Foreign Bank Accounts and Foreign Intercompany Accounts

Transcription

1 Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters Centrale Bank van Aruba March 2013 Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 0

2 Table of Contents Preface Overview Introduction Legal basis Reporting frequency FBA and FIA reporting forms.3 2. FBA and FIA reporting forms General information on the reporting resident company Input sheet for account balances Input sheet for transactions Example of completed FBA and FIA reporting forms Annexes 1. FBA and FIA reporting forms A. Transaction code list B. Definition of code list Country codes Currency codes Notification form - Foreign Assets and Liabilities Accounts Decree on Balance of Payments Reporting Instructions Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 1

3 Preface Foreign Bank Accounts and Foreign Intercompany Accounts: Guide for reporters (the Guide) is designed to assist the reporters responsible for completing the quarterly foreign bank account(s) (FBA) and foreign intercompany account(s) (FIA) reporting forms (FBA and FIA reporting forms) for the Centrale Bank van Aruba (CBA). The Guide, which contains main text, tables, and annexes, focuses on the practical issues associated with implementing the reporting instructions related to the notified FBAs and FIAs as stipulated in the Decree on Balance of Payments Reporting Instructions 2013 (Decree RI 2013). The Guide has been prepared by the CBA s Statistics Department. The use of this guide by reporters is strongly recommended to help them adequately complete the required FBA and FIA reporting forms, thereby providing the required information for compiling Aruba s balance of payments statistics. This Guide also is available on the CBA website at For additional information regarding the Guide, please contact the Statistics Department via its address: statistics.department@cbaruba.org. Correspondence related to the Guide should be addressed to the Statistics Department of the Centrale Bank van Aruba: J.E. Irausquin Boulevard 8 P.O. Box 18 Telephone: (297) Telefax: (297) Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 2

4 1. Overview 1.1 Introduction Resident companies must report to the CBA all transactions with nonresidents settled through a Foreign Bank Account (FBA) or a Foreign Intercompany Account (FIA), using the FBA and FIA reporting forms (see Annex 1). These forms must be appropriately completed to ensure the quality and completeness of the balance of payments statistics for Aruba because the mentioned transactions are not completely captured in the monthly foreign exchange reports of the local foreign exchange banks to the CBA. 1.2 Legal basis The legal reporting obligation of the mentioned residents is based on article 8 of the State Ordinance Foreign Exchange Transactions (SOFET) and the Decree on Balance of Payments Reporting Instructions 2013 (Decree RI 2013), which grant the CBA the authority to issue administrative instructions to obtain information for compiling Aruba s balance of payments. For details on the balance of payments reporting instructions, refer to Annex 6. The SOFET and the Decree RI 2013 are available on the CBA website. 1.3 Reporting frequency The completed FBA and FIA reporting forms must be submitted to the CBA on a quarterly basis no later than one month after the end of the calendar quarter via the address: reports@cbaruba.org 1.4 FBA and FIA reporting forms The FBA and FIA reporting forms are available on the CBA website. The FBA and FIA reporting forms consist of the following sheets: 1. Respondent identification sheet; 2. Input sheet for account balances; and 3. Input sheet for transactions. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 3

5 2. FBA and FIA reporting forms 2.1 General information on the reporting resident company The general information on the reporting resident company must be inserted on this sheet. This information consists of the name of the reporting resident company, the unique reporter code, mailing address and visiting address of the reporting resident company, the name, telephone/fax number, and address of a contact person and/or a representative appointed by the reporting resident company. Table 1 shows the respondent identification sheet. Table 1 Foreign Bank Accounts (FBA) and Foreign Intercompany Accounts (FIA) registration form - Respondent identification Name Mailing address Visiting address Name of the reporting resident company Unique reporter code Address Postal code City Country Address Country Name Contact person 1/ Position of representative of company completing the form Contact person at the Telephone number reporting resident company Fax number address Contact person 2/ Representative assigned by the reporting resident company to complete this form Name Position of person completing the form Telephone number Fax number address Definition Name The name of the reporting resident company must be the legal name as registered at the Chamber of Commerce and Industry in Aruba. The unique reporter code is the code given to the reporting resident company after the CBA has assigned the reporting resident company as a reporter. This code starts with an X followed by a number of three or more digits. Mailing address This is the mailing address of the reporting resident company and/or the representative appointed by the reporting resident company. Visiting address This is the visiting address of the reporting resident company and/or the representative appointed by the reporting resident company. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 4

