[Federal Register Volume 72, Number 246 (Wednesday, December 26, 2007)]
[Rules and Regulations]
[Pages 72917-72920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24972]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 070301044-7814-02]
RIN 0691-AA64


Direct Investment Surveys: BE-12, 2007 Benchmark Survey of 
Foreign Direct Investment in the United States

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-12, Benchmark Survey of Foreign Direct 
Investment in the United States. The BE-12 survey is conducted once 
every 5 years and covers virtually the entire universe of foreign 
direct investment in the United States in terms of value. The benchmark 
survey will be conducted for 2007. BEA is changing the reporting 
requirements on the BE-12 Benchmark survey to: Increase the exemption 
level for reporting on the BE-12(LF) (Long Form) from $125 million to 
$175 million; increase the exemption level for reporting on the BE-
12(SF) (Short Form) from $10 million to $40 million; and increase the 
exemption level for reporting on the BE-12 Bank Form from

[[Page 72918]]

$10 million to $15 million. In addition, BEA is amending Form BE-12(X) 
by: Re-naming it the Form BE-12 Claim for Not Filing and deleting 
several questions, which will be moved to a new Form BE-12 Mini. The 
Claim for Not Filing will be completed only by persons that are not 
subject to the reporting requirements of the BE-12 survey but have been 
contacted by BEA concerning their reporting status. The BE-12 Mini is 
an abbreviated form for reporting U.S. affiliates with total assets, 
sales or gross operating revenues, and net income (loss) less than or 
equal to $40 million.

DATES: This final rule will be effective January 25, 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 21, 2007, Federal Register, 
72 FR 53970-53973, BEA published a notice of proposed rulemaking 
setting forth revised reporting requirements for the BE-12, Benchmark 
Survey of Foreign Direct Investment in the United States. No comments 
on the proposed rule were received. Thus, the proposed rule is adopted 
without change. This final rule amends 15 CFR 806.17 to set forth the 
reporting requirements for the BE-12, 2007 Benchmark Survey of Foreign 
Direct Investment in the United States, and 15 CFR 806.18 to list the 
OMB control number for this survey.

Description of Changes

    The BE-12 benchmark survey is a mandatory survey and is conducted 
once every five years by BEA under the authority of 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 2008; responses will be due by May 31, 2008. This 
final rule (1) increases the exemption level for reporting on the BE-
12(LF) (Long Form) from $125 million to $175 million; (2) increases the 
exemption level for reporting on the BE-12(SF) (Short Form) from $10 
million to $40 million; and (3) increases the exemption level for 
reporting on the BE-12 Bank form from $10 million to $15 million. In 
addition, it amends Form BE-12(X) by: (1) Re-naming it the Form BE-12 
Claim for Not Filing; and (2) deleting several questions, which have 
been moved to a new Form BE-12 Mini. The Claim for Not Filing will be 
completed only by persons that are not subject to the reporting 
requirements of the BE-12 survey but have been contacted by BEA 
concerning their reporting status. The BE-12 Mini is a new abbreviated 
form for reporting U.S. affiliates with total assets, sales or gross 
operating revenues, and net income (loss) less than or equal to $40 
million. U.S. affiliates with assets, sales, and net income (loss) less 
than or equal to $15 million are required to report only selected items 
on the BE-12 Mini.
    In addition to these changes in the reporting criteria, this final 
rule adds questions to the BE-12(LF) (Long Form), BE-12(SF) (Short 
Form), and BE-12 Bank form to: (1) Collect detail on the broad 
occupational structure of employment; (2) identify companies that 
engage in cross-border services transactions; and (3) identify the 
financial reporting standards used to compile and report the survey. 
For the BE-12(LF) (Long Form), this rule adds questions to collect 
additional detail on the composition of external finances, trade, and 
research and development. For the BE-12(SF) (Short Form), this rule 
adds questions to collect sales of goods, sales of services, and 
investment income for majority-owned U.S. affiliates, including sales 
of services to U.S. persons and to foreign persons. For the BE-12 Bank 
form, this rule adds questions to make it easer to integrate data 
collected for banks with data collected for nonbank U.S affiliates. The 
items to be collected on this form include those needed to calculate 
value added as well as expenditures for property, plant, and equipment; 
sales of goods; and sales of services to the foreign parent group(s), 
to foreign affiliates owned by the U.S. affiliate, and to other foreign 
persons.
    To offset the burden imposed by these additional questions, this 
final rule amends the BE-12 survey to discontinue collecting 
information on U.S. trade in goods by product, which had been collected 
on previous versions of the BE-12(LF) (Long Form), and to reduce the 
amount of detail collected for minority-owned U.S. affiliates on the 
BE-12(SF) (Short Form) and BE-12 Bank form. In addition, questions on 
services transactions between U.S. affiliates and their foreign parent 
group(s) are dropped from the BE-12 survey because collection of this 
information has been shifted to BEA's surveys of cross-border 
transactions in services and intangible assets (the BE-120, BE-125, and 
BE-185).

