[Federal Register Volume 60, Number 206 (Wednesday, October 25, 1995)]
[Rules and Regulations]
[Pages 54590-54592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26327]



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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

RIN 0691-AA25


Direct Investment Surveys: Change in Reporting Requirements for 
the Annual Survey of U.S. Direct Investment Abroad (BE-11)

agency: Bureau of Economic Analysis, Commerce.

action: Final rule.

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summary: These final rules revise the reporting requirements for the 
BE-11, Annual Survey of U.S. Direct Investment Abroad. The BE-11 is a 
mandatory survey of U.S. direct investment abroad conducted by the 
Bureau of Economic Analysis (BEA), U.S. Department of Commerce. The 
final rules will: Raise the overall exemption level for the survey, and 
the exemption level for reporting individual nonbank foreign affiliates 
on Forms BE-11B(LF) and BE-11C, from $15 million to $20 million; 
institute a short form, Form BE-11B(SF), for U.S. companies to report 
their majority-owned nonbank foreign affiliates with assets, sales, and 
net income in the $20 to $50 million range; and for fiscal year 1997 
only, require the largest nonbank foreign affiliates owned between 10 
and 20 percent to reported on Form BE-11C, along with affiliates owned 
between 20 and 50 percent. In all years, nonbank foreign affiliates 
owned between 20 and 50 percent by all U.S. Reporters (U.S. parent 
companies) of the affiliate combined must be reported on Form BE-11C if 
their assets, sales, or net income exceed $20 million. For fiscal year 
1997 only, Form BE-11C must also be filed for nonbank foreign 
affiliates owned, directly and/or indirectly, at least 10 percent by 
one U.S. Reporter (i.e., U.S. parent company), but less than 20 percent 
by all U.S. Reporters of the affiliate combined, if the affiliate's 
total assets, sales, or net income exceed $100 million.

effective date: These rules will be effective November 24, 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 1, 1995 Federal Register, 
Volume 60, No. 147, 60 FR 39128, BEA published a notice of proposed 
rulemaking to revise the reporting requirements for the BE-11, Annual 
Survey of U.S. Direct Investment Abroad. No comments on the proposed 
rules were received. Thus, these final rules are the same as the 
proposed rules.
    The BE-11 annual survey is part of BEA's regular data collection 
program for U.S. direct investment abroad. The survey is mandatory and 
is conducted pursuant to the International Investment and Trade in 
Services Survey Act (Pub. L. 94-472, 90 Stat. 2059, 22 U.S.C. 3101-
3108, as amended).
    The BE-11 survey consists of an instruction booklet, a claim for 
not filing the BE-11, and the following report forms:
    1. Form BE-11A for reporting by a U.S. Reporter that is not a bank;
    2. Form BE-11B(LF) (Long Form) for reporting majority-owned nonbank 
foreign affiliates with assets, sales, or net income greater than $50 
million (positive or negative);
    3. Form BE-11B(SF) (Short Form) for reporting majority-owned 
nonbank foreign affiliates with assets, sales, or net income greater 
than $20 million, but not greater than $50 million (positive or 
negative); and
    4. Form BE-11C for reporting minority-owned nonbank foreign 
affiliates.
    A Form BE-11A must be filed by each nonbank U.S. person having a 
foreign affiliate reportable on Form BE-11B(LF), BE-11B(SF), or BE-11C. 
Under these final rules, the exemption level for reporting individual 
foreign affiliates on Form BE-11B(LF) or (SF) or BE-11C--and, thus, for 
determining whether a U.S. person has to file Form BE-11A--is raised 
from $15 million to $20 million. The exemption level is the level of a 
foreign affiliate's assets, sales, or net income below which a Form BE-
11B(LF) or (SF) or BE-11C is not required. Raising the exemption level 
lowers the number of reports that otherwise must be filed, thus 
reducing the reporting and processing burdens. The new exemption level 
of $20 million is the same as that recently approved for the related 
quarterly Form BE-577, Direct Transactions of U.S. Reporter With 
Foreign Affiliate.
    In addition to raising the exemption level, these final rules will 
institute the BE-11B(SF) short form. Majority-owned nonbank foreign 
affiliates for which assets, sales, or net income is greater than $20 
million (positive or negative), but for which no one of these items is 
greater than $50 million (positive or negative), will be required to be 
reported on Form BE-11B(SF). The use of a short form means that, for 
about 3,700 foreign affiliates, U.S. companies will now report 
significantly fewer data items than on the last (1993) annual survey.
    For fiscal year 1997 only, these final rules will require the 
largest nonbank foreign affiliates owned between 10 and 20 percent to 
be reported on Form BE-11C, along with affiliates owned between 20 and 
50 percent. In all years, reporting on Form BE-11C is required if an 
affiliate is owned between 20 and 50 percent by all U.S. Reporters 
combined and if its assets, sales, or net income exceed $20 million. 
Primarily to reduce reporting burden of the survey, affiliates owned 
less than 20 percent do not have to be reported. However, U.S. direct 
investment abroad is defined by law to include all foreign business 
enterprises owned 10 (not 20) percent or more, directly or indirectly, 
by a U.S. person. BEA conducts periodic benchmark surveys of U.S. 
direct investment abroad (the BE-10), covering all foreign affiliates 
owned 10 percent or more. A benchmark survey for the year 1994 is now 
being conducted; the next survey will cover the year 1999. In order to 
maintain reliable estimates of data for the universe of all foreign 
affiliates in nonbenchmark years, reporting for the largest affiliates 
owned between 10 and 20 percent is needed for at least one year between 
benchmark surveys. Although the U.S. ownership percentages in these 
affiliates are low, some of the affiliates are very large and have a 
sizable impact on the estimates. Under these final rules, reporting of 
Form BE-11(C) for nonbank foreign affiliates owned directly and/or 
indirectly, at least 10 percent by one U.S. Reporter, but less than 20 
percent 

