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SITS Components

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International trade in services is classified broadly into 12 components:

  1. Manufacturing services on physical inputs owned by others

It covers fees charged by the processor to owner of the goods for manufacturing activities done (i.e., processing, assembly, packing or labelling). Recognition of this type of services is parallel with the treatment of exclusion goods for processing (with no change of ownership) from exports and imports goods compilation in balance of payments statistics.

  1. Maintenance and Repair Services

Includes maintenance and repair works by residents on goods owned by non-residents (and vice versa). The repairs may be performed at the site of the repairer or elsewhere. Maintenance and repairs on ships, aircraft and other transport equipment are included.

Exclude:

  1. Cleaning of transport equipment (included in transport services);
  2. Construction repairs and maintenance (included in construction); and
  3. Maintenance and repairs of computers (included in computer services).

 

  1. Transport

Transport covers all modes of transportation namely sea, air, other modes (including land, internal waterway, space, and pipeline) and postal and courier services. It involves the carriage of passengers, freight (movement of goods), other transport services and postal and courier services.

  1. Travel

The item refers to the goods and services such as accommodation, meals, entertainment, internal transportation and gifts and souvenirs acquired from Malaysia by visitors during their stay in Malaysia and from abroad by Malaysian visitors travelling overseas. Expenditure by ships/carriers crews are also taken into account. The international carriage of visitors is recorded under transport services. Both types of visitors namely tourists and excursionists are included in the compilation.                                             

  1. Construction

Construction services cover both new and repair work. Construction is valued on a gross basis inclusive of all goods and services used as input to the work and other cost of production. This relates to site preparation work, construction and completion work for buildings (painting, plumbing, demolition, etc.), construction work for civil engineering, installation of machinery and assembly work and other construction (such as renting services of construction or demolition equipment with operator; exterior cleaning work of building, etc..

  1. Insurance and Pension Services

Covers the services of providing life insurance, non-life insurance, reinsurance, freight insurance, pensions and auxiliary services to insurance.

  1. Financial Services

Covers both explicit and implicit charges for financial intermediation and auxiliary services (except those of insurance enterprises and pension funds) conducted between residents and non-residents. The explicit charges included deposit and lending services (e.g. application and commitment fees, fees for one-off guarantees, early or late repayment fees or penalties, and account charges). Also included are commissions and other fees related to letters of credit, bankers' acceptances, lines of credit, financial leasing, foreign exchange transactions, commissions and other fees related to transactions in securities, commissions of commodity futures traders, services related to asset management, financial market operational and regulatory services, security custody services but excluded interest. The implicit charges is measured by FISIM which using reference rate concept to represent services element between actual and reference interest rate on loans and deposits.

  1. Charges for the use of intellectual property

Charges for the use of intellectual property include:

  1. chargers for the use of propriety rights, such as patents, trademarks, copyrights, industrial processes and designs, trade secrets, and franchises, where rights arise from research and development, as well as from marketing; and
  2. charges for licenses to reproduce and/or distribute intellectual property embodied in produced originals or prototypes, such as copyrights on books and manuscripts, computer software, cinematographic works and sound recordings, and related rights, such as for the recording of live performances and for television, cable or satellite broadcast.

 

  1. Telecommunications, Computer, and Information Services

Telecommunications services encompass the broadcast of transmission of sound, image, data, or other information by telephone, telex, telegram, radio, and television satellite, electronic mail and facsimile including business network services, teleconferencing and support services.

Computer services consist of hardware and software related services and data processing services. These include sales of customized and non-customized software, installation and consultancy services. Information services include news agencies services, database services (database conception, storage, and dissemination), and direct non-bulk subscriptions to newspapers and periodicals, whether by mail, electronic transmission or other means.

  1. Other Business Services

Other business services comprise research and development services, professional and management consulting services, technical, trade related and other business services.

Research and development services cover those services associated with basic research, applied research, and experimental development of new products and processes. This includes outright sales as a result of research and development work, such as; patents, copyrights, information or industrial processes. Professional and management consulting services cover advisory, guidance and operational assistance services provided to businesses for business policy and strategy and the overall planning, structuring and control of an organization. This include legal services, accounting, management consulting, managerial services, public relations services, advertising, market research and public opinion polling services. Technical, trade-related and other business services comprise of services related to architectural, engineering, other technical, waste treatment and de-pollution, agricultural, mining, operating leasing, trade-related and other business services.

  1. Personal, Cultural, and Recreational Services

Refers to services associated to audio-visual and related services; and other personal, cultural, and recreational services. This includes charges for access to encrypted televisions channels, rental of audio-visual and related products, fees to actors, directors and producers, education services, health services, sports, recreational and entertainment services.

  • Government Goods and Services

These are transactions by the public sector with non-residents, which are not recorded elsewhere in the BOP components. The transactions include expenditures (goods and services) of Malaysia’s diplomatic and military representative abroad and of foreign governments’ diplomatic and military representative in Malaysia. Export covers operating and capital expenditures of foreign diplomatic missions, trade missions and international organisations in Malaysia. Import covers operating and capital expenditure of Malaysia’s embassies, high commissions, trade missions and students’ departments abroad.