[Federal Register Volume 63, Number 66 (Tuesday, April 7, 1998)]
[Rules and Regulations]
[Pages 16890-16892]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8985]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 971110266-8067-02]
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: Final rule.

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SUMMARY: These final rules amend 15 CFR Part 806.15 by raising the 
exemption level for reporting in two surveys of foreign direct 
investment in the United States. The exemption level

[[Page 16891]]

for the quarterly survey of transactions of U.S. affiliates with their 
foreign parents (Forms BE-605 and BE-605 Bank) is raised to $30 million 
from $20 million. The exemption level for the survey of U.S. businesses 
newly acquired or established by foreign inventors (Forms BE-13 and BE-
14) is raised to $3 million from $1 million.
    These changes bring the surveys into conformity with the BE-12, 
Benchmark Survey of Foreign Direct Investment in the United States--
1997, and reduce reporting burden on small respondents. For the 
quarterly survey, other changes, which do not require a change in 
rules, may increase the reporting burden slightly, thereby offsetting a 
portion of the overall reduction in burden that results from raising 
the exemption level.

EFFECTIVE DATE: These rules will be effective May 7, 1998.

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: In the December 10, 1997 Federal Register, 
Volume 62, No. 237, pages 65043-65044, the Bureau of Economic Analysis 
published a notice of proposed rulemaking to amend 15 CFR part 806.15 
by raising the exemption level for reporting in two surveys of foreign 
direct investment in the United States. No comments on the proposed 
rule were received. Thus, this final rule is the same as the proposed 
rule.
    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, (1) 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 (2) 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).
    These 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 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 collect 
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 survey covering all affiliates above a size-exemption level. 
The 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. Pursuant to these rules, the 
exemption level for the B-605 survey will be raised from $20 million to 
$30 million of assets, sales, or net income. The $30 million exemption 
level is the same as that 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 of the BE-605 survey, 
BEA has made one other change to the form. Specifically, trade in 
services between U.S. affiliates and their foreign parents by type of 
service must be reported once each year, similar to reporting 
requirements introduced on the 1997 BE-12 benchmark survey. However, 
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 revised BE-605 and BE-605 Bank forms will be required to be 
filed beginning with the report for the first calendar quarter of 1998.
    The second of the two surveys affected by these rules changes is 
the BE-13 new investment survey. In the 1997 BE-12 benchmark survey, 
the reporting threshold was raised to $3 million from $1 million of 
assets, sales, or net income in the previous benchmark survey. 
Accordingly, BEA has raised 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 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 has not changed. The 
exemption level for the related form BE-14 also has been raised to 
correspond to new $3 million threshold for the BE-13.
    To maintain consistency with the benchmark survey, the BE-13 will 
use the new North American Industry Classification System (NAICS) in 
place of the current industry coding system, which is based on the U.S. 
Standard Industrial Classification System. 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. 
The revised BE-13 and BE-14 report forms will be required to be filed 
for reports covering 1998 transactions, although the current version of 
the forms may be used until the revised forms become available.

Executive Order 12612

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

[[Page 16892]]

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 have 
been approved by OMB (OMB No. 0608-0009 for BE-605 and BE-605 Bank and 
OMB No. 0608-0035 for BE-13 and BE-14).
    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; such Control Numbers have been displayed. 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.
    Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing this 
burden 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 these final rules 
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 changes. For 
the BE-605 quarterly survey, the 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 above, 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 1997 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 806.1(j)(3)(ii)(c) is amended by deleting ``$1,000,000'' 
and inserting in its place ``$3,000,000.''
    6. Section 806.1(j)(4)(ii)(b) is amended by deleting ``$1,000,000'' 
and inserting in its place ``$3,000,000.''

[FR Doc. 98-8985 Filed 4-6-98; 8:45 am]
BILLING CODE 3510-06-M