AEG recommendations on treatments
of illegal activities
Viet Vu
UN Statistics Division
Illegal Activities in the 1993 SNA
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The 1993 SNA decides that all illegal and
underground activities should be part of the
SNA production boundary. This clearly
includes: prostitution, production of illegal
drugs and other underground activities.
Since then, a number of changes has been
recommended by the OECD’s Non-observed
Economy Handbook.
This requires a review of these
recommendations.
Theft
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1993 SNA records only production of stolen goods, but not in
household final consumption even if the amount is large
because theft is not a transaction (which requires mutual
agreement).
 When the value of stolen goods is small, it is not counted as
output.
 When the value of stolen goods is large, it is counted as
output, put into inventory and taken out of the balance
sheet as “other change in volume.
OECD: Recurrent thefts of significant value should be treated as
transactions. This means output is recorded:
 AEG rejects this recommendation.
OECD: Recurrent thefts of significant value by employees should
be treated as compensation of employees
 AEG rejects this recommendation.
AEG agrees: Sales of stolen goods (fencing) should be recorded
similar to the recording of second-hand goods.
Bribery
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The 1993 SNA does not provide guidance on how to
treat bribery.
AEG agrees: Bribery should be treated as a
transaction as it can be assumed that individuals
have a freedom of choice to enter into bribery.
Rejects: In provision of market goods and services, bribes
taken by employees as an additional margin on the “official”
price should be recorded as an increase in the value of output
of market production matched by an identical increase in the
compensation of employees.
• Agrees: In the provision of non-market services that are not
allowed or not publicly accepted , bribes should be recorded
as current transfers. The same holds for payments to persons
in privileged positions to obtain a contract.
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Extortion
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AEG agrees: that extortion payment
should be recorded as other change in
the volume of assets.
Money laundering
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AEG splits: difference between the value of the illegal cash
and the value of the legalized (laundered) cash should be
looked upon as a provision of services.
Thank You