[Federal Register Volume 64, Number 232 (Friday, December 3, 1999)]
[Rules and Regulations]
[Pages 67716-67719]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31412]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 9908102129310-02]
RIN 0691-AA36


Direct Investment Surveys: BE-10, Benchmark Survey of U.S. Direct 
Investment Abroad--1999

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Final rule.

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SUMMARY: These final rules revise regulations for the BE-10, Benchmark 
Survey of U.S. Direct Investment Abroad.
    The BE-10 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. 
The benchmark survey will be conducted for 1999. BEA will send the 
survey to potential respondents in March of the year 2000; responses 
will be due by May 31, 2000 for respondents required to file fewer than 
50 forms and by June 30, 2000 for those required to file 50 or more 
forms. The last benchmark survey was conducted for 1994. The benchmark 
survey covers virtually the entire universe of U.S. direct investment 
abroad in terms of value, and is BEA's most comprehensive survey of 
such investment in terms of subject matter.
    The revised rules increase the exemption level for reporting on the 
BE-10B(SF) short form and the BE-10B BANK form from $3 million to $7 
million; direct that minority-owned nonbank foreign affiliates, 
regardless of size, be reported on the BE-10B(SF) short form; increase 
the exemption level for reporting on the BE-10B(LF) long form from $50 
million to $100 million; and direct U.S. reporters with total assets, 
sales or gross operating revenues, and net income less than or equal to 
$100 million (positive or negative) to report only selected items.

EFFECTIVE DATE: These final rules will be effective January 3, 2000.

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: On September 7, 1999, the Bureau of Economic 
Analysis (BEA) published in the Federal Register, volume 64, No. 172, 
64 FR 48568-48572, a notice of

[[Page 67717]]

proposed rulemaking setting forth revised reporting requirements for 
the BE-10, Benchmark Survey of U.S. Direct Investment Abroad--1999. No 
comments on the proposed rules were received. Thus, these final rules 
are the same as the proposed rules.
    These final rules amend 15 CFR part 806 to set forth revised 
reporting requirements for the BE-10, Benchmark Survey of U.S. Direct 
Investment Abroad--1999. The Bureau of Economic Analysis, 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), 
hereinafter, ``the Act.'' Section 4(b) of the Act requires that with 
respect to United States direct investment abroad, the President shall 
conduct a benchmark survey covering year 1982, a benchmark survey 
covering year 1989, and benchmark surveys covering every fifth year 
thereafter. In conducting surveys pursuant to this subsection, the 
President shall, among other things and to the extent he determines 
necessary and feasible--
    (1) Identify the location, nature, and magnitude of, and changes in 
total investment by any parent in each of its affiliates and the 
financial transactions between any parent and each of its affiliates;
    (2) Obtain (A) information on the balance sheet of parents and 
affiliates and related financial data, (B) income statements, including 
the gross sales by primary line of business (with as much product line 
detail as is necessary and feasible) of parents and affiliates in each 
country in which they have significant operations, and (C) related 
information regarding trade, including trade in both goods and 
services, between a parent and each of its affiliates and between each 
parent or affiliate and any other person;
    (3) Collect employment data showing both the number of United 
States and foreign employees of each parent and affiliate and the 
levels of compensation, by country, industry, and skill level;
    (4) Obtain information on tax payments by parents and affiliates by 
country; and
    (5) Determine, by industry and country, the total dollar amount of 
research and development expenditures by each parent and affiliate, 
payments or other compensation for the transfer of technology between 
parents and their affiliates, and payments or other compensation 
received by parents or affiliates from the transfer of technology to 
other persons.
    In section 3 of Executive Order 11961, the President delegated 
authority granted under the Act as concerns direct investment to the 
Secretary of Commerce, who has redelegated it to BEA.
    The benchmark surveys are BEA's censuses, intended to cover the 
universe of U.S. direct investment abroad in terms of value. U.S. 
direct investment abroad is defined as the ownership or control, 
directly or indirectly, by one U.S. person of 10 percent or more of the 
voting securities of an incorporated foreign business enterprise or an 
equivalent interest in an unincorporated foreign business enterprise, 
including a branch.
    The purpose of the benchmark survey is to obtain universe data on 
the financial and operating characteristics of, and on positions and 
transactions between, U.S. parent companies and their foreign 
affiliates. The data are needed to measure the size and economic 
significance of U.S. direct investment abroad, measure changes in such 
investment, and assess its impact on the U.S. and foreign economies. 
The data will provide benchmarks for deriving current universe 
estimates of direct investment from sample data collected in other BEA 
surveys in nonbenchmark years. In particular, they will serve as 
benchmarks for the quarterly direct investment estimates included in 
the U.S. international transactions and national income and product 
accounts, and for annual estimates of the U.S. direct investment 
position abroad and of the operations of U.S. parent companies and 
their foreign affiliates.
    The survey consists of an instruction booklet, a claim for not 
filing the BE-10, and the following report forms:
    1. Form BE-10A--Report for U.S. Reporters that are not banks;
    2. Form BE-10A BANK--Report for U.S. Reporters that are banks;
    3. Form BE-10B(LF) (Long Form)--Report for majority-owned nonbank 
foreign affiliates of nonbank U.S. parents with assets, sales, or net 
income greater than $100 million (positive or negative);
    4. Form BE-10B(SF) (Short Form)--Report for majority-owned nonbank 
foreign affiliates with assets, sales, or net income greater than $7 
million, but not greater than $100 million (positive or negative), 
minority-owned nonbank foreign affiliates of nonbank parents with 
assets, sales, or net income greater than $7 million (positive or 
negative); and all nonbank affiliates of bank parents; and
    5. Form BE-10B BANK--Report for foreign affiliates that are banks.
    Although the survey is intended to cover the universe of U.S. 
direct investment abroad, in order to minimize the reporting burden, 
foreign affiliates with assets, sales, and net income each equal to or 
less than $7 million (positive or negative) are exempt from being 
reported on Form BE-10B(SF) or BE-10B BANK (but must be listed, along 
with selected identification information and data, on Form BE-10A 
SUPPLEMENT or BE-10A BANK SUPPLEMENT).

