[Federal Register Volume 70, Number 227 (Monday, November 28, 2005)]
[Rules and Regulations]
[Pages 71238-71240]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23316]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 050726200-5305-2]
RIN 0691-AA58


Direct Investment Surveys: BE-11, Annual Survey of U.S. Direct 
Investment Abroad

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Final rule.

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SUMMARY: This final rule amends regulations of the U.S. Department of 
Commerce, Bureau of Economic Analysis (BEA), for the BE-11, Annual 
Survey of U.S. Direct Investment Abroad.
    The BE-11 survey is conducted annually and is a sample survey that 
obtains financial and operating data covering the overall operations of 
nonbank U.S. parent companies and their nonbank foreign affiliates. To 
address the current needs of data users while at the same time keeping 
the respondent burden as low as possible, BEA is modifying, adding, or 
deleting items on the survey forms and in the reporting criteria. Most 
of the changes will bring the BE-11 forms and related instructions into 
conformity with the 2004 BE-10, Benchmark Survey of U.S. Direct 
Investment Abroad.

DATES: This final rule will be effective December 28, 2005.

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 or 
e-mail ([email protected]).

SUPPLEMENTARY INFORMATION: In the August 22, 2005, Federal Register, 70 
FR 48920-48923, BEA published a notice of proposed rulemaking setting 
forth revised reporting requirements for the BE-11, Annual Survey of 
U.S. Direct Investment Abroad. No comments on the proposed rule were 
received. Thus, the proposed rule is adopted without change. This final 
rule amends 15 CFR 806.14 to set forth the reporting requirements for 
the BE-11, Annual Survey of U.S. Direct Investment Abroad.

Description of Changes

    The BE-11, Annual Survey of U.S. Direct Investment Abroad, is a 
mandatory survey and is conducted annually by BEA 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.
    This final rule: (1) Increases the exemption level for reporting on 
the BE-11B(SF) form and BE-11C form from $30 million to $40 million; 
(2) increases the exemption level for reporting on the BE-11B(LF) form 
from $100 million to $150 million; and (3) increases the exemption 
level for reporting only selected items on Form BE-11A from $100 
million to $150 million. In addition to certain identification items, 
U.S. Reporters with total assets, sales or gross operating revenues, 
and net income (loss) less than or equal to $150 million report only 
selected items on the BE-11A report. In conjunction with the increase 
in the exemption level for reporting on Forms BE-11B(SF) and BE-11C, a 
schedule on Form BE-11A is introduced for reporting a few data items 
for affiliates with assets, sales, and net income between $10 million 
and $40 million that were established or acquired during the year. The 
foreign affiliate exemption level is the level of a foreign affiliate's 
assets, sales, or net income below which a Form BE-11B(LF), BE-11B(SF), 
or BE-11C is not required.
    In addition to the changes in reporting criteria mentioned above, 
BEA is introducing a statistical sampling procedure that utilizes a new 
BE-11B(EZ) form. This form provides a few basic indicators for non-
sample foreign affiliates that can be used as a basis for estimating 
data that otherwise would have to be reported on the lengthier BE-
11B(LF) and BE-11B(SF) forms.
    BEA is introducing a few changes to the report forms themselves. 
BEA is adding questions to the BE-11A form, BE-11B(LF) form, and BE-
11B(SF) form to bring the annual survey into conformity with the BE-10 
benchmark survey. BEA is collecting detail on: (1) The broad 
occupational structure of employment, (2) premiums earned and claims 
paid by U.S. Reporters and foreign affiliates operating in the 
insurance industry, and (3) goods purchased for resale for U.S. 
Reporters and foreign affiliates operating in the wholesale and retail 
trade industries. In addition, BEA is expanding the ownership section 
on the BE-11B(LF) and (SF) forms to include components that are 
collected on the benchmark survey and to add a retained earnings 
reconciliation section on the BE-11B(LF) form similar to that on the 
benchmark survey.

