[Federal Register Volume 68, Number 234 (Friday, December 5, 2003)]
[Rules and Regulations]
[Pages 67939-67941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29996]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 030818205-3281-02]
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: Final rule.

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SUMMARY: This final 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). 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.

DATES: This final rule will be effective January 5, 2004.

FOR FURTHER INFORMATION CONTACT: Obie G. Whichard, Chief, International 
Investment Division (BE-50), Bureau of Economic Analysis, U.S. 
Department of Commerce, Washington, DC 20230; phone (202) 606-9890.

SUPPLEMENTARY INFORMATION: On August 29, 2003, the Bureau of Economic 
Analysis (BEA) published in the Federal Register (68 FR 51942) a notice 
of proposed rulemaking setting forth revised reporting requirements for 
the BE-15, Annual Survey of Foreign Direct Investment in the United 
States. No comments on the proposed rule were received. Thus, the 
provisions in the proposed rule are adopted without change.

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 will introduce a sampling procedure to help reduce respondent 
burden for some U.S. businesses. The procedure utilizes the new BE-
15(EZ) form; this form provides 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, the 
following changes are being made 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

[[Page 67940]]

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, the following changes are being made 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 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 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 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 (PRA) unless that collection displays a 
currently valid Office of Management and Budget (OMB) Control Number. 
This final rule covers a collection of information subject to the 
provisions of the PRA. The OMB has approved this collection and 
assigned to it OMB Control Number 0608-0034. The collection will 
display this control number.
    The survey 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 survey is estimated to be 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 changes to the reporting requirements.

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 the proposed rule would not have a significant 
economic impact on a substantial number of small entities as that term 
is defined in the Regulatory Flexibility Act. The factual basis for the 
certification was published with the proposed rule. No comments were 
received regarding the economic impact of the rule. As a result, no 
final regulatory flexibility analysis was prepared.

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: November 24, 2003.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.

0
For reasons set forth in the preamble, BEA amends 15 CFR part 806 as 
follows:

PART 806--DIRECT INVESTMENT SURVEYS

0
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).

0
2. Section 806.15(i) is revised to read as follows:


Sec.  806.15  Foreign direct investment in the United States.

* * * * *
    (i) Annual report form. BE-15-Annual Survey of Foreign Direct 
Investment in the United States: One report is required for each 
consolidated

[[Page 67941]]

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 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. 03-29996 Filed 12-4-03; 8:45 am]
BILLING CODE 3510-06-P