edicom report - bilateral analysis of asymmetries in ... · statistics & analysis of trade unit...

EDICOM REPORT

200453202016

Bilateral Analysis of Asymmetries in Foreign Trade Statistics between Germany and the United Kingdom December 2005

Sunita Bundhoo-Jouglah Andrew Kochen and Tricia Williams

Statistics and Analysis of Trade Unit HM Revenue & Customs

5th Floor Central Alexander House

21 Victoria Avenue Southend-on-Sea SS99 1AA

United Kingdom

Bilateral Analysis of Asymmetries in Foreign Trade Statistics between Germany and the UK

Statistics & Analysis of Trade Unit (SATU) HM Revenue and Customs, December 2005 2

Table of Contents

Summary......................................................................................................................3

1. Introduction ..............................................................................................................3

2. Background ..............................................................................................................4

3. The equipment and software applications................................................................5

4. Trade in goods asymmetry between the UK and the rest of the EU ........................5

5. UK’s trade pattern ..................................................................................................10

6. Germany’s trade pattern ........................................................................................12

7. Asymmetries between UK and German Trade ......................................................14

7.1 Asymmetries between UK Arrivals and German Dispatches ............................15

7.2 Asymmetries between UK Dispatches and German Arrivals ............................22

8. Redistribution of trade for Chapter 99 by Germany ...............................................27

8.1 Impact of asymmetries after redistribution of Chapter 99 .................................29

8.2 UK’s Chapter 99................................................................................................31

9. Reasons for asymmetries between UK and the Member States ...........................32

10. Recommendations for further work ......................................................................37

11. Ongoing UK investigations...................................................................................39

12. Conclusion ...........................................................................................................40

Glossary .....................................................................................................................41

Appendix 1 .................................................................................................................43

Appendix 2 .................................................................................................................47



Summary A report on the study into United Kingdom (UK) and German reported trade as published on Comext, the European trade database. The aim was to identify the chapters that contributed most to the overall discrepancies between the reported trade of the two countries, and carry out an investigation to establish why such discrepancies might have arisen. This was done by comparison of data for the year 2003 between the two Member States. During the course of the study, some of the asymmetries were identified and measured. Based on the results of these analyses, conclusions have been drawn on the different sources of asymmetries. The special treatment in Germany and the United Kingdom of specific goods (e.g. aircraft, motor vehicle parts) and the use of Chapter 99 were analysed in this study and their impact evaluated. This report presents the conclusions and outcomes of the UK study. It also contributes to better understanding and resolution of asymmetries between Member States in general. 1. Introduction The Statistics and Analysis of Trade Unit (SATU) is part of the UK’s HM Revenue & Customs (HMRC), and is responsible for collection, compilation and publication of the UK’s Overseas Trade Statistics (OTS). The aim of the bilateral study between the UK and Germany was to analyse asymmetries in intra-community trade statistics, using data from the Comext database, in order to reduce the asymmetries between these two countries. The bilateral study was conducted between January 2005 and December 2005. Discrepancies between the UK and other Member States were identified at a total aggregate level over a three-year period (2002-2004). Discrepancies between UK and Germany were highlighted at the HS21 level for 2003. More detailed analyses were carried out at CN81 level (for 2003), starting with chapters showing the highest discrepancies at chapter level. The top 70 per cent of discrepancies at chapter level were shown, then the top CN8 commodity codes (comcodes) within these chapters where used for further analyses.

1 Classification: HS2 (Harmonised System) = 2 digit Chapter CN8 (Combined Nomenclature) = 8 digits Commodity



2. Background An asymmetry is the difference between trade recorded by countries in the mirror flow, e.g. the difference between what the UK records as an arrival from Germany and what Germany records as the corresponding dispatch to the UK. The reported trade as calculated by a reporting country is almost always different from the reported trade as calculated by the EU partner country. Asymmetries have always existed. However, differences between Member States increased after the introduction of the Intrastat system in 1993. This led to a discontinuity with the trade patterns seen prior to January 1993, and was partly due to differences in the recording of extra-trade2, e.g. non-EC trade recorded as EU trade. We have witnessed in more recent years a growth in trade asymmetries. Since this appears to be a growing problem, it is important to try and address the issues that may be influencing these discrepancies as well as reviewing the existing known differences in coverage. The result of this mirror analysis describes observed discrepancies between trade statistics declared by UK and those declared by Germany. It gives some of the possible reasons for the differences and recommendations for reducing asymmetries between the intra-EU countries. The year 2003 was chosen, as it was the most recent year where final data were available. The 2004 data were provisional and, with the additional 10 accessionary countries joining the EU in May 2004, there was distortion in the intra-EU trade statistics time series.

2 Extra-trade is trade that has been erroneously included on the Supplement declaration’s, leading to over-recording



3. The equipment and software applications Data were taken from the Comext Database via Internet link and are on a Special trade3 basis. The data were manipulated in SAS and Excel. We also used UK data held on a UNIX box4 and obtained some data directly from Germany to enable analysis at comcode level for some Chapters that were suppressed on the Comext database. The project was discussed over three meetings; these included visits by HMRC to Germany Federal Statistics Office and vice versa. The first one was a pre-meeting in March 2004; three UK representatives from the HMRC visited Wiesbaden to discuss the planning of the project. In the June 2005 visit, three UK representatives visited Wiesbaden and exchanged data with the Germans and discussed the chapters to be analysed in detail. In October 2005, the visit of the two German representatives to HMRC enabled mutual problems to be discussed, and further detailed analysis identified and agreed. 4. Trade in goods asymmetry between the UK and the rest of the EU Asymmetries have always existed between UK and the rest of the EU. The recent asymmetries of the UK with the rest of the EU for the years 2002, 2003 and 2004 in absolute and relative terms are illustrated in the Tables 4.1 - 4.4. The main indicators used to calculate asymmetry, as stated by Eurostat, are as follows: (1) Share of asymmetry arrivals = |mirror arrivals – declared arrivals| *100 Σ|mirror arrivals – declared arrivals| (2) Share of asymmetry dispatches = | declared dispatches- mirror dispatches| *100 Σ| declared dispatches – mirror dispatches|

3 Data on the Comext database excludes warehouse or freezone goods, and are referred to as “Special trade” 4 Data on Unix box are in pound sterling (GBP), so conversion to euro were made using the annual conversion rates



Table 4.1: Asymmetries between UK Dispatches and rest of the EU Arrivals

p: Provisional 1: Data for the additional Member States are from May 2004

Source: Comext Database, extracted August 2005

€ millions

France 29,461 25,455 4,006 26,825 24,480 2,344 26,186 26,041

145 Netherlands 21,909 18,642 3,267 19,181 17,348 1,833 16,931

16,523 408

Germany 34,391 33,484 907 29,476 31,905 -2,430 30,559 34,689

- 4,131 Italy 13,401 13,390 11 12,285 12,708 -423 11,848

11,999 -151

Ireland 25,097 23,223 1,874 18,492 16,537 1,955 19,770 17,351

2,418 Denmark 4,353 4,640 -287 3,175 3,510 -335 2,860

3,271 -411

Greece 1,909 1,345 564 1,813 1,641 171 1,968 1,761

207 Portugal 2,414 2,207 207 2,087 2,041 46 2,213

2,03 6 176

Spain 13,315 11,611 1,704 12,726 12,165 562 12,845 12,539

305 Belgium 15,827 15,646 181 15,589 15,632 -43 14,431

15,801 - 1,370

Luxembourg 563 472 91 414 340 74 369 220 150

Sweden 6,117 5,777 340 5,498 5,665 -167 6,118 5,815 304

Finland 2,276 2,155 121 2,149 2,003 146 1,904 1,908 -4

Austria 2,001 1,957 43 1,807 1,851 -44 1,537 1,773 -236

Malta 360 248 112

Estonia 133 107 26

Latvia 125 73 52

Lithuania 187 158 29

Poland 1,971 1,674 298

Czech Rep. 1,350 1,202 148

Slovakia 304 255 50

Hungary 1,282 836 446

Slovenia 217 149 68

Cyprus 438 292 146

2002 2003 2004 p

EU Partner UK Dispatches

EU14 Arrivals Asym UK

Dispatches EU14

Arrivals Asym UK Dispatches

EU24 Arrivals Asym



Table 4.2: Share of rest of the EU asymmetry Dispatches, UK declarant € millions and percentages

p: Provisional 1: Data for the additional Member States are from May 2004


Among the EU partners, the asymmetry between UK Dispatches and France Arrivals was highest in 2002 with €4,000m and the corresponding share of asymmetry was 29.5 per cent. However, the asymmetry was reduced to €2,300m in 2003 and in 2004 it was further reduced to €145m. The same was observed for Netherlands, the asymmetry was reduced from €3,200m in 2002 to €408m in 2004. However for Germany, the asymmetry increased significantly over the period, from €907m in 2002 to -€4,100m in 2004. The corresponding share of asymmetry dispatches for Germany increased from 6.5 per cent to 35.0 per cent.

