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Issue paper: Definition of remittances

Issue paper: Definition of remittances. Technical Subgroup on Movement of Persons – Mode 4 (New York, 22 - 24 February 2006). Overview. Background Personal transfers Personal remittances Total remittances. Background.

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Issue paper: Definition of remittances

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  1. Issue paper:Definition of remittances Technical Subgroup on Movement of Persons – Mode 4 (New York, 22 - 24 February 2006)

  2. Overview • Background • Personal transfers • Personal remittances • Total remittances

  3. Background • TSG on Movement of Persons-Mode 4 submitted its recommendations to BOPCOM and the AEG • Recommendations bring BPM6 flows in line with 1993 SNA using items in the Annotated Outline • AEG and BOPCOM conclusions diverge slightly • What next? Reconcile the differences and resubmit to AEG and BOPCOM

  4. Personal transfers • Definition Personal transfers consist of all current transfers in cash or in kind made, or received, by resident households to or from other non-resident households BOPCOM: Agree with definition. Workers remittances supplementary item to maintain time series. AEG: Suggests possible inclusion of capital transfers [Question 1]

  5. Personal remittances • Definition Personal remittances = compensation of employees – social contributions + personal transfers + capital transfers between households • Essentially household-to-household transfers • Excludes: non-life insurance premiums and claims, investment income

  6. Personal remittances (Cont’ed) • BOPCOM: Agree with definition and “netting” COE of social contribution, taxes on income, travel and transportation costs related to short term employment. • Should personal remittances (“netting” COE) be part of the standard presentation? • Should capital transfers be included in the definition?

  7. Personal remittances (Cont’ed) • AEG: Favors broader definition, proxy to disposable income from abroad: Personal remittances + social benefits Social benefits is likely to be an item of the standard presentation. • Should the new concept of disposable income from abroad be retained – in addition to personal remittances?

  8. Total remittances • Definition Total remittances = personal remittances + social benefits + current transfers to NPISHs BOPCOM: Agree with above definition. AEG: Agree but raise issue of whether to include capital transfers. • Should current transfers to NPISHs be considered part of the standard presentation? • Should capital transfers to NPISHs be included in the definition?

  9. Suggested Standard Components related to Remittances in BPM6 (AO)

  10. Questions to the TSG • What is the opinion of the TSG on whether to include capital transfers between resident and non-resident households in the definition of personal transfers in para 6? • Does the TSG agree with the definition of personal remittances as a household-to-household transfer defined as in para 12? • Is the TSG in favour of “netting” compensation of employees as part of the BOP standard presentation? • Does the TSG agree with the inclusion of capital transfers between households in the definition of personal remittances? Should capital transfers to/from households be a BOP standard component or a supplementary item?

  11. Questions to the TSG (Cont’ed) • Does the TSG agree with the definition of disposable income from abroad defined as the sum of personal remittances and social benefits? • Does the TSG agree with the definition of total remittances as defined in para 22? • What is the opinion of the TSG on whether to include capital transfers to NPISHs in the definition of total remittances? • If in favour, should capital transfers to NPISHs be a BOP standard component or a supplementary item?

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