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 United States 
direct investment abroad, the President shall, to the extent he deems 
necessary and feasible, conduct a regular data collection program to 
secure current information on international financial 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 
of U.S. direct investment abroad is a sample survey that provides a 
variety of measures of the overall operations of U.S. parent

[[Page 71239]]

companies and their foreign affiliates, including total assets, sales, 
net income, employment and employee compensation, research and 
development expenditures, and exports and imports of goods. The sample 
data are used to derive universe estimates in nonbenchmark years from 
similar data reported in the BE-10, Benchmark Survey of U.S. Direct 
Investment Abroad, which is taken every five years. The data are needed 
to measure the size and economic significance of direct investment 
abroad, measure changes in such investment, and assess its impact on 
the U.S. and foreign economies. The data are disaggregated by country 
and industry of the foreign affiliate and by industry of the U.S. 
parent.

Executive Order 12866

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

Executive Order 13132

    This final rule does not contain policies with Federalism 
implications sufficient to warrant preparation of a Federalism 
assessment under E.O. 13132.

Paperwork Reduction Act

    The collection-of-information required in this final rule has been 
approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act (PRA).
    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 OMB control number. The OMB control number 
for the BE-11 is 0608-0053; the collection will display the number.
    The survey is expected to result in the filing of reports from 
approximately 1,500 respondents. The respondent burden for this 
collection of information will vary from one company to another, but is 
estimated to average 78.4 hours per response, 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 total respondent burden of the 
survey is estimated at 117,600 hours (1,500 respondents times 78.4 
hours average burden).
    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 (Fax: 202-606-5311); and Office of Management andBudget, 
O.I.R.A., Paperwork Reduction Project 0608-0053, 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 rule will not have a significant economic 
impact on a substantial number of small entities. The factual basis for 
the certification was published in the proposed rule and is not 
repeated here. 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

    U.S. investment abroad, Multinational corporations, Economic 
statistics, Penalties, Reporting and recordkeeping requirements.

    Dated: November 14, 2005.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.

0
For the reasons set forth in the preamble, BEA is amending 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; E.O. 11961 (3 CFR, 
1977 Comp., p. 86), as amended by E.O. 12318 (3 CFR, 1981 Comp., p. 
173); E.O. 12518 (3 CFR, 1985 Comp., p. 348).


0
2. Section 806.14(f)(3) is revised to read as follows:


Sec.  806.14  U.S. direct investment abroad.

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    (f) * * *
    (3) BE-11--Annual survey of U.S. Direct Investment Abroad: A 
report, consisting of Form BE-11A and Form(s) BE-11B(LF) (Long Form), 
BE-11B(SF) (Short Form), BE-11B(EZ), and/or BE-11C, is required of each 
nonbank U.S. Reporter that, at the end of the Reporter's fiscal year, 
had a nonbank foreign affiliate reportable on Form BE-11B(LF), (SF), 
(EZ), or BE-11C. Forms required and the criteria for reporting on each 
are as follows:
    (i) Form BE-11A (Report for U.S. Reporter) must be filed by each 
nonbank U.S. person having a foreign affiliate reportable on Form BE-
11B(LF), (SF), (EZ), or BE-11C. If the U.S. Reporter is a corporation, 
Form BE-11A is required to cover the fully consolidated U.S. domestic 
business enterprise. However, where a U.S. Reporter's primary line of 
business is not in banking (or related financial activities), but the 
Reporter also has ownership in a bank, banking activities should be 
included on the BE-11A using the equity method of accounting.
    (A) If for a nonbank U.S. Reporter any one of the following three 
items total assets, sales or gross operating revenues excluding sales 
taxes, or net income after provision for U.S. income taxes was greater 
than $150 million (positive or negative) at the end of, or for, the 
Reporter's fiscal year, the U.S. Reporter must file a complete Form BE-
11A. It must also file a Form BE-11B(LF), (SF), (EZ), or BE-11C as 
applicable, for each nonexempt foreign affiliate.
    (B) If for a nonbank U.S. Reporter no one of the three items listed 
in paragraph (f)(3)(i)(A) of this section was greater than $150 million 
(positive or negative) at the end of, or for, the Reporters fiscal 
year, the U.S. Reporter is required to file on Form BE-11A only items 1 
through 27 and Part IV. It must also file a Form BE-11B(LF), (SF), 
(EZ), or BE-11C as applicable, for each nonexempt foreign affiliate.
    (ii) Forms BE-11B(LF), (SF), and (EZ) (Report for Majority-owned 
Foreign Affiliate).
    (A) A BE-11B(LF) (Long Form) is required to be filed for each 
majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter for 
which any one of the three items total assets, sales or gross operating 
revenues excluding sales taxes, or net income after provision for 
foreign income taxes was greater than $150 million (positive or 
negative) at the end of, or for, the affiliate's fiscal year, unless 
the nonbank foreign affiliate is selected to be reported on Form BE-
11B(EZ).
    (B) BE-11B(SF) (Short Form) is required to be filed for each 
majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter for 
which any one of the three items listed in paragraph (f)(3)(ii)(A) of 
this section was greater than $40 million (positive or negative), but 
for which no one of these items was greater than $150 million (positive 
or negative), at the end of, or for, the affiliate's fiscal year, 
unless the nonbank foreign affiliate is selected to be reported on Form 
BE-11B(EZ).
    (C) A BE-11B(EZ) is required be filed for each nonbank foreign 
affiliate that is selected to be reported on this form in

