[Federal Register Volume 63, Number 148 (Monday, August 3, 1998)]
[Rules and Regulations]
[Pages 41186-41188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20616]
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DEPARTMENT OF COMMERCE
Bureau of the Census
15 CFR Part 30
[Docket No. 980331081-8171-02]
RIN 0607-AA22
Foreign Trade Statistics Regulations; Reporting the Value of
Foreign Military Sales Shipments
AGENCY: Bureau of the Census, Commerce.
ACTION: Final rule.
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SUMMARY: The Bureau of the Census (Census Bureau) is amending the
Foreign Trade Statistics Regulations (FTSR) by adding a section
requiring exporters or their designated agents to include a foreign
military sales indicator code on the Shipper's Export Declaration (SED)
Form, Automated Export System (AES) Record Layout, and Automated Export
Reporting Program (AERP) Record Layout. This will apply whenever a
commercial exporter is shipping goods or reporting the repair of
military equipment under provisions of the Foreign Military Sales (FMS)
program. The Census Bureau is taking this action to assist the Bureau
of Economic Analysis (BEA), Department of Commerce, in improving the
accuracy and reliability of data collected on the value of exports made
under the FMS program. Exports under the FMS program are a component of
the U.S. balance of payments accounts and of the U.S. Gross Domestic
Product (GDP). The Census Bureau is also taking this action to assist
both the Census Bureau and BEA in improving the accuracy and
reliability of estimates presented in the Department of Commerce's
monthly release ``U.S. International Trade in Goods and Services.'' The
BEA has reviewed and approved this proposed rulemaking. The Department
of Treasury concurs with the provisions contained in this final rule.
[[Page 41187]]
DATES: Effective: September 1, 1998. Compliance date: Electronic filers
will have until November 1, 1998, to implement program changes to meet
this requirement.
FOR FURTHER INFORMATION CONTACT: C. Harvey Monk, Jr., Chief, Foreign
Trade Division, Bureau of the Census, Room 2104, Federal Building 3,
Washington, D.C. 20233-6700, by telephone on (301) 457-2255 or by fax
on (301) 457-2645.
SUPPLEMENTARY INFORMATION:
Background
The FMS program is authorized under the provisions of the Arms
Export Control Act of 1976 (Pub. L. 90-629, as amended) and predecessor
legislation. Under this program, goods and services are transferred
directly to foreign governments and international organizations by the
U.S. Department of Defense (DOD). The delivery is recorded by the DOD
at the time ownership is transferred to the foreign government or
international organization. This recording is consistent with balance
of payments accounting principles. The transfer may be made abroad, in
the United States for shipment abroad, or for use in the United States.
In the latter case, although the goods physically remain in the United
States (for example, equipment to train foreign personnel), ownership
is transferred to a foreign government. Transfers also may be made from
stocks at U.S. military installations abroad. The SEDs are not required
for FMS transactions by DOD agencies; SEDs are required by commercial
exporters, but these SEDs do not separately identify FMS transactions.
Program Requirements
The DOD submits quarterly reports to the BEA under provisions of
the Office of Management and Budget's (OMB) Statistical Policy
Directive No. 19, ``Reports of the Department of Commerce on
International Transactions.'' These reports contain details of FMS
deliveries by broad product category, by country of destination, and by
military agency (Army, Navy, Air Force, and other DOD agencies). The
reports include deliveries carried out by both DOD and commercial
exporters. The BEA prepares estimates of FMS deliveries based on these
reports for the quarterly balance of payments accounts.
The DOD also submits monthly reports to the Census Bureau that
contain detailed statistics on military assistance (Foreign Aid/Grant
Aid) shipments made from the United States by the DOD and shipments
made under the FMS program by the military agencies. These monthly
reports are furnished to the Census Bureau in lieu of the SED in order
to facilitate shipments of material under Grant Aid and FMS auspices.
However, these reports do not cover FMS deliveries by commercial
exporters, which comprise a significant share of FMS deliveries.
