[Federal Register Volume 59, Number 144 (Thursday, July 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18094]


[Federal Register: July 28, 1994]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 940795-4195]
RIN 0691-AA24


International Services Surveys: BE-80 Benchmark Survey of 
Financial Services Transactions Between U.S. Financial Services 
Providers and Unaffiliated Foreign Persons

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This notice sets forth proposed rules relating to 
international service surveys to institute a new survey, the BE-80, 
Benchmark Survey of Financial Services Transactions Between U.S. 
Financial Services Providers and Unaffiliated Foreign Persons, to be 
conducted by the Bureau of Economic Analysis (BEA), U.S. Department of 
Commerce. The survey will, for the first time, collect comprehensive 
information on trade in financial services between U.S. financial 
services providers and unaffiliated foreign persons. It is intended to 
cover the universe of such transactions by type and by country. The 
information is needed to support trade policy initiatives, including 
trade negotiations, on financial services and to compile the U.S. 
balance of payments and national income and product accounts. The 
survey will be conducted once every 5 years under the International 
Investment and Trade in Services Survey Act and the Omnibus Trade and 
Competitiveness Act of 1988. The first survey will cover 1994.

DATES: Comments on these proposed rules will receive consideration if 
submitted in writing on or before September 12, 1994.

ADDRESSES: Comments may be mailed to the Office of the Chief, 
International Investment Division (BE-50), Bureau of Economic Analysis, 
U.S. Department of Commerce, Washington, DC 20230, or hand delivered to 
Room M-100, 1441 L Street NW., Washington, DC 20005. Comments will be 
available for public inspection in Room 7006, 1441 L Street NW., 
between 8:30 a.m. and 4:30 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT:
Betty L. Barker, Chief, International Investment Division (BE-50), 
Bureau of Economic Analysis, U.S. Department of Commerce, Washington, 
DC 20230; phone (202) 606-9805.

SUPPLEMENTARY INFORMATION: These proposed rules amend existing 15 CFR 
801.9 and add new 15 CFR 801.11 to set forth reporting requirements for 
the BE-80, Benchmark Survey of Financial Services Transactions Between 
U.S. Financial Services Providers and Unaffiliated Foreign Persons. The 
survey will be conducted by the Bureau of Economic Analysis (BEA), U.S. 
Department of Commerce, under the International Investment and Trade in 
Services Survey Act (P.L. 94-472, 90 Stat. 2059, 22 U.S.C. 3101-3108, 
as amended) and the Omnibus Trade and Competitiveness Act of 1988 (P.L. 
100-418, 15 U.S.C. 4908(b)). Section 4(a) of the International 
Investment and Trade in Services Survey Act provides that ``The 
President shall, to the extent he deems necessary and feasible--. . . 
(4) conduct . . . benchmark surveys with respect to trade in services 
between unaffiliated United States persons and foreign persons . . .'' 
In Section 3 of Executive Order 11961, as amended by Executive Order 
12518, the President delegated the authority under the Act as concerns 
international trade in services to the Secretary of Commerce, who has 
redelegated it to BEA.
    The Omnibus Trade and Competitiveness Act of 1988 directs that 
``The Secretary (of Commerce) shall ensure that . . . there is included 
in the Data Bank information on service sector activity that is as 
complete and timely as information on economic activity in the 
merchandise sector. The Secretary shall undertake a new benchmark 
survey of services transactions, including transactions with respect to 
. . . banking services; (and) brokerage services.''
    The major purposes of the survey are to provide the information on 
financial services needed in monitoring U.S. services trade, analyzing 
its effects on the U.S. economy, formulating U.S. international trade 
policy, supporting bilateral and multilateral trade negotiations, 
compiling the U.S. balance of payments and national income and product 
accounts, developing U.S. international price indexes for services, 
assessing U.S. competitiveness in international trade in services, and 
improving the ability of U.S. businesses to identify and evaluate 
market opportunities.
    As proposed, the BE-80 survey will be conducted once every 5 years, 
and the first survey will be for 1994. The survey is intended to cover 
the universe of financial services transactions between U.S. financial 
services providers and unaffiliated foreign persons. Reporting is 
required from U.S. financial services providers who have sales to or 
purchases from unaffiliated foreign persons in all covered financial 
services combined in excess of $1 million during the reporting year. 
Those financial services providers meeting this criteria must supply 
data on the amount of their sales or purchases of each covered type of 
service, disaggregated by country. U.S. financial services providers 
that have covered transactions of less than $1 million during the 
reporting year are asked to provide, on a voluntary basis, estimates 
only of their total sales or purchases of each type of financial 
service.
    It is anticipated that the information from the benchmark survey 
will be updated in nonbenchmark years by an annual follow-on survey 
that is more limited in scope and that will cover only a sample of 
companies reporting in the BE-80 survey.

