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1 What is EGR?

Discover the EuroGroups Register (EGR), a statistical business register for multinational enterprise groups in EU and EFTA countries. Learn its history, legal framework, and impact on consistent business statistics.

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1 What is EGR?

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  1. 1 What is EGR? • ESTP course on EuroGroups Register • 22 – 23 May 2019

  2. What is EGR? • The EuroGroups Register (EGR) isa central statistical business registerof multinational enterprise groups in the EU Member States and in the EFTA countries • coverage: multinational enterprise groups operating in Europe, their constituent enterprises and legal units • the EGR process is in operation since 2009 • For statistical use only • Restricted use for national statistical offices of EU and EFTA countries and national central banks of EU Member States

  3. The work started years ago… • In 2003 Statistics Canada, France, Italy, Netherlands and UK launched a project: • MNE Project – Seeing the whole elephant • The MNE Project was an experiment on measuring the activities of groups using a mirror exercise • Measuring economic data on individual enterprises in one country vis-à-vis measuring the same data from the top of the MNE group • The results showed that it was necessary to start building a system integrating MNE groups data across countries and share them to have better quality

  4. … to arrive to EGR • As a follow-up of the MNE Projectin 2006 Eurostat launched theEGR pilot project for the creationof a European Business Register on MNE groups • 4 NSIs participated in the pilot, UK, Germany, Netherlands, Hungary • 2008 - new EU regulation on business registers BRs • NSIs have to register RELs and groups in their BR • allows micro data exchange to create EGR • EGR was set-up in 2008 • In 2011 the new concept of EGR version 2.0 was launched

  5. What is an enterprise group? • EU Regulation 696/93 on statistical units:

  6. Enterprise Group Enterprise Group Enterprise 1 Legal Unit 1 Enterprise 2 Legal Unit 2 Enterprise n Legal Unit n   Statistical representation • 1. As a simple set of legal units bound together • 2. As a set of enterprises carring out economic activity

  7. Statistical representation • 3. As a complete structure of legalunits and theircontrollingrelationships and the economicenterprises Head LEU A Enterprise Group Enterprise 1 LEUB LEU F LEU G Enterprise 4 LEU C LEU D LEU H LEUI Enterprise 2 LEU E LEU J LEU K Enterprise 5 Enterprise 3

  8. Information needed for statistical representation • Legal units • Unique identifiers • Relationships: ownership shares / voting rights • LEU A controls LEU B with x% voting rights • Enterprises • Economic characteristics (turnover, employment, NACE code) • Links to legal units • Groups • Group characteristics (turnover, employment, main NACE code) • Global decision centre (GDC) • Global group head (GGH)

  9. MNE group data in business registers • EU Regulation 177/2008 on statistical business registers • All Member States have to register the enterprise groups in their national business registers • National views on a multinational enterprise groups can be different • A global view is needed on groups to produce consistent business statistics

  10. EGR legal background • EU Regulation 177/2008 on statistical business registers • Article 10 - Exchange of confidential data between Member States • Two implementing EU Regulations: • Data exchange with NSIs 192/2009 • Data exchange with NCBs1097/2010

  11. The EGR mission • To provide a harmonised view on the multinational enterprise groups and their constituent units in the EU • consistent information • coordinated populations • coordinated data quality

  12. The EGR network • First time that Eurostat exchanges micro data with NSIs and use them to create one single European product • Data files are exchanged in secure IT platform • Data are stored in secure IT environment NSI A NSI C NSI B … EGR

  13. Example - before/after • NSIs mapped the groups individually • Group structures were not linked • Group heads could be different before EGR… in reality… DE ENT AT ENT2 AT ENT2 AT ENT1 AT ENT1 AT ENT1 CH ENT FI ENT NSBRs

