[Federal Register Volume 72, Number 241 (Monday, December 17, 2007)]
[Rules and Regulations]
[Pages 71220-71222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24362]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 07 0301041-7802-03]
RIN 0691-AA63


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 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. BEA 
is expanding 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 are reportable. 
A few minor changes are 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 implementing a new, specialized Form BE-11B(FN) 
for foreign affiliates of bank parents and bank foreign affiliates of 
nonbank parents.

DATES: This final rule will be effective January 16, 2008.

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 or 
e-mail ([email protected]).

SUPPLEMENTARY INFORMATION: In the September 13, 2007, Federal Register, 
72 FR 52316-52319, 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 Part 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 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.
    This final rule expands 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. Until now, collection of data on the 
BE-11 annual survey has been 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

[[Page 71221]]

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 will use 
the BE-11A, Report for U.S. Reporter, that is used for nonbank U.S. 
parents. BEA will use a new, specialized form, Form BE-11B(FN), for 
collecting data for foreign affiliates of bank U.S. parents and bank 
affiliates of nonbank U.S. parents. The items to be collected on this 
form 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 will 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 set the 
exemption level for reporting on Form BE-11B(FN) at $250 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) will 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 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 Federalism 
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 (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 BE-11 survey 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.
    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 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 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 29, 2007.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.

0
For the reasons set forth in the preamble, BEA amends 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) and 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.

* * * * *
    (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-

[[Page 71222]]

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 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. E7-24362 Filed 12-14-07; 8:45 am]
BILLING CODE 3510-06-P