[Federal Register Volume 72, Number 177 (Thursday, September 13, 2007)]
[Proposed Rules]
[Pages 52316-52319]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-18036]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 07 0301041-7043-02]
RIN 0691-AA63


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

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule would amend regulations concerning the 
reporting requirements 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 U.S. parent companies and their foreign 
affiliates. Currently, banks are excluded from coverage. BEA proposes 
to expand the reporting requirements on the BE-11 annual survey so that 
U.S. parent companies that are banks, foreign affiliates of bank 
parents, and bank foreign affiliates of nonbank parents will be 
reportable. A few minor changes will be required to the instructions on 
Form BE-11A, Report for U.S. Reporter, so it can be used to collect 
bank as well as nonbank data. BEA is now implementing a new, 
specialized Form BE-11B for foreign affiliates of bank parents and bank 
foreign affiliates of nonbank parents.

DATES: Comments on this proposed rule will receive consideration if 
submitted in writing on or before 5 p.m. November 13, 2007.

ADDRESSES: You may submit comments, identified by RIN 0691-AA63, 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, Direct Investment Division, 
(202) 606-5318.
     Mail: Office of the Chief, Direct Investment Division, 
U.S. Department of Commerce, Bureau of Economic Analysis, BE-50, 
Washington, DC 20230.
     Hand Delivery/Courier: Office of the Chief, Direct 
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 7005, between 8:30 a.m. and 5 p.m., Eastern Time 
Monday through Friday.

FOR FURTHER INFORMATION CONTACT: David H. Galler, Chief, Direct 
Investment Division (BE-50), Bureau of Economic Analysis, U.S. 
Department of Commerce, Washington, DC 20230; phone (202) 606-9835.

SUPPLEMENTARY INFORMATION: This proposed rule would amend 15 CFR Part 
806.14 to set forth the reporting requirements for the BE-11, Annual

[[Page 52317]]

Survey of U.S. Direct Investment Abroad. 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 BE-11 survey 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.
    BEA proposes to collect data on bank and nonbank U.S. parent 
companies and their bank and nonbank foreign affiliates on the BE-11 
annual survey. Currently, collection of data on the BE-11 annual survey 
is limited to that of nonbank U.S. parent companies and their nonbank 
foreign affiliates. Data for bank U.S. parent companies and their bank 
and nonbank foreign affiliates and data for bank affiliates of nonbank 
U.S. parent companies have been collected only once every five years on 
BEA's BE-10, Benchmark Survey of U.S. Direct Investment Abroad.
    To collect data for a U.S. Reporter that is a bank, BEA is 
proposing to use the BE-11A, Report for U.S. Reporter, that is used for 
nonbank U.S. parents. BEA is proposing that a new, specialized form, 
Form BE-11B(FN), be provided for foreign affiliates of bank U.S. 
parents and bank affiliates of nonbank U.S. parents. The items proposed 
to be collected on this form would include most of those collected on 
the form used for bank affiliates on the BE-10 benchmark survey and a 
few additional items, including sales of services by destination and 
employment by broad occupational structure, that would make the data 
more useful for studies of offshoring and more comparable with the data 
collected for nonbank affiliates of nonbank parents. Because affiliates 
of bank parents and bank affiliates of nonbank parents tend to be quite 
large, BEA is proposing to set the exemption level for reporting on the 
proposed Form BE-11B(FN) at $250 million. (In comparison, the exemption 
level for other foreign affiliates would be $40 million.) Foreign 
affiliates of bank U.S. parents and bank affiliates of nonbank U.S. 
parents with total assets, sales or gross operating revenues, and net 
income of $250 million or less (positive or negative) would not be 
required to be reported on the annual survey. Instructions on the forms 
and in the instruction booklet will be modified to include banks.

Survey Background

    The Bureau of Economic Analysis (BEA), U.S. Department of Commerce, 
conducts the BE-11 survey under the authority of 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, as amended by Executive 
Orders 12318 and 12518, the President delegated the responsibility for 
performing functions under the Act concerning 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 collects 
information on a variety of measures of the overall operations of U.S. 
parent 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 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 Federalism 
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 (PRA). The requirement has been 
submitted to the OMB for approval as a revision to a collection 
currently approved under OMB control number 0608-0053. BEA proposes to 
expand the reporting requirements on the BE-11 annual survey so that 
U.S. parent companies that are banks and their foreign affiliates and 
bank foreign affiliates of nonbank U.S. parent companies will now be 
reportable. Minor changes will be required to the instructions on Form 
BE-11A, Report for U.S. Reporter, so it can be used to collect bank as 
well as nonbank data. A new, sepialized form, Form BE-11B(FN), will be 
provided for foreign affiliates of bank parents and bank affiliates of 
nonbank parents.
    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 BE-11 survey, as proposed, is expected to result in the filing 
of reports from approximately 1,550 respondents. The respondent burden 
for this collection of information will vary from one company to 
another, but is estimated to average 79.3 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 122,900 hours (1,550 respondents times 79.3 
hours average burden). This estimate is slightly above the burden of 
117,600 hours currently requested for this survey in the OMB inventory. 
The increase in the burden is due to proposed changes in reporting 
requirements.
    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

[[Page 52318]]

