[Federal Register Volume 74, Number 169 (Wednesday, September 2, 2009)]
[Proposed Rules]
[Pages 45383-45385]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-21132]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 090130108-9629-01]
RIN 0691-AA70


Direct Investment Surveys: BE-605, Quarterly Survey of Foreign 
Direct Investment in the United States--Transactions of U.S. Affiliate 
With Foreign Parent

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 (BEA) setting forth reporting requirements for the 
BE-605 quarterly survey of foreign direct investment in the United 
States. The survey obtains quarterly sample data on transactions and 
positions between foreign-owned U.S. business enterprises (U.S. 
affiliates) and their ``affiliated foreign groups'' (i.e., their 
foreign parents and foreign affiliates of their foreign parents).
    BEA proposes a number of changes to the BE-605 survey. BEA proposes 
to discontinue the use of separate forms for banks. Beginning with the 
first quarter of 2010, both bank and nonbank U.S. affiliates would file 
Form BE-605. In conjunction with this change, BEA proposes to change 
the title of Form BE-605. BEA proposes to add and delete certain items 
on the survey form and change the reporting criteria. BEA also proposes 
to collect identification information for affiliates filing Form BE-605 
for the first time, and to make changes to the BE-605 form and 
instructions to bring them into conformity with the recently revised 
annual and benchmark surveys of foreign direct investment in the United 
States.

DATES: Comments on this proposed rule will receive consideration if 
submitted in writing on or before 5 p.m. November 2, 2009.

ADDRESSES: You may submit comments, identified by RIN 0691-AA70, 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.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in the 
proposed rule should be sent to both BEA through any of the methods 
above and to the Office of Management and Budget (OMB), O.I.R.A., 
Paperwork Reduction Project 0608-0009, Attention PRA Desk Officer for 
BEA, via e-mail at [email protected], or by FAX at (202) 395-7245.
    Public Inspection: All comments received are a part of the public 
record and will generally be posted to http://www.regulations.gov 
without change. All personal identifying information (for example, 
name, address, etc.) voluntarily submitted by the commentator may be 
publicly accessible. Do not submit confidential business information or 
otherwise sensitive or protected information. BEA will accept anonymous 
comments.

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 806.15 
to set forth the reporting requirements for the BE-605 quarterly survey 
of foreign direct investment in the United States. 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, 44 
U.S.C. 3501-3520 (``PRA'').
    The BE-605 survey is a mandatory quarterly survey of foreign direct 
investment conducted by BEA under the International Investment and 
Trade in Services Survey Act, 22 U.S.C. 3101-3108 (``the Act''). BEA 
will send BE-605 survey forms to potential respondents each quarter; 
responses will be due within 30 days after the end of each quarter, 
except for the final quarter of the fiscal year when reports will be 
due within 45 days of the end of the quarter.

Description of Changes

    BEA proposes a number of changes to the BE-605 survey. First, BEA 
proposes to discontinue the use of separate forms for banks. Beginning 
with the first quarter of 2010, both bank and nonbank U.S. affiliates 
would file Form BE-605. In conjunction with this change, BEA proposes 
to change the title of Form BE-605 to ``Quarterly Survey of Foreign 
Direct Investment in the United States--Transactions of U.S. Affiliate 
with Foreign Parent.'' Changes to language and instructions will be 
made to align Form BE-605 with recent changes to the annual and 
benchmark surveys of foreign direct investment.
    BEA also proposes to add items to Form BE-605 to collect additional 
identification information on U.S. affiliates of foreign parents filing 
the survey for the first time. (BEA previously collected more extensive 
identification information on the U.S. business being established or 
acquired, and on the new foreign owner, through Form BE-13, Initial 
Report on a Foreign Person's Direct or Indirect Acquisition, 
Establishment, or Purchase of the Operating Assets, of a Business

[[Page 45384]]

Enterprise, Including Real Estate, which was recently discontinued.) 
These additional items include the date the business enterprise became 
a U.S. affiliate of a foreign parent, and the U.S. affiliate's 
industry. BEA also proposes to add a question to the survey that asks 
U.S. affiliates whether they are planning to construct, or are in the 
process of constructing, a new production establishment.
    In addition, BEA proposes to discontinue collecting information on 
permanent intercompany debt funding, and interest receipts and payments 
associated with that funding, between U.S. affiliates that are banks 
and their foreign parents. This debt funding information is collected 
by the Treasury International Capital System, and recent changes in 
international statistical guidelines call for it now to be classified 
as portfolio investment. BEA also proposes to discontinue collecting 
data on loan loss reserves for banks, which, along with a number of 
related items, had been requested on the specialized bank form that 
will be discontinued. BEA will continue to collect intercompany debt 
and related interest data for the units of a consolidated U.S. bank 
affiliate that have insurance, real estate, or leasing activities.
    Finally, BEA proposes to increase the exemption level for reporting 
on Form BE-605 from $30 million to $60 million. The exemption level is 
stated in terms of the U.S. affiliate's total assets, sales or gross 
operating revenues, and net income after U.S. income taxes. At the new 
reporting threshold, BEA expects about 4,000 U.S. affiliates to report 
each quarter. This number is slightly higher than the number--3,950--
estimated at the time of the last clearance of the survey. However, the 
increase reflects growth in the number of foreign-owned firms, and 
would be significantly higher in the absence of the proposed increase 
in the reporting threshold.