France 29,461 25,455

29.5 26,825 24,480

22.2 26,186 26,041

1.2

Netherlands 21,909 18,642

24.0 19,181 17,348

17.3 16,931 16,523 3.5

Germany 34,391 33,484

6.7 29,476 31,905

23.0 30,559 34,689

35.0

Italy 13,401 13,390

0.1 12,285 12,708

4.0 11,848 11,999

1.3

Ireland 25,097 23,223

13.8 18,492 16,537

18.5 19,770 17,351

20.5

Denmark 4,353 4,640

2.1 3,175 3,510

3.2 2,860 3,271

3.5

Greece 1,909 1,345

4.1 1,813 1,641

1.6 1,968 1,761

1.8

Portugal 2,414 2,207

1.5 2,087 2,041

0.4 2,213 2,036

1.5

Spain 13,315 11,611

12.5 12,726 12,165

5.3 12,845 12,539

2.6

Belgium 15,827 15,646

1.3 15,589 15,632

0.4 14,431 15,801

11.6

Luxembourg 563 472

0.7 414 340

0.7 369 220

1.3

Sweden 6,117 5,777

2.5 5,498 5,665

1.6 6,118 5,815

2.6

Finland 2,276 2,155

0.9 2,149 2,003

1.4 1,904 1,908

0.0

Austria 2,001 1,957

0.3 1,807 1,851

0.4 1,537 1,773

2.0

Malta 360 248

0.9

Estonia 133 107

0.2

Latvia 125 73

0.4

Lithuania 187 158

0.2

Poland 1,971 1,674

2.5

Czech Rep. 1,350 1,202

1.3

Slovakia 304 255

0.4

Hungary 1,282 836

3.8

Slovenia 217 149

0.6

Cyprus 438 292

1.2

Total EU 173,033 160,004 100.0 151,516 147,826 100.0 155,905 156,720 100.0

Share of Asym

Dispatches (%)

EU Partner

2002 2003 2004 p,1

Mirror Dis-

patches

Share of Asym

Dispatches (%)

Dis- patches

Mirror Dis -

patches Dis -

patches Mirror Dis -

patches

Sh are of Asym

Dispatches (%)

Dis- patches



Table 4.3: Asymmetries between UK Arrivals and rest of the EU Dispatches

p: provisional 1: Data for the additional Member States are from May 2004

Source: Comext Database, extracted in August 2005

€ millions

France 30,046 34,565 -4,519 28,375 32,641 -4,266 28,017 33,735 -5,718

Netherlands 24,113 27,931 -3,818 22,589 26,570 -3,981 25,509 29,049 -3,541

Germany 48,752 53,760 -5,008 47,594 55,596 -8,002 49,151 61,057 -11,906

Italy 17,194 18,780 -1,586 16,936 18,686 -1,750 16,962 19,400 -2,437

Ireland 15,183 22,488 -7,305 14,507 14,875 -369 14,371 14,797 -426

Denmark 4,551 5,970 -1,419 4,348 4,997 -649 4,338 5,365 -1,027

Greece 945 681 264 905 883 22 929 923 7

Portugal 2,699 2,846 -147 2,804 2,888 -84 2,722 2,757 -35

Spain 13,060 12,862 198 12,218 12,901 -682 12,435 12,882 -447

Belgium 18,570 21,975 -3,405 17,596 20,554 -2,958 17,895 21,352 -3,457

Luxembourg 798 946 -148 896 1,066 -170 1,167 1,114 53

Sweden 6,882 6,922 -40 6,675 6,897 -222 7,293 7,568 -275

Finland 4,335 4,592 -256 3,825 3,765 60 3,299 3,461 -162

Austria 3,689 4,086 -397 3,926 4,070 -144 3,315 4,036 -721

Malta 250 169 81

Estonia 312 129 183

Latvia 774 276 498

Lithuania 356 270 86

Poland 2,419 2,309 111

Czech Rep. 1,800 1,655 145

Slovakia 373 502 -129

Hungary 2,204 1,584 620

Slovenia 234 189 45

Cyprus 251 149 102

UKArrivals

EU14 Dispatches AsymEU Partner

2002 2003 2004p1

UK Arrivals

EU14 Dispatches Asym

UK Arrivals

EU24 Dispatches Asym



Table 4.4: Share of rest of the EU asymmetry Arrivals, UK declarant € millions and percentages

p: provisional 1: Data for the additional Member States are from May 2004


The asymmetry between the UK arrivals and the Ireland dispatches was highest in 2002 with -€7,300m; but the asymmetry was largely reduced to -€369m in 2003. In relative terms, the share of asymmetry arrival dropped from 25.6 per cent in 2002 to 1.3 per cent in 2004. As for the asymmetries of France and Germany, they have been increasing over the three year period. For France, the asymmetry was -€4,500m in 2002 and reached -€5,700m in 2004. The corresponding share of asymmetry arrival for France increased from 15.9 per cent to 17.8 per cent. As for Germany, the increase in asymmetries was more significant over the three years, from -€5,000m in 2002 to -€8,000m in 2003 and -€11,900m in 2004. The share of asymmetry arrival increased from 17.6 per cent in 2002 and was doubled in 2003 with 34.3 per cent. It increased further to 37.0 per cent in 2004.

France 30,046 34,565 15.9 28,375 32,641 15.9 28,017 33,735 17.8Netherlands 24,113 27,931 13.4 22,589 26,570 13.4 25,509 29,049 11.0Germany 48,752 53,760 17.6 47,594 55,596 17.6 49,151 61,057 37.0Italy 17,194 18,780 5.6 16,936 18,686 5.6 16,962 19,400 7.6Ireland 15,183 22,488 25.6 14,507 14,875 25.6 14,371 14,797 1.3Denmark 4,551 5,970 5.0 4,348 4,997 5.0 4,338 5,365 3.2Greece 945 681 0.9 905 883 0.9 929 923 0.0Portugal 2,699 2,846 0.5 2,804 2,888 0.5 2,722 2,757 0.1Spain 13,060 12,862 0.7 12,218 12,901 0.7 12,435 12,882 1.4Belgium 18,570 21,975 11.9 17,596 20,554 11.9 17,895 21,352 10.7Luxembourg 798 946 0.5 896 1,066 0.5 1,167 1,114 0.2Sweden 6,882 6,922 0.1 6,675 6,897 0.1 7,293 7,568 0.9Finland 4,335 4,592 0.9 3,825 3,765 0.9 3,299 3,461 0.5Austria 3,689 4,086 1.4 3,926 4,070 1.4 3,315 4,036 2.2Malta 250 169 0.3Estonia 312 129 0.6Latvia 774 276 1.5Lithuania 356 270 0.3Poland 2,419 2,309 0.3Czech Rep. 1,800 1,655 0.4Slovakia 373 502 0.4Hungary 2,204 1,584 1.9Slovenia 234 189 0.1Cyprus 251 149 0.3

Total EU 190,817 218,404 100.0 183,193 206,390 100.0 196,375 224,725 100.0

EU Partner Arrivals Mirror Arrival

Share of Asym Arrival (%)

Mirror Arrival


2002 2003 2004 p,1

Arrivals Mirror Arrival


Arrivals



5. UK’s trade pattern The UK trade has been broken down by EU partner countries for the year 2003. The UK’s largest trading partners are illustrated in table 5. The corresponding percentages are presented in the charts. Table 5: UK’s trade in 2003 by main partner

€ billion

Partner Arrivals Dispatches Balance Arrivals (%)

Dispatches (%)

Germany 47.6 29.5 -18.1 24.9 18.7

France 28.4 26.9 -1.5 14.8 17.0

Netherlands 22.6 19.2 -3.4 11.8 12.2

Ireland 14.5 18.5 4.0 7.6 11.7

Belgium 17.6 15.6 -2.0 9.2 9.9

Italy 16.9 12.3 -4.6 8.9 7.8

Spain 12.2 12.7 0.5 6.4 8.1

Others 31.3 23.3 -8.0 16.4 14.7

Total 191.0 157.9 -33.1 100.0 100.0

Source: Comext Database, extracted August, 2005

The total UK arrivals in 2003 were €191bn. Germany was the largest trading partner of UK arrivals with 25 per cent of the total arrivals. France was the second largest trading partner followed by Netherlands, Belgium, Italy, Ireland and Spain.

Figure 5.1: UK Arrivals by main EU partner

Ireland8%

Spain6%

Others16%

Belgium9%

Italy9%

Germany25%

France15%

Netherlands12%



UK’s arrivals from the rest of the EU countries added up to €31.3bn, which represented 16 per cent of the total trade. The total UK dispatches in 2003 was €157.9bn. Germany was the largest trading partner of UK in terms of dispatches, which represented 19 per cent of the total dispatches. France was the second largest trading partner followed by Netherlands, Ireland, Belgium, Italy and Spain as shown in Figure 5.2. The UK dispatches for the rest of the EU countries added up to €23.3bn; 15 per cent of the total dispatches in relative terms. The corresponding balance for UK with the rest of the EU was -€33.1bn for the year 2003.

Figure 5.2: UK Arrivals by main EU partner

Ireland12%

Spain8%

Others15%

Belgium10% Italy

8%

Germany18%

France17%

Netherlands12%



6. Germany’s trade pattern In order to identify Germany’s largest trading partner among the rest of the EU countries, German trade has been broken down by EU partner countries. The top 7 largest trading partners are illustrated in table 6.1. Table 6.1: Germany’s trade in 2003 by main partner

€ billion

Partner Arrivals Dispatches Balance Arrivals (%)

Dispatches (%)

France 49.4 69.0 19.6 14.2 16.3

Netherlands 59.6 42.2 -17.4 17.1 10.0

UK 31.9 55.6 23.7 9.2 13.1

Italy 33.8 48.4 14.6 9.7 11.4

Belgium 38.2 35.3 -2.9 11.0 8.3

Austria 22.6 35.9 13.2 6.5 8.5

Spain 16.0 32.4 16.4 4.6 7.6

Others 96.1 105.1 9.0 27.6 24.8

Total 347.7 423.9 76.2 100.0 100.0

Source: Comext database, extracted September 2005

The total German arrivals in 2003 were €347.7bn and the total German dispatches were €423.9bn. The balance, for Germany’s trade with the rest of the EU was €76.2bn.

Figure 6.1: Germany Arrivals by main EU partner

Austria7%

Spain5%

Others27%

Belgium11%

Italy10%

UK9%

France14%

Netherlands17%



For the year 2003, France was the largest trading partner of Germany in terms of dispatches (16 per cent). UK was the second largest followed by Italy, Netherlands and Austria, Belgium and Spain. German dispatches to the rest of the EU countries added up to €105.1bn, which represented 25 per cent of the total trade.

