[Federal Register Volume 71, Number 221 (Thursday, November 16, 2006)]
[Proposed Rules]
[Pages 66706-66708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-19409]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 061005257-6257-01]
RIN 0691-AA62


International Services Surveys: BE-185, Quarterly Survey of 
Financial Services Transactions Between U.S. Financial Services 
Providers and Foreign Persons

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule amends regulations of the Bureau of 
Economic Analysis, Department of Commerce (BEA) to set forth the 
reporting requirements for the BE-185, Quarterly Survey of Financial 
Services Transactions Between U.S. Financial Services Providers and 
Foreign Persons. This rule would replace the rule for a similar but 
more limited survey, the BE-85, Quarterly Survey of Financial Services 
Transactions Between U.S. Financial Services Providers and Unaffiliated 
Foreign Persons. A new agency form number and survey title are being 
introduced because the survey program is being reconfigured to begin 
collection of data on transactions with affiliated foreigners using the 
same survey instruments as are used to collect information on 
transactions with unaffiliated foreigners. This change will allow 
respondents to report financial services transactions with foreign 
persons on one quarterly survey, rather than on as many as three 
different quarterly surveys. If adopted the BE-185 survey would be 
conducted quarterly beginning with the first quarter of 2007.
    The proposed BE-185 survey data would be used to update universe 
estimates from similar data reported on the BE-80, Benchmark Survey of 
Financial Services Transactions Between U.S. Financial Services 
Providers and Unaffiliated Foreign Persons and on the benchmark and 
quarterly direct investment surveys that were administered to collect 
data on transactions with affiliated foreign persons.

DATES: Comments on this proposed rule will receive consideration if 
submitted in writing on or before 5 p.m. January 16, 2007.

ADDRESSES: You may submit comments, identified by RIN 0691-AA62, and 
referencing the agency name (Bureau of Economic Analysis), by any of 
the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. For agency, select 
``Commerce Department--all.''
     E-mail: [email protected].
     Fax: Office of the Chief, International Investment 
Division, (202) 606-5318.
     Mail: Office of the Chief, International Investment 
Division, U.S. Department of Commerce, Bureau of Economic Analysis, BE-
50, Washington, DC 20230.
     Hand Delivery/Courier: Office of the Chief, International 
Investment Division, U.S. Department of Commerce, Bureau of Economic 
Analysis, BE-50, Shipping and Receiving, Section M100, 1441 L Street, 
NW., Washington, DC 20005.
     Public Inspection: Comments may be inspected at BEA's 
offices, 1441 L Street, NW., Room 7006, between 8:30 a.m. and 5 p.m., 
eastern time Monday though Friday.

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; e-mail; or phone (202) 
606-9890.

SUPPLEMENTARY INFORMATION: This proposed rule would amend 15 CFR 801.9 
to replace the reporting requirements for the BE-85, Quarterly Survey 
of Financial Services Transactions Between U.S. Financial Services 
Providers and Unaffiliated Foreign Persons, with requirements for the 
BE-185, Quarterly Survey of Financial Services Transactions Between 
U.S. Financial Services Providers and Foreign Persons. 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 Changes

    The proposed BE-185 survey would be a mandatory survey and would be 
conducted, beginning with transactions for the first quarter of 2007, 
by BEA under the International Investment and Trade in Services Survey 
Act (22 U.S.C. 3101-3108), hereinafter, ``the Act.'' For the initial 
quarter of coverage, BEA would send the survey to potential respondents 
in March of 2007; responses would be due by May 15, 2007.
    BEA maintains a continuing dialogue with respondents and with data 
users, including its own internal users, to ensure that, as far as 
possible, the required data serve their intended purposes and are 
available from existing records, that instructions are clear, and that 
unreasonable burdens are not imposed. In designing the BE-185 survey, 
BEA contacted potential survey respondents to obtain their views on the 
proposed quarterly survey. In reaching decisions on what questions to 
include in the survey, BEA considered the Government's need for the 
data, the burden imposed on respondents, the quality of the likely 
responses (for example, whether the data are available on respondents' 
books), and BEA's experience in previous related annual and quarterly 
surveys.
    If implemented the BE-185 would collect all the same information as 
the BE-85 but would also include financial services transactions with 
affiliated parties (i.e., with foreign affiliates, foreign parents, and 
foreign affiliates of foreign parents). BEA is currently collecting 
these transactions on its quarterly direct investment surveys (the BE-
577, Direct Transactions of U.S. Reporter with Foreign Affiliate, the 
BE-605, Transactions of U.S. Affiliate, except a U.S. Banking 
Affiliate, with Foreign Parent, and the BE-605 Bank, Transactions of 
U.S. Banking Affiliate with Foreign Parent). These transactions with 
affiliated parties that are collected on BEA's quarterly direct 
investment surveys would now be collected on the BE-185. In addition, 
the BE-185 would also bifurcate the category for brokerage services 
into two categories, by collecting information on services related to 
equities transactions separately from other brokerage services.

