[Federal Register Volume 65, Number 243 (Monday, December 18, 2000)]
[Rules and Regulations]
[Pages 78920-78923]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32089]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 000714208-0208-01]
RIN 0691-AA40


Direct Investment Surveys: BE-11, Annual Survey of U.S. Direct 
Investment Abroad

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Final rule.

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SUMMARY: These final rules amend the reporting requirements for the BE-
11, Annual Survey of U.S. Direct Investment Abroad.
    The BE-11 survey is a mandatory survey and is conducted annually by 
the Bureau of Economic Analysis (BEA), U.S. Department of Commerce, 
under the International Investment and Trade in Services Survey Act. 
BEA will send the annual survey to potential respondents in March of 
each year; responses will be due by May 31. The last BE-11 annual 
survey was conducted for 1998. (A BE-11 survey is not conducted in a 
year, such as 1999, when a BE-10 Benchmark Survey of U.S. Direct 
Investment Abroad is conducted.) The survey is a cut-off sample survey 
that obtains financial and operating data covering the overall 
operations of nonbank U.S. parent companies and their nonbank foreign 
affiliates.
    These final rules increase the exemption level for reporting on the 
BE-11B(SF) short form and the BE-11C form from $20 million to $30 
million; increase the exemption level for reporting on the BE-11B(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 on the BE-11A form. These changes will reduce the 
number of reports that otherwise must be filed, thus reducing 
respondent burden, particularly for small companies.

EFFECTIVE DATE: These final rules will be effective January 17, 2001.

[[Page 78921]]


