[Federal Register Volume 64, Number 131 (Friday, July 9, 1999)]
[Proposed Rules]
[Pages 37049-37051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17391]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 99061159-9159-01]
RIN 0691-AA35


International Services Surveys: BE-80, Benchmark Survey of 
Financial Services Transactions Between U.S. Financial Services 
Providers and Unaffiliated Foreign Persons

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This notice sets forth proposed rules to revise 15 CFR part 
801.11 to present the reporting requirements for the BE-80, Benchmark 
Survey of Financial Services Transactions Between U.S. Financial 
Services Providers and Unaffiliated Foreign Persons.
    The Department of Commerce, as part of its continuing effort to 
reduce paperwork and respondent burden, invites the general public and 
other Federal agencies to comment on proposed and/or continuing 
information collections, as required by the Paperwork Reduction Act of 
1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)).
    BEA proposes to raise the exemption level for the 1999 survey to $3 
million in covered sales or purchases transactions, from $1 million on 
the previous (1994) survey. Raising the exemption level will reduce 
respondent burden, particularly for small companies. BEA also proposes 
to combine private placement services with underwriting services, 
combine foreign exchange brokerage services with other brokerage 
services, and create a separate category for electronic funds 
transfers. Finally, BEA has restated the definition of ``financial 
services provider'' using the nomenclature of the new North American 
Industry Classification System that has replaced the U.S. Standard 
Industrial Classification System.
    The changes in the types of services to be reported separately 
reflect BEA's experience in collecting data on financial services 
transactions over the past 5 years. Data collected for both private 
placement and foreign brokerage services have been very small and do 
not justify the continuation of separate reporting. Electronic funds 
transfer services, in contrast, appear to account for a large fraction 
of both total receipts and total payments for ``other financial 
services,'' in which electronic funds transfers were previously 
included.

DATES: Comments on these proposed rules will receive consideration if 
submitted in writing on or before September 7, 1999.

ADDRESSES: Mail comments 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 deliver comments 
to room M-100, 1441 L Street, N.W., Washington, DC 2005. Comments will 
be available for public inspection in room 7005, 1441 L Street, N.W., 
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: These proposed rules amend 15 CFR part 801 
to set forth revised reporting requirements for the BE-80, Benchmark 
Survey of Financial Services Transactions Between Financial Services 
Providers and Unaffiliated Foreign Persons. The Bureau of Economic 
Analysis (BEA), U.S. Department of Commerce, will conduct the survey 
under the International Investment and Trade in Services Survey Act (22 
U.S.C. 3101-3108), and under section 5408 of the Omnibus Trade and 
Competitiveness Act of 1988 (15 U.S.C. 4908). Section 4(a) of the Act 
(22 U.S.C. 3103(a)) provides that ``The President shall, to the extent 
he deems necessary and feasible * * * (1) conduct a regular data 
collection program to secure current information--related to 
international investment and trade in services * * *; and (5) publish 
for the use of the general public and United States Government agencies 
periodic, regular, and comprehensive statistical information collected 
pursuant to this subsection * * *'' In Section 3 of Executive Order 
11961, the President delegated authority granted under the Act as 
concerns international trade in services to the Secretary of Commerce, 
who has redelegated it to BEA.
    The BE-80 survey is mandatory and is conducted once every 5 years 
by the Bureau of Economic Analysis (BEA), U.S. Department of Commerce, 
under the International Investment and Trade in Services Survey Act (22 
U.S.C. 3101-3108) hereinafter ``the Act'', and under Section 5408 of 
the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 4908). The 
proposed benchmark survey will be conducted for 1999. BEA will send the 
survey to potential respondents in January of the year 2000; responses 
will be due by March 31, 2000. The last benchmark survey was conducted 
for 1994. The benchmark survey will obtain universe data on trade in 
financial services, by type and by country, between U.S. financial 
services providers and unaffiliated foreign persons. Data from the BE-
80 survey (and the follow-on annual survey, the BE-82) are needed to 
monitor trade in financial services, analyze its impact on the U.S. and 
foreign economies, compile and improve the U.S. economic accounts, 
support U.S. commercial policy on financial services, conduct trade 
promotion, improve the ability of U.S. businesses to identify and 
evaluate market opportunities, and for other Government uses.
    The major purposes of the survey are to monitor trade in financial 
services, analyze its impact on the U.S. and foreign economies, compile 
and improve the U.S. economic accounts, support U.S. commercial policy 
on financial services, conduct trade promotion, and improve the ability 
of U.S. businesses to identify and evaluate market opportunities.
    As proposed, BEA will conduct the BE-80 survey once every 5 years. 
The last survey was conducted for 1994. The survey is intended to cover 
the universe of financial services transactions