Survey Background

    The Bureau of Economic Analysis (BEA), U.S. Department of Commerce, 
would conduct the BE-185 survey under the International Investment and 
Trade in Services Survey Act (22 U.S.C. 3101-3108), hereinafter, ``the 
Act'' and

[[Page 66707]]

Section 5408 of the Omnibus Trade and Competitiveness Act of 1988 (Pub. 
L. 100-418, 15 U.S.C. 4908(b)). Section 4(a) of the Act (22 U.S.C. 
3103(a)) provides that the President shall, to the extent he deems 
necessary and feasible, conduct a regular data collection program to 
secure current information related to international investment and 
trade in services and publish for the use of the general public and 
United States Government agencies periodic, regular, and comprehensive 
statistical information collected pursuant to this subsection.
    In Section 3 of Executive Order 11961, as amended by Executive 
Orders 12318 and 12518, the President delegated the responsibilities 
under the Act for performing functions concerning international trade 
in services to the Secretary of Commerce, who has redelegated them to 
BEA. The survey would provide a basis for updating estimates of the 
universe of financial services transactions between U.S. and foreign 
persons. The data are needed to monitor trade in financial services; 
analyze their impact on the U.S. and foreign economies; compile and 
improve the U.S. international transactions, national income and 
product, and input-output accounts; support U.S. commercial policy on 
financial services; assess and promote U.S. competitiveness in 
international trade in services; and improve the ability of U.S. 
businesses to identify and evaluate market opportunities.

Executive Order 12866

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

Executive Order 13132

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

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. The requirement will be 
submitted to OMB as a request for a revision of a currently approved 
collection under OMB control number 0608-0065.
    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 BE-185 quarterly survey, as proposed, is expected to result in 
the filing of reports containing mandatory data from approximately 175 
respondents on a quarterly basis, or 700 annually. The respondent 
burden for this collection of information would vary from one 
respondent to another, but is estimated to average 10 hours per 
response (40 hours annually), 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 for the 
BE-185 survey is estimated at 7,000 hours, compared to 5,000 hours 
estimated for the previous BE-85 survey. The increase in burden is a 
result of the inclusion of transactions with affiliated foreign 
persons.
    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, fax: 202-
606-5311; and the Office of Management and Budget, O.I.R.A., Paperwork 
Reduction Project 0608-0065, Attention PRA Desk Officer for BEA, via e-
mail 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 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. The information collection excludes most small businesses 
from mandatory reporting. Companies that engage in international 
transactions in financial services tend to be relatively large, thereby 
excluding them from the definition of small entity. In addition, the 
reporting threshold for this survey is set at a level that will exempt 
most small businesses from reporting. The proposed BE-185 quarterly 
survey will be required only from U.S. financial services providers 
whose sales of financial services to foreign persons exceeded $20 
million for the previous fiscal year or are expected to exceed that 
amount during the current fiscal year, or whose purchases of financial 
services from foreign persons exceeded $15 million for the previous 
fiscal year or are expected to exceed that amount during the current 
fiscal year. This amount is applied to the combined total of the 
individual types of transactions covered by the survey. The exemption 
level will exclude most small businesses from mandatory coverage. Of 
those smaller businesses that must report, most will tend to have 
specialized operations and activities, so they would likely report only 
one type of transaction, often limited to transactions with a single 
partner country; therefore, the burden on them should be small. In 
addition, this survey mailing is a targeted mailing. Thus, since small 
businesses tend not to be involved in the transactions to be covered by 
the BE-185 survey, few small businesses should receive the survey. 
However, those receiving the survey are expected to incur a minimal 
burden in completing the exemption form.

List of Subjects in 15 CFR Part 801

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

    Dated: November 8, 2006.
Sumiyo O. Okumo,
Acting Director, Bureau of Economic Analysis.

    For the reasons set forth in the preamble, BEA proposes to amend 15 
CFR part 801, as follows:

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

    1. The authority citation for 15 CFR part 801 continues 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, 3 CFR, 1977 Comp., p.86, as amended by E.O. 12318, 3 
CFR, 1981 Comp., p. 173, and E.O. 12518, 3 CFR, 1985 Comp., p. 348.

    2. Revise Sec.  801.9(c)(4). to read as follows:


Sec.  801.9  Reports required.

