[Federal Register Volume 59, Number 233 (Tuesday, December 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29767]
[[Page Unknown]]
[Federal Register: December 6, 1994]
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DEPARTMENT OF COMMERCE
Bureau of Economic Analysis
15 CFR Part 806
[Docket No. 940828-4318]
RIN 0691-AA22
Direct Investment Surveys: BE-10, Benchmark Survey of U.S. Direct
Investment Abroad--1994
AGENCY: Bureau of Economic Analysis, Commerce.
ACTION: Final rule.
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SUMMARY: These final rules set forth reporting requirements for the BE-
10, Benchmark Survey of U.S. Direct Investment Abroad--1994, to be
conducted by the Bureau of Economic Analysis (BEA), U.S. Department of
Commerce. The rules for the last benchmark survey, covering 1989, are
deleted. The major change in reporting requirements since the last
survey that is implemented in these final rules is the raising of the
exemption level for determining whether a long form or a short form
must be filed for nonbank foreign affiliates of nonbank U.S. parent
companies.
EFFECTIVE DATE: These rules will be effective January 5, 1995.
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) 606-9800.
SUPPLEMENTARY INFORMATION: In the August 26, 1994 Federal Register,
Volume 59, No. 165, 59 FR 44090, BEA published a notice of proposed
rulemaking to revise 15 CFR 806.16 to set forth reporting requirements
for the BE-10, Benchmark Survey of U.S. Direct Investment Abroad--1994.
No comments on the proposed rules were received. Thus, these final
rules are the same as the proposed rules.
The benchmark survey will be conducted by BEA under the
International Investment and Trade in Services Survey Act, hereinafter,
``the Act.'' Section 4(b) of the Act, as amended, requires that ``With
respect to United States direct investment abroad, the President shall
conduct a benchmark survey covering year 1982, a benchmark survey
covering year 1989, and benchmark surveys covering every fifth year
thereafter * * *'' Reporting in the survey is mandatory. The
responsibility for conducting benchmark surveys of U.S. direct
investment abroad has been delegated by the President to the Secretary
of Commerce, who has redelegated it to BEA.
The benchmark surveys are BEA's censuses, intended to cover the
universe of U.S. direct investment abroad in value terms. U.S. direct
investment abroad is defined as the ownership or control, directly or
indirectly, by one U.S. person of 10 percent or more of the voting
securities of an incorporated foreign business enterprise or an
equivalent interest in an unincorporated foreign business enterprise,
including a branch.
The purpose of the benchmark survey is to obtain comprehensive data
on the overall operations of U.S. parent companies and their foreign
affiliates, and on positions and transactions between them. The survey
is mandated by Congress to provide a factual framework for addressing
the concerns of policymakers and the general public about the effects
of direct investment abroad on the U.S. and foreign economies. The data
from the survey are needed to record the size of U.S. direct investment
abroad, measure changes in such investment, and assess its impact. The
data will provide benchmarks for deriving current universe estimates of
direct investment from sample data collected in other BEA surveys in
nonbenchmark years. In particular, they will serve as benchmarks for
the quarterly direct investment estimates included in the U.S.
international transactions and the national income and product
accounts, and for annual estimates of the U.S. direct investment
position abroad and of the operations of U.S. parent companies and
their foreign affiliates.
The benchmark surveys are the most comprehensive of BEA's surveys
in terms of subject matter in order that they obtain the detailed
information on U.S. direct investment abroad needed for policy
purposes. As specified in the Act, policy areas of particular interest
include, among other things, trade in both goods and services,
employment and employee compensation, taxes, and technology.
The survey consists of an instruction booklet, a claim for not
filing the BE-10, and the following report forms:
1. Form BE-10A for reporting by a U.S. Reporter that is not a bank;
2. Form BE-10A BANK for reporting by a U.S. Reporter that is a
bank;
3. Form BE-10B(LF) (Long Form) for reporting nonbank foreign
affiliates of nonbank U.S. parents with assets, sales, or net income
greater than $50 million (positive or negative);
4. Form BE-10B(SF) (Short Form) for reporting nonbank foreign
affiliates of nonbank U.S. parents with assets, sales, or net income
greater than $3 million, but not greater than $50 million (positive or
negative); and
5. Form BE-10B BANK for reporting foreign affiliates that are banks
with assets, sales, or net income greater than $3 million (positive or
negative).
