Geneva – 18/19 June 2007 EuroGroups Register A pilot study for Eurostat to create a register of multinational enterprise groups John Perry – UK ONS Barry Coenen – CBS Netherlands

CONSORTIUM This project was carried out for the European Commission by a consortium led by Harrie van der Ven (CBS) comprising : This project was carried out for the European Commission by a consortium led by Harrie van der Ven (CBS) comprising : Office for National Statistics (ONS)Office for National Statistics (ONS) Statistisches Bundesamt (DeStatis)Statistisches Bundesamt (DeStatis) Statistics Hungary (KSH)Statistics Hungary (KSH) Statistics Netherlands (CBS)Statistics Netherlands (CBS) Sogeti Luxemburg SASogeti Luxemburg SA This consortium delivered the product to Eurostat at the end of December This consortium delivered the product to Eurostat at the end of December 2006.

Aims of project To create a working system using dual private sector sources To create a working system using dual private sector sources Delineating multinational enterprise groups with group members within the EU Delineating multinational enterprise groups with group members within the EU For 600 enterprise groups For 600 enterprise groups Identifying issues for full implementation Identifying issues for full implementation

MAIN RESULTS The project demonstrated the elements of the required infrastructure to create and maintain a EuroGroups register (EGR) through : The project demonstrated the elements of the required infrastructure to create and maintain a EuroGroups register (EGR) through : Creation of an Oracle database system Creation of an Oracle database system Importing data from two private sector suppliers, Bureau van Dijk and Dun and Bradstreet. Importing data from two private sector suppliers, Bureau van Dijk and Dun and Bradstreet. Transforming country, legal form, industrial classifications, national identifiers and dates to a standard form Transforming country, legal form, industrial classifications, national identifiers and dates to a standard form Linking source data through national identifiers and legal names Linking source data through national identifiers and legal names

MAIN RESULTS (continued) Communication standards for transmission to and receipt from Member States for legal units and their relationships Communication standards for transmission to and receipt from Member States for legal units and their relationships Providing views of global and national enterprise group clusters Providing views of global and national enterprise group clusters Consolidating enterprise groups Consolidating enterprise groups It has created an integrated database for 600 multinational groups, their group members and the relationships, both control and percentage ownership, between the members. It has created an integrated database for 600 multinational groups, their group members and the relationships, both control and percentage ownership, between the members. The current version of the EGR is scaleable. The current version of the EGR is scaleable.

Some design principles Basis: use of sources with (maximal) global coverage Basis: use of sources with (maximal) global coverage Use of ‘National ID’s’ as basis for linkage of units Use of ‘National ID’s’ as basis for linkage of units Data integration: steered by flexible preference rules (source, time lag, attribute) Data integration: steered by flexible preference rules (source, time lag, attribute) Cyclic process driven by changes (in pilot yearly) Cyclic process driven by changes (in pilot yearly) Series of processes (with feedback to administrator) Series of processes (with feedback to administrator) Delineation of groups: concept of control Delineation of groups: concept of control

Dun & Bradstreet - Bureau van Dijk MAIN PROCESS

Source data (number of legal units) CountryBvDDnBTotal DE HU NL UK Other EU/ EFTA Rest of World

Import Source Transform source MAIN PROCESS

Import Source Transform source Link sources MAIN PROCESS

Import Source Transform source Link sources Com case 1 MAIN PROCESS

Communication case 1 Country checks own units Country checks own units Confirms existence and may correct national ID Confirms existence and may correct national ID Identifies units that are dead (why and when) Identifies units that are dead (why and when)

Some results Communication case 1 Country BvD & DnB linked automatically Resulting consolidated records Live on national register DE63% HU92% NL99% UK99%

Import Source Transform source Link sources Create relationships MAIN PROCESS

Import Source Transform source Link sources Create relationships Com case 2 MAIN PROCESS

Communication Case 2 Country checks upward links Country checks upward links Country checks downward links, where not in EU Country checks downward links, where not in EU Country must confirm control relationships Country must confirm control relationships Preliminary cluster and global group provided to NSI Preliminary cluster and global group provided to NSI The country with the largest national truncated group within a global group takes responsibility for checking the global group The country with the largest national truncated group within a global group takes responsibility for checking the global group Checks NACE Checks NACE Checks employment etc Checks employment etc

Some results Communication case 2 Country NACE present in both – 2 digit differs Relationships To be removed from EGR Same parent Same subsidiary different parent New to national register To be added to EGR DE44%----- HU27% NL24% UK18%

Import Source Transform source Link sources Create relationships Final control cluster MAIN PROCESS

Import Source Transform source Link sources Create relationships Final control cluster Final group MAIN PROCESS

Two Examples of checking by member states

Oceantech Ltd Dun & Bradstreet 1 - Oceantech LTD GB 2 - Ocean Technical Systems LTD GB 3 - Trans Ocean Trading LTD GB 4 - Datawatt International BV NL 5 - Datawatt BV NL 6 - Submarine Technology LTD GB 7 - Oceantech Marine LTD GB 8 - Oceantech- Datawatt LTD GB

Oceantech Ltd – Bureau van DIJK 1 – Oceantech Public Limited Company GB 2 - Ocean Technical Systems Limited GB 3 - Trans Ocean Trading Limited GB 4 – Datawatt International BV NL 5 – Datawatt BV NL 6 - Submarine Technology Limited GB 7 - Oceantech Marine Limited GB 8 - Oceantech- Datawatt Limited GB