Figure 6.2: Germany Dispatches by main EU partner

Austria9%

Spain8%

Others25%

Belgium8%

Italy11%

UK13%

France16%

Netherlands10%

Netherlands was the largest trading partner of Germany for arrivals (17 per cent). France was the second largest trading partner followed by Belgium, Italy, UK, Austria and Spain. German arrivals from the rest of the EU countries added up to presenting 27 per cent of the total trade.



7. Asymmetries between UK and German Trade As the study involves the asymmetry between UK and Germany in 2003, the trade between these two countries and their respective asymmetries is illustrated figure 7.1.

Figure 7.1: UK - German trade, 2003 (€ billion)

-2.4

-8.0

31.929.5

55.6

47.6

-20.0

-10.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

UK Arrivals (A) DE Dispatches (B) Discrepancy(A-B) UK Dispatches (C) DE Arrivals (D) Discrepancy(C-D)

Source: Comext database, extracted July 2005

The absolute discrepancy between UK arrivals and German dispatches in 2003 reached €8.0bn when analysed at total level. At the same level, the absolute discrepancy between the UK dispatches and German arrivals amounted to €2.4bn. UK trade balance with Germany was -€18.1bn in 2003, whereas Germany reported this as -€23.7bn. Therefore the difference in the UK trade balance with Germany was -€5.6bn in 2003.



7.1 Asymmetries between UK Arrivals and German Dispatches The asymmetries between UK arrivals and German dispatches were €786m in 1998 and reached -€9,200m in 2004, as shown by the time series in Figure 7.2. The introduction of the Intrastat system led to a discontinuity with the trade patterns prior to 1993. From 1997 onwards, a more significant increase in the asymmetries was observed.

Source: Comext database, extracted September 2005 The same absolute discrepancy has been analysed at HS2 digit level.

Figure 7.2: Asymmetries between UK Arrivals and German

Dispatches 1988-2004 (€ million)

-10,000

-9,000

-8,000

-7,000

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004



Table 7.1: Asymmetry between UK Arrivals and Mirror Arrivals

€ million and percentages

HS2 Description Declared Arrivals

Mirror Arrivals

Asym. Arrivals

Share of Asym

99 Other products 14 2,612 -2,598 27.985 Electrical machinery and equipment 4,718 5,988 -1,269 13.684 Nuclear reactors, boilers, machinery 8,579 9,616 -1,037 11.127 Mineral fuels, mineral oils, mineral waxes 394 1,067 -673 7.287 Vehicles other than railway 14,443 14,959 -516 5.586 Railway or tramway locomotives 56 403 -347 3.789 Ships, boats and floating structures 23 332 -309 3.348 Paper and paperboard; articles of paper 1,178 1,468 -290 3.195 Toys, games and sports requisites 262 470 -209 2.288 Aircraft, spacecraft, and parts thereof 396 576 -180 1.971 Natural or cultured pearls, precious stones 188 335 -147 1.624 Tobacco and manufactured tobacco substitutes 180 47 132 1.476 Aluminium and articles thereof 647 757 -110 1.282 Tools, implements,cutlery,spoons & fork 335 433 -99 1.126 Ores, slag and ash 97 3 94 1.0

Source: HMRC and Germany Federal Statistics Office, June 2005

Table 7.1 shows 73 per cent of UK arrival discrepancies to Germany were made up of 5 Chapters codes: chapter 99 (28 per cent); chapter 85 (14 per cent); chapter 84 (11 per cent); chapter 27 (7 per cent); and chapter 87(6 per cent). Chapter 99 is discussed in detail at a later stage in this report. Germany includes late response and below threshold in Chapter 99 which explains most of the discrepancy. In addition, Germany includes repairs unlike the UK. Analysis of the other chapters with the highest discrepancies, sorted by share of asymmetries Chapter 85 (Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles) Chapter 85 accounted for nearly 14 per cent (€1.3bn) of the discrepancies between UK arrivals and German dispatches during 2003. There were several CN8 digit commodities within this chapter showing relatively large discrepancies.



Table 7.2: Asymmetry between UK Arrivals and Mirror Arrivals € millions and percentages

CN8 Description Declared Arrivals

Mirror Arrivals

Asym Arrivals

Share of

asym (%)

85252091 Transmission apparatus, incorporating reception apparatus, 978 1,201 -223 8.4 for cellular networks 'mobile telephones'

85243100 Discs, recorded, for laser reading systems 21 124 -103 3.9 85254011 Still image digital video cameras and digital cameras 146 238 -94 3.5 85243920 Digital versatile discs 'DVD' 64 157 -93 3.5 85422169 Monolithic integrated circuits, digital, of MOS type (excl. in 40 117 -77 2.9

wafer or chip form, cards incorporating electronic integrated circuits, memories, microprocessors

85443090 Ignition wiring sets and other wiring sets for vehicle, 31 109 -78 2.9 aircraft or ships (excl. those for civil aircraft

Source: Comext database, extracted October 2005 Part of the discrepancies in Chapter 85 could be explained by missing declarations and triangulation trade. In addition, there could possibly be some classification problems with the comcodes 85252091 and 85254011.e.g. mobile phones with camera. UK classified them under the comcode 85252091. However, when looking at UK arrivals figure for this particular comcode, the weight per unit was much higher than the weight per unit dispatched by Germany. Table 7.3: Mobile phones UK Arrivals German Dispatches Price/unit Weight/unit Price/unit Weight/unit85252091 € 110 2359g € 129 423g 85254011 € 117 501g € 211 666g

Source: HMRC and Germany Federal Statistics Office, October 2005 After contacting the data editor5, it was found that for the months of November and December, the weights were unusually higher for the comcode 85252091 (2.7 kg and 13.5 kg respectively) than the previous months. It was assumed that these might be due to input error since the price per unit was not affected. However, for the comcode 85254011, the price per unit as declared by Germany was almost double than that declared by UK. When looking at the supplementary units for the comcode 85252091, the difference between the German dispatches and UK arrivals was 448,000; whereas that of 85254011 was -103,000. There could possibly be some classification problems between these two comcodes.

5 The Data Editors oversee the entry of the data in specific chapters as it is received from the traders. As such, they have a good knowledge of the trade in their particular field and therefore are sometimes able to comment directly on any discrepancy noted in the trade statistics.



Chapter 84 (nuclear reactors, boilers, machinery and mechanical appliances; parts thereof) Chapter 84 accounted for approximately 11 per cent (€1,04bn) of the discrepancies between UK dispatches and German arrivals during 2003. Table 7.4: Chapter 84 ranked by Share of asymmetries, top 20 per cent

€ millions and percentages


Mirror Arrivals

Asym Arrivals

Share asym(%)

84716040 Printers, for digital automatic data processing machines 159.6 463.2 -303.6 6.2

84717053 Hard disk storage drives for digital automatic data processing 371.4 137.0 234.4 4.8

84733090 Parts and accessories of automatic data processing 427.0 267.0 160.0 3.3

84111219 Turbo-jets of a thrust > 132 kN, for civil aircraft 26.4 174.5 -148.1 3.0

84715090 Processing units for automatic data processing machines,digital 441.4 568.0 -126.6 2.6

84571010 Horizontal machining centres for working metal 67.8 185.2 -117.4 2.4

Source: Comext database, extracted October 2005

Comcodes (84716040 and 84717053) account for 11 per cent of the arrivals asymmetry. The weight and price per unit for these two comcodes were calculated as shown in the table 7.4 Table 7.5: Printers and hard disks UK Arrivals German Dispatches Price/unit Weight/unit Price/unit weight/unit

84716040 € 156 7583g € 195 5755g

84717053 € 42 267g € 127 710g

Source: HMRC and Germany Federal Statistics Office, October 2005 Table7.5 shows additional analyses on the weight and price per unit. UK’s weight per unit received for the comcode 84716040 was much higher than that dispatched by Germany. However, for the comcode 84717053, both the weight and price per unit look much lower than the German reported figures. The differences might be partly explained by misclassification between these two comcodes. When the two comcodes are combined together, the asymmetry is reduced to -€69m. Chapter 27 (mineral fuels, mineral oils and products of their distillations, bituminous substances, mineral waxes) Chapter 27 contributed about 7 per cent of the asymmetry between UK arrivals and German dispatches.



Table 7.6: Chapter 27 ranked by Share of asymmetry Arrivals, top 76 per cent



Mirror Arrivals

Asym Arrivals

Share Asym

(%)

27090090 Petroleum oils and oils obtained from bituminous minerals 0 317 -317 34.3

27112100 Natural gas 0 259 -259 28.0

27101190 Fuel oils obtained from bituminous material 7 85 -78 8.4

27101941 Light oils and preparations, of petroleum 188 241 -53 5.7

Source: HMRC and Germany Federal Statistics Office, October 2005 The share of asymmetries for the rest of the chapter was less than one per cent per CN8 code. The UK arrivals for this chapter were €394m, whereas the corresponding Germany dispatches were €1,067m. The two most important commodities in this chapter were crude oil and natural gas. No UK arrival was reported for these two comcodes in 2003. In order to account for this large discrepancy, the data editors who deal with trade in this chapter were contacted, and asked if they knew of any reason why such an anomaly had occurred, possibly relating to transitional trade of crude oil. Further investigation of the data and liaison with the Netherlands (Dutch), improved our understanding of the Netherlands warehousing procedures. The discrepancy could possibly be explained by the quasi-transit in Netherlands ‘Rotterdam Effect’6 and customs warehousing in Netherlands. An example of quasi transit would be crude oil imported into the Netherlands but leaving the country in an unprocessed state. No transfer of ownership to a Dutch resident takes place. Table 7.7: Crude oil trade, declared by UK, Netherlands and Germany Thousand tonnes


6 The ‘Rotterdam Effect’ is used to describe asymmetries or anomalies arising from transit trade through major ports like Rotterdam. More information about the ‘Rotterdam Effect’ can be obtained from EDICOM report on the impact of the Rotterdam and Antwerp Effects.