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 Act

    The collection of information required in these final rules has 
been approved by OMB (OMB No. 0608-0049) under 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.
    The survey is expected to result in the filing of reports from 
about 3,500 respondents. The respondent burden for this collection of 
information is estimated to vary from 14 to 8,500 hours per response, 
with an average of 130 hours per response, including time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Thus the total respondent burden of the 
survey is estimated at 458,000 hours (3,500 respondents times 130 hours 
average burden).
    Comments regarding the burden estimate of any aspect of this 
collection of information 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 0608-0049, 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,

[[Page 67718]]

Small Business Administration, under the provision 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. A BE-10 report is required of any U.S. company that had a 
foreign affiliate--that is, that had direct or indirect ownership or 
control of at least 10 percent of the voting stock of an incorporated 
foreign business enterprise, or an equivalent interest in an 
unincorporated foreign business enterprise--at any time during the U.S. 
company's 1999 fiscal year. Companies that have direct investment 
abroad tend to be quite large. To minimize the reporting burden on 
smaller U.S. companies, U.S. Reporters with total assets, sales or 
gross operating revenues, and net income less than or equal to $100 
million (positive or negative) are required to report only selected 
items on the BE-10A form for U.S. Reporters in addition to forms they 
may be required to file for their foreign affiliates.

List of Subjects in 15 CFR Part 806

    Balance of payments, Economic statistics, U.S. investment abroad, 
Penalties, Reporting and recordkeeping requirements.

    Dated: November 17, 1999.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.
    For the reasons set forth in the preamble, 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, 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 806.16 is revised to read as follows:


Sec. 806.16  Rules and regulations for BE-10, Benchmark Survey of U.S. 
Direct Investment Abroad--1999.