6 Contact person 1 A person (for example, a manager or a chief financial officer) assigned by the reporting resident company who should be contacted in case questions arise concerning the submitted reporting forms. Contact person 2 A representative appointed by the reporting resident company to complete the FBA and FIA reporting forms. 2.2 Input sheet for account balances On the input sheet for account balances, the reporting resident company must report the balances of all its notified FBAs and FIAs. Even if no transaction took place in the reporting period and the account balances (opening and closing) of the respective account have not changed during this period, the reporting forms must be submitted to the CBA. Table 2 shows an overview of the input sheet for account balances. Table 2 FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance xxxx xxxx FA Type AccType FBA: CUA (current account) Reporter CHK Currency (checking account) Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance xxxx xxxx INC (interest checking account) SAV (savings account) TDA (time-deposit account) FA Type AccType Reporter OTA Currency (other type Period account) Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance xxxx xxxx FIA: DSA (debt securities assets) DSL (debt securities liabilities) LOA (intercompany loans assets) FA Type AccType Reporter LOL Currency (intercompany Period loans liabilities) Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance xxxx xxxx TCA (trade credit assets) TCL (trade credit liabilities) TAA (trade advances assets) FA Type AccType Reporter TAL Currency (trade advances Period liabilities) Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance ARP (accounts receivable/payable) xxxx xxxx FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance xxxx xxxx Definition Foreign Account (FAType) Indicate the type of the foreign account held by the reporting resident company, i.e., a Foreign Bank Account (FBA) or a Foreign Intercompany Account (FIA). Account type (AccType) Indicate the type of FBA, i.e., current account (CUA), checking account (CHK), interest checking account (INC), savings account (SAV), time deposit account (TDA), other type account (OTA), and the type of FIA, i.e., debt securities assets (DSA), debt securities liabilities (DSL), intercompany loans assets (LOA), intercompany loans liabilities (LOL), trade credit assets (TCA), trade credit liabilities (TCL), trade advances assets (TAA), trade advances liabilities (TAL), and accounts receivable /payable (ARP). Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 5

7 Reporter Fill in the unique reporter code assigned to the reporting resident company. For example, Buchi Beach N.V. has been assigned the unique reporter code X001. For inquiries regarding the reporter code, please contact the CBA s Statistics Department via its address: statistics.department@cbaruba.org. Currency The currency code refers to the currency in which the notified FBAs and/or FIAs are denominated. See Annex 4 for the currency codes, with the description of the currency and the jurisdiction (country names) that must be used. Period The period refers to the reporting quarter. For example, Mar-12 refers to the first quarter of 2012, Jun-12 refers to the second quarter of 2012, Sep-12 refers to the third quarter of 2012, and Dec-12 refers to the fourth quarter of Please note that only the first three letters of the month of the calendar quarter must be used. Bank Company Name For a resident FBA holder, the name of the foreign bank and the last six digits of the foreign bank account must be reported. For example, Buchi Beach N.V. (X001) has a US dollar current account at Bank of America in the U.S.A., with account number and an ANG time-deposit account at MCB Bank in Curacao with account number The input sheet for account balances for the third quarter of 2012 must be completed as follow: FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance FBA CUA X001 USD Sep-12 Bank of America FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance FBA TDA X001 ANG Sep-12 MCB Bank The name of the nonresident affiliated enterprise with which the FIA is held must be reported for a resident FIA holder. For example, Buchi Beach N.V. (X001) has an account payable denominated in Euro with Buchi Beach B.V. in the Netherlands, and a loan liability denominated in US dollars with its parent company Buchi Beach Inc. in the U.S.A. The input sheet for account balances must be completed as follow. FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance FIA ARP X001 EUR Sep-12 Buchi Beach B.V FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance FIA LOL X001 USD Sep-12 Buchi Beach Inc Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 6

8 OpeningBalance The opening balance is the position at the beginning of the reporting period. The opening balance of a quarter must be equal to the closing balance of the previous quarter. The opening balances of the foreign bank account and foreign intercompany account must be derived from, respectively, the foreign bank account statement and the company general ledger. For the resident FBA holder, the following applies when reporting the opening and closing balance: Plus sign (+) indicates a credit balance on the foreign bank statement; and Minus sign (-) indicates an overdraft and corresponds with a debit balance on the foreign bank statement. For the resident FIA holder, the following applies when reporting the opening and closing balance: Plus sign (+) balance indicates a claim on the nonresident affiliated company; and Minus sign (-) balance indicates a liability to the nonresident affiliated company. TotalDebits The total of debit transactions effectuated through an FBA or an FIA during the reporting period. TotalCredits The total of credit transactions effectuated through an FBA or an FIA during the reporting period. ClosingBalance The closing balance is the position at the end of the reporting period. The closing balance can also be calculated as a result of the Opening balance + Total debits Total credits. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 7