NL DE UK NL UK DE NL DE UK NL UK DE

Chapter 27 1,555 1,452 3,480 4,442 2,521 51,273 1,925 1,589 2,933 5,928 4,165 54,993

27090090 33 - 1,584 - 49 - - - 1,131 - 18 44

27112100 2 - - - 198 16,254 - - - - - -

German(DE) Dispatches

Netherlands (NL) Dispatches

2003 2004

UK Arrivals German(DE) Dispatches

Netherlands (NL) Dispatches UK Arrivals



Natural gas (CN 27112100) is suppressed by Germany. Under the special trade system in Comext, imported goods entering warehouses are not recorded in the importing country’s trade statistics until they are extracted from the warehouse for home use; if the goods are re-exported direct from the warehouse; they will never be reported on that country’s special trade statistics. Chapter 87 (Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof) Chapter 87 accounted for approximately 6 per cent (€516m) of the discrepancies between UK arrivals and German dispatches during 2003. Table 7.8: Chapter 87 sorted by Share of asymmetry Arrivals, top 73 per cent



Mirror Arrivals

Asym Arrivals

Share sAsym (%)

87033219 Motor cars & vehicles,with cylinder capacity >1500cm3 but < 2500 cm3 1,127 3,087 -1,960 24.2

87032319 Motor cars and vehicles,with cylinder capacity >1500cm3 but < 3000 cm3 6,346 4,633 1,714 21.1 87089998 Parts and access. for tractors, motor vehicles for the transport of >10 peop 1,826 365 1,461 18.0 87032410 Motor cars and vehicles,with cylinder capacity >3000cm3 832 1,639 -807 10.0 87033319 Motor cars and vehicles,with cylinder capacity >2500cm3 516 924 -408 5.0

Source: Comext database, extracted October 2005 Germany found that there were misclassifications in the comcodes 87033219 and 87032319. When these two comcodes are combined together, the asymmetry is reduced to €246m. These two comcodes explain around 45 per cent of the share of asymmetry arrival in this chapter. Germany also confirmed that for comcode 87089998, the car spare parts are included in Chapter 99, which accounted for the low German dispatches. Chapter 86 (Railway or tramway locomotives, rolling-stock and parts thereof) Most of the discrepancies in this chapter were explained by the comcode 86031000 (Self-propelled railway or tramway coaches, vans and trucks). There were no UK arrivals for this particular comcode whereas Germany dispatches were €354m. After contacting the data editors, it was found that one particular trader had not declared imported trains since 2003. In 2005, the trader submitted returns for the previous three years. However, since it is still under investigation, the UK arrivals have not been revised yet.



Chapter 88 (Aircraft, spacecraft, and parts thereof) There have been problems arising from the differences in the handling of trade in large aircraft between France and the UK. A previous investigation identified that some French dispatches to the UK were too high. However, in 2005, it was discovered that one UK company had acquired aircraft in 2004, sold them on to another company and then leased them back. They were not declaring these aircraft as arrivals. Another company that was VAT free (exempted from VAT on large aircraft) had not declared imported airbuses since 2001, being under the impression that they did not need to enter any declarations. The UK arrival figures from both France and Germany have been adjusted to take into account these missing aircraft. These adjustments were sent to Eurostat in July 2005. However, UK arrivals from Germany were not affected in 2003.



7.2 Asymmetries between UK Dispatches and German Arrivals The asymmetries between UK dispatches and German arrivals were -€453m in 1988 and reached -€2,900m in 2004 as shown in Figure 7.3. An increase from -€1,291m to €1,781m in the asymmetries was observed between 1992 and 1994. Prior to 1993, the Intrastat system led to a discontinuity with the patterns. This might be the reason for the sudden rise in the values during that period. However, between 2002 and 2003, a considerable change from €388m to -€2,413m was noticed.

Figure 7.3: Asymmetries between UK Dispatches and German Arrivals, 1988-2004 (€ million)

-3,500

-3,000

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004




Table 7.9: Share of asymmetry Dispatches at HS2 level, top 86 per cent € millions and percentages

HS2 Description Dispatches

Mirror Dis-

patches

Asym Dis-

patches

Share of asym (%)

99 Other products 6 2,653 -2,647 32.6

27 Mineral fuels, mineral oils and products of their distillation 2,075 3,981 -1,906 23.4

88 Aircraft, spacecraft, and parts thereof 1,712 1,122 591 7.3

84 Nuclear reactors, boilers, machinery and mechanical appl 5,475 5,078 397 4.9

87 Vehicles other than railway or tramway rolling-stock 2,878 2,494 384 4.7

90 Optical, photographic, cinematographic, measuring, 990 784 205 2.5

85 Electrical machinery and equipment and parts thereof; 4,281 4,134 147 1.8

76 Aluminium and articles thereof 575 716 -140 1.7

30 Pharmaceutical products 1,275 1,144 131 1.6

38 Miscellaneous chemical products 589 716 -127 1.6

29 Organic chemicals 1,664 1,786 -122 1.5

62 Articles of apparel and clothing accessories, not knitted 249 132 117 1.4

28 Inorganic chemicals: organic or inorganic compounds 209 304 -95 1.2

Source: HMRC and Germany Federal Statistics Office, June 2005

Table 7.9 shows 73 per cent of UK dispatch discrepancies to Germany were made up of 5 Chapters codes: chapter 99 (33 per cent); chapter 27 (23 per cent); chapter 88 (7 per cent); chapter 84 (5 per cent); and chapter 87(5 per cent). Detailed analysis for the chapters with the larger discrepancies follows. Chapter 27 (mineral fuels, mineral oils and products of their distillations, bituminous substances, mineral waxes) Chapter 27 accounted for approximately 23 per cent (€1.91bn) of the discrepancies between UK dispatches and German arrivals during 2003. There were several commodities within Chapter 27 showing relatively large discrepancies.



Table 7.10: Chapter 27 ranked by Share of asymmetry Dispatches, top 92 per cent € millions and percentages

CN8 Description

Mirror

Dis- patches

Declared Dis-

patches

Asym Dis- patches

Share Asym (%)

27090090 Petroleum oils and oils obtained 3,373 1,808 1,565 71.2 from bituminous minerals 27112100 Natural gas 334 0 334 15.2 27101961 Fuel oils obtained from bituminous material 0 71 -71 3.2

27101190 Light oils and preparations, of petroleum 70 4 67 3.0 Source: HMRC and Germany Federal Statistics Office, October 2005

The rest of the chapter was made up of small (less than 1.0 per cent of CN8 code) asymmetries. The share of asymmetry dispatch for comcode 27090090 (Other petroleum oils and oils obtained from bituminous minerals and crude) was 71 per cent. Germany appeared to have received €1.6bn (6.6m tonnes) more crude oil than actually dispatched by UK. In order to account for this large discrepancy, the data editors were contacted. However, they could not explain the differences and it might possibly be related to the ‘Rotterdam Effect’. The Dutch were also contacted to see if any anomaly could have occurred. According to the Dutch, crude oil from UK could go into Dutch warehouse UK and could go from the warehouse to Germany. In this case, the oil is cleared in Germany. Once again, it is related to quasi-transit trade, also referred to as the ‘Rotterdam Effect’. Table 7.11: Crude oil and natural gas trade by declaring country; UK, Netherlands and Germany

Tonnes ‘000s

Source: Comext database, extracted September 2005 As far as oil shipped from the North Sea is concerned, it has been discovered that some vessels ship oil directly from the wellhead to their respective destinations without the oil being landed in the UK. Investigation has started to check if these vessels are involved in any transitional trade with continental Europe. This may account for the excess crude oil dispatched by UK.

NL DE UK NL UK DE NL DE UK NL UK DE

Chapter 27 22,515 10,630 17,028 34,690 15,766 3,885 20,000 13,160 18,676 38,147 16,107 12,793

27090090 17,279 9,354 15,925 3,782 11,877 302 13,711 11,412 17,564 3,370 8,908 181

27112100 - - - - - 2 - - - - 2,240 7,343

2003 2004 UK Dispatches German(DE) Arrivals Netherlands (NL)

Arrivals UK Dispatches German(DE) Arrivals

Netherlands (NL) Arrivals



Chapter 88 (Aircraft, spacecraft, and parts thereof) Chapter 88 accounted for 7 per cent (€591m) of the discrepancies between UK dispatches and German arrivals during 2003. No detailed analysis at CN8 level could be published for this particular chapter, due to suppressions by the UK. Chapter 84 (nuclear reactors, boilers, machinery and mechanical appliances; parts thereof) Chapter 84 accounted for approximately 5 per cent (€396m) of the discrepancies between UK dispatches and German arrivals during 2003. Table 7.12: Chapter 84, ranked by Share of asymmetry Dispatches (top 30 per cent)


CN8 Description Dis- patches

Mirror Dis-

patches Asym

Share asym Dis-

patches(%)

84717051 Disk storage units for digital automatic data processing 21 195 -175 6.7 84733090 Parts and accessories of automatic data processing 94 266 -173 6.7 84111219 Turbo-jets of a thrust > 132 kN, for civil aircraft 35 200 -164 6.3 84119110 Parts of turbo-jets or turbo-propellers, for civil aircraft,. 103 12 92 3.5 84295900 Self-propelled mechanical shovels, excavators and 86 3 82 3.2 84073491 Spark-ignition reciprocating piston eng.,used for vehicles of chapt 87 311 230 82 3.1 84099900 Parts suitable for use solely or principally with compression-ignition 121 43 78 3.0


The asymmetries for comcodes 84717051 and 84733090 were -€175m and -€173m respectively and their corresponding shares of asymmetries were around 14 per cent when added together. German arrivals for these two comcodes appear to be much bigger than UK dispatches. Germany might be misclassifying these comcodes in Chapter 84 instead of Chapter 85. Table 7.13: Comcode 84717051

UK Dispatches German Arrivals Price/unit weight/unit Price/unit weight/unit

84717051 € 207 1626g € 74 956g

Source: HMRC and Germany Federal Statistics Office, October 2005 Both the price and weight per unit for the comcode 84717051 recorded by Germany, are lower than that recorded by UK.



