STATISTICS ESTONIA

DATA ACQUISITION AND PROCESSING DEPARTMENT

Tatari 51, 10134 Tallinn, Estonia

The EuroGroups register (EGR) is the statistical business register of Eurostat and the EU Member States and European Free Trade Association (EFTA) countries for multinational enterprise groups. The purpose of the EGR is to offer to statistical users a tool for coordinating frame population, to derive consistent statistical output with an improved quality in measuring global activities of European enterprises part of multinational enterprise groups.

The EGR produces data in yearly cycles and covers microdata on the groups and their enterprises and legal units. The EGR aims to register all multinational enterprise groups that have enterprises in EU Member States or EFTA countries, including European and non-European groups.

The Member States, EFTA countries and Eurostat exchange data on multinational enterprise groups and on the units belonging to those groups for the purposes of the European framework for statistical business registers to ensure the quality of the multinational enterprise group’s information in the Union.

The EGR brings together microdata on multinational enterprise groups from the EU and the EFTA countries' national statistical institutes, in line with the requirements of the Regulation (EU) No 2152/2019, and from a commercial data source for data outside the EU and EFTA.

Classification systems and main code lists used in the EGR are as follows:

• Statistical classification of economic activities in the European Community (NACE Rev2);
• European System of Accounts (ESA 2010);
• List of 2-digit country codes (ISO 3166-1);
• List of legal forms of the legal units;
• Currency codes (ISO 4217).

The coverage of the data transmitted to the EGR is defined in the Regulation (EU) 2019/2152 on European business statistics.

For the purposes of the European framework for statistical business registers, the following economic activities are considered:

• any activity comprising the offer of goods and services on a given market;
• non-market services contributing to the GDP;
• direct and indirect holdings of active legal units.

Holding assets and/or liabilities are also considered an economic activity.

Global group head

The global group head (GGH) of an enterprise group is the parent legal unit that is not controlled either directly or indirectly by any other legal unit. The subsidiary legal units of a subsidiary legal unit are considered to be subsidiaries of the parent legal unit.

Global decision centre

The global decision centre (GDC) of an enterprise group is the unit where the enterprise group level’s strategic decisions are taken. A group may have several decision-making centres or several units dedicated to a particular internal function, for example accounting or human resources. However, the decisions about the group are made only in the GDC. The GDC may be the GGH or another legal unit under the GGH.

Ultimate Controlling Institutional unit

The ultimate controlling institutional unit (UCI) of a foreign affiliate means the institutional unit higher up a foreign affiliate’s chain of control that is not controlled by another institutional unit.

Activity of unit

In EE statistical register an enterprise group is considered to be active if at least one of it's resident members belongs to an annual population of active units (frozen frame). In BRquestionnaire we provide information on population of active units, therefore the information on enterprise groups is also on only provided on active groups. When we send data to EGR the files include also inofrmation on dormant multinational groups as the group may be active in some other EU country.

 An enterprise is considered to have been active during the reference period, if in said period it made investments, had employees or generated turnover. Also other "signs of life" are taken into account - making cross-border transactions, receiving state subsidies, providing statistical data to SE etc. Holding assets and/or liabilities shall also be regarded as an economic activity.

A legal unit can be legally or administratively active without any economic activity, when the inactive legal unit is part of an enterprise in combination with economically active legal units.

Number of employees

The number of employees of an enterprise group sent to EGR from EE is the number provided by enterprise group itself in their annual consolidated report.

The number of employees of an enterprise represents the average number of persons who were at some point during the reference year, employees of the enterprise.

Number of employees and self -employed persons

The number of employees and self-employed persons of an enterprise is the sum of the number of employees and the number of self-employed persons. The minimal value for an active enterprise is "1".

Net turnover

Net turnover (in millions EUR) of an enterprise group sent to EGR from EE is the figure provided by enterprise group itself in their annual consolidated report.

Net turnover of an enterprise:

For all activities except for NACE 64, 65 and some activities of NACE 66 net turnover consists of all income arising during the reference period in the course of ordinary activities of the statistical unit, and is presented net of all price reductions, discounts and rebates granted by it.