  14. Example - before/after • With the EGR: • NSIs deliver to EGR pairwise relationships • CH-AT1 • AT1-AT2, AT2-DE • FI-AT1 • DE (no controlling LEU) • EGR creates the groups from the pairwise relationships • Validation of groups in EGR before… in EGR… DE ENT AT ENT2 AT ENT1 CH ENT FI ENT EGR

  15. Example - before/after before EGR… after EGR…

  16. EGR information • EGR provides harmonised information on • MNE groups, enterprises, legal units (identification, demographic and economic characteristics) • Relationships and control • Shareholdings of at least 10% • Users can use EGR as • coordinated frame population • to derive consistent statistical output • with an improved quality • in measuring global activities • of European enterprises part of multinational groups

  17. Statistics using EGR • Information on multinational enterprise groups are used for statistics related to globalisation in the EU Member States and EFTA countries, e.g.: • Foreign Affiliates Statistics (FATS) • Foreign Direct Investment statistics (FDI) • Structural Business Statistics (SBS) • Gross National Income statistics (GNI) • Etc.

  18. National databases EGR

  19. EGR 1.0 • EGR process is running since 2009 • First reference year of data was 2008 • EGR 1.0 process was used for reference years 2008 to 2011 • The EGR 1.0 process was based on commercial data • Commercial data were compared to NSI data • Validations were done by NSIs in several steps

  20. EGR 1.0 process overview CDP EGR NSI Legal unit update Processing commercial data Commercial data Processing LEU update Relationships update Processing relationships update Preliminary frame Validation frame Processing validation corrections Final frame 20

  21. EGR redesign to EGR 2.0 (1) • Redesign of the EGR system to EGR 2.0 from 2012 to 2015 • Targets of the redesign: • Improve the EGR process – collecting NSI data and improving it with commercial data. The EGR 1.0 process was validation of commercial data by NSIs • Create a system assigning unique IDs to the legal entities applied in the EGR data exchanges

  22. EGR redesign to EGR 2.0 (2) • Targets of the redesign: • Improve EGR functionalities (e.g. better validation of input files, collaborative platforms for users) • Create on-line tools for users with remote access • Improve the quality of EGR output • Targeting complete coverage on MNEs active in Europe • By the end of 2015 EGR 2.0 was fully implemented • Completely new system, new way of working, new database, new applications, new identifiers …

  23. EGR 2.0 - Main concepts (1) • Authenticity of NSIs data • NSI data and CDP data are complementary in EGR • NSI data have preference according to settings in the system • Unique identification of units • In EGR 1.0 the missing unique identification resulted several duplicates • Record based updating • Entities (LEUs, RELs, …) are updated on record level • Live register / Master frames • For the moment only one yearly cycle is implemented

  24. EGR 2.0 - Main concepts (2) • Online applications for users with remote access to confidential data • EGR data are available for users and producers in different steps of the production • Collaborative platforms for users • Allowing modifications on EGR data • Individually or in batch mode with data files

  25. EGR 2.0 process overview EGR CDP NSI Identification of legal units Identification service Commercial data (LEU,REL) Processing NSI and commercial data NSI data (LEU, REL, ENT) Consult and update preliminary frame and GEG data Initial and preliminary frames Final frame 25

  26. EGR 2.0 – Applications (1) • Identification Service (EGR IS) • Supports users in identifying legal units • Core application (EGR CORE) • Consolidates input data and generates the frame • The 'heart' of EGR 2.0 (source, transformation, consolidation, output, administrative module) • Interactive Module (EGR IM) • Provides users with interactive web interface to validate data in consolidation area of EGR CORE • Output interface (EGR FATS) • Provides users with web interface to inspect output

  27. EGR 2.0 – Applications (2) CDP web- service EGR IS EGR CORE NSIs EGR IM NSIs and CDPs NSIs EGR FATS NSI and NCB users

  28. Further reading • Eurostat website - Statistics explained pages • Publicly available information on the EGR • http://ec.europa.eu/eurostat/statistics-explained/index.php/EuroGroups_register

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