[Federal Register Volume 67, Number 200 (Wednesday, October 16, 2002)]
[Proposed Rules]
[Pages 63860-63861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-26220]



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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 020913214-2214-01]
RIN 0691--AA45


Direct Investment Surveys: BE-605, Transactions of U.S. 
Affiliate, Except a U.S. Banking Affiliate, With Foreign Parent, and 
BE-605 Bank, Transactions of U.S. Banking Affiliate With Foreign Parent

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This notice sets forth a proposed rule to amend the reporting 
requirements for the quarterly survey of foreign direct investment in 
the United States, which is comprised of two forms--the BE-605, 
Transactions of U.S. Affiliate, Except a U.S. Banking Affiliate, With 
Foreign Parent, and BE-605 Bank, Transactions of U.S. Banking Affiliate 
with Foreign Parent.
    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. The BE-605 and BE-605 Bank are mandatory surveys and are 
conducted quarterly 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 survey forms to potential 
respondents each quarter; responses will be due within 30 days after 
the close of each fiscal quarter, except for the final quarter of the 
fiscal year, when reports will be due within 45 days. These surveys are 
cut-off sample surveys that cover all U.S. affiliates above a size-
exemption level and seek to obtain data on transactions and positions 
between U.S. affiliates and their affiliated foreign groups.
    BEA proposes the following changes: Direct bank holding companies 
(BHC's) to file a fully consolidated report, including all banking and 
nonbanking operations, on the BE-605 Bank form. Previously, the banking 
and non-banking operations of a BHC filed separate reports: the nonbank 
operations of the BHC filed on the BE-605 form, and the BHC itself and 
its banking operations filed on the BE-605 Bank form. To reduce 
respondent burden for BHC's, BEA proposes that the BHC file a single, 
fully consolidated, report to include both its banking and nonbanking 
operations on the BE-605 Bank form. However, separate reports still 
will be filed in those special instances where a U.S. affiliate's 
primary line of business is not in banking (or related financial 
activities), such as a manufacturer or retailer, but the affiliate also 
has a direct or indirect ownership in a BHC (or other banking 
activities such as U.S. wholesale or limited purpose banks). In these 
instances, the BHC, including all of its subsidiaries or units, will 
file on the BE-605 Bank form and the nonbanking operations not owned by 
the BHC will file on the BE-605 form. Add questions to the BE-605 Bank 
form to collect data on loans from or to the foreign parent group by 
certain nonbanking subsidiaries (e.g., insurance companies) included in 
the consolidated report to maintain consistency of the U.S. 
international transactions accounts with international statistical 
standards and avoid gaps in coverage. Add questions to the BE-605 Bank 
form to collect detail on intercompany premiums earned and claims 
payable for insurance companies included in the consolidated report.
    BEA believes that the proposed changes should result in no change 
in the overall respondent burden. Any increase in burden due to the 
addition of questions on the BE-605 Bank form will be offset by a 
reduction in burden for BHC's, because reporting for these entities 
will be more consistent with the filing of regulatory reports and 
annual reports to stockholders.

DATES: Comments on these proposed rules will receive consideration if 
submitted in writing on or before December 16, 2002.

ADDRESSES: Direct all written comments to the Office of the Chief, 
International Investment Division (BE-50), Bureau of Economic Analysis, 
U.S. Department of Commerce, Washington, DC 20230. Because of slow 
mail, and to assure that comments are received in a timely manner, 
please consider using one of the following delivery methods: (1) Fax to 
(202) 606-5318, (2) deliver by courier to U.S. Department of Commerce, 
Bureau of Economic Analysis, BE-49(A), Shipping and Receiving, Section 
M100, 1441 L Street NW., Washington, DC, 20005, or (3) e-mail to 
[email protected]. Comments received will be available for public 
inspection in Room 7005, 1441 L Street NW., between 8:30 a.m. and 4:30 
p.m., eastern time 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: This proposed rule amends 15 CFR 806.15 to 
set forth reporting requirements for the BE-605, Transactions of U.S. 
Affiliate, Except a U.S. Banking Affiliate, With Foreign Parent, and 
BE-605 Bank, Transactions of U.S. Banking Affiliate with Foreign 
Parent. 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) hereinafter, 
``the Act.'' Section 4(a) of the Act requires that with respect to 
foreign direct investment in the United States, the President shall, to 
the extent he deems necessary and feasible--

    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.