9 2.3 Input sheet for transactions In the input sheet for transactions, the reporting resident company must report all transactions effectuated through the notified FBA and/or FIA during the reporting period. If no transaction took place in the reporting period and the account balances (opening and closing) of the respective account have not changed, the reporting forms still must be submitted to the CBA. Table 3 shows an overview of the input sheet for transactions. Table 3 FA Type AccType Reporter Currency Period Bank_Company_Name Transactioncodes Countrycode Debit Credit Description Definition For the definition of the variables in the input sheet for transactions, i.e., FA Type, Acc Type, Reporter, Currency, Period, Bank_Company_Name, please refer to the definition of these variables in paragraph 2.2 (Input sheet for account balances). Transaction codes The transaction code list consists of several transaction codes. Each code refers to a specific type of transaction (see Annex 2A). The reporting resident company must use the transaction code list when completing its quarterly FBA and FIA reporting forms. Transactions must be aggregated when the nature of the transactions is the same. Countrycode The country code refers to the country where the nonresident counterpart of the reporting resident company is established. The country code list consists of country codes with the country names that must be used for each transaction or aggregated transactions with the same transaction code (see Annex 3). Debit A debit entry refers to the amount of debit transactions in the currency in which the FBA and/or FIA is denominated. The transactions must be derived from, respectively, the foreign bank account statement or the company general ledger. FBA: Debit transactions refer to: Inflow of funds on the foreign bank account. FIA: Debit transactions refer to: Transactions that lead to an increase in the foreign intercompany claim. Transactions that lead to a decrease in the foreign intercompany liability. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 8

10 Credit A credit entity refers to the amount of credit transactions denominated in the indicated currency. The transactions must be derived from, respectively, the foreign bank account statement and the company general ledger. FBA: Credit transactions refer to: Outflow of funds on the foreign bank account. FIA: Credit transactions refer to: Transactions that lead to a decrease in the foreign intercompany claim. Transactions that lead to an increase in the foreign intercompany liability. Description A brief description of the nature of the transaction must be given in this column. For details on the nature of the transaction and definition, refer to the transaction code list (see Annexes 2A and 2B). Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 9

11 3. Example of completed FBA and FIA reporting forms The following example illustrates how transactions must be reported on the FBA and FIA reporting forms. Example Reporting resident company Buchi Beach N.V. has notified the following FBAs and FIAs to the CBA through the attached (Annex 5) Notification form - Foreign Assets and Liabilities Accounts (Notification form - FALAs). FBAs: FIAs: US dollar current account (CUA) at Bank of America, account number: ANG time-deposit (TDA) at MCB Bank, account number: Accounts payable (ARP) denominated in Euros with Bucuti Beach B.V. (parent company of Buchi Beach Inc.) established in the Netherlands (NL). Loan liability (LOL) denominated in US dollars with its parent company Buchi Beach Inc. established in the USA (US). Accounts receivable (ARP)denominated in US dollars with Buchi Beach Resort Corporation established in Puerto Rico (PR). Balances of the FBAs and FIAs at the beginning of the third quarter of 2012: FBAs: Current account at Bank of Amerika: USD Time-deposit at MCB Bank: ANG (5%) FIAs: Accounts payable with Bucuti Beach B.V.: EUR (3%) Loan liability with Buchi Beach Inc.: USD (10%) Accounts receivable with Buchi Beach Resort Corporation: USD Conversion rate during the quarter: AWG 2.50 = Eur 1 USD 1.40 = Eur 1 Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 10

12 The following transactions were settled during the third quarter of 2012 (Sep-12). 1. Transfers in the amount of USD from the resident current account of Buchi Beach N.V. held at a local bank to its FBA held at Bank of America. 2. Transfers in the amount of Eur from the resident current account of Buchi Beach N.V. held at a local bank to pay off its accounts payable held with Buchi Beach B.V. 3. Transfers in the amount of USD received on the FBA of Buchi Beach N.V. held at Bank of America from Hotel.com regarding hotel bookings of several nonresidents. 4. Tranfers from the FBA of Buchi Beach N.V. held at Bank of America to pay off its loan liability to Buchi Beach Inc. in the amount of USD Interest accrued booked on the accounts payable held with Buchi Beach B.V.: 3% x Eur =Eur per year (Eur per quarter) 6. Interest accrued booked on the loan held with Buchi Beach Inc.: 10% x USD = USD per year (USD per quarter) 7. Interest accrued on the time-deposit held at MCB Bank: 5% x USD = USD per year (USD per quarter) 8. Management fees of USD charged by Buchi Beach B.V. to Buchi Beach N.V. (Please note that this entry implies a new intercompany account held between Buchi Beach B.V. and Buchi Beach N.V. denominated in another foreign currecy, in this case USD. This new intercompany account must be notified to the CBA through the Notification form Foreign Assets and Liabilities Accounts ( Notification form FALAs). 9. Goods purchased by Buchi Beach B.V. on behalf of Buchi Beach N.V. for Eur Settlement of USD (Eur ) between the accounts receivable held with Buchi Beach Resort Corporation and the accounts payable held with Buchi Beach B.V. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 11