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 21, 2000, the Bureau of 
Economic Analysis (BEA), U.S. Department of Commerce, published in the 
Federal Register, volume 65, No. 184, FR 57123-57126, a notice of 
proposed rulemaking setting forth revised reporting requirements for 
the BE-11, Annual Survey of U.S. Direct Investment Abroad. 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 806.14 to set forth the 
reporting requirements for the BE-11, Annual Survey of U.S. Direct 
Investment Abroad. BEA 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(a) of the Act requires that with 
respect to United States direct investment abroad, the President shall, 
to the extent he deems necessary and feasible--
    (1) Conduct a regular data collection program to secure current 
information on international capital flows and other information 
related to international investment and trade in services, including 
(but not limited to) such information as may be necessary for computing 
and analyzing the United States balance of payments, the employment and 
taxes of United States parents and affiliates, and the international 
investment and trade in services position of the United States; and
    (2) Conduct such studies and surveys as may be necessary to prepare 
reports in a timely manner on specific aspects of international 
investment which may have significant implications for the economic 
welfare and national security of the United States.
    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 annual survey of U.S. direct investment abroad provides a 
variety of measures of the overall operations of U.S. parent companies 
and their foreign affiliates, including total assets, sales, net 
income, employment and employee compensation, research and development 
expenditures, and exports and imports of goods. The BE-11 is a cut-off 
sample survey that covers all foreign affiliates (and their U.S. parent 
companies) above a size-exemption level. The sample data are used to 
derive universe estimates in nonbenchmark years by extrapolating 
forward similar data reported in the BE-10, Benchmark Survey of U.S. 
Direct Investment Abroad, which is taken every five years. 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 are disaggregated by 
country and industry of the foreign affiliate and by industry of the 
U.S. parent.
    The survey consists of an instruction booklet, a claim for not 
filing the BE-11, and the following report forms:
    1. Form BE-11A--Report for nonbank U.S. Reporters;
    2. Form BE-11B(LF) (Long Form)--Report for majority-owned nonbank 
foreign affiliates with assets, sales, or net income greater than $100 
million (positive or negative);
    3. Form BE-11B(SF) (Short Form)--Report for majority-owned nonbank 
foreign affiliates with assets, sales, or net income greater than $30 
million, but not greater than $100 million (positive or negative); and
    4. Form BE-11C--report for minority-owned nonbank foreign 
affiliates with assets, sales, or net income greater than $30 million 
(positive or negative).
    Under these final rules, BEA is increasing the exemption level for 
reporting on the BE-11B(SF) short form and BE-11C form from $20 million 
to $30 million and the exemption level for reporting on the BE-11B(LF) 
long form from $50 million to $100 million. The exemption level for 
these forms is the level of a foreign affiliate's assets, sales, or net 
income at or below which a form is not required. In addition to raising 
the exemption levels, BEA is directing 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 on the BE-11A form.
    For fiscal year 2002 only, these final rules will require the 
largest nonbank foreign affiliates owned between 10 and 20 percent to 
be reported on Form BE-11C, along with affiliates owned between 20 and 
50 percent. In all years, reporting on Form BE-11C is required if an 
affiliate is owned between 20 and 50 percent by all U.S. Reporters 
combined and if its assets, sales, or net income exceed $30 million 
(positive or negative). Primarily to reduce reporting burden of the 
survey, affiliates owned less than 20 percent do not have to be 
reported annually. However, U.S. direct investment abroad is defined by 
law to include all foreign business enterprises owned 10 (not 20) 
percent or more, directly or indirectly, by a U.S. person. BEA conducts 
periodic benchmark surveys of U.S. direct investment abroad (the BE-
10), covering all foreign affiliates owned 10 percent or more. A 
benchmark survey for the year 1999 is now being conducted; the next 
benchmark survey will cover the year 2004. In order to maintain 
reliable estimates of data for the universe of all foreign affiliates 
in nonbenchmark years, reporting for the largest affiliates owned 
between 10 and 20 percent is needed for at least one year between 
benchmark surveys. Although the U.S. ownership percentages in these 
affiliates are low, some of the affiliates are very large and have a 
sizable impact on the estimates. Under these final rules, submission of 
Form BE-11C for nonbank foreign affiliates owned directly and/or 
indirectly, at least 10 percent by one U.S. Reporter, but less than 20 
percent by all U.S. Reporters of the affiliate combined, and for which 
assets, sales, or net income exceed $100 million (positive or negative) 
would be required for fiscal year 2002 only.
    These new rules will first apply to the survey covering fiscal year 
2000. The 2000 forms will be mailed out in March 2001 and will be due 
May 31, 2001.
    BEA has made a few changes to the report forms themselves. These 
changes, however, did not require rule changes and are not reflected in 
the final rules. BEA is extending the use of the North American 
Industry Classification System (NAICS) to the annual survey. NAICS is 
already being used on all BEA surveys of foreign direct investment in 
the United States and BEA used NAICS to collect industry information on 
the 1999 BE-10 benchmark survey of U.S. direct investment abroad.
    In addition to the change in industry classification, BEA is adding 
equity ownership, interest received, and interest paid to the BE-
11B(LF); expanding the owner's equity section on the BE-11B(LF); 
reducing the detail collected on the composition of external finances 
of the foreign affiliate on the BE-11B(LF); and deleting production 
royalty payments on the BE-11B(LF). Finally, BEA is making improvements 
in the layout of the survey forms, and in the placement and clarify of 
instructions. The design follows that used for the BE-10 benchmark 
survey.

Executive Order 12866

    These final rules are not significant for purposes of E.O. 12866.

[[Page 78922]]

Executive Order 13132

    These final rules do not contain policies with Federalism 
implications sufficient to warrant preparation of a Federalism 
assessment under E.O. 13132.

Paperwork Reduction Act

    The collection of information required in these final rules has 
been approved by OMB (OMB No. 0608-0053) 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 1,500 respondents. The respondent burden for this collection of 
information is estimated to vary from 4 to 3,000 hours per response, 
with an average of 68.4 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 102,600 hours (1,500 respondents times 68.4 
hours average burden).
    Comments regarding the burden estimate or any other 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 0608-0053, 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 the 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. Few, if any, 
small U.S. businesses are subject to the reporting requirements of this 
survey. U.S. companies that have direct investments abroad tend to be 
quite large. The exemption level for the BE-11 survey is set in terms 
of the size of a U.S. company's foreign affiliates (foreign companies 
owned 10 percent or more by the U.S. company); if a foreign affiliate 
has assets, sales, or net income greater than the exemption level, it 
must be reported on Form BE-11B(LF), BE-11B(SF), or BE-11C. Usually, 
the U.S. parent company that is required to file the report is many 
times larger than its largest foreign affiliate. With the increase in 
the exemption level for the BE-11 survey from $20 million to $30 
million, even fewer small U.S. businesses will be required to file. To 
further reduce the reporting burden on small businesses, 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-11A 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, Penalties, Reporting and 
recordkeeping requirements, United States investment abroad.