Oceantech Ltd – Integrated Dun & Bradstreet is preferred source for link 1 - Oceantech LTD GB 2 - Ocean Technical Systems LTD GB 3 - Trans Ocean Trading LTD GB 4 - Datawatt International BV NL 5 - Datawatt BV NL 6 - Submarine Technology LTD GB 7 - Oceantech Marine LTD GB 8 - Oceantech- Datawatt LTD GB

Oceantech Ltd – Integrated UK checks links 3 -2, 2-1, 6-1, 7-1 and Oceantech LTD GB 2 - Ocean Technical Systems LTD GB 3 - Trans Ocean Trading LTD GB 4 - Datawatt International BV NL 5 - Datawatt BV NL 6 - Submarine Technology LTD GB 7 – Oceantech Marine LTD GB 8 - Oceantech- Datawatt LTD GB

Oceantech Ltd – Integrated NL checks links 5-4 and Oceantech LTD GB 2 - Ocean Technical Systems LTD GB 3 - Trans Ocean Trading LTD GB 4 - Datawatt International BV NL 5 - Datawatt BV NL 6 - Submarine Technology LTD GB 7 - Oceantech Marine LTD GB 8 - Oceantech- Datawatt LTD GB

Risol Imports Ltd – Dun & Bradstreet 1 – Risol Imports LTD GB 2 – Regatta LTD GB 3 – Regatta GmbH DE 4 – Regatta Ltd NL 5 –RGO Retail Ltd GB 6 - Timescale LTD GB

Risol Imports Ltd – Bureau van Dijk Keith J Black (7) owns 66.03% of Keith J Black (natural person) 1 – Risol Imports LTD GB 2 – Regatta LTD GB 3 – Regatta GmbH DE 5 –RGO Retail Ltd GB 6 - Timescale LTD GB

Risol Imports Ltd – Integrated 7 - Keith J Black (natural person) 1 – Risol Imports LTD GB 2 – Regatta LTD GB 3 – Regatta GmbH DE 4 – Regatta Ltd NL 5 –RGO Retail Ltd GB 6 - Timescale LTD GB

Risol Imports Ltd – Integrated UK checks 1 -7, 2 – 1, 6 -1, Keith J Black (natural person) 1 – Risol Imports LTD GB 2 – Regatta LTD GB 3 – Regatta GmbH DE 4 – Regatta Ltd NL 5 –RGO Retail Ltd GB 6 - Timescale LTD GB

Risol Imports Ltd – Integrated DE checks Keith J Black (natural person) 1 – Risol Imports LTD GB 2 – Regatta LTD GB 3 – Regatta GmbH DE 4 – Regatta Ltd NL 5 –RGO Retail Ltd GB 6 - Timescale LTD GB

Risol Imports Ltd – Integrated NL checks Keith J Black (natural person) 1 – Risol Imports LTD GB 2 – Regatta LTD GB 3 – Regatta GmbH DE 4 – Regatta Ltd NL 5 –RGO Retail Ltd GB 6 - Timescale LTD GB

US DE GB FR GB AU GLOBAL CLUSTER OF CONTROL

US GB AU DE FR NATIONAL GROUP STRUCTURE (EU)

US GB AU DE FR GLOBAL GROUP

TWO VIEWS ON THE GROUPS The next two slides show a part of the data in the pilot database of the EGR The next two slides show a part of the data in the pilot database of the EGR Slide 1: country view of a global enterprise groupSlide 1: country view of a global enterprise group Slide 2: legal structure view of a global enterprise groupSlide 2: legal structure view of a global enterprise group Note: the data are from publicly available sources and do not contain data checked by statistical offices

Conclusions Project demonstrated the elements of the required infrastructure to create the EuroGroup Register Project demonstrated the elements of the required infrastructure to create the EuroGroup Register National ID is essential for automated linkage – minimises clerical resource National ID is essential for automated linkage – minimises clerical resource Control relationships form the definitive part of the system Control relationships form the definitive part of the system An EGR will improve national systems An EGR will improve national systems Single data source likely to produce incomplete system Single data source likely to produce incomplete system

Conclusions (continued) Feedback from national systems is not essential but will improve the quality of the EGR Feedback from national systems is not essential but will improve the quality of the EGR Meta data are essential and should be maintained centrally Meta data are essential and should be maintained centrally Legal unit may not be the appropriate level to provide valid economic data Legal unit may not be the appropriate level to provide valid economic data Rules for treatment of natural persons, Special Purpose Entities, decision centres and branches should be agreed Rules for treatment of natural persons, Special Purpose Entities, decision centres and branches should be agreed Feedback to private data suppliers is required for the completeness of the system (legal and policy constraints) Feedback to private data suppliers is required for the completeness of the system (legal and policy constraints)

Conclusions (continued) System is complex and further development requires co-operation with senior users - Communication in the project with users showed that requirements are not always clear System is complex and further development requires co-operation with senior users - Communication in the project with users showed that requirements are not always clear Resources with funding are necessary both in Eurostat for the development and management of the central systems and in Member States for the management of the local systems and the linking procedures Resources with funding are necessary both in Eurostat for the development and management of the central systems and in Member States for the management of the local systems and the linking procedures Consistency over time will be difficult to achieve without continuity of private sector supplier contracts Consistency over time will be difficult to achieve without continuity of private sector supplier contracts

Conclusions (continued) Accurate time-stamping is needed to deliver quality efficiently Agreeing quality measurement Keeping up with developing user needs

Organisational issues Involvement of stakeholders to identify their needs Definition of roles and responsibilities of different parties (in particular, who is responsible for quality of a group) Ensuring that the necessary skills and controls are in place Provision of leadership in the further development