Survey Background

    The Bureau of Economic Analysis (BEA), U.S. Department of Commerce, 
conducts the BE-12 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(b) of the Act provides that with 
respect to foreign direct investment in the United States, the 
President shall conduct a benchmark survey covering year 1980, a 
benchmark survey covering year 1987, and benchmark surveys covering 
every fifth year thereafter. In conducting surveys pursuant to this 
subsection, the President shall, among other things and to the extent 
he determines necessary and feasible--
    (1) Identify the location, nature, and magnitude of, and changes in 
the total investment by any parent in each of its affiliates and the 
financial transactions between any parent and each of its affiliates;
    (2) Obtain (A) information on the balance sheet of parents and 
affiliates and related financial data, (B) income statements, including 
the gross sales by primary line of business (with as much product line 
detail as is necessary and feasible) of parents and affiliates in each 
country in which they have significant operations, and (C) related 
information regarding trade, including trade in both goods and 
services, between a parent and each of its affiliates and between each 
parent or affiliate and any other person;
    (3) Collect employment data showing both the number of United 
States and foreign employees of each parent and affiliate and the 
levels of compensation, by country, industry, and skill level;
    (4) Obtain information on tax payments by parents and affiliates by 
country; and
    (5) Determine, by industry and country, the total dollar amount of 
research and development expenditures by each parent and affiliate, 
payments or other compensation for the transfer of technology between 
parents and their affiliates, and payments or other compensation 
received by parents or affiliates from the transfer of technology to 
other persons.
    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 benchmark surveys are BEA's censuses, intended to cover the 
universe of foreign direct investment in the United States in terms of 
value, and are BEA's most comprehensive surveys of such investment in 
terms of subject matter. Foreign direct investment in the

[[Page 72919]]

United States is defined as the ownership or control, directly or 
indirectly, by one foreign person (foreign parent) of 10 percent or 
more of the voting securities of an incorporated U.S. business 
enterprise or an equivalent interest in an unincorporated U.S. business 
enterprise, including a branch.
    The purpose of the benchmark survey is to obtain universe data on 
the financial and operating characteristics of U.S. affiliates, and on 
positions and transactions between U.S. affiliates and their foreign 
parent groups (which are defined to include all foreign parents and 
foreign affiliates of foreign parents). These data are needed to 
measure the size and economic significance of foreign direct investment 
in the United States, measure changes in such investment, and assess 
its impact on the U.S. economy. Such data are generally found in 
enterprise-level accounting records of respondent companies. These data 
are used to derive current universe estimates of direct investment from 
sample data collected in other BEA surveys in nonbenchmark years. In 
particular, they would serve as benchmarks for the quarterly direct 
investment estimates included in the U.S. international transactions 
and national income and product accounts, and for annual estimates of 
the foreign direct investment position in the United States and of the 
operations of the U.S. affiliates of foreign companies.
    The survey consists of a number of report forms and a claim for not 
filing. The amount and type of data required to be reported will vary 
according to the size of the U.S. affiliate, whether it is a bank or a 
nonbank, and whether or not it is majority-owned by foreign direct 
investors. The report forms to be used in the survey consist of the 
following:
    1. Form BE-12(LF) (Long Form)--Report for a majority-owned nonbank 
U.S. affiliate (a majority-owned U.S. affiliate is one in which the 
combined direct and indirect ownership interest of all foreign parents 
of the U.S. affiliate exceeds 50 percent) with total assets, sales or 
gross operating revenues, or net income greater than $175 million 
(positive or negative);
    2. Form BE-12(SF) (Short Form)--Report for (1) a majority-owned 
nonbank U.S. affiliate with total assets, sales or gross operating 
revenues, or net income greater than $40 million (positive or 
negative), but not greater than $175 million (positive or negative), 
and (2) a minority-owned nonbank U.S. affiliate (owned 50 percent or 
less) with total assets, sales or gross operating revenues, or net 
income greater than $40 million (positive or negative);
    3. Form BE-12 Bank--Report for a U.S. affiliate that is a bank; and
    4. Form BE-12 Mini--Report for a nonbank U.S. affiliate with total 
assets, sales or gross operating revenues, and net income (positive or 
negative) less than or equal to $40 million.
    The Form BE-12 Claim for Not Filing will be provided for response 
by persons that are not subject to the reporting requirements of the 
BE-12 survey but have been contacted by BEA concerning their reporting 
status.