Income is defined as increases in economic benefits during the reference period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.

The inflows referred to are arising from contracts with customers and are realized through the satisfaction by the statistical unit of performance obligations as foreseen in said contracts. Usually, a performance obligation is represented by the sale (transfer) of goods or the rendering of services, however, the gross inflows can also contain revenues obtained as a yield on the use by others of the statistical unit’s assets.

Excluded from net turnover are:

—   all taxes, duties or levies linked directly to revenue;

—   any amounts collected on behalf of any principal, if the statistical unit is acting as an agent in its relationship with said principal; 

—   all income not arising in the course of ordinary activities of the statistical unit. Usually, these types of income are classified as ‘Other (operating) income’, ‘Financial income’, ‘Extra-ordinary income’ or under a similar heading, depending on the respective set of generally accepted accounting standards used to prepare the financial statements.

Infra-annual statistics may not be able to take into account aspects such as annual price reductions, subsidies, rebates and discounts.

For the activities of NACE K6411, K6419 and K649 net turnover is defined as the value of output minus subsidies or government grants.

For the activities of NACE K642 and K643 net turnover can be approximated by the total operating costs, if net turnover is not available in the financial statements.

For the activities of NACE K6511, K6512 and K652 net turnover is defined as Gross premiums earned.

For the activities of NACE K653 the net turnover is defined as total pension contributions

For activities of NACE K66 for which net turnover is not available in the financial statements, net turnover is defined as the value of output minus subsidies or government grants. For activities of NACE K66 for which net turnover is available in the financial statements, the standard definition of net turnover applies.

Total assets

Total assets (in millions EUR) of an enterprise group sent to EGR from EE is the figure provided by enterprise group itself in their annual consolidated report.

Principal activity

Principal activity of a group is defined according to the value added created at its members engaged in different economic activities

Principal activity on an enterprise:

The principal (or main) activity is the activity that contributes most to the total value added of an eterprise under consideration. Ideally, the principal activity of the enterprise should be determined with reference to the value added to the goods and services produced, by applying the top-down method. The top-down method follows a hierarchical principle: the classification of the unit at the lowest level of the classification must be consistent with the classification of the unit at higher levels. The principal activity so identified does not necessarily account for 50 % or more of the unit’s total value added.

In the European Union the classification of principal activity is determined by reference to NACE Rev. 2, first at the highest level of classification and then at more detailed levels (top-down method).

The statistical units maintained in the EGR are defined in accordance with the Regulation (EEC) No 696/93 on the statistical units for the observation and analysis of the production system in the Community.

The EGR frame contains the following units: Legal units, Enterprises and Multinational enterprise groups.

Legal units include:

- legal persons whose existence is recognized by law independently of the individuals or institutions which may own them or are members of them,

- natural persons who are engaged in an economic activity in their own right.

The legal unit always forms, either by itself or sometimes in combination with other legal units, the legal basis for the statistical unit known as the 'enterprise'.

Enterprise

The enterprise is the smallest combination of legal units that is an organizational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations. An enterprise may be a sole legal unit.

Multinational enterprise group

A multinational enterprise group is an enterprise group that has at least two enterprises or legal units located in different countries.  In business statistics also term ‘global enterprise group’ is used.

The data transmitted to the EGR during the cycle is made of the following datasets.

The data set with information on all incorporated resident legal units for the EGR Identification Service.

ISRLE file includes all EE incorporated legal units which are not liquidated or are liquidated on the reference year. EE population of resident legal units is sent to EGR for identification.

The data set with information on foreign legal units for the EGR Identification Service.

ISNORLE file includes foreign parents and foreign subsidiaries from EE statistical register which are not liquidated and which' LEID_ID is missing or not valid (based on information from re-identification of LEID_IDs). EE population of foreign legal unit recorded in national statistical business register is sent to EGR for identification.

The data set with information on legal units.

LEU file including EE resident legal units which are present in the REL file and belong to a global enterprise group (incl.  to dormant groups) is sent to EGR for processing.

