[Federal Register Volume 72, Number 23 (Monday, February 5, 2007)]
[Rules and Regulations]
[Pages 5167-5169]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-1783]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 061005257-7018-02]
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: Final rule.

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SUMMARY: This final 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 survey replaces 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. 
The BE-185 survey will be conducted quarterly beginning with the first 
quarter of 2007.
    The BE-185 survey data will 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: This final rule will be effective March 7, 2007

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 
[email protected]; or phone (202) 606-9890.

SUPPLEMENTARY INFORMATION: In the November 16, 2006 Federal Register, 
71 FR 66706, BEA published a notice of proposed rulemaking setting 
forth reporting requirements for the BE-185, Quarterly Survey of 
Financial Services Transactions Between U.S. Financial Services 
Providers and Foreign Persons. No comments were received on the 
proposed rule. Thus, the proposed rule is adopted without change. This 
final rule amends 15 CFR Part 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.

Description of Changes

    The BE-185 survey is a mandatory survey and will 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). For the initial quarter of coverage, BEA will send 
the survey to potential respondents in March of 2007; responses will be 
due by May 15, 2007.
    The BE-185 will collect all the same information as the BE-85 but 
will 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 
will now be collected on the BE-185 instead. In addition, the BE-185 
will 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, 
will 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 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

[[Page 5168]]

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 will 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 its 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 final rule has been determined to be not 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 Federal assessment 
under E.O. 13132.

Paperwork Reduction Act

    The collection-of-information in this final rule has been approved 
by the Office of Management and Budget (OMB) 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 to the 
requirements of the Paperwork Reduction Act unless that collection 
displays a currently valid Office of Management and Budget Control 
Number. The OMB control number for the BE-185 is 0608-0065; the 
collection will display this number.
    The BE-185 quarterly survey 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 will 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 regarding this 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 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 rule will not have a significant economic 
impact on a substantial number of small entities. The factual basis for 
this certification was published with the proposed rule. No comments 
were received regarding the economic impact of this rule. As a result, 
no final regulatory flexibility analysis was prepared.

List of Subjects in 15 CFR Part 801

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

    Dated: January 30, 2007.
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 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.

0
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:
    (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 judgment 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 to 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

[[Page 5169]]

voluntary. The estimates may be based on the reasoned judgment 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]
* * * * *

 [FR Doc. E7-1783 Filed 2-2-07; 8:45 am]
BILLING CODE 3510-07-P