As for comcode 84111219, Germany assumed that the UK dispatches might be in transit to France. Differences in classification for comcodes 84111219 and 84119110 by UK and Germany are also a possibility. Table 7.14: Analysis of turbo jets and parts of turbo jets

UK Dispatch FR Arrival Discrepancy FR Dispatch DE Arrival Discrepancy

84111219 € 2,043m € 102m € 1,94m € 9m € 55m -€ 46m 84119110 € 36m € 63m € -27m € 242m € 28m € 214m

Source: HMRC data, October 2005 Assuming the UK dispatches were in transit to France, it still does not account for all the discrepancy. There could possibly be misclassification between these two comcodes. However, further investigation would require exchange of trader level information. Germany included parts for aircraft engine (comcode 84119110) in their Chapter 99; this explained why their arrivals from UK were lower compared to UK dispatches. Chapter 87 (Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof) Chapter 87 accounted for approximately 5 per cent (€384m) of the discrepancies between UK dispatches and German arrivals during 2003. Table 7.15: Chapter 87 Dispatches by CN8, top 51 per cent of asymmetries


CN8 Description Dispatches Mirror Dispatches Asym

Share of asym

Dispatches(%)

87032410 Motor cars and vehicles, with cylinder capacity >3000cm3 59 172 113 9.3 87083910 Brakes and servo-brakes and their parts for the industrial 25 124 99 8.2 87083990 Brakes and servo-brakes and their parts for tractors, moto 137 53 -84 7.0 87115000 Motor-cycles, incl. mopeds, with reciprocating internal comb 95 22 -73 6.1 87032319 Motor cars and vehicles, with capacity>1500cm3 < 3000 cm3 749 678 -71 5.9 87082990 Motor-cycles, incl. mopeds, with reciprocating internal 169 100 -69 5.7 87033219 Motor cars and vehicles, cylinder capacity >1500cm3, < 2500 231 289 59 4.9 87089410 Steering wheels, steering columns and steering boxes 0 53 53 4.4


Part of the asymmetry in this chapter may be explained by misclassification between comcodes 87083910 and 87083990. When these two comcodes are combined together, the asymmetry is reduced to €13m. Comcodes 87033219 and 87032319 were misclassified by Germany. When combined together the asymmetry drops to -€14m.



8. Redistribution of trade for Chapter 99 by Germany

As mentioned earlier in the report, Germany’s trade for Chapter 99 included late response, below threshold and repairs. Germany redistributed the trade within Chapter 99 to the corresponding chapters so that the results of the mirror analysis between Germany and the UK were more accurate. The redistribution of trade for Chapter 99, German arrivals is illustrated in tables 8.1 and 8.2. Table 8.1: German Arrival after redistribution by HS2 level € millions

HS 2 DE Arrivals

DE Arrivals after

redistribution

Redistributed value

99 2,653 33 -2,61984 5,078 5,424 34685 4,134 4,416 28227 3,981 4,252 27129 1,786 1,908 12230 1,144 1,221 7839 1,012 1,081 6990 784 838 5338 716 765 4976 716 764 4933 501 535 3472 435 464 3040 367 392 2548 348 372 2432 321 343 2228 304 324 2173 240 257 16

49 224 239 15

Source: German Federal Statistics Office, October 2005

Data in the tables 8.1 and 8.2 are by redistributed value and show values greater than €15m.



Table 8.2: German Dispatches after redistribution by HS2 level

€ millions

HS 2 DE Dispatches

DE Dispatches after

redistribution

Redistributed value

99 2,612 168 -2,444

87 14,959 16,051 1,092

84 9,616 9,896 281

88 576 835 259

85 5,987 6,162 175

39 2,180 2,243 64

90 1,739 1,790 51

48 1,468 1,511 43

30 1,087 1,118 32

27 1,067 1,098 31

29 1,022 1,052 30

73 799 822 23

76 757 779 22

72 673 692 20

94 589 606 17

40 572 589 17

38 551 567 16 Source: German Federal Statistics Office, October 2005



8.1 Impact of asymmetries after redistribution of Chapter 99 It is important to look at the changes in the asymmetries within the chapters redistributed. Table 8.3: Share of asymmetry Arrivals after redistribution of Chapter 99 at HS2 level


HS2 Description Mirror Arrivals

Declared Arrivals

Asym Arrivals

Share of Asym (%)

87 Vehicles other than railway or tramway 16,051 14,454 1,597 17.6

85 Electrical machinery and equipment and parts 6,162 4,714 1,449 15.9

84 Nuclear reactors, boilers, machinery 9,896 8,579 1,317 14.5

27 Mineral fuels, mineral oils and products 1,098 396 702 7.7

88 Aircraft, spacecraft, and parts thereof 835 397 438 4.8

86 Railway or tramway locomotives, 414 56 359 3.9

48 Paper and paperboard; articles of paper 1,511 1,177 -334 3.7

89 Ships, boats and floating structures 341 23 319 3.5

95 Toys, games and sports requisites; 484 260 223 2.5

71 Natural or cultured pearls, precious stones 345 189 155 1.7

99 Other products 168 14 155 1.7


The share of asymmetry arrival for Chapter 99 dropped from 28 per cent to 2 per cent after the redistribution. However, the asymmetry arrival for Chapter 87 increased from €516m to €1600m. The corresponding share of asymmetry arrival increased from 6 per cent to 18 per cent. Slight changes were observed for the rest of the chapters.



Table 8.4: Share of asymmetry Dispatches after redistribution, by HS2 level


HS2 Description Declared Dispatches

Mirror Dispatches

Asym. Dispatches

Share of Asym

(%) 27 Mineral fuels, mineral oils and products 2,066 4,252 -2,186 83.929 Organic chemicals 1,662 1,908 -247 9.588 Aircraft, spacecraft, and parts thereof 1,712 1,473 239 9.276 Aluminium and articles thereof 576 764 -188 7.238 Miscellaneous chemical products 591 765 -174 6.790 Optical, photographic, cinematographic, measuring 989 838 152 5.887 Vehicles other than railway or tramway 2,878 3,004 -127 4.928 Inorganic chemicals: organic or inorganic 206 324 -118 4.585 Electrical machinery and equipment and parts 4,299 4,416 -117 4.562 Articles of apparel and clothing accessories 249 141 107 4.175 Nickel and articles thereof 48 132 -83 3.239 Plastics and plastic products 1,000 1,081 -81 3.173 Articles of iron or steel 316 257 59 2.389 Ships, boats and floating structures 44 103 -59 2.361 Articles of apparel and clothing accessories 274 215 58 2.230 Pharmaceutical products 1,273 1,221 51 2.084 Nuclear reactors, boilers, machinery 5,475 5,424 51 2.094 Furniture; medical and surgical furniture; 137 92 45 1.795 Toys, games and sports requisites; 122 81 42 1.635 Aluminous substances; modified starches 107 67 40 1.593 Arms and ammunition; parts and accessories 40 3 37 1.440 Rubber and articles thereof 359 392 -34 1.372 Iron and steel 432 464 -32 1.271 Natural or cultured pearls, precious 182 213 -32 1.208 Edible fruit and nuts; peel of citrus fruits 8 38 -31 1.282 Tools, implements, cutlery, spoons 224 194 30 1.104 Dairy produce; birds' eggs; natural honey 86 116 -30 1.137 Photographic or cinematographic products 168 196 -28 1.122 Beverages, spirits and vinegar 223 196 28 1.199 Other products 6 33 -27 1.0

Source: HMRC and German Federal Statistics Office

A large drop from -€2,600m to €27m was observed in the Chapter 99 mirror dispatches after the redistribution. The corresponding share of asymmetry dropped from 33 per cent to 1 per cent. However, the asymmetry for Chapter 27 changed from -€1,900m to -€2,200m. The corresponding share of asymmetry increased from 23 per cent to 84 per cent. Slight changes were observed for the rest of the chapters.



8.2 UK’s Chapter 99 The UK include data for the following areas in the Chapter 99:

Low Value Trade; Late responses; Parcel Post; Continental Shelf; Estimates of missing trade due to VAT fraud (MTIC); Suppressed data, where the commodity is suppressed;

95 per cent of UK dispatches to Germany classified as comcode 99500000(99AAA000 as shown in Comext), represents transactions of low value trade not classified according to kind. It cannot be said that redistribution of Chapter 99 improved the overall asymmetry as it became worse in other chapters. However, Chapter 99 should be used with more consistency since it is a problematic comcode to investigate.



9. Reasons for asymmetries between UK and the Member States Transit trade Goods may be misclassified because they are in transit from one country to another. An example is the transit of crude oil through the Netherlands; crude oil that is on the way to Germany may pass through the Netherlands, but is neither traded nor cleared in the Netherlands. However, the German trader may report it as an arrival from Netherlands instead of the true country of dispatch. Triangular trade

This term is used to refer to situations where goods move from one EC country to another while a principle in the transaction is based elsewhere. Whatever the financial and invoicing arrangements are in such cases, Supplementary Declarations (SD) must be made in accordance with the physical movements of the goods. For example.

1. Company A (in Italy) places an order with Company B (in France). 2. Company B contracts with Company C (in the United Kingdom) to

Manufacture and dispatch the goods direct to company A. 3. Company C dispatches the goods to Company A 4. Company C invoices Company B for the goods. 5. Company B invoices Company A for the goods received direct from Company

C.

In this example, the Intrastat declaration is made as a dispatch from the UK company to Italy. The Italian company declares an arrival from the UK.



Missing traders In Missing Trader Intra-community (MTIC) fraud, the importing trader does not submit VAT returns, and in virtually all cases these traders also submit no Intrastat declarations. This has a corresponding impact on the trade statistics, especially in low weight and high value priced items such as Chapter 85. There are two types of fraud.

(i) Acquisition fraud - where the goods are imported from the EU by a trader who then goes missing without a VAT return or Intrastat declaration after selling the goods to an internal buyer. The ‘missing trader’ therefore has a VAT free supply of goods, as they make no payment of VAT on the goods.