The data set with information on relationships of ownership and control.

REL file including EE relationships between legal units identified in EGR (have LEID_IDs) and beloning to a global enterpirse group (incl.  to dormant groups) is sent to EGR for processing:

• two resident legal units
• one resident and one foreign legal unitg
• two foreign legal units from non EU+EFTA countries.

Relationships in the REL are:

• control relationships (>50%)
• minority relationships (<50%)

In REL file also relationships of resident legal units not belonging to the population of active units (to frozen frame) are sent as these might play an important role in the global chain of control.

The data set with information on enterprises.

ENT file including EE enterprises (incl. the ones not belonging to the population of active units) made of legal unit sent in LEU files is sent to EGR for processing. IN EE statstical register all LEUs (whether active on not) are linked to an ENT.

The Data set with information on links between enterprises and legal units.

LEL file including EE links between enterprise (ENT) and legal units (LEU) is sent to EGR for processing.

The Data set with information on enterprise groups of which country is the GDC country for the EuroGroups Register.

GEG file including EE multinational groups data is sent to the EGR for processing.

The groups’ variables are updated after receiving the preliminary frame:

• Enterprise group's net turnover
• Enterprise group's total assets
• Enterprise group's number of empoyees
• Enterprise group's principal activity

The variables are updated only for those groups which have provided a consolidated annual report for the reference year.

EE sends to EGR data on those multinational enterprise groups at least one of which' members is registered in Estonia

The EGR frames are available from reference year 2008 onwards. EE_NSI transmits data for the EGR production cycle since 2008 year.

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The economic variables on employment are recorded in absolute figures.

The net turnover for enterprises is recorded in EUR currency.

The net turnover and net total asset is recorded in millions in EUR currency.

The reference period for data sent to the EGR reflects the picture of 31 December of the given reference year.

Data transmitted to EGR during the EGR 2022 cycle includes data for the 2022 reference year. The identification, economic variables (number of employees, turnover and economic activity) refer to the 2022 reference year.

The content of the national data sent to EGR is defined according the Regulation (EU) 2019/2152 on European business statistics.

Commission Implementing Regulation (EU) 2020/1197 of 30 July 2020 is laying down the technical specifications and arrangements pursuant to Regulation (EU) 2019/2152 of the European Parliament and of the Council on European business statistics.

The legal framework setting up the procedures for EGR data exchanges and access to confidential data for the purpose of the European framework for statistical business registers are defined in the Regulation (EU) 2019/2152 on European business statistics (Art.10). 

European legislation:

• Regulation (EC) No 223/2009 on European statistics;
• Regulation (EU) 2019/2152 on European business statistics (Art.10).

The national legislative measures or other formal procedures which prevent unauthorised disclosure of data that identify a person or economic entity either directly or indirectly include:

• Official Statistics Act (entry into force 01.08.2010), in particular § 34. Confidential data, § 35. Dissemination of confidential data https://www.riigiteataja.ee/en/eli/ee/506012015002/consolide/current
• Data protection (Privacy policy) https://www.stat.ee/en/statistics-estonia/data-protection-privacy-policy

EGR data are stored by the Commission (Eurostat) and by the national statistical authorities (NSAs) in the EU Member States and EFTA countries in a secure area with restricted and controlled access.

The transmission of the EGR data is done in an encrypted form and by electronic means via the Commission (Eurostat) single entry point for exchange of confidential data Edamis.

Rules applied for treating the data set to ensure statistical confidentiality and prevent unauthorised disclosure are defined according to the policy rules (see section 7.1).

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The micro-data exchange of confidential data on multinational enterprise groups and on the statistical units belonging to those groups takes place, exclusively for statistical purposes, between EU Member States and EFTA countries and the European Commission (Eurostat).

Where such exchange of confidential data is carried out to ensure the quality of the multinational enterprise groups information in the Union and the exchange is explicitly authorised by the competent NSA which provides the data, national central banks may be party to the exchange of confidential data, exclusively for statistical purposes.

NSI exchanges information on multinational enterprise groups with:

• Other Member States for FATS.
• National Central Bank (NCB) for FATS.