13 Following is an example of how the account balances and transactions should be reported to the CBA. Input sheet for account balances: FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance FBA CUA X001 USD Sep-12 Bank of America ,100, , , ,350, FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance FBA TDA X001 ANG Sep-12 MCB Bank ,000, , ,062, FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance FIA ARP X001 EUR Sep-12 Buchi Beach B.V. (2,000,000.00) 744, , (1,310,715.00) FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance FIA LOL X001 USD Sep-12 Buchi Beach Inc. (10,000,000.00) 400, , (9,850,000.00) FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance FIA ARP X001 USD Sep-12 Buchi Beach Resort Corporation 3,000, ,000, ,000, FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance FIA ARP X001 USD Sep-12 Buchi Beach N.V , (100,000.00) New intercompany account that needs to be notified to the CBA, through the Notification form - FALAs. Input sheet for transactions: Transactions: FA Type AccType Reporter Currency Period Bank_Company_Name Transactioncodes Countrycode Debit Credit Description 1 FBA CUA X001 USD Sep-12 Bank of America US 50, Transfer from AUA to FBA 3 FBA CUA X001 USD Sep-12 Bank of America US 600, Toerism (hotel reservation) 4 FBA CUA X001 USD Sep-12 Bank of America US 400, Transfer from FBA to pay off loan with Buchi Beach INC FA Type AccType Reporter Currency Period Bank_Company_Name Transactioncodes Countrycode Debit Credit Description 7 FBA TDA X001 ANG Sep-12 MCB Bank CW 62, Interest FA Type AccType Reporter Currency Period Bank_Company_Name Transactioncodes Countrycode Debit Credit Description 2 FIA ARP X001 EUR Sep-12 Buchi Beach B.V NL 30, Transfer from AUA to FIA 10 FIA ARP x001 EUR Sep-12 Buchi Beach B.V NL 714, Settlement with Buchi Beach Resort Corporation 9 FIA ARP x001 EUR Sep-12 Buchi Beach B.V NL 40, Goods 5 FIA ARP x001 EUR Sep-12 Buchi Beach B.V NL 15, Interest on intercompany FA Type AccType Reporter Currency Period Bank_Company_Name Transactioncodes Countrycode Debit Credit Description 4 FIA LOL X001 USD Sep-12 Buchi Beach Inc US 400, Pay off of loan by Buchi Beach N.V. from FBA 6 FIA LOL X001 USD Sep-12 Buchi Beach Inc US 250, Interest on intercompany FA Type AccType Reporter Currency Period Bank_Company_Name Transactioncodes Countrycode Debit Credit Description 10 FIA ARP X001 USD Sep-12 Buchi Beach Resort Corporation 5555 PR 1,000, Settlement with Buchi Beach B.V. FA Type AccType Reporter Currency Period Bank_Company_Name Transactioncodes Countrycode Debit Credit Description 8 FIA ARP X001 USD Sep-12 Buchi Beach B.V US 100, Management fees Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 12

14 Annex 1: FBA and FIA reporting forms Sheet 1: General information of the reporting resident company Sheet 2: Input sheet for account balances FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance xxxx xxxx FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance xxxx xxxx FA Type AccType Reporter Currency Period Bank_Company_Name OpeningBalance TotalDebits TotalCredits ClosingBalance xxxx xxxx Sheet 3: Input sheet for transactions FA Type AccType Reporter Currency Period Bank_Company_Name Transactioncodes Countrycode Debit Credit Description Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 13

15 Annex 2A: Transaction code list 1. GOODS 1010 Consumer goods 1020 Investment goods 1031 Oil products 1050 Goods procured in ports by carriers 1070 Free-zone merchandise trade 1071 Re-exports other sector 1080 Goods acquired and sold under merchanting 2. SERVICES 1111 Sea transport passengers 1112 Sea transport freight 1113 Sea transport other 1121 Air transport passengers 1122 Air transport freight 1123 Air transport other 1211 Travel transfers for the purpose of vacations or business by means of travelers check or wire transfers 1212 Travel transfers for the purpose of vacations or business by means of credit cards 1231 Travel transfers for the purpose of vacations or business by means of cash 1240 Travel transfers for health-related purpose 1250 Travel transfers for education-related purpose 1310 Government goods and services 1320 Government tourism-related services 1401 Manufacturing services related to goods for processing in reporting economy Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 14

16 1402 Manufacturing services related to goods for processing abroad 1404 Maintenance and repair services n.i.e Telecommunication, computer, and information services 1420 Construction services abroad 1421 Construction services in reporting economy 1440 Financial services 1460 Other business services 1470 Insurance and pension services 1481 Charges for the use of intellectual property n.i.e Personal, cultural, and recreational services 3. PRIMARY INCOME 3.1 Compensation of employees 1510 Compensation of employees 3.2 Direct investment income 1520 Dividends and distributed profits 1521 Interest on intercompany lending 1523 Income related to real estate 1524 Income related to time shares 3.3 Portfolio investment income 1530 Income on equity investment 1531 Interest on long-term debt securities (bonds and notes) 1532 Interest on short-term debt securities (money market instruments) 3.4 Other investment income 1540 Interest on deposits 1542 Interest on loans Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 15

