[Federal Register Volume 69, Number 156 (Friday, August 13, 2004)]
[Rules and Regulations]
[Pages 50062-50064]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18497]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 030929241-4172-02]
RIN 0691-AA55


International Services Surveys: BE-9, Quarterly Survey of Foreign 
Airline Operators' Revenues and Expenses in the United States

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Final rule.

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SUMMARY: This final rule amends regulations to set forth the reporting 
requirements for the BE-9, Quarterly Survey of Foreign Airline 
Operators' Revenues and Expenses in the United States.
    The survey is mandatory and will be conducted under the 
International Investment and Trade in Services Survey Act. Data from 
the BE-9 survey are needed for the compilation of the U.S. balance of 
payments accounts. The information collected in this survey will be 
used in developing the ``transportation'' portion of the U.S. balance 
of payments accounts. The balance of payments accounts, which are 
published quarterly in the Survey of Current Business, are one of the 
major statistical products of BEA. They are used extensively by both 
government and private organizations. Without the information collected 
in this survey, quarterly data needed for estimating an integral 
component of the transportation account would be unavailable. The data 
are utilized by private organizations and numerous government agencies 
for analyzing economic trends. The data collected are also used for 
compiling the U.S. national income and product accounts, and for 
reporting to international organizations such as the International 
Monetary Fund.
    The survey will cover the transactions currently covered on the BE-
36, Foreign Airline Operators' Revenues and Expenses in the United 
States, which is collected annually. The BE-36 will be discontinued 
following the final data collection for 2003.

DATES: Effective Date: This final rule will be effective September 13, 
2004.

FOR FURTHER INFORMATION CONTACT: Edward Dozier, Balance of Payments 
Division (BE-58), Bureau of Economic Analysis, U.S. Department of 
Commerce, Washington, DC 20230; via the Internet at 
[email protected]; or via telephone at (202) 606-9559.

SUPPLEMENTARY INFORMATION: In the October 17, 2003, Federal Register 
(68 FR 59750-59751), BEA published a notice of proposed rulemaking that 
set forth the reporting requirements for the BE-9, Quarterly Survey of 
Foreign Airline Operators' Revenues and Expenses in the United States. 
The major purpose of the survey is for the compilation of the U.S. 
balance of payments accounts. The information collected in this survey 
is used in developing the ``transportation'' portion of the U.S. 
balance of payments accounts. The balance of payments accounts, which 
are published quarterly in the Survey of Current Business, are one of 
the major statistical products of BEA. They are used extensively by 
both Government and private organizations. Without the information 
collected in this survey, quarterly data needed for estimating an 
integral component of the transportation account would be unavailable. 
The data are utilized by private organizations and numerous government 
agencies for analyzing economic trends. The data collected are also 
used for compiling the U.S. national income and product accounts, and 
for reporting to international organizations such as the International 
Monetary Fund.
    The BE-9 survey is mandatory and will be conducted under the 
International Investment and Trade in Services Survey Act. The survey 
requests information from foreign air carriers operating in the United 
States. Information is collected on a quarterly basis from foreign air 
carriers with total annual covered revenues or total annual covered 
expenses incurred in the United States of $5 million or more. Foreign 
air carriers with total annual covered revenues and expenses below $5 
million are exempt from reporting. The exemption criterion is based on 
the annual revenues or expenses covered by the survey for both the 
current and previous year. Thus, if a foreign airline operator had 
revenues or expenses covered by the survey of $5 million or more during 
the previous year or if the company expects its revenues or expenses 
will be $5 million or more during the current year, then it must 
complete the survey for each of the four quarters of the current year.
    The BE-9 quarterly survey will cover the transactions currently 
covered on the BE-36, Foreign Airline Operators' Revenues and Expenses 
in the United States, which is collected annually. The BE-36 survey 
will be discontinued following a final data collection for 2003.
    In response to the proposed rule published on October 17, 2003, 
three organizations commented on the proposed rule. As a result of 
these comments, BEA made one change in issuing this final rule. 
Specifically, the estimated average number of hours per response was 
increased from 5 hours to 8 hours, which increased the estimated annual 
reporting burden from 1,120 hours to 1,792 hours. BEA addressed all 
comments on the proposed rule in a December 23, 2003 letter that was 
sent to all organizations that provided comments and to OMB. Below is a 
summary of the comments received and BEA's response.
    Comment: BEA has not demonstrated the need for a quarterly 
collection of data.
    Response: The Bureau of Economic Analysis (BEA) is responsible for 
compiling the quarterly U.S. balance of payments (BOP) accounts, which 
are published in the Survey of Current Business. U.S. exports and 
imports of transportation services, which are derived in part from BEA 
surveys such as the BE-36, are major components of these accounts. The 
BOP accounts are used extensively by Government and by private 
organizations, for supporting U.S. international economic policy, 
including trade negotiations, and for analyzing the impact of that 
policy and the policy of foreign countries on international trade in 
services. The accounts also are included in the quarterly national 
income and product (or GDP) accounts.
    Annual information on transportation services are now collected by 
BEA on annual form BE-36. Quarterly estimates of transportation 
services currently must be made by extrapolating forward data 
pertaining to the prior year (as reported on form BE-36 for the prior 
year) through the use of indicator series, such as on the number of 
travelers or on the