Although the survey is intended to cover the universe of U.S.
direct investment abroad, in order to minimize the reporting burden,
foreign affiliates with assets, sales, and net income each equal to or
less than $3 million (positive or negative) are exempt from being
reported on Form BE-10B(SF) or BE-10B BANK (but must be listed on Form
BE-10A SUPPLEMENT or BE-10A BANK SUPPLEMENT).
The major rule change from the last (1989) survey to the 1994
survey is the raising, from $15 million to $50 million, of the
exemption level for reporting foreign affiliates on the more detailed
long form. In the 1994 survey, nonbank foreign affiliates for which
assets, sales, or net income is greater than $50 million (positive or
negative) are required to be reported on Form BE-10B(LF) (Long Form);
nonbank foreign affiliates for which assets, sales, or net income is
greater than $3 million (positive or negative), but for which no one of
these items is greater than $50 million (positive or negative), are
required to be reported on Form BE-10B(SF) (Short Form). In the 1989
benchmark survey, the long-form exemption level was $15 million. This
change means that approximately 6,000 foreign affiliates that
previously would have been reported on the long form will now be
reported instead on the short form, thus reducing both reporting and
editing burden from what it would otherwise have been.
Forms for the 1994 benchmark survey are scheduled to be mailed out
at the end of February 1995. A completed report is due to BEA not later
than May 31, 1995 for a U.S. Reporter filing less than 50 Forms BE-
10B(LF), BE-10B(SF), and/or BE-10B BANK and not later than June 30,
1995 for a U.S. Reporter required to file 50 or more Forms BE-10B(LF),
BE-10B(SF), and/or BE-10 BANK. A response is required from persons
subject to the reporting requirements of the BE-10 whether or not they
are contacted by BEA. Also, a person, or their agent, who is contacted
by BEA about reporting in this survey must respond in writing.
Executive Order 12612
These rules do not contain policies with Federalism implications
sufficient to warrant preparation of a Federalism assessment under E.O.
12612.
Executive Order 12866
These rules have been determined to be not significant for purposes
of E.O. 12866.
Paperwork Reduction Act
The collection of information required in these final rules has
been approved by OMB (OMB No. 0608-0049).
The public reporting burden for this collection of information is
estimated to vary from 14 to 8,500 hours per response, with an average
of 159.4 hours per response, including time for reviewing 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
these final rules will not have a significant economic impact on a
substantial number of small entities. The exemption level is set in
terms of the size of a U.S. company's foreign affiliates. If an
affiliate is owned 10 percent or more by the U.S. company and has
assets, sales, or net income greater than $3 million (positive or
negative), it must be reported. Usually, the U.S. parent company (the
one required to file the report) is many times larger. Also, to
minimize the reporting burden on smaller U.S. businesses, nonbank
foreign affiliates with assets, sales, and net income all below $50
million will be reported on the abbreviated BE-10B(SF), or short form,
rather than the BE-10B(LF), or long form.
List of Subjects in 15 CFR Part 806
Balance of payments, Economic statistics, U.S. investment abroad,
Penalties, Reporting and recordkeeping requirements.
Dated: November 10, 1994.
Carol S. Carson,
Director, Bureau of Economic Analysis.
For the reasons set forth in the preamble, BEA amends 15 CFR Part
806 as follows:
PART 806--DIRECT INVESTMENT SURVEYS
1. The authority citation for 15 CFR Part 806 continues to read as
follows:
Authority: 5 U.S.C. 301; 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 806.16 is revised to read as follows:
Sec. 806.16 Rules and regulations for BE-10, Benchmark Survey of U.S.
Direct Investment Abroad--1994.
A BE-10, Benchmark Survey of U.S. Direct Investment Abroad will be
conducted covering 1994. All legal authorities, provisions,
definitions, and requirements contained in Secs. 806.1 through 806.13
and 806.14 (a) through (d) are applicable to this survey. Specific
additional rules and regulations for the BE-10 survey are given in
paragraphs (a) through (e) of this section.
(a) Response required. A response is required from persons subject
to the reporting requirements of the BE-10, Benchmark Survey of U.S.