    Dated: December 1, 2000.
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 806.14(f)(3)(i), (f)(3)(ii), (f)(3)(iii), and 
(f)(3)(iv)(A) through (C), are revised to read as follows:


Sec. 806.14  U.S. direct investment abroad.

* * * * *
    (f) * * *
    (3) * * *
    (i) Form BE-11A (Report for U.S. Reporter) must be filed by each 
nonbank U.S. person having a foreign affiliate reportable on form BE-
11B(LF), BE-11B(SF), or BE-11C. If the U.S. reporter is a corporation, 
Form BE-11A is required to cover the fully consolidated U.S. domestic 
business enterprise.
    (A) 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 the end of, or for, the 
Reporter's fiscal year, the U.S. Reporter must file a complete Form BE-
11A. It must also file a Form BE-11B(LF), BE-11B(SF), or BE-11C, as 
applicable, for each nonexempt foreign affiliate.
    (B) If for a nonbank U.S. Reporter no one of the three items listed 
in paragraph (f)(3)(i)(A) of this section was greater than $100 million 
(positive or negative) at the end of, or for, the Reporter's fiscal 
year, the U.S. Reporter is required to file on Form BE-11A only items 1 
through 27 and Part IV. It must also file a Form BE-11B(LF), BE-
11B(SF), or BE-11C, as applicable, for each nonexempt foreign 
affiliate.
    (ii) (Form BE-11B(LF) or (SF) (Report for Majority-owned Foreign 
Affiliate).
    (A) A BE-11B(LF) (Long Form) is required to be filed for each 
majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter 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 the end of, or for, for the affiliate's fiscal year.
    (B) A BE-11B(SF)(Short Form) is required to be filed for each 
majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter for 
which any one of the three items listed in paragraph (f)(3)(ii)(A) of 
this section was greater than $30 million (positive or negative), but 
for which no one of these items was greater than $100 million (positive 
or negative), at the end of, or for, the affiliate's fiscal year.
    (iii) Form BE-11C (Report for Minority-owned Foreign Affiliate) 
must be filed for each minority-owned nonbank foreign affiliate that is 
owned at least 20 percent, but not more than 50 percent, directly and/
or indirectly, by all U.S. Reporters of the affiliate combined, and for 
which any one of the three items listed in paragraph(f)(3)(ii)(A) of 
this section was greater than $30 million (positive or negative) at the 
end of, or for, the affiliate's fiscal year. In addition, for the 
report covering fiscal year 2002 only, a Form BE-11C must be filed for 
each minority-owned nonbank foreign affiliate that is owned, directly 
or indirectly, at least 10 percent by one U.S. Reporter, but less than 
20 percent by all U.S. Reporters of the affiliate combined, and for 
which any one of the three items listed in paragraph (f)(3)(ii)(A) of 
this section was greater than $100 million (positive or negative) at 
the end of, or for, the affiliate's fiscal year.
    (iv) * * *

[[Page 78923]]

    (A) None of the three items listed in paragraph (f)(3)(ii)(A) of 
this section exceeds $30 million (positive or negative).
    (B) For fiscal year 2002 only, it is less than 20 percent owned, 
directly or indirectly, by all U.S. Reporters of the affiliate combined 
and none of the three items listed in paragraph (f)(3)(ii)(A) of this 
section exceeds $100 million (positive or negative).
    (C) For fiscal years other than 2002, it is less than 20 percent 
owned, directly or indirectly by all U.S. Reporters of the affiliate 
combined.
* * * * *
[FR Doc. 00-32089 Filed 12-15-00; 8:45 am]
BILLING CODE 3510-06-M