[[Page 50063]]

value or weight of goods imports and exports. In addition to these 
quarterly estimates, monthly estimates must also be prepared from these 
data through indicator series; these estimates are included in broader 
aggregates in the joint BEA-Census Bureau monthly news release on trade 
in goods and services.
    More current and accurate reported data on trade in services are 
needed in periods, such as now, when trade in such services may be 
experiencing sharp movements. One organization remarked about the sharp 
business downswing now being experienced by the airline industry. For 
BEA's quarterly estimates of international trade and GDP to accurately 
reflect the extent of the downswing, quarterly data are essential. For 
example, data on 2003 transactions are not reported to BEA until annual 
form BE-36 is filed, which was in the spring of 2004. At that time, 
only annual data was provided, which are not of significant help in 
monitoring changes in business conditions or for compiling the 
quarterly GDP or balance of payments accounts. The quality of the 
transportation estimates in international transactions accounts and 
national income and product accounts will substantially improve with 
the collection of accurate quarterly data on a quarterly survey. 
Quarterly surveys also will provide more accurate current information 
on U.S. trade in transportation services for use in connection with 
trade negotiations and for other international economic policy uses. In 
addition, they would provide the solid basis needed for assuring 
accuracy of the monthly goods and services trade estimates.
    Comment: BEA's estimate of time and cost associated with filing the 
survey is substantially understated.
    Response: BEA had estimated 5.0 hours as the average reporting 
burden on respondents for reviewing instructions and completing the 
report form. BEA first developed this estimate many years ago, based on 
conversations with a number of companies that file the annual BE-36 
survey, and has periodically since then looked into its accuracy. For 
example, on April 2, 2003, BEA sent a letter and a description of the 
proposed BE-9 survey to 5 foreign air carriers, and requested comments 
and suggestions from the recipients on the proposed survey. BEA did not 
receive any comments on the burden estimate at that time.
    Some of the concerns about the time needed to complete the survey 
may be based on a misunderstanding of some of the reporting 
requirements. For example, one organization commented that many of 
aircraft maintenance items are incurred and paid overseas and should be 
attributed to expenses contemplated in this survey. In fact, the report 
form is designed to capture transactions between U.S. and foreign 
persons, and so, for example, expenditures made overseas for aircraft 
maintenance (and all other overseas expenses) should be excluded (see 
instructions for item 3 of the report form). BEA would be pleased to 
talk or to meet with any respondent to discuss survey reporting 
requirements, and would welcome suggestions for improving the clarity 
of survey instructions.
    Also, it should be noted that estimates are acceptable where exact 
accounting figures are unavailable. Proposed form BE-9 has relatively 
few data items (consisting of just 9 data items). Basically, BEA is 
looking to see what foreign airlines spent in the United States (which 
are U.S. exports to foreigners), and what U.S. persons paid to foreign 
airlines (which are U.S. imports of services from foreigners), 
excluding passenger fares (which are estimated by BEA using other 
means).
    Despite the above comments, BEA agrees that the estimate of average 
respondent burden for form BE-9 is probably too low. Based on the 
comments received, BEA increased the estimate of average reporting 
burden from 5.0 hours to 8.0 hours. Furthermore, BEA will consult with 
respondents after they have experience with form BE-9, and if it is 
determined that the burden estimate should be revised again at that 
time, BEA will do so.