    A BE-10, Benchmark Survey of U.S. Direct Investment Abroad will be 
conducted covering 1999. All legal authorities, provisions, 
definitions, and requirements contained in Secs. 806.1 through 806.13 
and Sec. 806.14(a) through (d) are applicable to this survey. Specific 
additional rules and regulations for the BE-10 survey are given in 
paragraphs (a) through (e) of this section.
    More detailed instructions are given on the report forms and 
instructions.
    (a) Response required. A response is required from persons subject 
to the reporting requirements of the BE-10, Benchmark Survey of U.S. 
Direct Investment Abroad--1999, contained in this section, whether or 
not they are contacted by BEA. Also, a person, or their agent, who is 
contacted by BEA about reporting in this survey, either by sending them 
a report form or by written inquiry, must respond in writing pursuant 
to Sec. 806.4. They may respond by:
    (1) Certifying in writing, within 30 days of being contacted by 
BEA, to the fact that the person had no direct investment within the 
purview of the reporting requirements of the BE-10 survey;
    (2) Completing and returning the ``BE-10 Claim for Not Filing'' 
within 30 days of receipt of the BE-10 survey report forms; or
    (3) Filing the properly completed BE-10 report (comprising Form BE-
10A or BE-10A BANK and Forms BE-10B(LF), BE-10B(SF), and/or BE-10B 
BANK) by May 31, 2000, or June 30, 2000, as required.
    (b) Who must report. (1) A BE-10 report is required of any U.S. 
person that had a foreign affiliate--that is, that had direct or 
indirect ownership or control of at least 10 percent of the voting 
stock of an incorporated foreign business enterprise, or an equivalent 
interest in an unincorporated foreign business enterprise--at any time 
during the U.S. person's 1999 fiscal year.
    (2) If the U.S. person had no foreign affiliates during its 1999 
fiscal year, a ``BE-10 Claim for Not Filing'' must be filed within 30 
days of receipt of the BE-10 survey package; no other forms in the 
survey are required. If the U.S. person had any foreign affiliates 
during its 1999 fiscal year, a BE-10 report is required and the U.S. 
person is a U.S. Reporter in this survey.
    (3) Reports are required even though the foreign business 
enterprise was established, acquired, seized, liquidated, sold, 
expropriated, or inactivated during the U.S. person's 1999 fiscal year.
    (c) Forms for nonbank U.S. Reporters and foreign affiliates.--(1) 
Form BE-10A (Report for the U.S. Reporter). A BE-10A report must be 
completed by a U.S. Reporter that is not a bank. If the U.S. Reporter 
is a corporation, Form BE-10A is required to cover the fully 
consolidated U.S. domestic business enterprise.
    (i) If for a nonbank U.S. Reporter any one of the following three 
items--total assets, sales or gross operating revenues excluding sales 
taxes, or net income after provision for U.S. income taxes--was greater 
than $100 million (positive or negative) at any time during the 
Reporter's 1999 fiscal year, the U.S. Reporter must file a complete 
Form BE-10A and, as applicable, a BE-10A SUPPLEMENT listing each, if 
any, foreign affiliate that is exempt from being reported on Form BE-
10B(LF), BE-10B(SF), or BE-10B BANK. It must also file a Form BE-
10B(LF), BE-10B(SF), or BE-10B BANK, as appropriate, for each nonexempt 
foreign affiliate.
    (ii) If for a nonbank U.S. Reporter no one of the three items 
listed in paragraph (c)(1)(i) of this section was greater than $100 
million (positive or negative) at any time during the Reporter's 1999 
fiscal year, the U.S. Reporter is required to file on Form BE-10A only 
items 1 through 27 and items 30 through 35 and, as applicable, a BE-10A 
SUPPLEMENT listing each, if any, foreign affiliate that is exempt from 
being reported on Form BE-10B(LF), BE-10B(SF), or BE-10B BANK. It must 
also file a Form BE-10B(LF), BE-10B(SF), or BE-10B BANK, as 
appropriate, for each nonexempt foreign affiliate.
    (2) Form BE-10B(LF) or (SF) (Report for nonbank foreign affiliate). 
(i) A BE-10B(LF) (Long Form) must be filed for each majority-owned 
nonbank foreign affiliate of a nonbank U.S. Reporter, whether held 
directly or indirectly, 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 $100 
million (positive or negative) at any time during the affiliate's 1999 
fiscal year.
    (ii) A BE-10B(SF) (Short Form) must be filed:
    (A) For each majority-owned nonbank foreign affiliate of a nonbank 
U.S. Reporter, whether held directly or indirectly, for which any one 
of the three items listed in paragraph (c)(2)(i) of this section was 
greater than $7 million but for which no one of these items was greater 
than $100 million (positive or negative), at any time during the 
affiliate's 1999 fiscal year, and
    (B) For each minority-owned nonbank foreign affiliate of a nonbank 
U.S. Reporter, whether held directly or indirectly, for which any one 
of the three items listed in paragraph (c)(2)(i) of this section was 
greater than $7 million (positive or negative), at any time during the 
affiliate's 1999 fiscal year, and
    (C) For each nonbank foreign affiliate of a U.S. bank Reporter, 
whether held directly or indirectly, for which any one