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by all U.S. Reporters of the affiliate combined, and for which assets, 
sales, or net income exceed $100 million would be required for fiscal 
year 1997 only.
    These new rules will be effective with the survey covering fiscal 
year 1995. The 1995 forms will be mailed out in March 1996 and will be 
due May 31, 1996. The last BE-11 survey covered the year 1993. (A BE-11 
survey is not conducted in a year, such as 1994, when a BE-10 benchmark 
survey is conducted.)

Executive Order 12612

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

Executive Order 12866

    These final rules have been determined to be not significant for 
purposes of E.O. 12866.

Paperwork Reduction

    The collection of information in these final rules has been 
approved by OMB (OMB No. 0608-0053).
    Notwithstanding any other provision of law, no person is required 
to respond to nor shall a person be subject to a penalty for failure to 
comply with a collection of information subject to the requirements of 
the Paperwork Reduction Act unless that collection of information 
displays a currently valid OMB Control Number.
    The public reporting burden for a U.S. company for this collection 
of information can range from 4 hours for the smallest and least 
complex U.S. Reporter that has one affiliate, to approximately 3,000 
hours for a large U.S. Reporter that has up to 150 affiliates with a 
wide range of activities; the average burden per Reporter is 62 hours. 
The estimated burden includes 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: Acting 
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 (OMB Control No. 0608-0053).

Regulatory Flexibility Act

    The Assistant General Counsel for Legislation and Regulation, 
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. Only if the affiliate's assets, 
sales, or net income exceeds $20 million must it be reported. Usually, 
the U.S. parent company (the one required to file the report) is many 
times larger.
    In addition, by raising the exemption level from $15 million to $20 
million, U.S. parent companies will no longer have to report for 
affiliates between $15 and $20 million. This change should reduce the 
reporting burden on smaller U.S. businesses that own these affiliates. 
Also, to minimize the reporting burden on smaller U.S. businesses, 
majority-owned affiliates with assets, sales, and net income in the 
range of $20 million to $50 million will be reported on the abbreviated 
BE-11B(SF), or short form, rather than the BE-11B(LF), or long form.