Executive Order 12612

    These proposed rules do not contain policies with Federalism 
implications sufficient to warrant preparation of a Federalism 
assessment under E.O. 12612.

Executive Order 12866

    This proposed rule has been determined to be not significant for 
purposes of E.O. 12866.

Paperwork Reduction Act

    These proposed rules contain a collection of information 
requirement subject to the Paperwork Reduction Act. A request for 
review of the forms has been submitted to the Office of Management and 
Budget under section 3504(h) of the Paperwork Reduction Act.
    Public reporting burden for this collection of information is 
estimated to vary from 4 to 150 hours, with an overall average burden 
of 7.5 hours. This includes time for reviewing the instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collection of information. 
Comments from the public regarding the burden estimate or any other 
aspect of this collection of information should be addressed to: 
Director, Bureau of Economic Analysis (BE-1), U.S. Department of 
Commerce, Washington, DC 20230; and to the Office of Management and 
Budget, Washington, DC 20503, Attention: Desk Officer for the 
Department of Commerce.

Regulatory Flexibility Act

    The General Counsel, Department of Commerce, has certified to the 
Chief Counsel for Advocacy, Small Business Administration, under the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 605(b)), that 
this proposed rulemaking, if adopted, will not have a significant 
economic impact on a substantial number of small entities. The 
exemption level for the survey excludes most small businesses from 
mandatory reporting. Reporting is required only if total sales or total 
purchases transactions in financial services with unaffiliated foreign 
persons by U.S. persons who are financial services providers, or by 
U.S. persons whose consolidated enterprise includes a separately 
organized subsidiary or part that is a financial services provider, 
exceed $1 million during the year. In addition, international business 
tends to be conducted mainly by the larger companies in a given 
industry; in the financial services industry, this is particularly 
true, because of the high degrees of consolidation occurring in that 
industry in the United States during the past several years. In any 
event, small businesses tend to have specialized operations and 
activities, so those with reportable transactions will likely not have 
significant amounts of data to report; therefore, the burden on them 
will be relatively small.

List of Subjects in 15 CFR Part 801

    Economic statistics, Balance of payments, Foreign trade, Penalties, 
Reporting and recordkeeping requirements.

    Dated: June 30, 1994.
Carol S. Carson,
Director, Bureau of Economic Analysis.

    For the reasons set forth in the preamble, BEA proposes to amend 15 
CFR part 801, as follows:

PART 801--[AMENDED]

    1. The authority citation for 15 CFR Part 801 is revised to read as 
follows:

    Authority: 5 U.S.C. 301; 15 U.S.C. 4908(b); 22 U.S.C. 3101-3108; 
and E.O. 11961 (3 CFR, 1977 Comp., p. 86) as amended by E.O. 12013 
(3 CFR, 1977 Comp., p. 147), E.O. 12318 (3 CFR, 1981 Comp., p. 173), 
and E.O. 12518 (3 CFR, 1985 Comp., p. 348).
    2. Section 801.9 is amended by revising paragraph (a) to read as 
follows:


Sec. 801.9  Reports required.

    (a) Benchmark surveys. Section 4(a)(4) of the Act (22 U.S.C. 3103) 
provides that benchmark surveys of trade in services between U.S. and 
unaffiliated foreign persons be conducted, but not more frequently than 
every 5 years. General reporting requirements, exemption levels, and 
the year of coverage of the BE-20 survey may be found in Sec. 801.10, 
and general reporting requirements, exemption levels, and the year of 
coverage of the BE-80 survey may be found in Sec. 801.11. More detailed 
instructions are given on the forms themselves.
* * * * * * *
    3. Section 801.11 is added to read as follows:


Sec. 801.11  Rules and regulations for the BE-80, Benchmark Survey of 
Financial Services Transactions Between U.S. Financial Services 
Providers and Unaffiliated Foreign Persons.