    (c) Quarterly surveys. * * *
    (4) BE-185, Quarterly Survey of Financial Services Transactions 
Between U.S. Financial Services Providers and Foreign Persons:

[[Page 66708]]

    (i) A BE-185, Quarterly Survey of Financial Services Transactions 
Between U.S. Financial Services Providers and Foreign Persons, will be 
conducted covering the first quarter of the 2007 calendar year and 
every quarter thereafter.
    (A) Who must report--(1) Mandatory reporting. Reports are required 
from each U.S. person who is a financial services provider or 
intermediary, or whose consolidated U.S. enterprise includes a 
separately organized subsidiary or part that is a financial services 
provider or intermediary, and that had sales of covered services to 
foreign persons that exceeded $20 million for the previous fiscal year 
or expects sales to exceed that amount during the current fiscal year, 
or had purchases of covered services from foreign persons that exceeded 
$15 million for the previous fiscal year or expects purchases to exceed 
that amount during the current fiscal year These thresholds should be 
applied to financial services transactions with foreign persons by all 
parts of the consolidated U.S. enterprise combined that are financial 
services providers or intermediaries. Because the thresholds are 
applied separately to sales and purchases, the mandatory reporting 
requirement may apply only to sales, only to purchases, or to both 
sales and purchases. Quarterly reports for a year may be required 
retroactively when it is determined that the exemption level has been 
exceeded.
    (i) The determination of whether a U.S. financial services provider 
or intermediary is subject to this mandatory reporting requirement may 
be based on the judgement of knowledgeable persons in a company who can 
identify reportable transactions on a recall basis, with a reasonable 
degree of certainty, without conducting a detailed records search.
    (ii) Reporters who file pursuant to this mandatory reporting 
requirement must provide data on total sales and/or purchases of each 
of the covered types of financial services transactions and must 
disaggregate the totals by country.
    (2) Voluntary reporting. If a financial services provider or 
intermediary, or all of a firm's subsidiaries or parts combined that 
are financial services providers or intermediaries, had covered sales 
of $20 million or less, or covered purchases of $15 million or less 
during the previous fiscal year, and if covered sales or purchases are 
not expected to exceed these amounts in the current fiscal year, a 
person is requested to provide an estimate of the total for each type 
of service for the most recent quarter. Provision of this information 
is voluntary. The estimates may be based on the reasoned judgement of 
the reporting entity. Because these thresholds apply separately to 
sales and purchases, voluntary reporting may apply only to sales, only 
to purchases, or to both.
    (B) BE-185 definition of financial services provider. The 
definition of financial services provider used for this survey is 
identical in coverage to Sector 52 B Finance and Insurance, and holding 
companies that own or influence, and are principally engaged in making 
management decisions for these firms (part of Sector 55 B Management of 
Companies and Enterprises) of the North American Industry 
Classification System, United States, 2002. For example, companies and/
or subsidiaries and other separable parts of companies in the following 
industries are defined as financial services providers: Depository 
credit intermediation and related activities (including commercial 
banking, savings institutions, credit unions, and other depository 
credit intermediation); nondepository credit intermediation (including 
credit card issuing, sales financing, and other nondepository credit 
intermediation); activities related to credit intermediation (including 
mortgage and nonmortgage loan brokers, financial transactions 
processing, reserve, and clearinghouse activities, and other activities 
related to credit intermediation); securities and commodity contracts 
intermediation and brokerage (including investment banking and 
securities dealing, securities brokerage, commodity contracts dealing, 
and commodity contracts brokerage); securities and commodity exchanges; 
other financial investment activities (including miscellaneous 
intermediation, portfolio management, investment advice, and all other 
financial investment activities); insurance carriers; insurance 
agencies, brokerages, and other insurance related activities; insurance 
and employee benefit funds (including pension funds, health and welfare 
funds, and other insurance funds); other investment pools and funds 
(including open-end investment funds, trusts, estates, and agency 
accounts, real estate investment trusts, and other financial vehicles); 
and holding companies that own, or influence the management decisions 
of, firms principally engaged in the aforementioned activities.
    (C) Covered types of services. The BE-185 survey covers the 
following types of financial services transactions (purchases and/or 
sales) between U.S. financial services providers and foreign persons: 
Brokerage services related to equities transactions; other brokerage 
services; underwriting and private placement services; financial 
management services; credit-related services, except credit card 
services; credit card services; financial advisory and custody 
services; securities lending services; electronic funds transfer 
services; and other financial services.
    (ii) [Reserved]
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[FR Doc. E6-19409 Filed 11-15-06; 8:45 am]
BILLING CODE 3510-06-P