List of Subjects in 15 CFR Part 806

    Balance of payments, Economic statistics, Foreign investments in 
United States, Reporting and recordkeeping requirements, United States 
investments abroad.
J. Steven Landefeld,
Acting Director, Bureau of Economic Analysis.

    For the reasons set forth in the preamble, 15 CFR Part 806 is 
amended 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 806.14(f)(3) introductory text, (f)(3)(i), (f)(3)(ii), 
(f)(e)(iii), (f)(3)(iv) (A) through (C), and (f)(3)(v) are revised to 
read as follows:


Sec. 806.14  U.S. direct investment abroad.

* * * * *
    (f) * * *
    (3) BE-11--Annual Survey of U.S. Direct Investment Abroad: A 
report, consisting of Form BE-11A and Forms(s) BE-11B(LF), BE-11B(SF), 
and/or BE-11C, is required of each nonbank U.S. Reporter who, at the 
end of the Reporter's fiscal year, had a nonbank foreign affiliate 
reportable on Form BE-11B(LF), BE-11B(SF), or BE-11C. Forms required 
and the criteria for reporting on each are as follows:
    (i) Form BE-11A (Report for U.S. Reporter) must be filed by each 
nonbank U.S. person having a foreign affiliate reportable on Form BE-
11B(LF), BE-11B(SF), or BE-11C.
    (ii) Form BE-11B (LF) or (SF) (Report for Majority-owned Foreign 
Affiliate).
    (A) A BE-11B(LF) (Long Form) is required to be filed for each 
majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter 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 the end of, or for, the affiliate's fiscal year.
    (B) A BE-11B(SF)(Short Form) is required to be filed for each 
majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter for 
which any one of the three items listed in paragraph (f)(3)(ii)(A) of 
this section was greater than $20 million (positive or negative), but 
for which no one of these items was greater than $50 million (positive 
or negative), at the end of, or for, the affiliate's fiscal year.
    (iii) Form BE-11C (Report for Minority-owned Foreign Affiliate) 
must be filed for each minority-owned nonbank foreign affiliate that is 
owned at least 20 percent, but not more than 50 percent, directly and/
or indirectly, by all U.S. Reporters of the affiliate combined, and for 
which any one of the three items listed in paragraph (f)(3)(ii)(A) of 
this section was greater than $20 million (positive or negative) at the 
end of, or for, the affiliate's fiscal year. In addition, for the 
report covering fiscal year 1997 only, a Form BE-11C must be filed for 
each minority-owned nonbank foreign affiliate that is owned, directly 
or indirectly, at least 10 percent by one U.S. Reporter, but less than 
20 percent by all U.S. Reporters of the affiliate combined, and for 
which any one of the three items listed in paragraph (f)(3)(ii)(A) of 
this section was greater than $100 million (positive or negative) at 
the end of, or for, the affiliate's fiscal year.
    (iv) * * *
    (A) None of its exemption level items is above $20 million.
    (B) For fiscal year 1997 only, it is less than 20 percent owned, 
directly or indirectly, by all U.S. Reporters of the affiliate combined 
and one of its 

[[Page 54592]]
exemption level items exceeds $100 million.
    (C) For fiscal years other than 1997, it is less than 20 percent 
owned, directly or indirectly, by all U.S. Reporters of the affiliate 
combined.
* * * * *
    (v) Notwithstanding paragraph (f)(3)(iv) of this section, a Form 
BE-11B(LF), BE-11B(SF), or BE-11C must be filed for a foreign affiliate 
of the U.S. Reporter than owns another nonexempt foreign affiliate of 
that U.S. Reporter, even if the foreign affiliate parent is otherwise 
exempt. That is, all affiliates upward in the chain of ownership must 
be reported.
* * * * *
[FR Doc. 95-26327 Filed 10-24-95; 8:45 am]
BILLING CODE 3510-EA-M