1 What is EGR? ESTP course on EGR 6-7 September 2016

What is EGR? The EuroGroups Register (EGR) is a statistical business register of multinational enterprise groups in the EU Member States and in the EFTA countries coverage: multinational groups present in Europe, their constituent enterprises and legal units the EGR process is in operation since 2009 For statistical use only Restricted use in national statistical offices and national central banks of EU and EFTA countries

What is an enterprise group? EU Regulation 696/93 on statistical units: an association of enterprises bound together by legal and/or financial links Enterprise groups are used for statistics related to globalisation in the Member States, e.g.: Statistics on foreign affiliates (FATS) Foreign direct investment statistics (FDI) SME statistics …

Statistical representation 1. As a simple set of legal units bound together 2. As a set of enterprises carring out economic activity Legal Unit 1 Legal Unit 2 Legal Unit n    Enterprise Group Enterprise 1 Enterprise 2 Enterprise n    Enterprise Group

Statistical representation 3. As a complete structure of legal units and their controlling relationships and the economic enterprises Enterprise Group Enterprise 1 Enterprise 4 Enterprise 2 Enterprise 3 Enterprise 5 Head LEU A LEU E LEU D LEU C LEU B LEU F LEU G LEU I LEU H LEU J LEU K

Information needed for statistical representation Legal units Unique identifiers Relationships: ownership shares / voting rights LEU A controls LEU B with x% voting rights Enterprises Economic characteristics (turnover, employment) Links to legal units Groups Group characteristics (turnover, employment) Global decision centre

MNE data in business registers EU Regulation 177/2008 on statistical business registers All Member States have to register the enterprise groups in their national business registers National views on a multinational groups can be different A global view is needed on groups to produce consistent business statistics

The work started years ago… In 2003 Statistics Canada, France, Italy, Netherlands and UK launched a project: MNE Project – Seeing the whole elephant The MNE Project was an experiment on measuring the activities of groups using a mirror exercise Measuring economic data on individual enterprises in one country vis-à-vis measuring the same data from the top of the MNE The results showed that it was necessary to start building a system integrating MNE data across countries and share them to have better quality

… to arrive to EGR As a follow-up of the MNE Project in 2006 Eurostat launched the EGR pilot project for the creation of a European Business Register on MNEs 4 NSIs participated in the pilot, UK, Germany, Netherlands, Hungary 2008 - new EU regulation on business registers NSIs have to register RELs and groups in their BR allows micro data exchange to create EGR EGR was set-up in 2008 In 2011 the new concept of EGR version 2.0 was launched

The EGR mission To provide a harmonised view on the multinational enterprise groups and their constituent units in the EU consistent information coordinated populations coordinated data quality

EGR legal background EU Regulation 177/2008 on statistical business registers Article 10 - Exchange of confidential data between Member States Two implementing EU Regulations: Data exchange with NSIs Data exchange with NCBs

The EGR network NSI NSI NSI NSI EGR First time that Eurostat exchanges micro data with NSIs and use them to create one single European product Data files are exchanged in secure IT platform Data are stored in secure IT environment

EGR information EGR provides harmonised information on Groups, enterprises, legal units (identification, demographic and economic characteristics) Relationships and control Shareholdings of at least 10% Users can use EGR as coordinated frame population to derive consistent statistical output with an improved quality in measuring global activities of European enterprises part of multinational groups

Example - before/after NSIs mapped the groups individually Group structures were not linked Group heads could be different before EGR… in reality…

Example - before/after With the EGR: NSIs deliver to EGR pairwise relationships CH-AT1 AT1-AT2, AT2-DE FI-AT1 DE (no controlling LEU) EGR creates the groups from the pairwise relationships Validation of groups in EGR before… in EGR…

Example - before/after before EGR… after EGR…

EGR 1.0 EGR process is running since 2009 First reference year of data was 2008 EGR 1.0 process was used for reference years 2008 to 2011 The EGR 1.0 process was based on commercial data Commercial data were compared to NSI data Validations were done by NSIs in several steps

EGR 1.0 process overview CDP EGR NSI Commercial data Processing commercial data Legal unit update Processing LEU update Relationships update Processing relationships update Preliminary frame Validation frame Processing validation corrections Final frame 18

EGR redesign to EGR 2.0 Redesign of the EGR system to EGR 2.0 from 2012 to 2015 Targets of the redesign: Improve the EGR process – collecting NSI data and improving it with commercial data. The EGR 1.0 process was validation of commercial data by NSIs Create a system assigning unique IDs to the legal entities applied in the EGR data exchanges

EGR redesign to EGR 2.0 (2) Targets of the redesign (cont.): Improve EGR functionalities (e.g. better validation of input files, collaborative platforms for users) Create on-line tools for users with remote access Improve the quality of EGR output Targeting complete coverage on MNEs active in Europe By the end of 2015 EGR 2.0 was fully implemented Completely new system, new way of working, new database, new applications, new identifiers …

EGR 2.0 - Main concepts (1) Authenticity of NSIs data NSI data and CDP data are complementary in EGR NSI data have preference according to settings in the system Unique identification of units In EGR 1.0 the missing unique identification resulted several duplicates Record based updating Entities (LEUs, RELs, …) are updated on record level Live register / Master frames For the moment only one yearly cycle is implemented

EGR 2.0 - Main concepts (2) Online applications for users with remote access to confidential data EGR data are available for users and producers in different steps of the production Collaborative platforms for users Allowing modifications on EGR data Individually or in batch mode with data files

EGR 2.0 process overview CDP EGR NSI Identification of legal units Identification service Commercial data (LEU,REL) Processing NSI and commercial data NSI data (LEU, REL, ENT) Consult and update preliminary frame and GEG data Initial and preliminary frames Final frame 23

EGR 2.0 – Applications (1) Identification Service (EGR IS) Supports users in identifying legal units Core application (EGR CORE) Consolidates input data and generates the frame The 'heart' of EGR 2.0 (source, transformation, consolidation, output, administrative module) Interactive Module (EGR IM) Provides users with interactive web interface to validate data in consolidation area of EGR CORE Output interface (EGR FATS) Provides users with web interface to inspect output

EGR 2.0 – Applications (2) EGR IS EGR CORE EGR IM EGR FATS CDP web- service EGR IS EGR CORE NSIs EGR IM NSIs and CDPs NSIs EGR FATS NSI and NCB users

Further reading Eurostat website - Statistics explained pages Publicly available information on the EGR http://ec.europa.eu/eurostat/statistics-explained/index.php/EuroGroups_register

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