Estimation techniques for missing intra-EU trade ADVANCED ISSUES IN INTERNATIONAL TRADE IN GOODS STATISTICS ESTP training course 2 – 4 April 2014

Estimation techniques for missing intra-EU trade According to the Regulation (EC) No 638/2004 art. 12 ‘Member States shall provide to the Commission (Eurostat) with monthly results which cover their total trade in goods by using estimates, where necessary’

Estimation techniques - prerequisities Arrivals 2012 2013 Exemption threshold 269 348 EUR (1.1 mln PLN) 265 239 EUR (1.1 mln PLN) Trade coverage 96.3% 96.0% Number of PSIs 18 547 15 080 Statistical value thresh. 8 805 831 EUR (36 mln PLN) 10 127 315 EUR (42 mln PLN) Trade coverage 70% 70% Number of PSIs 3 876 3 141 Dispatches Exemption threshold 269 348 EUR (1.1 mln PLN) 265 239 EUR (1.1 mln PLN) Trade coverage 97.9% 97.9% Number of PSIs 12 295 10 458 Statistical value thresh. 17 611 662 EUR (72 mln PLN) 18 325 617 EUR (76 mln PLN) Trade coverage 70% 71% Number of PSIs 2 668 2 141

Estimation techniques – data sources Data sources for estimation techniques for missing intra-EU trade come from the Analytical Database of the IT system: Intrastat data (INTRASTAT system) Extrastat data (CELINA system ) – for new MS VAT data - for taxable persons below the exemption threshold and for new PSIs above the exemption threshold for which the trade pattern is unknown. VAT data are also used for comparison of data coming from the INTRASTAT/CELINA system Business register (the national tax ID number called NIP, the ID number assigned to each company in the national register of business entities called REGON, threshold category, priority code) Table of trade pattern covering turnover between PL and partner Countries for the year t-1

Method of estimating non/ late response – prerequisites Threshold category – the IT system checks if Intrastat declarations were submitted according to the corresponding threshold Priority code – the code granted to all categories of intra-EU trade operators: code 1 – for trade operators below the exemption threshold (the lowest level) code 2 - for PSIs above the exemption threshold and below the statistical value threshold (basic data required ) code 3 - for chosen PSIs above the exemption threshold and below the statistical value threshold (detailed data required ) code 4 - for the biggest PSIs above the exemption threshold and below the statistical value threshold (detailed data required) code 5 - for PSIs above the statistical value threshold (detailed data required )

Description of the estimation method Estimation method consists of 3 stages: - Estimating trade for trade operators with trade volume below the exemption threshold (category 1, priority 1) Estimating trade for PSIs with trade volume below the statistical value threshold (category 2, priorities 2, 3, 4) Estimating statistical value for PSIs with category 2 and for PSIs with trade volume above the statistical value threshold (category 3, priority 5) which did not report statistical value or reported null

Assumptions for estimating trade below the exemption threshold The basis for calculating the total value of trade of those trade operators that in a given reference year did not exceed the exemption thresholds established separately for dispatches and arrivals, is the sum of the values registered in the VAT system. In fact, as estimation refers to the particular month, this is the monthly average value calculated on the basis of the sum of VAT values in the year t-1 of PSIs above the exemption threshold. The trade pattern (commodity code, country of destination/consignment/origin, nature of transaction) of trade operators below the exemption threshold is created on the basis of a real trade pattern of PSIs most similar in value.

What is the PSI most similar in value The notion of ‘PSIs most similar in value’ is used in the algorithm created for estimating trade below the threshold. These are the PSIs which are used to create the pattern of trade of ‘0000000000’ PSI, representing the whole trade value of trade operators below the threshold. The PSIs most similar in value in Poland mean PSIs reporting their trade value to the system due to having exceeded the established threshold. The simplified picture of the algorithm creating the set of ‘PSIs most similar in value’ consists of: Calculating the average monthly trade value of operators below the threshold (A value) Creating the initial set of PSIs consisting of those PSIs above the threshold which declare a trade value >0 for each month under estimation The created set is sorted in ascending order Starting from the PSI with the lowest reported trade, the algorithm takes subsequent PSIs comparing the sum of their monthly trade value (B value) with the average monthly trade value of trade operators below the threshold (A value) Step 4 is repeated until B<=A PSIs identified in steps 4 and 5 create the set of ‘PSIs similar in value’ and their trade pattern is used to estimate the pattern of trade for ‘0000000000’ PSI

Estimating trade below the exemption threshold – category 1 Estimating trade of trade operators with trade volume below the exemption threshold (category 1, priority 1) Value (statistical and invoiced), quantities (net mass, supplementary units), mode of transaction, country of origin/destination/consignment are calculated in total on the basis of VAT data (VAT-7 form) from the year t-1 Values calculated in total are redistributed on the basis of the pattern of trade The pattern of trade is determined on the basis of PSIs which are similar in value (PSIs just above the threshold - JATT) taking into account all categories of PSIs different than category 1 The pattern of trade is used as the basis to generate declarations and lines on declarations for trade operators belonging to category 1. Such declarations are registered in data sets under the NIP (tax ID number)/REGON (ID number assigned to each company) code consisting of zeros

Estimating trade above the exemption threshold – PSIs category 2 Trade data for PSIs above the exemption threshold are estimated for each PSI separately and include all data elements The system starts the imputation process for the PSI of priority >1 when the declaration is missing or when the declaration is not accepted by the IT system The real pattern of trade is determined on the basis of average monthly volume of trade in the year t-1 for each PSI above the exemption threshold (priorities 2, 3, 4) The real trade pattern is used to generate lines on declarations If the real trade pattern for the PSI for the year t-1 is unknown, the data for such PSIs are estimated collectively

Estimating trade above the exemption threshold –category 2 Total values which are calculated colectively are redistributed on the basis of the ‘artificial’ pattern of trade for the year t-1 ‘Artificial’ pattern of trade is calculated on the basis of chosen PSIs among those with the biggest ratio of declared trade All chosen PSIs are supplied with the same ‘artificial’ ratio of turnover ‘Artificial’ pattern of trade is used as the basis to generate lines on declarations for PSIs belonging to category 2 (priorities 2,3,4). Such lines are registered in data sets under the NIP (tax ID number)/REGON (ID number of PSI assigned to each company) code consisting of all digits 1

Description of the method – non response estimation Statistical value is estimated for each individual PSI on the basis of an average statistical value from the year t-1 Distribution of the estimated data is carried out on the basis of the trade pattern of the trade volume for PSIs of priority <5 and for PSIs of priority=5 Imputation of net mass and supplementary units is carried out for each CN8 In case of the lack of average price of net mass per 1 kilo or 1 supplementary unit required for data imputation - the IT system will be searching any values on a higher level of data aggregation. If there is no data available on any higher level of aggregation such data are not estimated but stored in the created table of mistakes being subject to the decision of the operator

Distribution of missing trade by partner and product For distribution of non/late/partial response, Poland uses the trade pattern of defined (qualified) characteristics, i.e. trade patterns of PSIs which declare the highest trade value The trade pattern of PSIs with similar characteristics was abandoned since this approach is possible only if - in the IT system information about the characteristics of activities of each PSI is available - classes of similar PSIs are also required because they allow mapping by PKD (NACE) codes A significant number of trading units are trading agents which have been grouped in Section G, Division 46 of NACE rev. 2. Each individual agent deals with products classified under Division 46 which displays what specific goods each agent deals with. This causes problems with NLPR trade distribution by PSIs according to similar characteristics

What is the Polish method like? It is: simple efficient of a high quality being constantly confirmed in reconciliation exercises with Partner Countries

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