Imports and exports of services (P.62 and P.72)

3.140 Definition:

Exports of services consist of all services rendered by residents to non-residents.

3.141 Definition:

Imports of services consist of all services rendered by non-residents to residents.

3.142 Exports of services include the following borderline cases:

1. transportation of exported goods after they have left the frontier of the exporting country when provided by a resident carrier (cases 2 and 3 in Table 3.4);
2. transportation of imported goods by a resident carrier:
   1. (1) up to the frontier of the exporting country when goods are valued f.o.b. to offset the transportation value included in the f.o.b.-value (case 3 in Table 3.5);
   2. up to the frontier of the importing country when goods are valued c.i.f. to offset the transportation value included in the c.i.f.-value (cases 3 and 2 c.i.f. in Table 3.5).
3. transportation of goods by residents on behalf of non-residents which does not involve imports or exports of the goods (e.g. the transport of goods that do not leave the country as exports or the transport of goods outside the domestic territory);
4. international or national passenger transportation on behalf of non-residents by resident carriers;
5. minor processing and repair activities on behalf of non-residents;
6. construction services when a construction site office abroad is not treated as a quasi-corporation. This applies to construction projects lasting less than a year and whose output is not gross fixed capital formation {see paragraph 2.09 and in particular the corresponding note (4)};

7. installation of equipment abroad when a project is of limited duration by its nature;
8. financial services by the amount of the explicit commissions and fees and the part of financial intermediation services indirectly measured used by non-residents;
9. insurance services by the amount of the services charge;
10. expenditure by non-resident tourists and business travellers (by convention classified as services; however, for the purposes of the supply and use and symmetric input-output tables, a global breakdown by products may be necessary);
11. expenditure by non-residents on health and education services provided by residents; this includes the provision of these services on the domestic territory as well as abroad;
12. services of owner-occupied holidays homes of non-residents (see paragraph 3.64);

13. royalties and license fees, receipts of which are associated with the authorised use of intangible non-produced non-financial assets and property rights, such as patents, copyrights, trademarks, industrial processes, franchises, etc., and with the use through licensing agreements of produced originals or prototypes, such as manuscripts, paintings, etc.

3.143 For imports of services most borderline cases are the mirror-image of those for exports of services; therefore, only a limited number of specific clarifications are necessary for imports of services.

3.144 Imports of transport services include the following borderline cases:

1. transportation of exported goods up to the frontier of the exporting country when provided by a non-resident carrier to offset the transportation value included in the f.o.b.-value of the exported goods (case 4 in Table 3.4);
2. transportation of imported goods by a non-resident carrier:

   (1) from the frontier of the exporting country as a separate transportation service when imported goods are valued f.o.b. (cases 4 and 5 f.o.b. in Table 3.5);

   (2) from the frontier of the importing country as a separate transportation service when imported goods are valued c.i.f. (in this case the value of the transportation service between the frontiers of the exporting and the importing country is already included in the c.i.f.-value of the good; case 4 in Table 3.5).

3. transportation of goods by non-residents on behalf of residents which does not involve imports or exports of goods (e.g. transport of goods in transit or transport outside the domestic territory);
4. international or national passenger transportation on behalf of residents by non-resident carriers.

Imports of transport services do not include transportation of exported goods after they have left the frontier of the exporting country when provided by a non-resident carrier (cases 5 and 6 in Table 3.4). Exports of goods are valued f.o.b. and all such transport services are thus to be regarded as transactions between non-residents, i.e. between a non-resident carrier and a non-resident importer. This applies even when these transportation services are paid under export-c.i.f.-contracts by the exporter.

3.145 Imports in respect of direct purchases abroad by residents cover all purchases of goods and services made by residents while travelling abroad for business or personal purposes. Two categories must be distinguished because they require different treatment:

1. expenditures by business travellers are intermediate consumption;
2. expenditures by other travellers on personal trips are household final consumption expenditure.

3.146 Imports and exports of services are recorded at the time at which they are rendered, which mostly coincides with the time at which the services are produced. Imports of services are to be valued at purchasers' price and exports of services at basic prices.

Table 3.4 The treatment of transportation of exported goods

Explanation of how to read this table: the first part of this table indicates that there are six different possibilities of transportation of exported goods, depending on whether the carrier is resident or not and depending on where the transport takes place: from a place on the domestic territory to the national border, from the national border to the border of the importing country or from the border of the importing country to a place within the importing country. In the second part of this table, for each of these six possibilities, it is indicated whether they are to be recorded as exports of goods, exports of services, imports of goods or imports of services.

Domestic territory		Territory in between		Territory of importing country
1. resident carrier		2. resident carrier		3. resident carrier
4. non-resident carrier		5. non-resident carrier		6. non-resident carrier

Table 3.5 The treatment of transportation of imported goods

Explanation of how to read this table: The first part of this table indicates that there are six different possibilities of transportation of imported goods, depending on whether the carrier is resident or not and depending on where the transport takes place: from a place in the exporting country to the border of this exporting country, from the border of the exporting country to the border of the importing country and from the border of the importing country to a place within the importing country. In the second part of this table, for each of these six possibilities, it is indicated whether they are to be recorded as imports of goods, imports of services, exports of goods or exports of services. In some instances (cases 2 and 5), this recording depends on the valuation principle applied for imported goods.
Note that the transition from valuation of imported goods at c.i.f. to f.o.b. consists of:

1. c.i.f./f.o.b. adjustment, i.e. from 2 c.i.f. to 2 f.o.b. (reduces total imports and exports);
2. c.i.f./f.o.b. reclassification, i.e. from 5 c.i.f. to 5 f.o.b. (leaves total imports and exports unchanged).

Domestic territory		Territory in between		Territory of importing country
1. resident carrier		2. resident carrier		3. resident carrier
4. non-resident carrier		5. non-resident carrier		6. non-resident carrier