OECD’s work on setting FDI standards and definitions

1

OECDrsquos work on settingFDI

standards and definitions

By Ayse BertrandInvestment Division OECD

aysebertrandoecdorg

2

OECD involvement in FDI statistics

Part of the mission of the OECD Investment Committeendash Setting international standards and definitions for

FDI statisticsndash FDI data collection and disseminationndash Analysis of FDI trends and developmentsndash Assessing regularly compliance of OECD

members with international standards [IMFOECD SIMSDI]

ndash Developing FDI globalisation indicators ndash Assistance to non-members (as required)

3

OECD Sets international FDI standardsand definitions

OECD Benchmark Definition of Foreign Direct Investmentndash Provides clear orientations to countries to develop

or to improve their FDI statistical systemsndash Improves the basis for economic analysis

particularly for international comparisonndash Offers objective standards for measuring FDI

activity

4

OECD Benchmark Definition

Prepared under the auspices of the OECD Investment Committee

Technical work conducted by the OECD experts of the Workshop of International Investment Statistics ndashWIIS (of the Investment Committee)

BMD first issued in 1983 and revised twice BMD Fourth edition ndash forthcoming in 2008 (1st half)

5

Revision of theBenchmark Definition

Purpose Recommendations The approach Work method Time table Structure

6

Revision of the Benchmark Definition

Purpose How to better meet user requirementsndash To review international statistical standards and

definition to measure FDIndash To bring them into line with the economic and

financial developments since the last revision in 1995

ndash Dichotomy of FDIbull Part of Balance of Payments statistics financial account

bull FDI statistics ndash independent set of statistics (including globalisation indicators)

7


Recommendations BOP related

ndash Only a few changes ndash continuity of historical time seriesndash Useful clarifications of existing concepts and methods

New challenges amp methodologies [developmental work]ndash Mergers and Acquisitions (as type of FDI)

bull Defining MampAs Greenfield investment extension of capitalbull Developing methodology for MampAs resulting from exchange of shares

ndash Developing meaningful presentations of FDI excluding transactions through Special Purpose Entities (SPEs) and other capital in transit

ndash Developing methodology to identify ultimate investingultimate host country

ndash Developing methodology to identify round-tripping of transactionsndash Research agenda with other items

8


The approachndash 1048766 Wide international co-operation

bull IMFOECD DITEGbull Timely co-ordination of outcomes information etc between IMF

BOPCONM and OECD WIIS

ndash 1048766 Transparency of documents discussionsbull Issues papersbull Background documentsbull Outcome papers

ndash 1048766 Focus on user requirementsbull OECD Investment Committee and its Secretariatbull UNCTAD and other international and national entities

9


Working methodUnder the general supervision of WIIS

ndash 1048766 OECD Benchmark Advisory Group (BAG)bull 1048766 Drafting group of WIIS to assist the Secretariat

bull 1048766 Held 3 meetings (April and November 2005 April 2006)

bull 1048766 Expected to hold 2 more meetings (March and October 2007)

ndash 1048766Project groups (focus on new recommendations)bull SPEs

bull Ultimate investinghost economy

bull Mergers and acquisitions

bull Income

10


1048766 Very tight calendar (extended by one year)bull Basic recommendations 1st drafts to be approved by OECD

WIIS ndashend 2006

bull New recommendations to be developed in 2006-2007ndash SPEsndash UICUHCndash MampAs

bull All texts to be approved (including new recommendations) in Oct 2006 by WIIS

bull Approval by the OECD Investment Committee ndash End 2007

bull Approval by the OECD Council ndash 2008 -1st half 2007

bull Publication ndash 1st half 2008

11


Contents1) Introduction2) Uses of FDI statistics3) Main concepts and definitions4) Scope of FDI5) Measuring FDI6) Special entities7) Country attribution and industry classification8) FDI and Globalisation9) Annexes10) Bibliography11) Glossary12) Index

12


Annexesi List of methodological changes from BMD 3rd editionii Standard presentation of FDI statisticsiii List of borderline casesiv Framework for direct investment relationshipv Valuation of unlisted equityvi Reinvested earningsvii SPEsviii Collective investment instrumentsix MampAsx Ultimate hostinvesting countryxi Currency Unionsxii Reporting methods data confidentiality data transmissionxiii Research agendaxiv OECD Council recommendation

13

Thank you

Ayse Bertrand

Manager International Investment Statistics

Investment Division

Directorate for Financial and Enterprise Affairs

Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34

E-mail aysebertrandoecdorg

2

OECD involvement in FDI statistics

Part of the mission of the OECD Investment Committeendash Setting international standards and definitions for

FDI statisticsndash FDI data collection and disseminationndash Analysis of FDI trends and developmentsndash Assessing regularly compliance of OECD

members with international standards [IMFOECD SIMSDI]

ndash Developing FDI globalisation indicators ndash Assistance to non-members (as required)

3





activity

4





5



6







7









8







9









bull Income

10



WIIS ndashend 2006






11



12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


3





activity

4





5



6







7









8







9









bull Income

10



WIIS ndashend 2006






11



12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


4





5



6







7









8







9









bull Income

10



WIIS ndashend 2006






11



12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


5



6







7









8







9









bull Income

10



WIIS ndashend 2006






11



12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


6







7









8







9









bull Income

10



WIIS ndashend 2006






11



12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


7









8







9









bull Income

10



WIIS ndashend 2006






11



12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


8







9









bull Income

10



WIIS ndashend 2006






11



12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


9









bull Income

10



WIIS ndashend 2006






11



12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


10



WIIS ndashend 2006






11



12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


11



12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


12



13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


13

Thank you

Ayse Bertrand


Investment Division


Tel 33 1 45 24 91 24

Fax 33 1 45 24 13 34


OECD’s work on setting FDI standards and definitions

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