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• EuroGroups Register communication space ( EGR wiki with restricted access)
• European business statistics methodological manual for statistical business registers – edition 2021

ESS Data Quality Programme for statistical business registers is availableon CIRCABC

Eurostat Data Quality Programme monitors the quality and compliance of the data transmitted by the countries to EGR using the instruments of the EBS quality framework.

At national level, the quality of the data sent to EGR is assured as follows: 

• Several different data validation procedures are in place in the register. Some are applied monthly during uploading the data from  different sources, some have specific peridical character, like logical controls conducted during active stage of compilation of the frozen frame etc
• Monthly monitoring of the availaility of contact data of economic units in the register. The data are evalueted and submitted to management once a month as part of the Data Acquisition and Processing Department report
• Close cooperation with SBS and FATS experts - validation of UCI country, additional data source on foreign subsidiaries 
• Close cooperation with Central Bank of Estonia - quaterly Balance of Payments is an important source on foreign subsidiaries

The quality assessment procedure includes:

• automatic validation procedures to check coherence between statistical units and their variables,
• data format and logical content of data
• crosschecks with other sources and data from previous years,

SBR are important for the compilation of consistent and comparable European business statistics, establishing efficient statistical survey frames, providing identification numbers of all units and for linking to many different sources, increasing statistical information and reducing the reporting burden on enterprises.

SBR are referred to as the "backbone" in the pproduction of economic statistics because they provide the core infrastructure to ensure data consistency between various statistical outputs.

Statistics Estonia produces preliminary frame and it is used as a backbone for production of the economic statistics

Central Bank of Estonia as a second national authority responsible for production of national statistics use the data of statistical business register.

SBR processes adapt regularly arising needs. All statistical domains are treated equally.

Information on user needs is collected on annual SBR meeting with users, bilateral meetings with domains and Central Bank and during everyday conatct with users.

Since 2017 Eurostat together with the EU Member States conducts SBR user survey addressing users and potential users of the national business registers (NSBR) and the EuroGroups Register (EGR).

SBR User Survey 2020 showed that NSBR are widely used at national level and users consider its quality to be significantly improved in the recent years.

The latest SBR User Survey was conducted at the beginning of 2023. All statistical domains of Statistics Estonia and Estonian CB, who use SBR data in their work, were involved and sent their contribution to the Eurostat.  According to the preliminary results, users of the SBR are satisfied with the quality of SBR data and also with the level of cooperation with register’s domain. Final results of survey will be elaborated and published  by Eurostat later.

The completeness of national statistical business register is annually assessed by Eurostat. The SBR assessment results are provided to EU Member States and EFTA countries and presented at the Statistical Business Registers Working Group (SBR WG).

Data completeness rate and missing variables or data in the national statistical business register are as follows:

- the mandatory variables for legal unit and enterprise are implemented in the SBR

- the mandatory variables for enterprise groups having an impact on the quality of the EGR statistical frame for the whole ESS are implemented in the SBR

The actions taken to monitor and to improve accuracy of the data sent to EGR are the following: 

• keeping Estonian NSBR in compliance with EU requirements
• close cooperation with users and taking into account their feedback
• validation of UCI country data with users
• using different administrative and statistical sources to update the data on legal units, enterprises, relationships, foreign legal units and enterprise groups in statistical register

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The EGR process refers to a reference year T and is run yearly over a period of 11 months, between May T+1 and March T+2.

Statistics Estonia transmits the data to EGR according to the cycle timetable

The geographical comparability of national statistical business registers is ensured by the application of common definitions of the statistical units laid down in the Council Regulation (EEC) No 696/93.

The SBR variables are harmonised and set up in accordance with the Annex VIII to the Commission Implementing Regulation (EU) 2020/1197 laying down technical specifications and arrangements pusuant to Regulation (EU) 2019/2152 on European business statistics.

Further guidelines on the variables implementation in the national statistical business registers are given in the EBS methodologic al manual for Statistic al Business Registers (2021 edition)

Statistics Estonia transmits data for the EGR production cycle since 2008.