Direct Investment Abroad--1994, contained herein, whether or not they
are contacted by BEA. Also, a person, or their agent, who is contacted
by BEA about reporting in this survey, either by sending them a report
form or by written inquiry, must respond in writing pursuant to
Sec. 806.4. They may respond by:
(1) Certifying in writing, within 30 days of being contacted by
BEA, to the fact that the person had no direct investment within the
purview of the reporting requirements of the BE-10 survey;
(2) Completing and returning the ``BE-10 Claim for Not Filing''
within 30 days of receipt of the BE-10 survey report forms; or
(3) Filing the properly completed BE-10 report (comprising Form BE-
10A or BE-10A BANK and Forms BE-10B(LF), BE-10B(SF) and/or BE-10B BANK)
by May 31, 1995, or June 30, 1995, as required.
(b) Who must report. (1) A BE-10 report is required of any U.S.
person that had a foreign affiliate--that is, that had direct or
indirect ownership or control of at least 10 percent of the voting
stock of an incorporated foreign business enterprise, or an equivalent
interest in an unincorporated foreign business enterprise--at any time
during the U.S. person's 1994 fiscal year.
(2) If the U.S. person had no foreign affiliates during its 1994
fiscal year, a ``BE-10 Claim for Not Filing'' must be filed within 30
days of receipt of the BE-10 survey package; no other forms in the
survey are required. If the U.S. person had any foreign affiliates
during its 1994 fiscal year, a BE-10 report is required and the U.S.
person is a U.S. Reporter in this survey.
(3) Reports are required even though the foreign business
enterprise was established, acquired, seized, liquidated, sold,
expropriated, or inactivated during the U.S. person's 1994 fiscal year.
(c) Forms for nonbank U.S. Reporters and foreign affiliates. (1)
Form BE-10A (Report for the U.S. Reporter). A BE-10A report must be
completed by a U.S. Reporter that is not a bank. If the U.S. Reporter
is a corporation, Form BE-10A is required to cover the fully
consolidated U.S. domestic business enterprise.
(i) If a nonbank U.S. Reporter had any foreign affiliates, whether
held directly or indirectly, for which any one of the following three
items--total assets, sales or gross operating revenues excluding sales
taxes, or net income after provision for foreign income taxes--was
greater than $3 million (positive or negative) at any time during the
affiliate's 1994 fiscal year, the U.S. Reporter must file a complete
Form BE-10A and, as applicable, a BE-10A SUPPLEMENT listing each, if
any, exempt foreign affiliate. It must also file a Form BE-10B(LF), BE-
10B(SF), or BE-10B BANK, as appropriate, for each nonexempt foreign
affiliate.
(ii) If a nonbank U.S. Reporter had no foreign affiliates for which
any one of the three items listed in paragraph (c)(1)(i) of this
section was greater than $3 million (positive or negative) at any time
during the affiliate's 1994 fiscal year, then only items 1-4 of Form
BE-10A and the BE-10A SUPPLEMENT, listing all exempt foreign
affiliates, must be completed.
(2) Form BE-10B(LF) or (SF) (Report for foreign affiliate).
(i) A BE-10B(LF) (Long Form) must be filed for each nonbank foreign
affiliate of a nonbank U.S. Reporter, whether held directly or
indirectly, for which any one of the three items--total assets, sales
or gross operating revenues excluding sales taxes, or net income after
provision for foreign income taxes--was greater than $50 million
(positive or negative) at any time during the affiliate's 1994 fiscal
year.
(ii) A BE-10B(SF) (Short Form) must be filed.
(A) For each nonbank foreign affiliate of a nonbank U.S. Reporter,
whether held directly or indirectly, for which any one of the three
items listed in paragraph (c)(2)(i) of this section was greater than $3
million, but for which no one of these items was greater than $50
million (positive or negative), at any time during the affiliate's 1994
fiscal year, and
(B) For each nonbank foreign affiliate of a U.S. bank Reporter,
whether held directly or indirectly, for which any one of the three
items listed in paragraph (c)(2)(i) of this section was greater than $3
million (positive or negative) at any time during the affiliate's 1994
fiscal year.
(iii) Notwithstanding paragraphs (c)(2)(i) and (c)(2)(ii) of this
section, a Form BE-1B(LF) or (SF) must be filed for a foreign affiliate
of the U.S. Reporter that owns another nonexempt foreign affiliate of
that U.S. Reporter, even if the foreign affiliate parent is otherwise
exempt, i.e., a Form BE-10B(LF), (SF), or BANK must be filed for all
affiliates upward in a chain of ownership.