    A BE-80, Benchmark Survey of Financial Services Transactions 
Between U.S. Financial Services Providers and Unaffiliated Foreign 
Persons, will be conducted covering companies' 1994 fiscal year and 
every fifth year thereafter. All legal authorities, provisions, 
definitions, and requirements contained in Sec. 801.1 through 
Sec. 801.9 are applicable to this survey. Additional rules and 
regulations for the BE-80 survey are given in paragraphs (a) through 
(d) of this section. More detailed instructions are given on the report 
form itself.
    (a) Who must report--(1) Mandatory reporting. Reports are required 
from each U.S. person who is a financial services provider or 
intermediary, or whose consolidated U.S. enterprise includes a 
separately organized subsidiary or part that is a financial services 
provider or intermediary, and who had transactions (either sales or 
purchases) directly with unaffiliated foreign persons in all financial 
services combined in excess of $1,000,000 during its fiscal year 
covered by the survey. The $1,000,000 threshold should be applied to 
financial services transactions with unaffiliated foreign persons by 
all parts of the consolidated U.S. enterprise combined that are 
financial services providers or intermediaries. Because the $1,000,000 
threshold applies separately to sales and purchases, the mandatory 
reporting requirement may apply only to sales, only to purchases, or to 
both sales and purchases.
    (i) The determination of whether a U.S. financial services provider 
or intermediary is subject to this mandatory reporting requirement may 
be judgmental, that is, based on the judgment of knowledgeable persons 
in a company who can identify reportable transactions on a recall 
basis, with a reasonable degree of certainty, without conducting a 
detailed manual records search.
    (ii) Reporters who file pursuant to this mandatory reporting 
requirement must provide data on total sales and/or purchases of each 
of the covered types of financial services transactions and must 
disaggregate the totals by country.
    (2) Voluntary reporting. If, during the fiscal year covered, sales 
or purchases of financial services by a firm that is a financial 
services provider or intermediary, or by a firm's subsidiaries or parts 
combined that are financial services providers or intermediaries, are 
$1,000,000 or less, the U.S. person is requested to provide an estimate 
of the total for each type of service. Provision of this information is 
voluntary. Because the $1,000,000 threshold applies separately to sales 
and purchases, this voluntary reporting option may apply only to sales, 
only to purchases, or to both sales and purchases.
    (b) BE-80 definition of financial services provider. The definition 
of financial services provider used for this survey is analogous in 
coverage to the finance and insurance part of Division H of the 1987 
Standard Industrial Classification Manual (SIC major groups 60 through 
64, and major group 67). More specifically, companies and/or 
subsidiaries and other separable parts of companies in the following 
industries are defined as financial services providers: Depository 
institutions (including commercial banks and thrifts); nondepository 
credit institutions; security and commodity futures brokers, dealers, 
exchanges, traders, underwriters, and services providers (including 
investment bankers and providers of securities custody services); 
credit card companies; insurance carriers, agents, brokers and services 
providers; investment advisors and managers; mutual funds; pension 
funds; trusts; holding companies; investors; oil royalty traders; etc.
    (c) Covered types of services. The BE-80 survey covers the 
following types of financial services transactions (purchases and/or 
sales) between U.S. financial services providers and unaffiliated 
foreign persons: Brokerage, except foreign exchange brokerage services; 
private placement services; underwriting services; financial management 
services; credit-related services, except credit card services; credit 
card services; financial advisory and custody services; securities 
lending services; foreign exchange brokerage services; and other 
financial services.
    (d) What to file. (1) The BE-80 survey consists of Forms BE-80(A) 
and BE-80(B). Before completing a Form BE-80(B), a consolidated U.S. 
enterprise (including the top parent and all of its subsidiaries and 
parts combined) must complete Form BE-80(A) to determine its reporting 
status. If the enterprise is subject to the mandatory reporting 
requirement, or if it is exempt from the mandatory reporting 
requirement but chooses to report data voluntarily, either a separate 
Form BE-80(B) may be filed for each separately organized financial 
services subsidiary or part of the consolidated U.S. enterprise, or a 
single BE-80(B) may be filed, representing the sum of covered 
transactions by all financial services subsidiaries or parts of the 
enterprise combined.
    (2) Reporters that receive the BE-80 survey from BEA, but that are 
not reporting data in either the mandatory or voluntary section of any 
Form BE-80(B), must return the Exemption Claim, attached to Form BE-
80(A), to BEA.

[FR Doc. 94-18094 Filed 7-27-94; 8:45 am]
BILLING CODE 3510-24-P