[Federal Register Volume 68, Number 168 (Friday, August 29, 2003)]
[Proposed Rules]
[Pages 51942-51944]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22074]



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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 030818205-3205-01]
RIN 0691-AA48


Direct Investment Surveys: BE-15, Annual Survey of Foreign Direct 
Investment in the United States

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule amends regulations that set forth reporting 
requirements for the BE-15, Annual Survey of Foreign Direct Investment 
in the United States. The annual survey is comprised of four forms--the 
BE-15(LF) long form, the BE-15(SF) short form, the BE-15(EZ) form, 
which is a new form, and the BE-15 Supplement C--Claim for Exemption 
From Filing a BE-15(LF), BE-15(SF), or BE-15(EZ).
    Overall respondent burden for the 2003 annual survey is estimated 
at 107,900 hours, down 20,100 hours from 128,000 hours estimated for 
the previous (2001) annual survey. The decrease in the estimated total 
respondent burden is primarily attributable to the proposed changes to 
the reporting requirements.

DATES: Comments on this proposed rule will receive consideration if 
submitted in writing on or before October 28, 2003.

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. 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 7006, 1441 L 
Street NW., between 8:30 a.m. and 4:30 p.m., eastern time Monday 
through Friday.

FOR FURTHER INFORMATION CONTACT: Obie G. Whichard, Acting 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 part 806.15 
to set forth reporting requirements for the BE-15, Annual Survey of 
Foreign Direct Investment in the United States. 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.

Description of Revisions

    The BE-15, Annual Survey of Foreign Direct Investment in the United 
States, is mandatory 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 (22 U.S.C. 
3101-3108)--hereinafter, ``the Act.'' BEA will send the survey to 
potential respondents in March of each year; responses will be due by 
May 31.
    BEA proposes to introduce a sampling procedure to help reduce 
respondent burden for some U.S. businesses. The procedure will utilize 
the new BE-15(EZ) form; this form will provide a few basic indicators 
for non-sample firms that can be used as a basis for estimating data 
that they otherwise would have to report on the lengthier BE-15(LF) and 
BE-15(SF) forms. To bring the annual survey into conformity with the 
Benchmark Survey of Foreign Direct Investment in the United States--
2002, BEA proposes the following changes to the Code of Federal 
Regulations: (1) Direct that only nonbank majority-owned U.S. 
affiliates of foreign companies report on the BE-15(LF) long form 
(minority-owned affiliates will report on the BE-15(SF) short form, or 
the BE-15(EZ) form, regardless of size); (2) raise the exemption level 
on the BE-15(LF) long form from $100 million to $125 million (reporting 
on a given form is required if the affiliate's assets, sales, or net 
income (or loss) exceed the exemption level); and (3) exempt nonbank 
subsidiaries or units of U.S. bank or bank holding company affiliates 
from reporting.
    In addition, BEA proposes to make the following changes to the 
forms: (1) Add questions to the BE-15 (LF) long form to collect detail 
on premiums earned and claims paid for U.S. affiliates operating in the 
insurance industry, and to collect detail on finished goods purchased 
for resale for U.S. affiliates operating in the wholesale and retail 
trade industries; (2) in conjunction with increasing the exemption 
level for reporting on the BE-15(LF) long form, add four items to the 
short form that will serve to improve estimates of gross product for 
majority-owned U.S. affiliates--certain realized and unrealized gains 
and losses, U.S. income taxes, interest received, and interest paid; 
(3) in conjunction with requiring all minority-owned U.S. affiliates to 
file on the short form, revise the State Schedule to collect additional 
detail, by State, for minority-owned U.S. affiliates with activities in 
more than five States; and (4) to reduce overall respondent burden, 
drop several questions that BEA feels are no longer of significant 
analytical interest to the data users.

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 provides 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 annual survey is a sample survey that collects data on the 
financial structure and operations of nonbank U.S. affiliates of 
foreign companies needed to update similar data for the universe of 
U.S. affiliates collected once every 5 years in the BE-12 benchmark 
survey. The data are used to derive annual estimates of the operations 
of U.S. affiliates of foreign companies, including their balance 
sheets; income statements; property, plant, and equipment; external 
financing; employment and employee compensation; merchandise trade; 
sales of goods and services; taxes; and research and development 
activity. The data are needed to measure the size and economic 
significance of foreign direct investment in the United States, to 
measure changes in such investment, and to assess its impact on the 
U.S. economy. Such data are generally found

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in enterprise-level accounting records of respondent companies. The 
data are disaggregated by industry of U.S. affiliate, by country and 
industry of foreign parent or ultimate beneficial owner, and, for 
selected items, by State.

