[Federal Register Volume 62, Number 237 (Wednesday, December 10, 1997)]
[Proposed Rules]
[Pages 65043-65044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32251]
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DEPARTMENT OF COMMERCE
Bureau of Economic Analysis
15 CFR Part 806
[Docket No. 971110266-7266-01]
RIN 0691-AA31
Direct Investment Surveys: Raising Exemption Level for Two
Surveys of Foreign Direct Investment in the United States
AGENCY: Bureau of Economic Analysis, Commerce.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document sets forth proposed rules to amend 15 CFR 806.15
by raising the exemption level for reporting in two surveys of foreign
direct investment in the United States: raise the exemption level for
Forms BE-605 and BE-605 Bank to $30 million from $20 million; and raise
the exemption level for Forms BE-13 and BE-14 to $3 million from $1
million.
The purpose of these changes is to bring the surveys into
conformity with the proposed design of the BE-12, Benchmark Survey of
Foreign Direct Investment in the United States--1997. It is expected
that the changes will effect a reduction in the number of reports filed
by U.S. affiliates of foreign persons and thereby reduce reporting
burden. BEA is proposing other changes to the surveys that do not
require a change in the rule, and that may increase the reporting
burden slightly for the BE-605 survey, thereby offsetting a portion of
the reduction in burden that results from raising the exemption level.
DATES: Comments on the proposed rules will receive consideration if
submitted in writing on or before January 26, 1998.
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 received
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:
R. David Belli, Chief, International Investment Division (BE-50),
Bureau of Economic Analysis, U.S. Department of Commerce, Washington,
DC 20230; phone 202-606-9800.
SUPPLEMENTARY INFORMATION: The two surveys affected by these changes
are part of the Bureau of Economic Analysis (BEA) data collection
program for foreign direct investment in the United States. The
surveys, the BE-605, Transactions of U.S. Affiliate, Except a U.S.
Banking Affiliate, with Foreign Parent, together with the BE-605 Bank,
Transactions of U.S. Banking Affiliate with Foreign Parent, and the BE-
13, Initial Report on a Foreign Person's Direct or Indirect
Acquisition, Establishment, or Purchase of the Operating Assets, of a
U.S. Business Enterprise, Including Real Estate, together with BE-14,
Report by a U.S. Person Who Assists or Intervenes in the Acquisition of
a U.S. Business Enterprise by, or Who Enters Into a Joint Venture with,
a Foreign Person, are mandatory and are conducted pursuant to the
International Investment and Trade in Services Survey Act (22 U.S.C.
3101-3108, as amended).
The proposed changes will bring reporting by U.S. affiliates on the
BE-605 quarterly survey, the first of the two surveys, into conformity
with their reporting on the proposed BE-12, Benchmark Survey of Foreign
Direct Investment in the United States--1997. The BE-12 is BEA's
quinquennial census of foreign direct investment in the United States;
it collects annual data and is intended to cover the universe of U.S.
affiliates. (A U.S. affiliate is a U.S. business enterprise in which a
foreign person owns or controls ten percent or more of the voting
stock, or an equivalent interest in an unincorporated business
enterprise.) The BE-605 is a sample survey covering only larger U.S.
affiliates. The sample data reported in the BE-605 survey will be
linked to data from the BE-12 benchmark survey in order to derive
universe estimates by quarter for benchmark and nonbenchmark years.
Under this proposed rule, the exemption level for the BE-605 survey
will be raised from more than $20 million to more than $30 million of
assets, sales, or net income. The proposed level of $30 million is the
same as that proposed to be used in the BE-12 Benchmark Survey of
Foreign Direct Investment in the United States--1997, to determine
whether reporting companies are required to provide similar balance of
payments data on the BE-12(SF) short form. Below the $30 million
threshold, companies reporting on the BE-12 do not provide these data.
In addition to raising the exemption level, BEA is proposing one
other change to the BE-605 survey form. Specifically, it is proposing
that trade in services between U.S. affiliates and their foreign
parents be reported once each year by type of service, similar to
reporting on the proposed BE-12 benchmark survey. This change is
necessary to bring the data collected on foreign direct investment in
the United States into conformity with those collected on U.S. direct
investment abroad data and also with current international guidelines
for the compilation of balance of payments accounts. Currently BEA can
only provide detail by type of service for unaffiliated, but not
affiliated, transactions for foreign direct investment in the United
States. However, this addition does not require a rule change and is
indicated here only for information. The revised BE-605 and BE-605 Bank
forms would be required to be filed beginning with the report for the
first calendar quarter of 1998.
For the BE-605 survey, an increase in the reporting burden due to
adding the requirement to provide information on services transactions
by type of service has been kept to a minimum by requesting that the
added information be reported only once each year. Many respondents do
not have transactions in services and will not have to file the added
information; those that do will only be required to provide it once
each year, along with other data that are already required to be filed
annually following the end of their fiscal year. In order to allow for
respondents' review of the additional instructions and the provision of
the information that will be required only on an annual basis, the
average burden was increased by one-fourth of an hour (1 hour for one
of the four quarters for which reports will be filed). The reporting
changes will only affect the BE-605 and not the BE-605 Bank form and
are the minimum necessary to maintain consistency with the benchmark
survey. However, because of raising the reporting threshold to $30
million from $20 million, BEA estimates that 650 companies, or 14
percent of potential respondents, will drop out of the reporting
sample, thus reducing the increased burden associated with reporting
services transactions by type.
