[Federal Register Volume 68, Number 17 (Monday, January 27, 2003)]
[Rules and Regulations]
[Pages 3811-3813]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-1770]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 020913215-3002-01]
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: Final rule.

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[[Page 3812]]

SUMMARY: This final rule revises regulations 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. This final rule amends 
15 CFR part 806.15 to set forth revised 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. BEA believes that these 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: This final rule will be effective February 26, 2003.

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 October 16, 2002 the Bureau of Economic 
Analysis (BEA), U.S. Department of Commerce, published in the Federal 
Register, (67 FR 63860-63861), a notice of proposed rulemaking setting 
forth revised 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. No comments on the proposed rule were received. Thus, this 
final rule is the same as the proposed rule.

Description of Revisions

    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.
    This final rule directs 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 
nonbanking 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, BHC's are now directed to file a single, fully 
consolidated, report to include both the banking and nonbanking 
operations on the BE-605 Bank form. However, separate reports still 
must 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, must 
file on the BE-605 Bank form and the nonbanking operations not owned by 
the BHC must file on the BE-605 form. Questions have been added to the 
BE-605 Bank form to collect data on loans from or to the foreign parent 
group by nonbanking subsidiaries, included in the consolidated report, 
with operations in insurance, real estate, and leasing, to maintain 
consistency of the U.S. international transactions accounts with 
international statistical standards and avoid gaps in coverage. In 
addition, questions have been added to the BE-605 Bank form to collect 
detail on intercompany premiums earned and claims payable for insurance 
companies included in the consolidated report.

Survey Background

    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 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.

Executive Order 13132

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

Executive Order 12866

    This final rule has been determined to be not significant for 
purposes of E.O. 12866.

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 Office of Management

[[Page 3813]]

and Budget (OMB) Control Number. This rule covers collections of 
information subject to the provisions of the PRA. The OMB has approved 
this collection and assigned to it OMB Control Number 0608-0009. The 
collection will display this 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 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 0608-0009, Washington, DC 20503 (Attention PRA Desk 
Officer for BEA).

Regulatory Flexibility Act

    The Chief Counsel for Regulation, Department of Commerce, certified 
to the Chief Counsel for Advocacy, Small Business Administration, under 
the provisions of the Regulatory Flexibility Act (RFA) (5 U.S.C. 
605(b)), that this final rule 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. Accordingly, this action will relieve 
reporting burdens on small entities.

List of Subjects in 15 CFR Part 806

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

    Dated: January 3, 2003.
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 806.15(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. 03-1770 Filed 1-24-03; 8:45 am]
BILLING CODE 3510-06-P