17 4. SECONDARY INCOME 4.1 Government sector 1610 Social contributions 1630 Social benefits 1640 Current taxes on income, wealth, etc Current international cooperation 1660 Other government transactions 4.2 Other sectors 1710 Workers remittances 1720 Other transfers 1730 Non-life insurance premiums 1731 Claims paid-out from non-life insurance 5. CAPITAL ACCOUNT 5.1 Government sector 2012 Capital grants 2031 Other capital transactions of the government 5.2 Other sectors 2120 Other capital transfers by other sectors 5.3 Other capital account transactions 2130 Acquisition/disposal n.p.,n.f.a. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 16

18 6. DIRECT INVESTMENT Net acquisition of financial assets 2211 Equity capital 2212 Intercompany lending extended to a foreign direct investment enterprise 2213 Real estate 2214 Other intercompany lending extended to a foreign direct investment enterprise 2216 Time share with ownership aspect 2219 Trade credits extended to a foreign direct investment enterprise 2227 Intercompany lending extended to a foreign direct investor or a foreign fellow enterprise 2228 Other intercompany lending extended to a foreign direct investor or a foreign fellow enterprise 2229 Trade credits extended to a foreign direct investor or a foreign fellow enterprise 2231 Debt securities issued by a foreign direct investment enterprise 2241 Debt securities issued by a foreign direct investor or a foreign fellow enterprise Net incurrence of liabilities 2217 Intercompany lending received from a foreign direct investment enterprise 2218 Other intercompany lending received from a foreign direct investment enterprise 2220 Trade credits received from a foreign direct investment enterprise 2221 Equity capital 2222 Intercompany lending received from a foreign direct investor or a foreign fellow enterprise 2223 Real estate 2224 Other intercompany lending received from a foreign direct investor or a foreign fellow enterprise 2226 Time share with ownership aspect 2230 Trade credits received from a foreign direct investor or a foreign fellow enterprise 2240 Debt securities held by a foreign direct investment enterprise 2242 Debt securities held by a foreign direct investor or a foreign fellow enterprise Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 17

19 7. PORTFOLIO INVESTMENT Net acquisition of financial assets 2320 Equity 2321 Debt securities Long-term 2322 Debt securities Short-term Net incurrence of liabilities 2310 Equity 2311 Debt securities Long-term 2312 Debt securities Short-term 8. OTHER INVESTMENT Net acquisition of financial assets 2520 Loans extended/ receipt of payments with an original maturity 1 year 2531 Trade credit receipts/advance payments 2540 Loans extended/ receipts of payments with an original maturity > 1 year 2550 Other financial assets transactions 2570 Transactions related to a life insurance contract with a nonresident company Net incurrence of liabilities 2420 Loans received/ repayments with an original maturity 1 year 2431 Trade credit payments/ advance receipts 2440 Loans received/ repayments with time of maturity > 1 year 2450 Other financial liabilities transactions 2470 Transactions related to a life insurance contract with a reporting resident company Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 18

20 9. NEUTRAL CODES 5255 Transfers between a local commercial bank account (LCB) and a foreign investment account Transfers between a local commercial bank account (LCB) and a foreign intercompany account (FIA) Transfers between a local commercial bank account (LCB) and a foreign bank account (FBA) Transfers between the foreign accounts, that are the FBA(s) and FIA(S). Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 19

21 Annex 2B: Definition of code list 1. GOODS 1010 Consumer goods Goods whose economic ownership is changed between a resident and a nonresident and are purchased for consumption, excluding items included under code 1031 and code Examples of consumer goods are: Food, clothing, medicaments, and so forth; Bank notes and coins not in circulation; Noncustomized packaged software (for example, Microsoft Office); and Goods traded in accordance with barter agreements Investment goods Investment goods are goods whose economic ownership is changed between a resident and a nonresident and that have a physical substance, a life in excess of one year, and are bought for the operation of the business, not intended for resale to customers, and are subject to depreciation. Examples of investment goods are: Machinery; Plants; and Heavy equipment Oil products Oil products are goods whose economic ownership is changed between a resident and a nonresident and cover materials derived from petroleum, natural gas, or asphalt. These goods include gasoline, diesel, fuels, liquefied petroleum gases (LPG and bugas), lubricants, waxes, greases, petroleum coke, petrochemicals, and sulfur Goods procured in ports by carriers Goods procured in ports by carriers are goods such as fuels (bunkering), provisions, stores, ballast, and dunnage. When these goods are obtained from resident providers by nonresident transport operators in ports, they should be included in exports. When these goods are obtained from nonresident providers by resident transport operators in ports they should be included in imports. Ports are defined as ocean or sea terminals or airports Free-zone merchandise trade This trade consists of import, export, and re-export of goods by resident free-zone companies Re-exports other sector These are foreign goods (goods produced in other economies and previously imported) that are exported with no substantial transformation from the state in which they were previously imported Goods acquired and sold under merchanting Goods acquired by a resident (should be recorded as a minus debit entry) from a nonresident and subsequently sold to nonresidents (should be recorded as a debit entry), without the same goods being present in the compiling economy. Merchanting is used for wholesaling and retailing. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 20

