1. In the context of BPM6; Compilation practices
Bank of Albania
Goods for processing
In the context of BPM6; Compilation practices
Iris Mele
Head of BoP Unit
Bank of Albania
Workshop on ITSS, Luxembourg, 2-3 June 2015

2. Introduction
Goods for processing are defined as raw materials or semi-processed goods belonging to the principal enterprise in country A which are send to the contractor (i.e. manufacturing enterprise) in country B for significant transformation and then returned to the original unit in country A
Goods sent abroad for processing without change of ownership (physical inputs owned by others)
New type of service – Manufacturing service on physical inputs owned by others
Impact on BOP aggregates: trade in goods deficit (in case of Albania) and change in trade in services balance

3. Measurement
Manufacturing services on physical inputs owned by others
Credit
Debit
-Goods for processing in reporting economy – Inward Processing
Goods received
Goods returned
-Goods for processing abroad – Outward Processing
Goods sent
Value of manufacturing services on physical inputs owned by others should be collected from enterprise data at detailed level, net recording method (processing fee)
Current method: gross recording method as the difference of processed goods
Data from both methods should be cross - checked (manufacturing services is not necessarily equal to the difference in goods sent abroad and returned after processing, but should be broadly in line)

4. Data source Customs database (inward and outward processing)
System declarations codes = the nature of the goods transaction.
Inward and outward processing defined as customs procedures.
Goods for processing are exempt from certain taxes.
Four digits
- first two digits, on-going procedure
- last two digits, previous procedure
Favorable tariff treatment
- 41- goods for processing under drawback system
- 51- goods for processing under suspension system
Time limit

5. Inward processing

6. Outward processing

7. Calculation of processing fee in BoP
Manufacturing services on physical inputs owned by others
Credit
( ) - ( )
Debit
6121
Goods for processing in reporting economy
-Goods for processing abroad
Outward processing-In the customs declaration is declared the service fee to the goods, not the value of the goods

8. Conclusions Expert of PP on ITSS advised:
BoA has to find a better solution estimating processing fee credits
In a short or medium term, conduction of a regular survey on manufacture enterprises in collaboration with INSTAT and Customs.
Data availability in customs database by geographical breakdown

9. THANK YOU FOR YOUR ATTENTION!