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).
    Not withstanding 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 number for the 
BE-12 is 0608-0042; the collection will display this control number.
    The BE-12 survey is expected to result in the filing of reports 
from approximately 18,550 respondents. The respondent burden for this 
collection of information is estimated to vary from 20 minutes to 715 
hours per response, with an average of 11.3 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 for the survey is estimated at 209,650 hours (18,550 times 11.3 
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 to the Office of Management and Budget, 
O.I.R.A., Paperwork Reduction Project 0608-0042, 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

    International transactions, Economic statistics, Foreign investment 
in the United States, Penalties, Reporting and record keeping 
requirements.

    Dated: December 6, 2007.
Rosemary D. Marcuss,
Acting 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. Sections 806.17 and 806.18 are revised to read as follows:


Sec.  806.17  Rules and regulations for BE-12, 2007 Benchmark Survey of 
Foreign Direct Investment in the United States.

    A BE-12, Benchmark Survey of Foreign Direct Investment in the 
United States will be conducted covering 2007. All legal authorities, 
provisions, definitions, and requirements contained in Sec.  806.1 
through Sec.  806.13 and Sec.  806.15(a) through (g) are applicable to 
this survey. Specific additional rules and regulations for the BE-12 
survey are given in this section.
    (a) Response required. A response is required from persons subject 
to the reporting requirements of the BE-12, 2007 Benchmark Survey of 
Foreign Direct Investment in the United States, contained in this 
section, whether or not they are contacted by BEA. Also, a person, or 
their agent, contacted by BEA

[[Page 72920]]