    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 quarterly survey is a cut-off sample survey that covers all 
U.S. affiliates above a size-exemption level and obtains data on 
transactions and positions between U.S. affiliates and their affiliated 
foreign groups. (The affiliated foreign group is (i) the foreign 
parent, (ii) any foreign person, proceeding up the foreign parent's 
ownership chain, which owns more than 50 percent of the person below it 
up to and including that person which is not more than 50 percent owned 
by another foreign person, and (iii) any foreign person, proceeding 
down the ownership chain(s) of each of these members, which is owned 
more than 50 percent by the person above it.) The sample data are used 
to derive universe estimates in nonbenchmark years by extrapolating 
forward similar data reported in the BE-12, Benchmark Survey of Foreign 
Direct Investment in the United States, which is taken every five 
years. The data are used in the preparation of the U.S. international 
transactions accounts, the input-output accounts, and the national 
income and product accounts. The data are needed

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to measure the size and economic significance of foreign direct 
investment in the United States, measure changes in such investment, 
and assess its impact on the U.S. economy. The data are disaggregated 
by industry of U.S. affiliate, by country of foreign parent, and, for 
selected items, by country of each member of the affiliated foreign 
group.
    BEA proposes the following changes: (1) Direct bank holding 
companies (BHC's) to file a fully consolidated report, including all 
banking and nonbanking operations, on the BE-605 Bank form. Previously, 
the banking and non-banking operations of a BHC were required to file 
separate reports: the nonbank operations of the BHC filed on the BE-605 
form, and the BHC itself and its banking operations filed on the BE-605 
Bank form. To reduce respondent burden for BHC's, BEA proposes that the 
BHC file a single, fully consolidated, report to include both its 
banking and nonbanking operations on the BE-605 Bank form. However, 
separate reports still will be filed in those special instances where a 
U.S. affiliate's primary line of business is not in banking (or related 
financial activities), such as a manufacturer or retailer, but the 
affiliate also has a direct or indirect ownership in a BHC (or other 
banking activities such as U.S. wholesale or limited purpose banks). In 
these instances, the BHC, including all of its subsidiaries or units, 
will file on the BE-605 Bank form and the nonbanking operations not 
owned by the BHC will file on the BE-605 form. (2) Add questions to the 
BE-605 Bank form to collect data on loans from or to the foreign parent 
group by certain nonbanking subsidiaries (e.g., insurance companies) 
included in the consolidated report to maintain consistency of the U.S. 
international transactions accounts with international statistical 
standards and avoid gaps in coverage. (3) Add questions to the BE-605 
Bank form to collect detail on intercompany premiums earned and claims 
payable for insurance companies included in the consolidated report.

Executive Order 13132

    This proposed rule does not contain policies with Federalism 
implications, as that term is defined in E.O. 13132.

Executive Order 12866

    These proposed rules have been determined to be not significant for 
purposes of E.O. 12866.

Paperwork Reduction Act

    This proposed rule contains a new collection-of-information 
requirement subject to review and approval by the Office of Management 
and Budget (OMB) under the Paperwork Reduction Act(PRA). The new 
requirement has been submitted to OMB for approval as a revision to a 
collection currently approved under OMB control number 0608-0009.
    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.
    An estimated 3,950 U.S. affiliates are expected to file responses 
quarterly, or 15,800 responses annually. The average burden for 
completing the BE-605 and BE-605 Bank remains unchanged at 1.25 hours 
per response, per quarter (five hours per year); the total annual 
respondent burden, from the current OMB inventory, also remains 
unchanged at 19,750 hours (15,800 responses times 1.25 hours average 
burden). This estimate covers the amount of time for respondents to 
review the instructions, search existing data sources, gather and 
maintain the data needed, and complete and review the collection of 
information. The burden estimates used in this submission are based 
upon experience with the same quarterly survey forms for several years 
and upon the burden estimates developed at the time of the benchmark 
survey.
    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 
0608-0009, 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 this proposed rulemaking, if adopted, 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. Most small businesses are not 
foreign owned; those that are and have total assets, sales or gross 
operating revenues, and net income each equal to or less than $30 
million are not required to report on the BE-605 or BE-605 Bank form.

List of Subjects in 15 CFR Part 806

    International transactions, economic statistics, foreign investment 
in the United States, penalties, reporting and recordkeeping 
requirements.

Rosemary Marcuss,
 Acting Director, Bureau of Economic Analysis.

    For the reasons set forth in the preamble, BEA proposes to amend 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 806.15 (h)(1) and (2) are revised to read as follows:


Sec.  806.15  Foreign direct investment in the United States.

* * * * *
    (h) * * *
    (1) BE-605--Transactions of U.S. Affiliate, Except a U.S. Banking 
Affiliate, With Foreign Parent: One report is required for each U.S. 
affiliate exceeding an exemption level of $30,000,000, that does not 
qualify for reporting on form BE-605 Bank.
    (2) BE-605 Bank--Transactions of U.S. Banking Affiliate with 
Foreign Parent: One report is required for each U.S. banking affiliate 
or U.S. bank holding company affiliate, including all of the 
subsidiaries and units of the bank holding company, exceeding an 
exemption level of $30,000,000.
* * * * *
[FR Doc. 02-26220 Filed 10-15-02; 8:45 am]
BILLING CODE 3510-06-P