22 2. SERVICES 1111 Sea transport passengers This category covers all sea services provided in the international transport of nonresidents by resident carriers (debit) and that of residents by nonresident carriers (credit). The valuation of passenger transport by sea should include fees payable by the carriers to travel agencies and other providers of reservation services. Also included are rentals, charters and leases of vessels or other commercial vehicles with crews for the carriage of passengers. Excluded are rentals or charters that are financial leases (included in loan) and rentals and time charters without crew (included in operating lease). Also excluded are cruise fare, which is included in travel Sea transport freight Sea freight services cover the transport by sea of objects other than people. In addition to freight on exports and imports, freight transport services may relate to goods where there is no change of ownership, such as goods sent for storage or processing Sea transport other Other sea transport services include services that are auxiliary to sea transport and not directly provided for the movement of goods and persons. This category includes cargo handling charges separate from freight, storage and warehousing, packing and repacking. Postal and courier services are also included. These cover pickup, transport and delivery of letters, newspapers, periodicals, brochures, other printed matter, and parcels. Also included are post office counter services such as sales of stamps and money orders, telegram services and so forth as well as door-to door delivery Air transport passengers This category covers all air services provided in the international transport of nonresidents by resident carriers (debit) and that of residents by nonresident carriers (credit). The valuation of passenger transport by air should include fees payable by the carriers to travel agencies and other providers of reservation services. Also included are rentals, charters and leases of vessels or other commercial vehicles with crews for the carriage of passengers. Excluded are rentals or charters that are financial leases (included in loan) and rentals and time charters without crew (included in operating lease) Air transport freight Air freight services cover the transport by air of objects other than people. In addition to freight on exports and imports, air freight transport services may relate to goods where there is no change of ownership, such as goods sent for storage or processing Air transport other Other transport services include services that are auxiliary to transport and not directly provided for the movement of goods and persons. This category includes cargo handling charges separate from freight, storage and warehousing, packing and repacking. Postal and courier services are also included. These cover pickup, transport, and delivery of letters, newspapers, periodicals, brochures, other printed matter, and parcels. Also included are post office counter services such as sales of stamps and money orders, telegram services and so forth as well as door-to door delivery. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 21

23 1211 Travel transfers for the purpose of vacations or business by means of travelers check or wire transfers Travel debits cover goods and services acquired by a nonresident from an economy during visits to that economy by means of travelers check, wire transfers, and so forth. Travel credits cover goods and services acquired by a resident going abroad by means of travelers check, wire transfers, and so forth. Examples Items acquired for personal use when the primary purpose of travel is for business. Items acquired for one s own use or to give away by a person when the purposes of travel are vacations, participation in recreational and cultural activities, visits with friends and relatives, pilgrimages, and so forth Travel transfers for the purpose of vacations or business by means of credit cards 1231 Travel transfers for the purpose of vacations or business by means of cash 1240 Travel transfers for health-related purpose Total expenditures by person going abroad for medical reason, such as medical services, other health care, food, accommodation, local transport, etc Travel transfers for education-related purpose Total expenditures by person going abroad for educational purposes, such as educational tuition, food, accommodation, local transport, etc Government goods and services These cover goods and services supplied by and to enclaves, such as embassies, military bases, and international organizations. They are acquired from the host economy by diplomats, consular staff, and military personnel located abroad and their dependents Government tourism-related services This category includes transfers from the government sector to tourism promotion offices abroad Manufacturing services related to goods for processing in reporting economy Manufacturing services cover processing, assembling, labeling, and packing undertaken by enterprises that do not own the goods concerned. These services should be undertaken in the reporting economy by a resident enterprise. These include oil refining, liquefaction of natural gas, assembly of clothing and electronics, labeling and packing Manufacturing services related to goods for processing abroad Manufacturing services cover processing, assembling, labeling, and packing undertaken by enterprises that do not own the goods concerned. These services should be undertaken abroad by a nonresident enterprise. These include oil refining, liquefaction of natural gas, assembly of clothing and electronics, labeling and packing Maintenance and repair services n.i.e. Maintenance and repair services n.i.e. cover both minor repairs that maintain the goods in working order and major repairs that extend the efficiency or capacity of the goods. These goods are owned by nonresidents. Repairs and maintenance on ships, aircraft, and other transport equipment are included under this item. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 22