(ii) Carousel fraud is similar to Acquisition fraud in the first stage, but the

goods are not sold for consumption on the home market. Rather, they are sold through a series of companies and then re-exported to another Member State, hence the goods moving in a circular pattern or ‘carousel’.

The UK includes an estimate for the impact of MTIC carousel fraud on the trade statistics. This is added to Chapter 99.

Misclassification of commodity codes Despite use of the standard Harmonised System for classification of goods, there can be differences in interpreting and applying codes. Classification adjustments have no effect at the total level, but this affects the comparison of trade flows at a detailed level. This analysis found that misclassification of comcodes by UK and Germany led to asymmetries at detailed CN8 level.



Exchange Rate variations

Figure 9.1 Monthly Exchange Rate of GB Pound per Euro, 2003

0.64

0.65

0.66

0.67

0.68

0.69

0.7

0.71

0.72

0.73

31/01 28/02 29/03 29/04 29/05 28/06 31/07 30/08 30/09 31/10 29/11 31/12Time

Valu

e in

£

Source: Europa Official Statistics Journals, 2003

Fluctuation in exchange rates may be only a source of minor difference and will not affect countries trading with the Euro zone. The only way to have a precise idea of the impact of exchange rate fluctuation on the discrepancies is to work trade statistics on a monthly basis. The exchange rate of the Euro against the pound sterling varied between 0.65 and 0.72 during 2003. Therefore, if the bulk of the trading flow is concentrated on a few months, the use of an average yearly exchange rate can lead to an under or over-valuation. Valuation differences Trade data for European statistics uses ‘statistical value7’. In the UK, to ease the burden on business, smaller traders are allowed to declare invoice value and HMRC calculate the statistical value. In other countries traders are required to declare statistical value using a mix of survey data and data from larger traders. The comparison of the flows can be affected by insurance and freight charges, as dispatches are valued in FOB (Free on Board) and arrivals valued in CIF (Cost, Insurance, Freight). 7 It is the value used for trade statistical purposes. The statistical value is taken either directly from the customs declaration or calculated within Extra-EC or Intra-EC.



Threshold differences The treatment of low-valued shipments varies from country to country. They may be excluded from statistics, reported in less detail, or estimated instead of compiled. EU Member States have different low value thresholds below which export shipments need not be reported. The reporting threshold for value of transaction in Germany was €200,000 and for the UK was €364,000 in 2003, leading to a difference in coverage of the transactions. Reporting timelags Timing differences resulting in movements of goods reported in different months by exporting and importing countries. With Intrastat there should not be any considerable time lag between the date on which a transaction is recorded as an export, and the date on which the same transaction is recorded as an import in the partner country. However, some transactions will be recorded in different months or even in different countries. Reporting concessions and simplifications Countries may allow special concessions for larger traders. For example, shipment of mixed products (e.g. vehicle parts) can be reported under a single commodity code. Both Germany and the UK have simplified reporting concession for the motor trade. Countries may have different thresholds below which value or tonnage, a detailed commodity breakdown is not required. Confidentiality The import and export information required by law to be given to the Department, and subsequently used to compile UK trade statistics, is confidential between the trader concerned and the Department. In most cases, aggregation of the individual items of data prevents any breach of confidentiality. However, it is sometimes necessary to withhold publication of statistics where this would disclose the commercial activities of an importer or exporter. This can affect either products or partner country. The application of secrecy rules should only affect figures at a detailed level. Sometimes, however, certain military goods are subject to strategic suppression and this may have an effect on the aggregate level as well. Goods may be reclassified for confidentiality and data suppressed to avoid disclosure of confidential information.



Specific movements of goods ‘Specific movements’ are goods where it is difficult to apply the UN Concepts (theory). The characteristics may relate to the movement itself, the nature of the goods or the transaction which gives rise to the movement, from either the exporter or importer's point of view. Specific movements of goods include mainly movements of military goods, ships and aircraft, sea products, domestic and foreign armed forces, industrial plant, staggered consignments, ship's stores and bunker supplies and installations at sea. The collection and processing of information relating to these operations are generally covered by special or simplified rules. In the absence of harmonised statistical rules at Community level, national provisions apply. While the revision to Intrastat legislation from 2005 has tried to clarify these rules, specific movement of goods remains a difficult area for harmonised statistics. E.g. sea products; prior to January 2005, fish caught by British-registered fishing vessels and landed elsewhere in the EC need not be included as dispatches. No declaration was required for British-registered vessels landing their catch in the UK. However, landings in the UK from other EC-registered fishing vessels were included in supplementary declarations as ‘arrivals’. Where there was no UK VAT registration covering the vessel, the buyer of the catch was responsible for Intrastat. Other factors leading to discrepancies

Differences in recording leased goods and repairs8 Goods sent to another Member States to be processed and returned are being declared in UK. An example is steel sheets sent to France from the UK to be turned into pipes, then returned to the UK.

Differences in country of consignment and country of origin Consignment goods moved to another Member State to create a stock over which the owner retains control and from which supplies are made in the destination Member State. An example is steel moved from the UK to France to create a stock from which the UK owner makes supplies with France.

Fraudulent declarations

Errors in data collection and processing

8 Repairs have been excluded from 2005



10. Recommendations for further work Chapter 99 The asymmetry analysis shows that Chapter 99 makes a large contribution to the asymmetry between UK and Germany. Eurostat may wish to consider how different countries use this chapter and discuss how Chapter 99 might be harmonised. VAT missing trader intra-community (MTIC) fraud Arrival figures for the UK’s trade in goods include adjustments to allow for the impact of VAT MTIC fraud. The adjustments were introduced for the first time in the UK Overseas Trade Statistics in 2005, backcast to 1999. The fraud impacts on trade in goods statistics as the dispatch is recorded but, usually, the arrival submission is missing. The fraudsters use low weight, high value goods such as mobile phones and computer goods. The UK is currently the only Member State to include estimates on the impact of MTIC in their trade statistics. The adjustments are added to Chapter 99. While this has improved the overall asymmetries between the UK and the rest of the EU, individual chapter level asymmetries have not been improved. Following changes in the pattern of MTIC related trading; the UK is reviewing the methodology, and will investigate if improvements to the partner country imports can be made. The inclusion of estimates on MTIC in other Member States could improve the overall level of asymmetries, but further work needs to be done to improve the commodity and country level data. Crude oil Crude oil continues to be a problematic area. While the UK has tried to improve the coverage in their own figures, the problems with transit trade are not easily solved. More clarification about the Netherlands oil warehousing would allow a better understanding of warehouse movements. Close monitoring from Other Member States are required to make sure the traders are completing their declarations correctly. Aircraft Trade in aircraft, particularly triangular trade and leasing, are difficult to measure. The UK needs to chase up traders who do not declare their aircraft imports and also make adjustments to the UK arrival figure for any known missing aircraft. Further investigation is required to check for any transit trade between UK, Germany and France.



Gas and Electricity The legalisation introduced on 1 January 2005 clarified the requirement to collect data on the physical cross-border flow of electricity and gas. Previously Intrastat information for gas and electricity was collected from the wholesalers. This is primarily based on the fiscal transactions rather than physical flow across the UK’s frontier. With a change in supply rules for VAT, this will create a situation whereby the wholesalers need not supply information and Member States are changing the coverage of these commodities as from 2005. This will lead to any movement of gas and electricity being reported by the interconnector instead of declarations from trading partners. Asymmetries are likely to increase from January 2005 as a result. It would be useful if Eurostat could benchmark and monitor the changes. Sea products Discussion on Article 21 of Regulation 1982/2004 lays down the rules for reporting the landing of fishery products, minerals, salvage and any other product of the sea that are being landed in an EU Member State for the first time by a vessel registered in another EU Member State where inconclusive. It should be noted that prior to this legislation, fish caught by British-registered fishing vessels and landed elsewhere in the EC need not be included as dispatches. At the moment, the ‘nationality’ of a catch is assigned to the country of registration for the vessel, no matter where the catch is made. Therefore, if a UK registered vessel lands its catch in a port in another Member State, this must be reported as dispatch to that Member State. An example is the Spanish owned vessels, which operate from Spain, that are registered in the UK fish off the coast of Brazil and land the catch in Spain. This is a dispatch to Spain from the UK.

However, because of the complexity in reporting, data providers are likely to submit incorrect declarations. Further work to clarify and simplify the legislation would reduce asymmetries in this area.



11. Ongoing UK investigations SATU is keen to investigate asymmetries as part of its continuing quality assurance work. It has undertaken another Edicom Project in addition to this one, examining the problem of trade discrepancies caused by Transit trade and the ‘Rotterdam effect’. The second project investigated the ‘Rotterdam/Antwerp effect’, whereby vessels moving to ports in Holland and Belgium carrying goods with a final destination to a another country are seen instead as dispatches to these EU Member States, thereby distorting the level of recorded EU trade. An analysis of the trade in goods asymmetry between the UK and the rest of the EU is carried out by SATU each quarter using data maintained by Eurostat on the Comext Database. The analysis has mainly focused on the EU countries for the last three years. As from May 2004, data refer to EU25. During 2004, SATU benchmarked the asymmetries between the UK and the 10 accessionary countries. A follow-up to this in 2005/06 will look at the impact of these countries joining the EU. We are still investigating chapters showing large discrepancies in areas that have already been covered in this report, as well as areas that we have not yet examined in detail such as Chapters 29, 39, 89, 90 and 94. If a large trade discrepancy can be identified and attributed to a movement of goods for which an explanation in difference can be offered, a suitable adjustment can be applied retrospectively for that year.



12. Conclusion This bilateral project helped us to provide a more accurate picture of the trade asymmetries between the UK and Germany over the course of the year 2003. It also indicated possible areas of investigation for future years. We identified problems relating to aircraft, trains, crude oil and missing traders. Some recommendations for future work have been specified. With the gas and electricity new legislation in 2005, asymmetries with the physical flow need to be followed closely by all the Member States. We have also made some general recommendations that may lead to a reduction in asymmetries across the EU.



