enterprise with one or more affiliates located in foreign countries? 
There are more affiliates than multinational enterprises: True or False?
How many multinational enterprises did the United Nations identify in 2008 ?
800
80 000
800 000

40. Exercise 6C- Direct, indirect control and FATS
Enterprise A in country 1 controls the enterprise B in country 2 (60%) and exerts an influence on the enterprise C of the reporting country 3 (30%). Similarly B exerts an influence on the enterprise C. Does the enterprise C has to report on inward FATS? If your answer is yes, what is the counterpart country? A
Country 1
60% B
30%
Country 2
30% C
Reporting country 3

41. Direct, indirect control and FATS
Reporting country 1
It has been demonstrated that foreign control can be exerted either directly either indirectly. Please determine the (those) enterprise (s) of the reporting economy which is ( are) foreign controlled enterprises and which have to report FATS statistics.
Country 2
90% Y
70% X X1
30%
60% X3 X2