24 1410 Telecommunication, computer, and information services Telecommunication services encompass the broadcast or transmission of sound, images, data, or other information by telephone, telex, telegram, radio and television cable transmission, radio and television satellite, electronic mail, facsimile, and so forth. Also included are business network services, teleconferencing, and support services, mobile telecommunication services, and customized packaged software Construction services abroad Construction work for nonresidents by enterprises resident in the compiling economy Construction services in reporting economy Construction work for residents of the compiling economy by nonresident construction enterprises Financial services These services include those usually provided by banks and other financial corporations and include deposit taking and lending services, letters of credit, credit card services, commissions and charges related to financial leasing, factoring, underwriting, and clearing of payments. Also included are financial advisory services, custody of financial assets, financial asset management, monitoring services, liquidity provision services, risk assumption services other than insurance, merger and acquisition services, credit rating services, stock exchange services, and trust services Other business services Items included in other business services are: Research and development services, associated with basic research, applied research, and experimental development of new products and processes; Professional and management consulting, which includes: 1. Legal services, accounting, management consulting, managerial services, and public relations services; 2. Advertising, market research, and public opinion polling services. Technical, trade-related, and other business services, which include: 1. Architectural, engineering, and other technical services; 2. Operating leasing services cover leasing (rental) and charters, without crew, of ships, aircraft, and transport equipment, such as railway, cars, containers, and rigs without crew, operating lease payments related to other types of equipment without an operator, including computers and telecommunications equipment; and 3. Trade-related services that cover commissions on good service transactions payable to merchants, commodity brokers, dealers, auctioneers, and commission agents; and Other business services n.i.e Insurance and pension services Includes insurance and pension services fee and excludes premium charges and paying claims Charges for the use of intellectual property n.i.e. Franchise fees, trademark revenue, payments for the use of brand names and so forth include aspects of property income as well as aspects of services. The payments made by the licensee to the owner may be described in various ways, such as fees, commissions, or royalties Personal, cultural, and recreational services Personal, cultural, and recreational services consist of audiovisual and related services and other recreational services, which include fees related to the production of motion pictures, radio and television programs, and musical recording. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 23

25 3. PRIMARY INCOME 3.1 Compensation of employees 1510 Compensation of employees Compensation of employees is the total remuneration in cash or in kind payable by resident enterprises to nonresident employees in return for work done by the latter during the accounting period. For the economy where the individuals are resident, it is the total remuneration in cash or in kind received by them from nonresident enterprises in return for work done during the accounting period. 3.2 Direct investment income 1520 Dividends and distributed profits Dividends are the distributed earnings allocated to the owners of equity for placing funds at the disposal of corporations Interest on intercompany lending Interest accrual on intercompany lending granted (assets) or received (liabilities) is determined by applying the relevant interest rate as specified in the contractual arrangements between parties to the amount of the outstanding loan Income related to real estate This category is Income associated with the return for providing financial assets (real estate). Debit entries reflect income receivable by the compiling economy, and credit entries reflect income payable by the compiling economy Income related to time shares This is income associated with the return for providing financial assets (time-share accommodations with ownership aspect). Debit entries reflect income receivable by the compiling economy, and credit entries reflect income payable by the compiling economy. Maintenance fee should be included under this heading. 3.3 Portfolio investment income 1530 Income on equity investment Income (dividend) arising from the holding of issuing of equity securities (share, stock) Interest on long-term debt securities (bonds and notes) Income (interest) arising from the holding of issuing of long-term debt securities (share, stock) Interest on short-term debt securities (money market instruments) Income (interest) arising from the holding of short-term debt securities (money market instruments). 3.4 Other investment income 1540 Interest on deposits Debit entries on interest on deposits reflect income receivable by the compiling economy, and credit entries reflect income payable by the compiling economy. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 24

26 1542 Interest on loans Debit entries on interest on loans reflect income receivable by the compiling economy, and credit entries reflect interest payable by the compiling economy. 4. SECONDARY INCOME 4.1 Government sector 1610 Social contributions Social contributions are the actual contributions made by resident households to social insurance schemes nonresident so that social benefits can be paid. Social insurance schemes include social security schemes (which cover the entire community or large sections of it and are imposed, controlled, and financed by government) and employment-related schemes (including funded and unfunded pension schemes). Social contributions in the international accounts are recorded when a resident makes contributions to social security and pension schemes in another economy for his or her employment in that economy, or an employer makes actual contributions on behalf of the employee. Similarly, social contributions are recorded when a nonresident makes social contributions to the resident social security and pension schemes Social benefits Social benefits are benefits payable under social security and pension schemes and include pensions and nonpension benefits regarding events or circumstances such as sickness, unemployment, housing, and education. These benefits may be in cash or in kind. Also included in this category are social benefits payable to households by government units or nonprofit institutions that serve households to meet the same needs as those under social insurance schemes but are not made under a social insurance scheme Current taxes on income, wealth, etc. Current taxes on income, wealth, etc. consist mainly of taxes levied on the income earned by residents from the provision of their labor or financial assets. Taxes on capital gains arising from assets of nonresidents are also included. Taxes on wages and salaries earned by nonresident employees are recorded as payable by the nonresident employees. Taxes on income and capital gains from financial assets can be payable by individuals, corporations, nonprofit institutions, governments, and international organizations Current international cooperation Current international cooperation consists of current transfers in cash or in kind between the governments of different countries or between governments and international organizations. These transfers include: (a) transfers between governments that are used by the recipients to finance current expenditures, including emergency aid after natural disasters; they include in-kind transfers in the form of food, clothing, blankets, medicines, and so forth; (b) annual or other regular contributions paid by member governments to international organizations (excluding taxes payable to supranational organizations) and regular transfers made as a matter of policy by the international organizations to governments (for the treatment of capital contributions); and (c) payments by governments or international organizations to cover the salaries of those technical assistance staff who are deemed to be resident in the economy in which they are working and who are in an employer-employee relationship with the host government. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 25