[[Page 37050]]

between U.S. financial services providers and unaffiliated foreign 
persons. Reporting is required from U.S. financial services providers 
who have sales to or purchases from affiliated foreign persons in all 
covered financial services combined in excess of $3 million during the 
reporting year. Financial services providers meeting this criteria must 
supply data on the amount of their sales or purchases for each covered 
type of service, disaggregated by country. U.S. financial services 
providers that have covered transactions of less than $3 million during 
the reporting year are asked to provide voluntary estimates of their 
total sales or purchases of each type of financial service.
    The information from the benchmark survey is updated in 
nonbenchmark years by an annual follow on survey, the BE-82. Currently, 
the annual survey covers only those U.S. financial services providers 
that have covered transaction in excess of $5 million during the 
reporting year.

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 (PRA) and have been 
submitted to the Office of Management and Budget for review under the 
PRA.
    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.
    The survey, as proposed, is expected to result in the filing of 
reports, containing mandatory or voluntary data, from about 500 
respondents. The average burden for completing the BE-80--both the 
mandatory and voluntary sections--is estimated to be 7 hours. Thus, the 
total respondent burden of the survey is estimated at 3,500 hours (500 
respondents times 7 hours average burden). The actual burden will vary 
from reporter to reporter, depending upon the number and variety of 
their financial services transactions and the ease of assembling the 
data. Thus, it may range from 4 hours for a reporter that has a small 
number and variety of transactions and easily accessible data, or that 
reports only in the voluntary section of the form, to 150 hours for a 
very large reporter that engages in a large number and variety of 
financial services transactions and has difficulty in locating and 
assembling the required data. This estimate 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 functions 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 
0608-0062, Washington, DC 20503 (Attention PRA Desk Officer for BEA).

Regulatory Flexibility Act

    The Chief Counsel for 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. The information collection excludes most small businesses 
from mandatory reporting. Companies that engage in international 
financial services transactions tend to be quite large. In addition, 
the reporting threshold for this survey is set at a level that will 
exempt most small businesses from reporting. The BE-80 benchmark survey 
will be required only from U.S. persons with sales to, or purchases 
from, unaffiliated foreign persons in excess of $3,000,000 during the 
reporting year, in all covered financial services transactions 
combined; the exemption level for the previous benchmark survey, 
covering 1994, was $1,000,000. Thus, the exemption level will exclude 
most small businesses form mandatory coverage. Of those small 
businesses that must report, most will tend to have specialized 
operations and activities, so they will likely report only one type of 
transaction; therefore, the burden on them should be small.

List of Subjects in 15 CFR Part 806

    Balance of Payments, Economic statistics, Foreign trade, Penalties, 
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 801, as follows:

PART 801--SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S. 
AND FOREIGN PERSONS

    1. The authority citation for 15 CFR Part 801 continues to read as 
follows:

    Authority: 5 U.S.C. 301, 15 U.S.C. 4908, 22 U.S.C. 3101-3108; 
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 801.11 is revised to read as follows:


Sec. 801.11  Rules and regulations for the BE-80, Benchmark Survey of 
Financial Services Transactions Between U.S. Financial Services 
Providers and Unaffiliated Foreign Persons.