In order to reconcile the two sets of data provided by DOD, the
Census Bureau is adding an FMS indicator code to the SEDs and the
electronic transmissions required from commercial exporters. The
addition of this indicator code will assure more accurate
identification of FMS transactions in the goods data reported to the
Census Bureau and will enable the BEA to make a more accurate estimate
of this class of FMS transactions when it removes them from the goods
data to avoid counting these transactions twice when it compiles the
balance of payments accounts. An FMS indicator code on the SEDs and
electronic transmissions from commercial exporters will permit the BEA
and the Census Bureau to improve the accuracy and reliability of its
balance of payments and GDP estimates, as well as the estimates
published in the ``U.S. International Trade in Goods and Services''
release.
The Census Bureau is amending Section 30.7(p) of the FTSR to add
paragraph (5) requiring commercial exporters to identify those exports
that represent FMS deliveries with an ``M'' indicator code in Item (16)
on Commerce Form 7525-V and in Item (23) on Commerce Form 7525-V-ALT
(Intermodal) on the paper SEDs, with an ``FS'' Export Information Code
on the Commodity Line Item Description (CL1) record on the AES record
layout, and with a ``3'' indicator code in field 2 (Type) of the AERP
record layout for participants of the AERP.
Response to Comments
The Census Bureau published a Notice of Proposed Rulemaking and
Request for Comments in the Federal Register (63 FR 18344) on April 15,
1998. The Bureau of the Census received three letters commenting on the
proposed rule. All of the comments received have been addressed and
resolved by the Census Bureau. As a result of the comments, one
revision was made to the final rule to clarify that the indicator code
also applies to FMS shipments financed under the Foreign Military
Finance (FMF) Program.
Executive Orders
This rule has been determined to be not significant for purposes of
Executive Order 12866. This rule does not contain policies with
federalism implications sufficient to warrant preparation of a
federalism assessment under Executive Order 12612.
Paperwork Reduction Act
Notwithstanding any other provisions 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 (PRA) unless that collection of
information displays a currently valid OMB control number.
This rule covers collections of information subject to the
provisions of the PRA, which are cleared by the OMB under OMB control
number 0607-0152.
This rule will not impact the current response burden requirements
as approved under OMB control number 0607-0152 under provisions of the
PRA of 1995, Public Law 104-13.
List of Subjects in 15 CFR Part 30
Economic statistics, Foreign trade, Exports, Reporting and
recordkeeping requirements.
For the reasons set out in the preamble, Part 30 is amended as
follows:
PART 30--FOREIGN TRADE STATISTICS
1. The authority citation for 15 CFR part 30 continues to read as
follows:
Authority: 5 U.S.C. 301; 13 U.S.C. 301-307; Reorganization Plan
No. 5 of 1950 (3 CFR 1949-1953 Comp., 1004); Department of Commerce
Organization Order No. 35-2A. August 4, 1975, 40 CFR 42765.
Subpart A--General Requirements--Exporter
2. Section 30.7 is amended by adding paragraph (p)(5) to read as
follows:
Sec. 30.7 Information required on Shipper's Export Declarations.
* * * * *
(p) * * *
(5) Foreign Military Sales (FMS) indicator. For any export that
represents the delivery of goods or the repair of military equipment
under provisions of the FMS program (including those financed under the
Foreign Military Finance (FMF) Program), an ``M'' indicator code should
be included in Item (16) on Commerce Form 7525-V and in Item (23) on
Commerce Form 7525-V-ALT (Intermodal) of the paper SED, with an ``FS''
Export Information Code on the Commodity Line Item Description (CL1)
field of the Automated Export System (AES) record layout, and a ``3''
indicator code in field
[[Page 41188]]
2 (Type) of the Automated Export Reporting Program (AERP) record
layout. This indicator code should be used in lieu of the domestic (D)
or foreign (F) indicator code required in those fields on the SED Form,
the AES record, and the AERP record. The FMS indicator code will serve
to identify more accurately that segment of U.S. exports that represent
FMS deliveries in the U.S. export statistics.
* * * * *
Dated: July 16, 1998.
Bradford R. Huther,
Deputy Director, Bureau of the Census.
[FR Doc. 98-20616 Filed 7-31-98; 8:45 am]
BILLING CODE 3510-07-U