27 1660 Other government transactions Other government current transfers include transactions in cash or in kind, other than those used in the previous code for current transfers-government sector. 4.2 Other sectors 1710 Workers remittances Workers remittances include only those transfers abroad made by workers who are residents of the economy in which they are employed. Resources may be sent abroad by residents of an economy for the purpose of financing other residents of the same economy who are staying abroad (such as those sent by parents to children who are studying in other territories). These transactions should not be recorded as current transfers, because the parties are residents of the same economy. The expenses abroad constitute a purchase of education services in the case of students Other transfers Other government current transfers include transactions in cash or in kind, other than those used in the previous code for current transfers-other sector Non-life insurance premiums Nonlife insurance premiums consist of both the gross premiums payable by policyholders to obtain non-life insurance. These non-life insurance premiums are meant to protect against various events or accidents resulting in damage to goods or property or harm to persons as a result of natural or human causes fires, floods, crashes, collisions, sinkings, theft, violence, accidents, sickness, and so forth or against financial losses resulting from events such as sickness, unemployment, and accidents Claims paid-out from non-life insurance Non-life insurance claims are the amounts payable in settlement of claims whose premiums become due at the moment when the event occurs that gives rise to a valid claim. 5. CAPITAL ACCOUNT 5.1 Government sector 2012 Capital grants Investment grants consist of capital transfers in cash or in kind made by governments or international organizations to other institutional units to finance all or part of the costs of their acquiring fixed assets. The recipients are other governments. The recipients are obliged to use investment grants received in cash for purposes of gross fixed capital formation, and these grants are often tied to specific investment projects, such as large construction projects Other capital transactions of the government Major nonrecurrent payments in compensation for extensive damages or serious injuries not covered by insurance policies are included in capital transfers. The payments may be awarded by courts of law or by arbitration or settled out of court. They include payments of compensation for damages caused by major explosions, oil spillages, the side effects of pharmaceutical products, and so forth. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 26

28 5.2 Other sectors 2120 Other capital transfers by other sectors Major nonrecurring payments in compensation for extensive damages or serious injuries not covered by insurance policies are included in capital transfers. These payments may be awarded by courts of law or by arbitration or settled out of court. They include payments of compensation for damages caused by major explosions oil spillages, the side effects of pharmaceutical products, and so forth. 5.3 Other capital account transactions 2130 Acquisition/disposal n.p.,n.f.a. Acquisition/disposal nonproduced, nonfinancial assets covers those contracts, leases, and licenses that are recognized as economic assets. These assets are creations of society and its legal system and are sometimes called intangible assets. Examples include marketable operating leases, permissions to use natural resources that are not recorded as outright ownership of those resources, permissions to undertake certain activities (including some government permits), and entitlements to purchase a good or service on an exclusive basis. 6. DIRECT INVESTMENT Net acquisition of financial assets 2211 Equity capital Injection of equity or shares by the reporting resident company in another company that is resident in another economy with the purpose of having a significant degree of influence or control over the management of that company. Note: The definition of having a significant degree of influence on an enterprise is when a resident directly owns a permanent interest equal to 10% or more in a nonresident enterprise Intercompany lending extended to a foreign direct investment enterprise This category refers to intercompany lending extended by the reporting resident company to a nonresident enterprise in which it has a significant degree of influence or control over the management of this nonresident enterprise (foreign direct investment) Real estate Purchases of a land or building located in a different economy by the reporting resident company Other intercompany lending extended to a foreign direct investment enterprise Other intercompany lending extended (other than those included in the previous code for direct investment) by the reporting resident company to a nonresident enterprise (foreign direct investment enterprise) in which it has a significant degree of influence or control over the management of this nonresident enterprise Time share with ownership aspect Purchases of a time-share unit located in a different economy by reporting resident company. Foreign Bank Accounts and Foreign Intercompany Accounts Guide for reporters 27