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

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

Paperwork Reduction Act

    This proposed rule contains a collection-of-information requirement 
subject to review and approval by the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act (PRA). The requirement has been 
submitted to OMB for approval as a revision to a collection currently 
approved under OMB control number 0608-0034.
    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 from approximately 4,950 U.S. affiliates. The respondent burden 
for this collection of information is expected to vary from 20 minutes 
for the smallest and least complex company reporting on the BE-15 
Supplement C form to 550 hours for the largest and most complex company 
reporting on the BE-15(LF) long form, with an average burden of 21.8 
hours per response (down from 32 hours for the previous annual survey), 
including time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information. Total respondent burden for 
the previous (2001) annual survey was estimated at 128,000 hours. Total 
respondent burden for this proposed survey is estimated at about 
107,900 hours (4,950 responses times 21.8 hours average burden). The 
decrease of 20,100 hours in the estimated total respondent burden is 
largely attributable to the proposed changes to the reporting 
requirements.
    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 
0608-0034, Attention PRA Desk Officer for BEA, via the Internet at 
[email protected], or by fax at (202) 395-7245.

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-15(LF) long form, BE-15 
(SF) short form, or BE-15(EZ) form. Such entities need only file, on a 
one-time basis, a BE-15, Supplement C-Claim for Exemption.
    BEA estimates that each year there will be approximately 300 small 
business that file the BE-15, Supplement C--Claim for Exemption. Of the 
300 small entities that will be filing the BE-15, Supplement C, the 
respondent burden for this collection of information is expected to 
range from 20 minutes to 75 minutes, with an average burden of 1 hour, 
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 aggregate respondent 
burden would be 300 hours.
    Because there are few small businesses that are subject to the 
reporting requirements and because those small businesses that are 
subject to reporting are subject to minimal recordkeeping burdens, the 
Chief Counsel for Regulation certifies that this proposed rule will not 
have a significant impact on a substantial number of small entities.

List of Subjects in 15 CFR Part 806

    International transactions, Economic statistics, Foreign investment 
in the United States, Penalties, Reporting and record keeping 
requirements.

    Dated: August 19, 2003.
Rosemary Marcuss,
Deputy Director, Bureau of Economic Analysis.
    For 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(i) is revised to read as follows:


Sec.  806.15  Foreign direct investment in the United States.

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    (i) Annual report form. BE-15--Annual Survey of Foreign Direct 
Investment in the United States: One report is required for each 
consolidated U.S. affiliate, except a 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 
million. A long form, BE-15(LF), must be filed by each nonbank 
majority-owned U.S. affiliate (a ``majority-owned'' U.S. affiliate is 
one in which the combined direct and indirect ownership interests of 
all foreign parents of the U.S. affiliate exceed 50 percent) for which 
at least one of the three items--total assets, sales or gross operating 
revenues excluding sales taxes, or net income after provision for U.S. 
income taxes--exceeds $125 million (positive or negative), unless the 
nonbank majority-owned U.S. affiliate is selected to file a BE-15(EZ) 
form. A short form, BE-15(SF), must be filed by each nonbank majority-
owned U.S. affiliate for which at least one of the three items--total 
assets, sales or gross operating revenues excluding sales taxes, or net 
income after provision for U.S. income taxes--exceeds $30 million but 
no one item exceeds $125 million (positive or negative), and by each 
nonbank minority-owned U.S. affiliate (a ``minority-owned'' U.S. 
affiliate is one in which the combined direct and

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indirect ownership interest of all foreign parents of the U.S. 
affiliate is 50 percent or less) for which at least one of the three 
items--total assets, sales or gross operating revenues excluding sales 
taxes, or net income after provision for U.S. income taxes--exceeds $30 
million (positive or negative), unless the nonbank U.S. affiliate is 
selected to file a BE-15(EZ) form. A BE-15(EZ) form must be filed by 
each nonbank U.S. affiliate that is selected to file this form in lieu 
of filing the BE-15(LF) or BE-15(SF). A BE-15 Supplement C (Exemption 
Claim) must be filed by each nonbank U.S. affiliate to claim exemption 
from filing a BE-15(LF), BE-15(SF), or BE-15(EZ). Following an initial 
filing, the BE-15 Supplement C is not required annually from those 
nonbank U.S. affiliates that meet the stated exemption criteria from 
year to year.
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[FR Doc. 03-22074 Filed 8-28-03; 8:45 am]
BILLING CODE 3510-06-P