1. COICOP revision Item 16 of the agenda

2. Background (1) o The latest revision of COICOP (Classification of Individual Consumption by Purpose) was released in 1999. o The proposal to revise the COICOP classification was officially raised at the UN Expert Group on International Statistical Classifications (EG) meeting in 2011 but… o … as the System of National Accounts (SNA), had just been revised at that time, and COICOP being part of it, at the 2011 EG meeting experts recommended to avoid revisions that may conflict with the SNA implementation. o It was therefore decided that, before launching any formal revision, a global consultation should be conducted first, in order to assess the need and scope for such a revision.

3. Background (2) o A Technical Sub-Group (TSG-COICOP) chaired by Eurostat was formed and supported UNSD in preparing the survey and in analysing the results. The survey was carried out between October and December 2012; o Sixty-eight countries and four international organisations participated in the survey, providing 72 responses. o Results showed that countries were generally in favour of an update or revision of COICOP. o The results of the survey were presented and discussed during the EG meeting in 2013.

4. Background (3) o The TSG-COICOP subsequently identified three main groups of issues: o Group 1. Issues which would imply a change in the COICOP structure/level of detail or change in titles. o Group 2. Issues which could be solved by case laws, although a change in structure could be a better solution. o Group 3. Issues which could be solved by case laws (a class is clarified or expanded with products not elsewhere mentioned yet). o The TSG then started working on the preparation of clarifications for 16 issues from Group 2 and 17 from Group 3. For each case a COICOP class was proposed, the rationale for the decision was explained and possible improvements in the case of a revision were proposed.

5. Background (4) o The TSG-COICOP presented its final report at the EG meeting in 2015 where it was decided to proceed with a revision of COICOP. o It was agreed to continue with the current composition of the TSG-COICOP. Canada and IMF also volunteered to participate and ISWGNA will be involved as well as the Inter-Secretariat Working Group on Price Statistics (IWGPS).

6. Membership of the TSG-COICOP Country/OrganizationName AustraliaSelvi Sekhar AustraliaKate Lamb AustriaNorbert Reiner CanadaAlice Born EurostatAna Franco FAOValentina Ramaschiello ILOValentina Stoevska ILO Veronica Gianfaldoni IMF Li Fa Cheung Kai Suet ISWGNAHerman Smith IWGPSFrancette Koechlin New ZealandAndrew Hancock PhilippinesSevera de Costo SwitzerlandCindia Duc Sfez UNECECarsten Boldsen UNSD Alexander Loschky

7. Scope of work 1.Evaluate the proposals for change in terms of feasibility and relevance. Propose concrete changes in the present structure, ensuring a better alignment of COICOP with CPC - Mid May 2016 2.Elaborate a first draft of the revised classification including a possible 5 th digit - End of June 2016 3.Conduct a worldwide consultation on the draft to get feedback on the different proposals of change - End of October 2016

8. Scope of work 4.Amend the proposal with the feedback received and develop the final proposal - End of March 2017 5.Elaborate explanatory notes - End of 2017 6.Analyse impact of changes proposed in other related classifications of expenditure according to purpose in SNA (COFOG, COPNI, COPP) - February 2018 7.Preparation of a correspondence table between new COICOP, previous COICOP and CPC - April 2018 8.Report to the Expert Group on International Statistical Classifications - May 2017 and May 2018

9. Where we are now o The TSG meeting met in Geneva on 14-16 March 2016 o Started by discussing General Proposals of change… o … followed by discussion on proposals related to a specific COICOP division o Documents for each COICOP division are now being finalised containing the list of proposals retained, the reasons and the new structure proposed. o WHO, UNESCO and other international organizations will be consulted for the COICOP divisions of their expertise (Health, culture…) to answer concrete questions raised during the discussions and for a general opinion.

10. General proposals of change (1) o Name of the revised version of the classification: “COICOP Version X” o To introduce the 5-digit level (sub-class). o To try as much as possible to have a separation between goods and services although it was recognized that this is not always possible like in the case of restaurants, bundles, and products containing important part of intellectual property. o To improve alignment with CPC, keeping in mind the different nature of COICOP (consumption vs. production).

11. General proposals of change (2) o Keep distinction between Non-Durable, Semi-Durable and Durable goods. o Agreement in not separate new and used goods except if the transaction is significant (e.g. cars). o Do not identify leasing separately, consider it as buying new products o To provide guidelines on fees expenditures: no special class needed. o Accept the introduction of alternative aggregations o Provide guidelines on the classification of tips and donations.

12. Main proposals of change by division (1) o Division 01 o Have a class/ sub-class Ready-made meals o Have information on the type of animals and level of processing o Division 02 o Inclusion of a class/sub-class of Alcoholic soft drinks o Provide guidance on how to classify re-fills for e-cigarette o Division 03 o Have a breakdown of garments and footwear by sex and age (adults, children, infants) o Separate goods and services

13. Main proposals of change by division (2) o Division 04 o Move Fitted carpets and linoleum from Division 05 to 04, as well as the the service for laying them o Clarification of what is housing or an accommodation service based on the length of stay o More detail on domestic fuels o Division 05 o Separate goods and services o Provide detail on household textiles and appliances o Separate motorized tools from non-motorized tools o Division 06 o Traditional medicine o Beauty treatments carried out on hospitals o Update terminology to new medical treatments or exams.

14. Main proposals of change by division (3) o Division 07 o Move postal services from Division 08 to 07. Create 07.4 Transport services of goods and make clear the separation between transport of persons and transport of goods. o Clarify the classification of the different delivery fees o Division 08 o Rename division 08 into Information and Communication. o Move 09.1.1, 09.1.3 and 09.1.4 into Division 08. o Included many new IT products (tablets, smart phones, smartwatches) o Division 09 o Rename Group 9.1 into 9.1 Recreation and culture durables o Separate goods and services o Include a class for Celebration and devotional articles.

15. Main proposals of change by division (4) o Division 10 o The TSG didn't have time to discuss division 10. o Division 11 o Rename division 11 to: Food, beverage and accommodation services o Introduce the notion of service level to breakdown the type of services (full service, limited service and other service) o Introduce new accommodation services like Airbnb o Division 12 o Split Division 12 into o Insurance and financial service o Personal care, social protection, and Miscellaneous goods and services o Separate goods and services

16. Next steps o Finalize the proposed new structure o Consult relevant International Organisations o Launch the World wide consultation