Glossary Acquisition fraud

Goods are imported from the EU by a trader who then goes missing without completing a VAT return after selling the goods to an internal buyer. The ‘missing trader’ therefore has a VAT free supply of goods, as no payment of the VAT due is made on the goods. See Carousel fraud

Arrivals Goods sent from the rest of the EU to the UK, commonly referred to as imports.

Assimilation Threshold

See Threshold.

Asymmetries Differences between the trade recorded by countries, e.g. the difference between what the UK records as an arrival from Germany and what Germany records as a dispatch to the UK.

Carousel fraud Similar to Acquisition fraud in the first stage, but the goods are not sold for consumption on the home market. Rather, they are sold through a series of companies and then re-exported to another country, hence the goods move in a circular pattern or ‘carousel’.

COMEXT Eurostat’s public statistical database, which contains standardised trade data from all EU Member States.

Dispatches Goods sent from the UK to the rest of the EU, commonly referred to as exports.

ESL European Sales List: information required from VAT registered traders on the value of their dispatches with the rest of the EU.

Eurostat Office of the European Communities. Exports Goods sent from the UK to non EU countries, but often used to

describe EU trade as well. Imports Goods sent from non EU countries to the UK, but often used to

describe EU trade as well. Intrastat Survey of trade in goods between EU Member States. MTIC Missing Trader Intra-Community (VAT Fraud). OMS Other Member States (within the EU). Statistical value

On export, the value of the goods at the place and time they leave the statistical territory of the exporting Member State. On import, the value of goods at the place and time they enter the statistical territory of the importing Member State.

Threshold The Intrastat system in the UK has two thresholds, an assimilation threshold (above which traders must submit Supplementary Declarations giving details of their trade with the rest of the EU) and delivery terms threshold (a simplification where only traders above this threshold must submit details on delivery terms and costs).

Triangular Trade

In triangular trade there are 3 countries involved, for example, A sells goods to B, B sells goods to C, and A exports the goods to C. The goods go direct from the original seller to the final buyer and do not follow the financial flow.



VAT Value Added Tax VAT returns Submissions from VAT registered traders – all traders above a pre-

determined threshold must submit information for VAT purposes.

VIES VAT information exchange system: EU wide system to monitor trade from VAT registered businesses

WTO The World Trade Organization (WTO) is the global international organisation dealing with the rules of trade between nations

Zero rated A taxable supply where the rate of tax is nil.



Appendix 1

99 Other products 13,631 2,611,659 2,598,028 27.985 Electrical machinery and equipment and parts thereof; s 4,718,204 5,987,473 1,269,269 13.684 Nuclear reactors, boilers, machinery and mechanical ap 8,578,503 9,615,547 1,037,044 11.127 Mineral fuels, mineral oils and products of their distillatio 393,899 1,066,844 672,945 7.287 Vehicles other than railway or tramway rolling-stock, and 14,443,277 14,959,055 515,778 5.586 Railway or tramway locomotives, rolling-stock and parts 55,732 402,611 346,879 3.789 Ships, boats and floating structures 22,687 331,541 308,854 3.348 Paper and paperboard; articles of paper pulp, paper or p 1,177,922 1,468,421 290,499 3.195 Toys, games and sports requisites; parts and accessorie 261,519 470,153 208,634 2.288 Aircraft, spacecraft, and parts thereof 396,062 575,938 179,876 1.971 Natural or cultured pearls, precious or semi-precious sto 187,883 334,906 147,023 1.624 Tobacco and manufactured tobacco substitutes 179,493 47,441 -132,052 1.476 Aluminium and articles thereof 647,127 756,792 109,665 1.282 Tools, implements, cutlery, spoons and forks, of base m 334,699 433,225 98,526 1.126 Ores, slag and ash 97,428 2,934 -94,494 1.039 Plastics and plastic products 2,102,822 2,179,858 77,036 0.890 Optical, photographic, cinematographic, measuring, che 1,665,997 1,739,009 73,012 0.829 Organic chemicals 951,518 1,022,203 70,685 0.838 Miscellaneous chemical products 487,954 551,316 63,362 0.783 Miscellaneous articles of base metal 285,758 342,920 57,162 0.662 Articles of apparel and clothing accessories, not knitted 334,272 388,650 54,378 0.622 Beverages, spirits and vinegar 292,750 342,280 49,530 0.530 Pharmaceutical products 1,132,491 1,086,680 -45,811 0.593 Arms and ammunition; parts and accessoriesthereof 56,770 13,104 -43,666 0.507 Edible vegetables and certain roots and tubers 56,856 18,290 -38,566 0.449 Books, newspapers, pictures and other products of the p 359,279 320,892 -38,387 0.470 Glass and glassware 257,721 291,352 33,631 0.444 Wood and articles of wood; wood charcoal 260,879 294,337 33,458 0.432 Tanning or dyeing extracts; tannins and their derivatives 466,889 433,542 -33,347 0.408 Edible fruit and nuts; peel of citrus fruits or melons 75,603 45,453 -30,150 0.328 Inorganic chemicals: organic or inorganic compounds of 271,283 300,296 29,013 0.340 Rubber and articles thereof 543,382 572,138 28,756 0.303 Fish and crustaceans, molluscs and other aquatic invert 37,617 65,566 27,949 0.394 Furniture; medical and surgical furniture; bedding, mattre 563,487 588,919 25,432 0.333 Essential oils and resinoids; perfumery, cosmetic or toile 365,149 342,089 -23,060 0.209 Coffee, tea, mate and spices 49,637 27,776 -21,861 0.272 Iron and steel 651,029 672,573 21,544 0.259 Impregnated, coated, covered or laminated textile fabric 41,593 62,247 20,654 0.223 Residues and waste from the food industries; prepared a 58,622 79,041 20,419 0.215 Animal or vegetable fats and oils and their cleavage prod 79,783 60,300 -19,483 0.263 Other made up textile articles; sets; worn clothing and w 54,488 73,308 18,820 0.202 Meat and edible meat offal 211,527 192,916 -18,611 0.264 Footwear, gaiters and the like; parts of such articles 104,001 121,686 17,685 0.220 Preparations of vegetables, fruit, nuts or other parts of p 185,566 168,342 -17,224 0.221 Miscellaneous edible preparations 191,907 175,204 -16,703 0.218 Cocoa and cocoa preparations 123,513 139,161 15,648 0.298 Complete industrial plant exported in accordance with co 0 14,879 14,879 0.279 Zinc and articles thereof 28,877 16,710 -12,167 0.174 Copper and articles thereof 291,618 279,604 -12,014 0.160 Knitted or crocheted fabrics 19,935 31,377 11,442 0.125 Salt; sulphur; earths and stone; plastering material, lime 47,713 36,602 -11,111 0.134 Soaps, organic surface-active agents, washing prepratio 213,147 224,139 10,992 0.1

Thousand euros and percentages

AsymShare of Asym arr

(%)HS2 Description Arrivals Mirror

Arrival

UK mirror discrepancies with Germany by HS2 level, 2003



68 Articles of stone, plaster, cement, asbestos, mica or sim 131,460 141,783 10,323 6.755 Man-made staple fibres 92,010 102,297 10,287 6.704 Dairy produce; birds' eggs; natural honey; edible produc 248,280 257,101 8,821 5.816 Preparations of meat, fish or crustaceans, molluscs or o 131,713 140,014 8,301 5.497 Works of art, collectors' pieces and antiques 24,001 15,960 -8,041 5.335 Albuminous substances; modified starches; glues; enzy 74,001 81,315 7,314 4.812 Oil seeds and oleaginous fruits; miscellaneous grains, s 43,048 49,874 6,826 4.581 Other base metals; cermets; articles thereof 39,396 45,280 5,884 3.857 Carpets and other textile floor coverings 34,573 28,995 -5,578 3.673 Articles of iron or steel 803,460 798,502 -4,958 3.206 Live trees and other plants; bulbs, roots and the like; cut 11,585 16,200 4,615 3.010 Cereals 39,847 44,340 4,493 2.917 Sugars and sugar confectionery 62,339 66,606 4,267 2.813 Lacs; gums, resins and other vegetable saps and extrac 9,033 13,173 4,140 2.754 Man-made filaments 144,205 147,973 3,768 2.556 Wadding, felt and nonwovens; special yarns; twine, cord 106,046 102,300 -3,746 2.442 Articles of leather; saddlery and harness; travel goods, h 40,685 44,261 3,576 2.392 Musical instruments; parts and accessories for such 23,752 20,321 -3,431 2.261 Articles of apparel and clothing accessories, knitted or c 178,832 181,988 3,156 2.196 Miscellaneous manufactured articles 115,595 112,448 -3,147 2.152 Cotton 32,487 29,375 -3,112 2.058 Special woven fabrics; tufted textile products; lace; tape 17,181 20,232 3,051 2.091 Clocks and watches and parts thereof 35,966 38,886 2,920 1.937 Photographic or cinematographic products 134,021 131,287 -2,734 1.819 Preparations of cereals, flour, starch or milk; pastrycook 237,719 235,110 -2,609 1.731 Fertilizers 70,381 67,806 -2,575 1.769 Ceramic products 108,178 110,464 2,286 1.547 Pulp of wood or of other fibrous cellulosic material; wast 11,088 9,045 -2,043 1.378 Lead and articles thereof 13,616 11,603 -2,013 1.311 Products of the milling industry; malt; starches; inulin; wh 35,360 37,323 1,963 1.375 Nickel and articles thereof 33,621 35,497 1,876 1.251 Wool, fine and coarse animal hair; yarn and fabrics of ho 19,878 21,662 1,784 1.236 Explosives; pyrotechnic products; matches;pyrophoric a 15,088 13,359 -1,729 1.141 Hides and skins (other than furskins) and leather 12,941 11,508 -1,433 0.953 Other vegetable textile fibres; paper yarnand woven fabr 2,612 1,507 -1,105 0.767 Prepared feathers and down and articles made of feathe 600 1,596 996 0.750 Silk 2,598 3,548 950 0.643 Furskins and artificial fur; articles thereof 4,701 3,816 -885 0.680 Tin and articles thereof 2,094 1,294 -800 0.514 Vegetable plaiting materials; vegetable products not else 174 765 591 0.401 Live animals 2,734 2,327 -407 0.345 Cork and articles of cork 301 450 149 0.146 Wickerwork and basketwork 1,569 1,699 130 0.105 Products of animal origin not elsewhere specified or incl 6,654 6,537 -117 0.165 Headgear and parts thereof 6,543 6,625 82 0.166 Umbrellas, sun umbrellas, walking-sticks, seat-sticks, w 3,491 3,556 65 0.0