The second of the two surveys affected by these rules changes is
the BE-13 new investment survey. In the proposed 1997 BE-12 benchmark
survey, the reporting threshold is raised to over $3 million from over
$1 million of assets, sales, or net income in the previous benchmark
survey. Accordingly, BEA proposes to raise the threshold for reporting
on the BE-13 new investment survey (measured by the acquired or
established U.S. company's total assets) to $3 million to correspond to
the initial reporting level on the BE-12. For both surveys, the BE-13
and BE-12, only an exemption claim must be filed for companies below
the $3 million level, thereby reducing
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respondent burden for small companies. A concomitant requirement on the
BE-13 that a report be filed for all acquisitions of 200 or more acres
of U.S. land will not be changed. The exemption level for the related
form BE-14 also is raised to correspond to the new $3 million threshold
for the BE-13.
To maintain consistency with the benchmark survey, BEA also
proposes to base the industry coding system used on the BE-13 on the
new North American Industry Classification System (NAICS) in place of
the current system, which is based on the U.S. Standard Industrial
Classification System. However, this modification does not require a
rule change and therefore is not reflected in this proposed rule. The
revised BE-13 and BE-14 report forms would be required to be filed for
reports covering 1998 transactions.
The change in the basis for industry coding should not affect the
average reporting burden for the BE-13 new investment survey. However,
BEA estimates that 300 potential respondents to the survey will not be
required to file in the survey because of raising the reporting
threshold to $3 million from $1 million. This represents a 20 percent
decrease in the estimated number of reporters that would otherwise be
required to report in the survey.
A copy of the proposed survey forms may be obtained from: Chief,
Direct Investment in the United States Branch, International Investment
Division, BE-49, Bureau of Economic Analysis, U.S. Department of
Commerce, Washington, DC 20230; phone (202) 606-5577.
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
These proposed rules have 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. The collection of
information requirement contained in the proposed rule has been
submitted to the Office of Management and Budget for review under
section 3507 of the Paperwork Reduction Act.
Notwithstanding any other provisions of the law, no person is
required to respond to, nor shall any 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
displays a currently valid Office of Management and Budget Control
Number.
Public reporting burden for the BE-605 collection of information is
estimated to vary from \1/2\ hour to 4 hours per response with an
average 1\1/4\ hours per response. The estimated average burden of 1\1/
4\ hours per form includes time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information.
Public reporting burden for the BE-13 collection of information is
estimated to vary from 1 to 4 hours per response, with an average 1\1/
2\ hours per response. The estimated average burden of 1\1/2\ hours
includes time for reviewing instructions, searching existing data
sources, gathering and maintaining the data needed, and completing and
reviewing the collection of information.
Comments are requested concerning: (a) Whether the proposed
collection of information is necessary for the proper performance of
the agency, including whether the information will have practical
utility; (b) the accuracy of the burden estimate; (c) ways to enhance
the quality, utility, and clarity of the information collected; and (d)
ways to minimize the burden of the collection of information on the
respondents, including the use of automated collection techniques or
other forms of information technology. Comments 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, O.I.R.A., Paperwork Reduction Project 0608-0009 (BE-605/605
Bank) or Paperwork Reduction Project 0608-0035 (BE-13/14), Washington,
DC 20503.
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 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. Most small businesses are not
foreign owned, and many that are will not be required to report because
of these proposed changes. For the BE-605 quarterly survey, the
proposed rule changes increase the exemption level at which reporting
will be required, thereby eliminating the reporting requirement for a
number of small companies. For the BE-13 new investment survey, the
reporting threshold is being raised from $1 million to $3 million, thus
eliminating an additional number of small companies that would have
been required to file. These provisions are intended to reduce the
reporting burden on smaller companies.
List of Subjects in 15 CFR Part 806
Balance of payments, Economic statistics, Foreign investment in the
United States, Reporting and recordkeeping requirements.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.
For the reasons set forth in the preamble, BEA proposes to amend 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).
Sec. 806.15 [Amended]
2. Section 806.15(h)(1) is amended by deleting ``$20,000,000'' and
inserting in its place ``$30,000,000.''
3. Section 806.15(h)(2) is amended by deleting ``$20,000,000'' and
inserting in its place ``$30,000,000.''
4. Section 806.15(j)(3)(ii)(b) is amended by deleting
``$1,000,000'' and inserting in its place ``$3,000,000.''
5. Section 806.15(j)(3)(ii)(c) is amended by deleting
``$1,000,000'' and inserting in its place ``$3,000,000.''
6. Section 806.15(j)(4)(ii)(b) is amended by deleting
``$1,000,000'' and inserting in its place ``$3,000,000.''
[FR Doc. 97-32251 Filed 12-9-97; 8:45 am]
BILLING CODE 3510-06-M