[[Page 71240]]

lieu of Form BE-11B(LF) or Form BE-11B(SF).
    (iii) Form BE-11C (Report for Minority-owned Foreign Affiliate) 
must be filed for each minority-owned nonbank foreign affiliate that is 
owned at least 20 percent, but not more than 50 percent, directly and/
or indirectly, by all U.S. Reporters of the affiliate combined, and for 
which any one of the three items listed in paragraph (f)(3)(ii)(A) of 
this section was greater than $40 million (positive or negative) at the 
end of, or for, the affiliate's fiscal year. In addition, for the 
report covering fiscal year 2007 only, a Form BE-11C must be filed for 
each minority-owned nonbank foreign affiliate that is owned, directly 
or indirectly, at least 10 percent by one U.S. Reporter, but less than 
20 percent by all U.S. Reporters of the affiliate combined, and for 
which any one of the three items listed in paragraph (f)(3)(ii)(A) of 
this section was greater than $100 million (positive or negative) at 
the end of, or for, the affiliate's fiscal year.
    (iv) Based on the preceding, an affiliate is exempt from being 
reported if it meets any one of the following criteria:
    (A) None of the three items listed in paragraph (f)(3)(ii)(A) of 
this section exceeds $40 million (positive or negative). (However, 
affiliates that were established or acquired during the year and for 
which at least one of these items was greater than $10 million but not 
over $40 million must be listed, and key data items reported, on a 
supplement schedule on Form BE-11A.)
    (B) For fiscal year 2007 only, it is less than 20 percent owned, 
directly or indirectly, by all U.S. Reporters of the affiliate combined 
and none of the three items listed in paragraph (f)(3)(ii)(A) of this 
section exceeds $100 million (positive or negative).
    (C) For fiscal years other than 2007, it is less than 20 percent 
owned, directly or indirectly, by all U.S. Reporters of the affiliate 
combined.
    (D) Its U.S. parent (U.S. Reporter) is a bank.
    (E) It is itself a bank.
    (v) Notwithstanding paragraph (f)(3)(iv) of this section, a Form 
BE-11B(LF), (SF), (EZ) or BE-11C must be filed for a foreign affiliate 
of the U.S. Reporter that owns another non-exempt foreign affiliate of 
that U.S. Reporter, even if the foreign affiliate parent is otherwise 
exempt. That is, all affiliates upward in the chain of ownership must 
be reported.
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[FR Doc. 05-23316 Filed 11-25-05; 8:45 am]
BILLING CODE 3510-06-P