SNA ADVISORY EXPERT GROUP Bangkok, July 2005

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SNA ADVISORY EXPERT GROUP(Bangkok, July 2005)

• Non-resident SPEs linked to General Government
• TFHPSA

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Non-resident SPEs linked to General Government

• Government may create SPEs abroad for specific
  activities like
• Privatisation
• Defeasance
• Securitisation of assets

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Non-resident SPEs linked to General Government

• Issue classification of the SPE as resident (on
  the economic territory) or non-resident
• In principle, in the SNA1993, the concept and
  coverage of residence is identical to those in
  the BOP manual of IMF
• Questions Is the SPE an institutional unit?
  Where is its  centre of economic interest ?

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Non-resident SPEs linked to General Government

• Reminder of SNA 1993
• 14.7  the concept of residence is not based on
  nationality or legal criteria.  Primacy of the
   centre of economic interest , over  a long
  period of time  (14.12)
• General government (14.30) has agencies abroad
  (embassies), considered extraterritorial in the
  economy in which they are physically located.

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Non-resident SPEs linked to General Government

• TFHPSA recommendation for the SNA update
• To classify these SPEs created by government for
  its financial convenience inside the general
  government sector (S.13), and not as corporations
  (financial or non-financial)
• BOP Committee has a different view

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Non-resident SPEs linked to General Government

• TFHPSA rationale
• This type of units acts under the direct control,
  financing and management of the general
  government, and usually for a limited period of
  time
• They cannot be financial intermediaries ( they
  do not put themselves at risk , SNA, 4.78)
• They would rather be considered ancillary units
  or treated like embassies.

7
Way forward

• More research to be conducted in the case of SPEs
  created by general government.
• The TFHPSA will explore alternatives for the
  treatment of government SPEs and/or their
  transactions.
• The TFHPSA will circulate proposals to an
  informal working group including BOP
  representatives during the Summer 2005.