    Comment: The quality of reported data may be poor.
    Response: One organization commented that many expenditures 
incurred during the year will not be booked in an airline's accounting 
system until the end of the year; before then, the expenditures may be 
placed in a pending account. They expressed a similar concern about 
actual commissions--these may be known with certainty only after final 
auditing is completed, which is at or after the end of the year.
    BEA recognizes that final, audited data are often unavailable in 
time for quarterly (or even annual) reporting on its surveys. Thus, as 
noted above, respondents are encouraged to use estimates where precise 
final data are unavailable from readily available accounting data.
    BEA also believes that it can identify substantial errors in 
reported data and obtain respondent cooperation in providing corrected 
data. BEA believes that the quarterly estimates that it prepares will 
therefore be substantially correct and, certainly, they will be much 
more accurate than BEA estimates of quarterly transactions based on 
extrapolations of the respondent's prior year data.
    It should also be noted that expenses reported on the proposed 
quarterly survey, as well as on the existing annual survey, must be 
disaggregated by major category--fuel and oil; wages and salaries; 
brokers' fees and commissions; aircraft handling and terminal expenses; 
aircraft leasing expenses; and all other expenses. Data for most of 
these categories should exhibit a relatively smooth trend from quarter 
to quarter unless there were substantial changes in the U.S. operations 
of the foreign air carrier. Thus, unusual quarterly changes in the 
reported data can easily be spotted by BEA and would be brought to the 
respondent's attention. If the respondent determined that the reported 
data incorrectly excluded major categories of expenses (or that 
expenses for the full year were incorrectly bunched in the fourth 
quarter of that year), corrected estimates would be provided.
    Finally, BEA notes that it has collected quarterly revenue and 
expenses data from U.S. air carriers for many years, on quarterly form 
BE-37. That is, U.S. carriers have been providing the information on 
their foreign revenues and expenses for a considerable number of years, 
and BEA's proposal for the BE-9 is to collect similar information from 
foreign air carriers. While BEA agrees that the BE-9 entails some 
increase in burden for respondents now reporting on the annual BE-36 
survey, our experience in collecting information from U.S. air carriers 
leads us to conclude that the quality of the quarterly data will be 
high.

Executive Order 12866

    This final rule is not significant for purposes of E.O. 12866.

Executive Order 13132

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

Paperwork Reduction Act

    The collection of information required in this final rule was 
approved by the Office of Management and Budget 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

[[Page 50064]]

to the requirements of the Paperwork Reduction Act unless that 
collection displays a currently valid Office of Management and Budget 
Control Number; such a Control Number (0608-0068) will be displayed.
    The BE-9 survey is expected to result in the filing of reports from 
about 56 respondents on a quarterly basis, or about 224 responses 
annually. The average number of hours per response is 8.0 hours, or an 
annual reporting burden of 1,792 hours (224 responses multiplied by 8 
hours average burden). This estimate includes time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. The actual burden may vary from reporter to 
reporter, depending upon the number and variety of the respondent's 
transactions and the ease of assembling the data.
    Comments regarding the burden estimate or any 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; or faxed (202) 395-7245) or e-mailed ([email protected]) to the 
Office of Management and Budget, O.I.R.A. (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 provisions of the Regulatory Flexibility Act (5 
U.S.C. 605(b)), that this rule will 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 801

    International transactions, Economic statistics, Foreign trade, 
Penalties, Reporting and recordkeeping requirements.

    Dated: August 5, 2004.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.


0
For the reasons set forth in the preamble, BEA amends 15 CFR part 801, 
as follows:

PART 801--SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S. 
AND FOREIGN PERSONS

0
1. The authority citation for 15 CFR Part 801 is revised to read as 
follows:

    Authority: 5 U.S.C. 301; 15 U.S.C. 4908; 22 U.S.C. 3101-3108; 
and E.O. 11961, January 19,1977 (as amended by E.O. 12318, August 
21, 1981; and E.O. 12518, June 3, 1985).


0
2. Section 801.9 is amended by adding new paragraph (c)(3) to read as 
follows:


Sec.  801.9  Reports required.

    (c) Quarterly surveys. * * *
    (3) BE-9, Quarterly Survey of Foreign Airline Operators' Revenues 
and Expenses in the United States:
    (i) Who must report. A BE-9 report is required from U.S. offices, 
agents, or other representatives of foreign airlines that are engaged 
in transporting passengers or freight and express to or from the United 
States. If the U.S. office, agent, or other representative does not 
have all the information required, it must obtain the additional 
information from the foreign airline operator.
    (ii) Exemption. A U.S. person otherwise required to report is 
exempt from reporting if total annual covered revenues and total annual 
covered expenses incurred in the United States were each less than $5 
million during the previous year and are expected to be less than $5 
million during the current year. If either total annual covered 
revenues or total annual covered expenses were or are expected to be $5 
million or more, a report must be filed.
* * * * *
[FR Doc. 04-18497 Filed 8-12-04; 8:45 am]
BILLING CODE 3510-06-P