The statistical units are implemented and maintained in the national statistical business register as follows:

• Enterprise group – implemented and maintained since 2005. All-resident enterprise groups, truncated enterprise groups and multinational enterprise groups were implemented simultaneously.  
• Enterprise (equal to legal unit) – implemented and maintained since 1994. First enterprise comprised of several legal units was implemented in year 2008.

The NSBR frame provides information on the active population of enterprises carrying out economic activities which contribute to the gross domestic product (GDP), the legal units of

which those enterprises consist of, local units, kind of activity units and enterprise groups, incl. all-resident and multinational enterprise groups.

The national statistical business register is used by statistical users as a coordinated frame population in order to derive consistent statistical output.

The final frame on 2022 has been produced for SBS. BR Questionnaire data is extracted from the same frame. But as the final frame is compiled only in December of next year, the preliminary frozen frame data is sent to EGR.

The SBR data included in the final frame and the data sent to EGR are internally consistent.

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The national statistical business registers is set up in accordance with EBS Regulation (EU) 2019/2152 using any relevant data sources while avoiding excessive burden on respondents and taking due account of the cost effectiveness of the NSAs.

NSI uses the following data sources, including a combination thereof for the national statistical business register:

• Commercial Register
• Tax and Customs Board
• Central Bank of Estonia
• Financial Supervision Authority (Finantsinspektsioon) 
• Estonian Competition Authority (Konkurentsiamet)
• Agricultural Registers and Information Board (ARIB)
• Cultural Endowment of Estonia (Eesti Kultuurkapital)
• Estonian Film Foundation (Eesti Filmi Instituut)
• Estonian Public Broadcasting
• Estonian Education Information System
• Enterprise Estonia
• Estonian Transport Administration (Transpordiamet)
• Consumer Protection and Technical Regulatory Authority (Tarbijakaitse ja Tehnilise Järelevalve Amet)
• EGR
• EU national statistical institutes
• Statistical works

National data sent to EGR annually

Estonian statistical business register uses data from administrative and statistical data sources, and from any other relevant sources that are comparable and compliant with the applicable specific quality requirements.

The data is first updated in statistical register and validated. All the data sent to EGR are extracted from statistical business register.

All the data sent to EGR are extracted from Estonian statistical business register.

There are several different data validation procedures in place in the register. Some of these are applied monthly during the uploading of the data from different sources, some have specific periodical character, like logical controls conducted during active stage of the compilation of the frozen enterprise groups frame.

 Format and file structure validations are made when compiling the data files for EGR.

Data on shareholders of Estonian enterprises is updated in statistical register based on information from Commercial Register. Shareholders can be resident or foreign legal units or resident or foreign private persons.

Only Estonian multinational groups' foreign subsidiaries are maintained in the statsitical register. Data on foreign subsidiaries are received from:

• Central Bank of Estonia's quaterly Balance of Payments questionnaire
• enterprises' annual reports
• OFATS questionnaire

Based on ownership links the enterprise groups are compiled automatically following the chain of control. In case of a foreign GGH, it is checked from EGR if it is part of some other enterprise group and if necessary a new ultimate group head is added to the statistical register or the groups are merged into one. Feedback from EGR is used to update the activity, names and national IDs of foreign legal units.

Frame of enterprise groups is frozen next year in March and it's based on ownership links as of 31.12.

UCI country is determined for all commercial undertakings belonging to the population of active units in a reference year whether these units belong to an enterprise group or not.

In line of Baltic cooperation the UCI country is coordinated between Baltic States. This exchange of data also provides additional information on subsidiaries of Estonian companies located in Latvia and Lithuania.

In 2022 the methodology for production of the final frame was significantly improved. The final frame of active units is compiled in December T+1.  For BR Questionnaire the data is extracted from this final frame, therefore the information on enterprise groups is provided also on only active groups (where at least one resident member is included in the population of active units (frozen frame)).

When data are sent to EGR, the data are extracted from preliminary frame and include also inofrmation on dormant multinational groups as the dormant group may be active in some other EU country.

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