about reporting in this survey, either by sending them a report form or 
by written inquiry, must respond pursuant to Sec.  806.4. This may be 
accomplished by:
    (1) Filing the properly completed BE-12 report--Form BE-12(LF), 
Form BE-12(SF), Form BE-12 Mini, or Form BE-12 Bank, by May 31, 2008, 
as required;
    (2) Completing and returning the Form BE-12 Claim for Not Filing by 
May 31, 2008; or
    (3) Certifying in writing, by May 31, 2008, to the fact that the 
person is not a U.S. affiliate of a foreign person and not subject to 
the reporting requirements of the BE-12 survey.
    (b) Who must report. A BE-12 report is required for each U.S. 
affiliate, that is, for each U.S. business enterprise in which a 
foreign person (foreign parent) owned or controlled, directly or 
indirectly, 10 percent or more of the voting securities in an 
incorporated U.S. business enterprise, or an equivalent interest in an 
unincorporated U.S. business enterprise, at the end of the business 
enterprise's fiscal year that ended in calendar year 2007. A BE-12 
report is required even if the foreign person's ownership interest in 
the U.S. business enterprise was established or acquired during the 
2007 reporting year. Beneficial, not record, ownership is the basis of 
the reporting criteria.
    (c) Forms to be filed. (1)--Form BE-12(LF) (Long Form) must be 
completed by a U.S. affiliate that was majority-owned by one or more 
foreign parents (for purposes of this survey, a ``majority-owned'' U.S. 
affiliate is one in which the combined direct and indirect ownership 
interest of all foreign parents of the U.S. affiliate exceeds 50 
percent), if:
    (i) It is not a bank and is not owned directly or indirectly by a 
U.S. bank holding company or financial holding company, and
    (ii) On a fully consolidated basis, or, in the case of real estate 
investment, on an aggregated basis, any one of the following three 
items for the U.S. affiliate (not just the foreign parent's share), was 
greater than $175 million (positive or negative) at the end of, or for, 
its fiscal year that ended in calendar year 2007:
    (A) Total assets (do not net out liabilities);
    (B) Sales or gross operating revenues, excluding sales taxes; or
    (C) Net income after provision for U.S. income taxes.
    (2) Form BE-12(SF) (Short Form) must be completed by a U.S. 
affiliate if:
    (i) It is not a bank and is not owned directly or indirectly by a 
U.S. bank holding company or financial holding company, and
    (ii) On a fully consolidated basis, or, in the case of real estate 
investment, on an aggregated basis, any one of the three items listed 
in paragraph (c)(1)(ii) of this section for a majority-owned U.S. 
affiliate (not just the foreign parent's share), was greater than $40 
million (positive or negative) but none of these items was greater than 
$175 million (positive or negative) at the end of, or for, its fiscal 
year that ended in calendar year 2007.
    (iii) On a fully consolidated basis, or, in the case of real estate 
investment, on an aggregated basis, any one of the three items listed 
in paragraph (c)(1)(ii) of this section for a minority-owned U.S. 
affiliate (not just the foreign parent's share), was greater than $40 
million (positive or negative) at the end of, or for, its fiscal year 
that ended in calendar year 2007. (A ``minority-owned'' U.S. affiliate 
is one in which the combined direct and indirect ownership interest of 
all foreign parents of the U.S. affiliate is 50 percent or less.)
    (3) Form BE-12 Mini must be completed by a U.S. affiliate if:
    (i) It is not a bank, and is not owned directly or indirectly by a 
U.S. bank holding company or financial holding company, and
    (ii) On a fully consolidated basis, or, in the case of real estate 
investment, on an aggregated basis, none of the three items listed in 
paragraph (c)(1)(ii) of this section for a U.S. affiliate (not just the 
foreign parent's share), was greater than $40 million (positive or 
negative) at the end of, or for, its fiscal year that ended in calendar 
year 2007.
    (4) Form BE-12 Bank must be completed by a U.S. affiliate if:
    (i) The U.S. affiliate is a bank. For purposes of the BE-12 survey, 
a ``bank'' is a business entity engaged in deposit banking or closely 
related functions, including commercial banks, Edge Act corporations 
engaged in international or foreign banking, U.S. branches and agencies 
of foreign banks whether or not they accept domestic deposits, savings 
and loans, savings banks, bank holding companies and financial holding 
companies under the Gramm-Leach-Bliley Act, including all subsidiaries 
or units of a bank holding company or financial holding company, and
    (ii) On a fully consolidated basis any one of the three items 
listed in paragraph (c)(1)(ii) of this section for a U.S. affiliate 
(not just the foreign parent's share), was greater than $15 million 
(positive or negative) at the end of, or for, its fiscal year that 
ended in calendar year 2007.
    (5) Form BE-12 Claim for Not Filing will be provided for response 
by persons that are not subject to the reporting requirements of the 
BE-12 survey but have been contacted by BEA concerning their reporting 
status.
    (d) Aggregation of real estate investments. All real estate 
investments of a foreign person must be aggregated for the purpose of 
applying the reporting criteria. A single report form must be filed to 
report the aggregate holdings, unless written permission has been 
received from BEA to do otherwise. Those holdings not aggregated must 
be reported separately on the same type of report that would have been 
required if the real estate holdings were aggregated.
    (e) Due date. A fully completed and certified Form BE-12(LF), BE-
12(SF), BE-12 Mini, BE-12 Bank, or Form BE-12 Claim for Not Filing is 
due to be filed with BEA not later than May 31, 2008.


Sec.  806.18  OMB control numbers assigned to the Paperwork Reduction 
Act.

    (a) Purpose. This section complies with the requirements of section 
3507 (f) of the Paperwork Reduction Act (PRA) which requires agencies 
to display a current control number assigned by the Director of OMB for 
each agency information collection requirement.
    (b) Display.

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                                                             Current OMB
       15 CFR section where identified and described         control No.
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806.1 through 806.17.......................................    0608-0020
                                                                    0024
                                                                    0032
                                                                    0004
                                                                    0035
                                                                    0030
                                                                    0009
                                                                    0023
                                                                    0034
                                                                    0042
                                                                    0053
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[FR Doc. E7-24972 Filed 12-21-07; 8:45 am]
BILLING CODE 3510-06-P