(d) Forms for U.S. Reporters and foreign affiliates that are banks
or bank holding companies.
(1) For purposes of the BE-10 survey, ``banking'' covers a business
entity engaged in deposit banking or closely related functions,
including commercial banks, Edge Act corporations engaged in
international or foreign banking, foreign branches and agencies of U.S.
banks whether or not they accept deposits abroad, savings and loans,
savings banks, and bank holding companies, ie., holding companies for
which over 50 percent of their total income is from banks that they
hold. If the bank or bank holding company is part of a consolidated
business enterprise and the gross operating revenues from nonbanking
activities of this consolidated entity are more than 50 percent of its
total revenues, then the consolidated entity is deemed not to be a bank
even if banking revenues make up the largest single source of all
revenues. (Activities of subsidiaries of a bank or bank holding company
that may not be banks but that provide support to the bank parent
company, such as real estate subsidiaries set up to hold the office
buildings occupied by the bank parent company, are considered bank
activities.)
(2) Form BE-10A BANK (Report for a U.S. Reporter that is a bank). A
BE-10A BANK report must be completed by a U.S. Reporter that is a bank.
For purposes of filing Form BE-10A BANK, the U.S. Reporter is deemed to
be the fully consolidated U.S. domestic business enterprise and all
required data on the form shall be for the fully consolidated domestic
entity.
(i) If a U.S. bank had any foreign affiliates at any time during
its 1994 fiscal year, whether a bank or nonbank and whether held
directly or indirectly, for which any one of the three items--total
assets, sales or gross operating revenues excluding sales taxes, or net
income after provision for foreign income taxes--was greater than $3
million (positive or negative) at any time during the affiliate's 1994
fiscal year, the U.S. Reporter must file a complete Form BE-10A BANK
and, as applicable, a BE-10A BANK SUPPLEMENT listing each, if any,
exempt foreign affiliate, whether bank or nonbank. It must also file a
Form BE-10B(SF) for each nonexempt nonbank foreign affiliate and a Form
BE-10B BANK for each nonexempt foreign bank affiliate.
(ii) If the U.S. bank Reporter had no foreign affiliates for which
any one of the three items listed in paragraph (d)(2)(i) of this
section was greater than $3 million (positive or negative) at any time
during the affiliate's 1994 fiscal year, then only items 1-4 of Form
BE-10A BANK and the BE-10A BANK SUPPLEMENT, listing all exempt foreign
affiliates, should be completed.
(3) Form BE-10B BANK (Report for a foreign affiliate that is a
bank).
(i) A BE-10B BANK report must be filed for each foreign bank
affiliate of a bank or nonbank U.S. Reporter, whether directly or
indirectly held, for which any one of the three items--total assets,
sales or gross operating revenues excluding sales taxes, or net income
after provision for foreign income taxes--was greater than $3 million
(positive or negative) at any time during the affiliate's 1994 fiscal
year.
(i) Notwithstanding paragraph (d)(3)(i) of this section, a Form BE-
10B BANK must be filed for a foreign bank affiliate of the U.S.
Reporter that owns another nonexempt foreign affiliate of that U.S.
Reporter, even if the foreign affiliate parent is otherwise exempt,
i.e., a Form BE-10B(LF), (SF), or BANK must be filed for all affiliates
upward in a chain of ownership. However, a Form BE-10B BANK is not
required to be filed for a foreign bank affiliate in which the U.S.
Reporter holds only an indirect ownership interest of 50 percent or
less and that does not own a reportable nonbank foreign affiliate, but
the indirectly owned bank affiliate must be listed on the BE-10A BANK
SUPPLEMENT.
(e) Due date. A fully completed and certified BE-10 report
comprising Form BE-10A or 10A BANK, BE-10A SUPPLEMENT (as required),
and Form(s) BE-10B(LF), (SF), or BANK (as required) is due to be filed
with BEA not later than May 31, 1995 for those U.S. Reporters filing
less than 50, and June 30, 1995 for those U.S. Reporters filing 50 or
more, Forms BE-10B(LF), (SF) or BANK.
[FR Doc. 94-29767 Filed 12-5-94; 8:45 am]
BILLING CODE 3510-EA-M