Survey Background

    The BEA conducts the BE-605 survey under the International 
Investment and Trade in Services Survey Act. Section 4(a) of the Act 
provides that, with respect to foreign direct investment in the United 
States, the President shall, to the extent he deems it necessary and 
feasible, ``conduct a regular data collection program to secure current 
information on international capital 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 * * * 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 BE-605 quarterly survey is a sample survey that collects data 
on transactions and positions between foreign-owned U.S. business 
enterprises and their ``affiliated foreign groups'' (i.e., their 
foreign parents and foreign affiliates of their foreign parents). The 
sample data are used to derive universe estimates in nonbenchmark years 
from similar data reported in the BE-12, Benchmark Survey of Foreign 
Direct Investment in the United States, which is conducted every five 
years. The data are used in the preparation of the U.S. international 
transactions accounts, national income and product accounts, and input-
output accounts. The 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.

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 as that term is defined in 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 
will be submitted to OMB for approval as a revision to a collection 
currently approved under OMB Control Number 0608-0009.
    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 PRA unless that collection displays a currently 
valid OMB control number.
    As proposed, the BE-605 survey is expected to result in the filing 
of approximately 4,000 reports each financial quarter. The respondent 
burden for this collection of information is estimated to vary from 
one-half hour to three hours per response, with an average of one hour 
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. (The burden 
will vary depending, in part, on the size and ownership structure of 
the U.S. business enterprise that is being reported.) Because reports 
are filed 4 times per year, 16,000 responses annually are expected. 
Thus, the average total annual respondent burden of the survey is 
estimated at 16,000 hours (4,000 respondents filing 4 times per year 
multiplied by 1 hour average burden). This estimate is slightly higher 
than the 15,800 burden hours currently in the OMB inventory for this 
survey because the increase in burden due to the growth in the number 
of foreign-owned firms slightly exceeds the reduction in burden 
resulting from the proposed increase in the reporting threshold.
    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.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in the 
proposed rule should be sent to both BEA and OMB following the 
instructions given in the ADDRESSES section above.

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. Under the proposed regulations, foreign-owned U.S. 
businesses would be required to report on the BE-605 survey only if 
they have total assets, sales or gross operating revenues, or net 
income after U.S. income taxes that exceed $60 million. These reporting 
thresholds will

[[Page 45385]]

exempt the majority of small businesses from the survey. For most 
industries, the size standard used by the Small Business Administration 
(SBA) for designating businesses as ``small'' is based on receipts or 
employment. For the industries designated as small based on receipts, 
the SBA size standards, as published in the Table of Small Business 
Size Standards, are all significantly below $60 million; it is 
reasonable to assume that few, if any, of the businesses in these 
industries would have to file the BE-605. For industries where the 
small business size standard is based on employment, a direct 
comparison with the BE-605 reporting criteria is not possible because 
employment is not used as a reporting criterion and is not collected on 
the survey. However, after examining the employment-based standards, 
and under the assumption they are roughly comparable to the receipts-
based indicators in terms of the size of firm that is to be designated 
as small, BEA has concluded that it is unlikely that many small 
businesses in these industries would be required to file the BE-605. 
For certain types of banking and finance companies, the SBA size 
standard is based on assets. Approximately 20 small businesses in these 
industries would be required to file the BE-605. This number represents 
a small percentage (0.5%) of the expected total number of 4,000 filers 
of the BE-605. Additionally, based on the estimated average burden of 
one hour per response per quarter, BEA estimates the total respondent 
burden for the BE-605 on these businesses would be only 80 hours 
annually, while the total estimated respondent burden for all companies 
is 16,000 hours.
    Because few small businesses are subject to the reporting 
requirements, and because those small businesses that are subject to 
reporting are subject to minimal record keeping burdens, the Chief 
Counsel for Regulation certifies that this proposed rule will not have 
a significant impact on a substantial number of small entities.

List of Subjects in 15 CFR Part 806

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

    Dated: July 30, 2009.
J. Steven Landefeld,

Director, Bureau of Economic Analysis.
    For 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 806.15(h) is revised to read as follows:


Sec.  806.15  Foreign direct investment in the United States.

* * * * *
    (h) Quarterly report form. BE-605, Quarterly Survey of Foreign 
Direct Investment in the United States--Transactions of U.S. Affiliate 
with Foreign Parent: One report is required for each U.S. affiliate 
exceeding an exemption level of $60 million.
* * * * *
[FR Doc. E9-21132 Filed 9-1-09; 8:45 am]
BILLING CODE 3510-06-P