Opinion of the European Central Bank of 10 November 2021 on reporting requirements for cross-border service transactions (CON/2021/31)

OPINION OF THE EUROPEAN CENTRAL BANK of 10 November 2021 on reporting requirements for cross-border service transactions (CON/2021/31) Introduction and legal basis

On 11 October 2021 the European Central Bank (ECB) received a request from the Oesterreichische Nationalbank (OeNB) for an opinion on a balance of payments reporting regulation of the OeNB on the statistical collection of data regarding the provision of cross-border services (hereinafter the ‘draft regulation’) . The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third and fourth indents of Article 2(1) of Council Decision 98/415/EC , as the draft regulation relates to the OeNB and the collection of balance of payments statistics. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

1. Purpose of the draft regulation

1.1 The draft regulation replaces the existing balance of payments reporting regulation of the OeNB on the statistical collection of data governing the provision of cross-border services . The draft regulation implements Article 6 of the Law of 2004 on foreign exchange under which the OeNB is responsible for compiling the Austrian balance of payments, international investment position statistics, direct investment statistics and all statistics regarding cross-border transactions and positions in the context of the abovementioned statistics required by Union law. 1.2 The draft regulation aims to reflect recent developments in cross-border services transactions which have led to increased challenges in the compilation of high-quality balance of payments data. For example, rapid digitalisation combined with an increased trend towards globalisation have resulted in significant cross-border transactions organised through online platforms and businesses accessing wider markets. Better communication and transport have also facilitated the movement of people for the purposes of tourism, migration, employment, and trade. These developments have resulted in a substantial increase in service industries and an unprecedented growth in the volume

of international trade in services. In order to address these issues, the draft regulation aims to collect extended statistical data, while at the same time simplifying reporting obligations in Austria. For example, the direct reporting of card schemes for the purpose of balance of payments statistics is substituted by reliance on statistical data reported for other purposes. To improve the quality of the statistical information compiled in relation to the travel item in Austria, the draft regulation specifies the use of the additional information (merchant codes) provided for in ECB payment statistics. By reorganising the reporting by non-financial businesses for the purposes of external statistics to make use of administrative data, the reporting requirements are eased. In particular, by using VIES data (the Value Added Tax Information Exchange System), the quarterly reporting can be focused on main transactors while the respondents and the thresholds for annual reporting remain unchanged. In this vein, reporting of international services trade in the non-financial sector is separated into quarterly reporting (with a threshold of EUR 5 million) and annual reporting (with a threshold of EUR 500 000), subject to a uniform reporting concept. 1.3 Furthermore, the draft regulation aims to reflect new international legal requirements, specifically Regulation (EU) 2019/2152 of the European Parliament and of the Council , which created a new common legal framework for business statistics focused on three main principles: (1) the use of common methodological principles, definitions and quality criteria; (2) the need for greater flexibility to respond to economic changes and emerging statistical needs; and (3) the identification of crossdomain synergies and simplifications of data requirements to alleviate the burden on businesses. 1.4 Finally, the draft regulation promotes electronic and standardised reporting by requiring all reports to be submitted electronically in accordance with the technical standards prescribed by the OeNB or Statistics Austria, a Federal institution under public law . Furthermore, the draft regulation requires that, whenever data is reported, the content of the report must be structured in line with the specifications that can be accessed on the website of the OeNB or Statistics Austria . Under the current legal framework, reports may still be submitted using printed reporting forms. 1.5 The draft regulation is intended to enter into force on 1 January 2022 and replace the existing reporting regulation on cross-border service transactions .

2. General observations

2.1 A wide range of new applications of information technology in business models and products are transforming the economy and society at a rapid pace. The digitalisation of the economy and society affects the size, composition and way in which services are traded across borders, which poses challenges for collecting data that offers a comprehensive view of cross-border economic activities in balance of payments statistics. In addition, the operations of multinational enterprises with extensive intra-group trade in services, as well as extensive integration in global value chains, imply the need for new alternative data sources for good statistical coverage in balance of

payments statistics. The ECB therefore welcomes the changes introduced by the draft regulation to rationalise and collect extended statistical data for balance of payments, including card-based payments data that provide relevant information such as country details of the transacting parties and merchant category codes. 2.2 The ECB welcomes the fact that the draft regulation aims, inter alia, to reduce the reporting burden on businesses while ensuring that the quality of data and statistics remain at a high level. These aims are in line with the statistical principles underlying European statistics produced by the European System of Central Banks (ESCB) set out in Article 3a of Council Regulation (EC) No 2533/98 , and in particular the principles of minimisation of the reporting burden and high output quality. 2.3 The ECB understands that the draft regulation will not interfere with legal requirements imposed by the ECB in the field of statistics, in particular those set out in Guideline ECB/2011/23 of the European Central Bank on external statistics and Regulation (EU) No 1409/2013 of the European Central Bank (ECB/2013/43) on payment statistics. In this respect, the ECB understands that the OeNB will continue to provide the ECB with the monthly and quarterly data required under Guideline ECB/2011/23. It is further understood that these data will also continue to meet the quality standards set out in Guideline ECB/2011/23 .

This opinion will be published on EUR-Lex.

Done at Frankfurt am Main, 10 November 2021.

[signed]

The President of the ECB

Christine LAGARDE