[[Page 67719]]

of the three items listed in paragraph (c)(2)(i) of this section was 
greater than $7 million (positive or negative), at any time during the 
affiliate's 1999 fiscal year.
    (iii) Notwithstanding paragraphs (c)(2)(i) and (c)(2)(ii) of this 
section, a Form BE-10B(LF) or (SF) must be filed for a foreign 
affiliate of the U.S. Reporter that owns another nonexempt foreign 
affiliate of that U.S. Reporter, even if the foreign affiliate parent 
is otherwise exempt, i.e., a Form BE-10B(LF), (SF), or BANK must be 
filed for all affiliates upward in a chain of ownership.
    (d) Forms for U.S. Reporters and foreign affiliates that are banks 
or bank holding companies. (1) For purposes of the BE-10 survey, 
``banking'' covers a business entity engaged in deposit banking or 
closely related functions, including commercial banks, Edge Act 
corporations engaged in international or foreign banking, foreign 
branches and agencies of U.S. banks whether or not they accept deposits 
abroad, savings and loans, savings banks, and bank holding companies, 
i.e., holding companies for which over 50 percent of their total income 
is from banks that they hold. If the bank or bank holding company is 
part of a consolidated business enterprise and the gross operating 
revenues from nonbanking activities of this consolidated entity are 
more than 50 percent of its total revenues, then the consolidated 
entity is deemed not to be a bank even if banking revenues make up the 
largest single source of all revenues. (Activities of subsidiaries of a 
bank or bank holding company that may not be banks but that provide 
support to the bank parent company, such as real estate subsidiaries 
set up to hold the office buildings occupied by the bank parent 
company, are considered bank activities.)
    (2) Form BE-10A BANK (Report for a U.S. Reporter that is a bank). A 
BE-10A BANK report must be completed by a U.S. Reporter that is a bank. 
For purposes of filing Form BE-10A BANK, the U.S. Reporter is deemed to 
be the fully consolidated U.S. domestic business enterprise and all 
required data on the form shall be for the fully consolidated domestic 
entity.
    (i) If a U.S. bank had any foreign affiliates at any time during 
its 1999 fiscal year, whether a bank or nonbank and whether held 
directly or indirectly, 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 $7 
million (positive or negative) at any time during the affiliate's 1999 
fiscal year, the U.S. Reporter must file a Form BE-10A BANK and, as 
applicable, a BE-10A BANK SUPPLEMENT listing each, if any, foreign 
affiliate, whether bank or nonbank, that is exempt from being reported 
on Form BE-10B (SF), or BE-10B BANK. It must also file a Form BE-10B 
(SF) for each nonexempt nonbank foreign affiliate and a Form BE-10B 
BANK for each nonexempt bank foreign affiliate.
    (ii) If the U.S. bank Reporter had no foreign affiliates for which 
any one of the three items listed in paragraph (d)(2)(i) of this 
section was greater than $7 million (positive or negative) at any time 
during the affiliate's 1999 fiscal year, the U.S. Reporter must file a 
Form BE-10A BANK and a BE-10A BANK SUPPLEMENT, listing all foreign 
affiliates exempt from being reported on Form BE-10B (SF) or BE-10 
BANK.
    (3) Form BE-10B BANK (Report for a foreign affiliate that is a 
bank). (i) A BE-10B BANK report must be filed for each foreign bank 
affiliate of a bank or nonbank U.S. Reporter, whether directly or 
indirectly held, 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 $7 million 
(positive or negative) at any time during the affiliate's 1999 fiscal 
year.
    (ii) Notwithstanding paragraph (d)(3)(i) of this section, a Form 
BE-10B BANK must be filed for a foreign bank affiliate of the U.S. 
Reporter that owns another nonexempt foreign affiliate of that U.S. 
Reporter, even if the foreign affiliate parent is otherwise exempt, 
i.e., a Form BE-10B (LF), (SF), or BANK must be filed for all 
affiliates upward in a chain of ownership. However, a Form BE-10B BANK 
is not required to be filed for a foreign bank affiliate in which the 
U.S. Reporter holds only an indirect ownership interest of 50 percent 
or less and that does not own a reportable nonbank foreign affiliate, 
but the indirectly owned bank affiliate must be listed on the BE-10A 
BANK SUPPLEMENT.
    (e) Due date. A fully completed and certified BE-10 report 
comprising Form BE-10A or 10A BANK, BE-10A SUPPLEMENT (as required), 
and Form(s) BE-10B (LF), (SF), or BANK (as required) is due to be filed 
with BEA not later than May 31, 2000 for those U.S. Reporters filing 
fewer than 50, and June 30, 2000 for those U.S. Reporters filing 50 or 
more, Forms BE-10B (LF), (SF), or BANK.
[FR Doc. 99-31412 Filed 12-2-99; 8:45 am]
BILLING CODE 3510-06-M