    A BE-80, Benchmark Survey of financial Services Transactions 
Between U.S. Financial Services Providers and Unaffiliated Foreign 
Persons, will be conducted covering 1999 and every fifth year 
thereafter. All legal authorities, provisions, definitions, and 
requirements contained in Secs. 801.1 through 801.9 are applicable to 
this survey. Additional rules and regulations for the BE-80 survey are 
given in paragraphs (a) through (d) of this section. More detailed 
instructions are given on the report forms and instructions.
    (a) Who must report--(1) Mandatory reporting. Reports are required 
from each U.S. person who is a financial services provider or 
intermediary, or whose consolidated U.S. enterprise includes a 
separately organized subsidiary, or part, that is a financial services 
provider or intermediary, and who had transactions (either sales or 
purchases) directly with unaffiliated foreign persons in all financial 
services combined in excess of $3,000,000 during its fiscal year 
covered by the survey. The $3,000,000 threshold

[[Page 37051]]

should be applied to financial services transactions with unaffiliated 
foreign persons by all parts of the consolidated U.S. enterprise 
combined that are financial services providers or intermediaries. 
Because the $3,000,000 threshold applies separately to sales and 
purchases, the mandatory reporting requirement may apply only to sales, 
only to purchases, or to both.
    (i) The determination of whether a U.S. financial services provider 
or intermediary is subject to this mandatory reporting requirement may 
be based on the judgement of knowledgeable persons in a company who can 
identify reportable transactions on a recall basis, with a reasonable 
degree of certainty, without conducting a detailed manual records 
search.
    (ii) Reporters who file pursuant to this mandatory reporting 
requirement must provide data on total sales and/or purchases of each 
of the covered types of financial services transactions and must 
disaggregate the totals by country.
    (2) Voluntary reporting. If during the fiscal year covered, sales 
of purchases of financial services by a firm that is a financial 
services provider or intermediary, or by a firm's subsidiaries, or 
parts, combined that are financial services providers or 
intermediaries, are $3,000,000 or less, the U.S. person is requested to 
provide an estimate of the total for each type of service. Provision of 
this information is voluntary. Because the $3,000,000 threshold applies 
separately to sales and purchases, this voluntary reporting option may 
apply only to sales, only to purchases, or to both.
    (b) BE-80 definition of financial services provider. Except for 
Monetary Authorities (i.e., Central Banks), the definition of financial 
services provider used for this survey is identical in coverage to 
Sector 52--Finance and Insurance--of the North American Industry 
Classification System, United States, 1997. For example, companies and/
or subsidiaries and other separable parts of companies in the following 
industries are defined as financial services providers: Depository 
credit intermediation and related activities (including commercial 
banking, holding companies, savings institutions, check cashing, and 
debit card issuing); nondepository credit intermediation (including 
credit card issuing, sales financing, and consumer lending); 
securities, commodity contracts, and other financial investments and 
related activities (including security and commodity futures brokers, 
dealers, exchanges, traders, underwriters, investment bankers, and 
providers of securities custody services); insurance carriers and 
related activities (including agents, brokers, and services providers); 
investment advisors and managers and funds, trusts, and other financial 
vehicles (including mutual funds, pension funds, real estate investment 
trusts, investors, stock quotation services, etc.).
    (c) Covered types of services. The BE-80 survey covers the 
following types of financial services transactions (purchases and/or 
sales) between U.S. financial services providers and unaffiliated 
foreign persons: Brokerage, including foreign exchange brokerage 
services; underwriting and private placement services; financial 
management services; credit-related services, except credit card 
services; credit card services; financial advisory and custody 
services; securities lending services; electronic funds transfer 
services; and other financial services,
    (d) What to file. (1) The BE-80 survey consists of Forms BE-80(A) 
and BE-80(B). Before completing a form BE-80(B), a consolidated U.S. 
enterprise (including the top U.S. parent and all of its subsidiaries 
and parts combined) must complete Form BE-80(A) to determine its 
reporting status. If the enterprise is subject to the mandatory 
reporting requirement, or if it is exempt from the mandatory reporting 
requirement but chooses to report data voluntarily, it should either
    (i) File a separate Form BE-80(B) for each separately organized 
financial services subsidiary or part of a consolidated U.S. 
enterprise; or
    (ii) File a single BE-80(B) representing the sum of all covered 
transactions by all financial services subsidiaries or parts of the 
enterprise combined.
    (2) Reporters who receive the BE-80 survey from BEA but are not 
subject to the mandatory reporting requirements and choose not to 
report data voluntarily must complete and return to BEA the Exemption 
Claim.

[FR Doc. 99-17391 Filed 7-8-99; 8:45 am]
BILLING CODE 3510-06-M