TOTAL 3,165,456 3,217,608 100.0


AsymShare of Asym arr

(%)HS2 Description Arrivals Mirror

Arrival



99 Other products 6,145 2,652,818 -2,646,673 32.627 Mineral fuels, mineral oils and products of their distillati 2,075,336 3,980,871 -1,905,535 23.488 Aircraft, spacecraft, and parts thereof 1,712,426 1,121,706 590,720 7.384 Nuclear reactors, boilers, machinery and mechanical ap 5,474,454 5,077,972 396,482 4.987 Vehicles other than railway or tramway rolling-stock, an 2,877,644 2,494,109 383,535 4.790 Optical, photographic, cinematographic, measuring, ch 989,569 784,171 205,398 2.585 Electrical machinery and equipment and parts thereof; 4,280,786 4,134,210 146,576 1.876 Aluminium and articles thereof 575,351 715,532 -140,181 1.730 Pharmaceutical products 1,274,852 1,143,554 131,298 1.638 Miscellaneous chemical products 589,368 716,132 -126,764 1.629 Organic chemicals 1,663,982 1,786,375 -122,393 1.562 Articles of apparel and clothing accessories, not knitted 248,801 132,112 116,689 1.428 Inorganic chemicals: organic or inorganic compounds o 208,901 303,742 -94,841 1.273 Articles of iron or steel 316,034 240,196 75,838 0.975 Nickel and articles thereof 48,387 123,422 -75,035 0.961 Articles of apparel and clothing accessories, knitted or c 273,827 201,729 72,098 0.989 Ships, boats and floating structures 43,556 96,057 -52,501 0.694 Furniture; medical and surgical furniture; bedding, matt 137,251 86,577 50,674 0.695 Toys, games and sports requisites; parts and accessor 122,127 75,369 46,758 0.635 Albuminous substances; modified starches; glues; enzy 106,993 63,026 43,967 0.582 Tools, implements, cutlery, spoons and forks, of base m 222,235 181,410 40,825 0.522 Beverages, spirits and vinegar 223,914 183,111 40,803 0.549 Books, newspapers, pictures and other products of the 261,263 223,750 37,513 0.593 Arms and ammunition; parts and accessoriesthereof 39,552 2,760 36,792 0.559 Impregnated, coated, covered or laminated textile fabric 93,603 62,064 31,539 0.403 Fish and crustaceans, molluscs and other aquatic inver 92,851 61,761 31,090 0.408 Edible fruit and nuts; peel of citrus fruits or melons 7,572 35,836 -28,264 0.320 Preparations of vegetables, fruit, nuts or other parts of 16,506 40,079 -23,573 0.304 Dairy produce; birds' eggs; natural honey; edible produc 86,743 108,705 -21,962 0.368 Articles of stone, plaster, cement, asbestos, mica or sim 101,182 79,236 21,946 0.321 Miscellaneous edible preparations 89,293 71,154 18,139 0.271 Natural or cultured pearls, precious or semi-precious st 181,941 199,843 -17,902 0.226 Ores, slag and ash 30,529 12,627 17,902 0.233 Essential oils and resinoids; perfumery, cosmetic or toil 516,999 500,829 16,170 0.286 Railway or tramway locomotives, rolling-stock and parts 32,139 16,195 15,944 0.237 Photographic or cinematographic products 167,871 183,250 -15,379 0.264 Footwear, gaiters and the like; parts of such articles 58,261 43,103 15,158 0.270 Glass and glassware 180,366 166,465 13,901 0.254 Man-made filaments 85,406 72,825 12,581 0.248 Paper and paperboard; articles of paper pulp, paper or 360,355 348,412 11,943 0.183 Miscellaneous articles of base metal 112,413 100,972 11,441 0.118 Cocoa and cocoa preparations 28,787 40,225 -11,438 0.1


Asym Dis-patches

Share of Asym dis-patches

(%)

HS2 Description Dispatches Mirror Dis-patches

UK mirror discrepancies with Germany by HS2 level, 2003



97 Works of art, collectors' pieces and antiques 22,856 12,496 10,360 5.244 Wood and articles of wood; wood charcoal 37,158 26,856 10,302 5.242 Articles of leather; saddlery and harness; travel goods, 34,709 25,068 9,641 4.824 Tobacco and manufactured tobacco substitutes 50,429 59,581 -9,152 4.657 Carpets and other textile floor coverings 16,717 7,637 9,080 4.623 Residues and waste from the food industries; prepared 67,950 59,044 8,906 4.540 Rubber and articles thereof 358,799 367,419 -8,620 4.302 Meat and edible meat offal 78,522 86,661 -8,139 4.134 Soaps, organic surface-active agents, washing preprati 129,398 135,964 -6,566 3.356 Wadding, felt and nonwovens; special yarns; twine, cor 40,125 33,814 6,311 3.201 Live animals 15,588 9,551 6,037 3.012 Oil seeds and oleaginous fruits; miscellaneous grains, s 29,131 34,954 -5,823 2.963 Other made up textile articles; sets; worn clothing and w 29,348 23,589 5,759 2.917 Sugars and sugar confectionery 26,217 20,543 5,674 2.969 Ceramic products 45,911 40,276 5,635 2.880 Tin and articles thereof 2,363 7,278 -4,915 2.565 Headgear and parts thereof 10,936 6,093 4,843 2.451 Wool, fine and coarse animal hair; yarn and fabrics of h 24,016 19,238 4,778 2.458 Special woven fabrics; tufted textile products; lace; tape 11,958 7,582 4,376 2.239 Plastics and plastic products 1,007,563 1,011,676 -4,113 2.198 Complete industrial plant exported in accordance with c 0 3,878 -3,878 1.992 Musical instruments; parts and accessories for such 15,839 12,047 3,792 1.910 Cereals 36,198 39,808 -3,610 1.896 Miscellaneous manufactured articles 54,598 51,129 3,469 1.736 Explosives; pyrotechnic products; matches;pyrophoric a 5,757 2,569 3,188 1.647 Pulp of wood or of other fibrous cellulosic material; was 16,987 13,920 3,067 1.578 Lead and articles thereof 25,648 22,774 2,874 1.481 Other base metals; cermets; articles thereof 50,824 47,974 2,850 1.415 Animal or vegetable fats and oils and their cleavage pro 32,684 35,350 -2,666 1.331 Fertilizers 3,664 6,118 -2,454 1.272 Iron and steel 432,187 434,626 -2,439 1.252 Cotton 12,289 10,301 1,988 1.053 Other vegetable textile fibres; paper yarnand woven fab 7,437 5,450 1,987 1.005 Products of animal origin not elsewhere specified or inc 8,036 6,122 1,914 1.055 Man-made staple fibres 39,071 40,823 -1,752 0.913 Lacs; gums, resins and other vegetable saps and extra 5,136 3,432 1,704 0.909 Coffee, tea, mate and spices 8,146 6,488 1,658 0.832 Tanning or dyeing extracts; tannins and their derivative 319,186 320,821 -1,635 0.860 Knitted or crocheted fabrics 19,264 20,898 -1,634 0.825 Salt; sulphur; earths and stone; plastering material, lime 56,558 54,944 1,614 0.843 Furskins and artificial fur; articles thereof 2,640 1,128 1,512 0.891 Clocks and watches and parts thereof 9,580 8,424 1,156 0.611 Products of the milling industry; malt; starches; inulin; w 7,474 8,586 -1,112 0.679 Zinc and articles thereof 9,948 10,934 -986 0.541 Hides and skins (other than furskins) and leather 9,148 8,240 908 0.507 Edible vegetables and certain roots and tubers 10,858 9,985 873 0.450 Silk 2,033 1,323 710 0.406 Live trees and other plants; bulbs, roots and the like; cu 1,893 2,553 -660 0.374 Copper and articles thereof 143,244 143,899 -655 0.319 Preparations of cereals, flour, starch or milk; pastrycoo 59,098 58,615 483 0.246 Wickerwork and basketwork 337 30 307 0.266 Umbrellas, sun umbrellas, walking-sticks, seat-sticks, w 1,713 1,519 194 0.167 Prepared feathers and down and articles made of feath 432 268 164 0.145 Cork and articles of cork 206 92 114 0.114 Vegetable plaiting materials; vegetable products not els 47 46 1 0.0

TOTAL 3,447,854 3,390,434 100.00


Asym Dis-patches

Share of Asym dis-patches

(%)

HS2 Description Dispatches Mirror Dis-patches



Appendix 2 Introduction of new Intrastat commodity codes Article 18 of Regulation (EC) No 1982/2004, introduced in January 2005, provides a legal basis for Member States to use simplified provisions for motor vehicle and aircraft parts. Further to this, 2 new commodity codes have been introduced for Intrastat for use of classify goods using the concessions/special provisions. These are 99908700 for motor vehicle parts and 99908800 for aircraft parts. Notification of these codes was issued at too late a date for the UK to introduce the new commodity codes for January 2005.

edicom report - bilateral analysis of asymmetries in ... · statistics & analysis of trade unit...

Documents