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15.117. An important source for identifying affiliates and allocating them to the UCI should be the new EuroGroups Register (EGR).The EGR should cover, step-by-step, all multinational enterprise groups operating in the European Union. This will help to correctly identify the country code of the UCI to which the enterprises belong. With a full and well-developed EGR, no double-counting or gaps will exist and the same data sets from different compilers will be linked.
Back to F. Attribution of FATS variables
[1] BD4 "strongly encourages" the reallocation of all FDI positions (voting power of 10 per cent or more) to the country of the ultimate controlling parent (UCP) of the direct investor. To the extent that the UCPs of all direct investors in resident enterprises are identified, the UCPs of those direct investors with controlling interests in residents will be available. In order to apply the directional principle, FDI statistics identify whether the resident direct investment enterprise has a foreign or domestic UCP (noting that this parent will be controlled by itself and so will have a resident ultimate parent, if there are no controlling links above it).
[2] As a matter of comparison, BD4 encourages that supplemental inward FDI position statistics be compiled on an ultimate investing country (UIC), and the corresponding industry sector..
[3] Identification of the UCI can also be used to identify cases of round-tripping in inward FATS statistics. Round-tripping refers to the channelling abroad by direct investors of local funds that are then subsequently returned to the local economy in the form of direct investment.
[4] It is important to note that for the latter, this will lead to double counting when comparing with data compiled by other countries.
[5] This is in contrast to the guidelines for FDI. According to BD4, if the ownership is through a directly held affiliate located in another country, the variables should be attributed to the country of that affiliate. BD4 included in its research agenda the presentation of FDI positions by the country in which the affiliate is located (ultimate host country). Because of the difficulties in tracking financial flows from the immediate counterparty to the ultimate destination, most countries present only FDI data attributed to the immediate counterparty.