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 to the Office of Management and Budget, 
O.I.R.A., Paperwork Reduction Project 0608-0053, 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 the 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. Few small U.S. businesses are subject to the reporting 
requirements of this survey. U.S. companies that have direct 
investments abroad tend to be quite large, thereby excluding them from 
the definition of small entity. The proposed changes to the BE-11 
annual survey would not increase the burden on small businesses. The 
exemption level for the BE-11 survey is set in terms of the size of a 
U.S. company's foreign affiliates (foreign companies owned 10 percent 
or more by the U.S. company); if a foreign affiliate has total assets, 
sales, or net income (loss) greater than the exemption level, it must 
be reported on Form BE-11B(LF), BE-11B(SF), BE-11B(FN), BE-11B(EZ), or 
BE-11C. The exemption level for the BE-11 survey for nonbank affiliates 
of nonbank U.S. Reporters is unchanged at $40 million. Because 
affiliates of bank parents and bank affiliates of nonbank parents tend 
to be quite large and to keep respondent burden as low as possible, the 
proposed exemption level for reporting on the proposed Form BE-11B(FN) 
is $250 million. Affiliates of bank parents and bank affiliates of 
nonbank parents with total assets, sales or gross operating revenues, 
and net income (loss) of $250 million or less would not be required to 
be reported on the annual survey. To further ease the reporting burden 
on smaller businesses, U.S. Reporters with total assets, sales or gross 
operating revenues, and net income (loss) less than or equal to $150 
million are required to report only selected items on the BE-11A form 
for U.S. Reporters in addition to forms they may be required to file 
for their foreign affiliates.
    Because few small businesses are impacted by this rule, and because 
those small businesses that are impacted are subject to only minimal 
recordkeeping burdens, the Chief Counsel for Regulation certifies that 
this proposed rule will not have a significant economic impact on a 
substantial number of small entities.

List of Subjects in 15 CFR Part 806

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

    Dated: August 2, 2007.
Rosemary D. Marcuss,
Acting Director, Bureau of Economic Analysis.

    For the reasons set forth in the preamble, BEA proposes to amend 15 
CFR part 806 as follows:

PART 806--DIRECT INVESTMENT SURVEYS

    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) and E.O. 12518 (3 CFR, 1985 Comp., p. 348).

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


Sec.  806.14  U.S. direct investment abroad.

* * * * *
    (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(FN), BE-11B(EZ), and/or BE-11C, is 
required of each U.S. Reporter that, at the end of the Reporter's 
fiscal year, had a foreign affiliate reportable on Form BE-11B(LF), 
(SF), (FN), (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 
U.S. person having a foreign affiliate reportable on Form BE-11B(LF), 
(SF), (FN), (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, the bank, including all of its 
domestic subsidiaries or units, must file on a separate Form BE-11A. 
The nonbanking U.S. operations not owned by the bank must also file on 
a Form BE-11A.
    (A) If for a 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), (FN), (EZ), or BE-11C 
as applicable, for each nonexempt foreign affiliate.
    (B) If for a 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 Reporter's fiscal 
year, the U.S. Reporter is required to file on Form BE-11A only items 1 
through 31 and Part IV. It must also file a Form BE-11B(LF), (SF), 
(FN), (EZ), or BE-11C as applicable, for each nonexempt foreign 
affiliate.
    (ii) Forms BE-11B(LF), (SF), and (EZ) (Report for Majority-owned 
Nonbank Foreign Affiliate of Nonbank U.S. Reporter).
    (A) A BE-11B(LF)(Long Form) must 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) A BE-11B(SF)(Short Form) must 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) must be filed for each nonbank foreign affiliate 
of a nonbank U.S. Reporter that is selected to be reported on this form 
in lieu of Form BE-11B(LF) or Form BE-11B(SF).
    (iii) Form BE-11B(FN) (Report for Foreign Affiliate of Bank U.S. 
Reporter and Bank Affiliate of Nonbank U.S. Reporter) must be filed for 
(1) each foreign affiliate (bank and nonbank) of a bank U.S. Reporter 
for which any one of the three items listed in paragraph (f)(3)(ii)(A) 
of this section was greater than $250 million (positive or negative) at 
the end of, or for, the affiliate's fiscal year and (2) each bank 
foreign affiliate

[[Page 52319]]

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 $250 
million (positive or negative) at the end of, or for, the affiliate's 
fiscal year.
    (iv) Form BE-11C (Report for Minority-owned Nonbank Foreign 
Affiliate of Nonbank U.S. Reporter) must be filed for each minority-
owned nonbank foreign affiliate of a nonbank U.S. Reporter 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 nonbank U.S. Reporter, but 
less than 20 percent by all nonbank 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.
    (v) Based on the preceding, an affiliate is exempt from being 
reported if it meets any one of the following criteria:
    (A) For nonbank affiliates of nonbank U.S. Reporters, 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 affiliates of bank U.S. Reporters and bank affiliates of 
nonbank U.S. Reporters, none of the three items listed in paragraph 
(f)(3)(ii)(A) of this section exceeds $250 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 $250 million must be listed, and key data items 
reported, on a supplement schedule on Form BE-11A.
    (C) For nonbank foreign affiliates of nonbank U.S. Reporters, 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).
    (D) 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.
    (vi) Notwithstanding paragraph (f)(3)(v) of this section, a Form 
BE-11B(LF), (SF), (FN), (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. E7-18036 Filed 9-12-07; 8:45 am]
BILLING CODE 3510-06-P