[Federal Register Volume 74, Number 188 (Wednesday, September 30, 2009)]
[Proposed Rules]
[Pages 50150-50154]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-23586]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 09013008909096-01]
RIN 0691-AA71


Direct Investment Surveys: BE-10, 2009 Benchmark 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 of the Bureau of 
Economic Analysis (BEA), Department of Commerce, to set forth the 
reporting requirements for the 2009 BE-10, Benchmark Survey of U.S. 
Direct Investment Abroad. The benchmark survey covers the U.S. direct 
investment abroad universe, and is BEA's most comprehensive survey of 
such investment in terms of subject matter. Benchmark surveys are 
conducted every 5 years. The proposed changes for the 2009 benchmark 
survey include changes in form design and reporting criteria to 
simplify the forms and improve response rates and changes that would 
reduce detail collected while considering the current needs of data 
users and respondent burden. Some of the items that would no longer be 
collected are those that are now collected on BEA's surveys of 
international services.

DATES: Comments on this proposed rule will receive consideration if 
submitted in writing on or before 5 p.m. November 30, 2009.

ADDRESSES: You may submit comments, identified by RIN 0691-AA71, 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.

[[Page 50151]]

    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 0608-0049, 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 806.16 
to set forth the reporting requirements for the BE-10, Benchmark 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 (PRA).
    The BE-10 survey is a mandatory survey and is conducted every 5 
years by BEA under the International Investment and Trade in Services 
Survey Act, 22 U.S.C. 3101-3108 (the Act). BEA will send the survey to 
potential respondents in March 2010; responses will be due to be filed 
with BEA not later than May 28, 2010 for those U.S. Reporters filing 
fewer than 50, and June 30, 2010 for those U.S. Reporters filing 50 or 
more, foreign affiliate Forms BE-10B, C, and/or D.

Description of Changes

    The proposed changes to the benchmark survey include: (a) Changes 
in survey form design and reporting criteria to simplify the survey 
forms and improve response rates; and (b) modifications, deletions and 
additions of specific items on the survey forms. To simplify reporting, 
BEA is proposing to discontinue the use of separate forms for banks. 
For 2009, bank and nonbank U.S. Reporters would file Form BE-10A, 
Report for U.S. Reporter. A U.S. Reporter would report all domestic 
operations on a fully consolidated basis. The 2004 benchmark survey 
Form BE-10A BANK would be discontinued. Similarly, Form BE-10B BANK, 
report for foreign affiliates that are banks, would be discontinued.
    As the survey is proposed, all foreign affiliates, regardless of 
industry, would be filed on one of three foreign affiliate forms--
    (a) Form BE-10B--Report for majority-owned foreign affiliates with 
total assets, sales or gross operating revenues, or net income greater 
than $80 million, positive or negative; additional items would be filed 
for affiliates with assets, sales, or net income greater than $300 
million, positive or negative. Form BE-10B would replace the 2004 
benchmark survey Forms BE-10B(LF) long form and BE-10B(SF) short form 
for reporting large majority-owned foreign affiliates;
    (b) Form BE-10C--Report for majority-owned foreign affiliates with 
total assets, sales or gross operating revenues, or net income greater 
than $25 million, positive or negative, but for which no one of these 
items is greater than $80 million, positive or negative, and for 
minority-owned foreign affiliates with total assets, sales or gross 
operating revenues, or net income greater than $25 million, positive or 
negative. Form BE-10C would replace the 2004 benchmark survey Form BE-
10B(SF) short form for reporting small majority-owned foreign 
affiliates and minority-owned foreign affiliates; or
    (c) Form BE-10D--Schedule for foreign affiliates with total assets, 
sales or gross operating revenues, and net income less than or equal to 
$25 million, positive or negative. Form BE-10D would replace the 2004 
benchmark survey Form BE-10B Mini and the 2004 BE-10A Supplement A 
schedule for reporting the smallest majority- and minority-owned 
foreign affiliates.
    BEA also proposes to increase the exemption level for reporting of 
selected items on Form BE-10A from $150 million to $300 million.
    In addition to the changes in the reporting criteria, BEA proposes 
combining or deleting some items on the benchmark survey reporting 
forms. Changes to the forms for foreign affiliates include combining 
the category for U.S. exports of ``capital equipment and other goods 
charged to fixed asset accounts'' with the ``other'' exports category 
and no longer including financial derivatives in the debt balances 
between the U.S. Reporter and their foreign affiliates. In addition, 
BEA proposes to no longer collect selected balance sheet items as 
separate items: Other current receivables; allowance for doubtful 
accounts; other current assets; equity investments in other foreign 
affiliates using cost method; other equity investments; other 
noncurrent assets; current liabilities and long-term debt; and other 
noncurrent liabilities. BEA also proposes to discontinue collecting 
liabilities owed to and receivables due from U.S. Reporters according 
to the books of U.S. Reporters (liabilities owed to and receivables due 
from U.S. Reporters according to the books of the foreign affiliate 
will continue to be collected); the breakdown of total employee 
compensation between wages and salaries and employee benefit plans and 
the breakdown of the number of employees and employee compensation by 
occupational classification; the composition of external finances; 
number of equity shares and price per share; subsidies received; number 
of employees who are U.S. citizens; and wholesale and retail trade 
items (i.e., the cost of goods purchased for resale and inventory of 
goods purchased for resale).
    Changes to the 2009 U.S. Reporter benchmark survey form parallel 
those proposed for the foreign affiliate forms. BEA proposes to no 
longer collect the following selected balance sheet items as separate 
items: Other current assets; noncurrent receivables; other noncurrent 
assets; other current liabilities and long-term debt; and other 
noncurrent liabilities. BEA also proposes to no longer collect the 
breakdown of total employee compensation between wages and salaries and 
employee benefit plans; the breakdown of number of employees and 
employee compensation by occupational classification; and information 
about wholesale and retail trade items.
    Several items on cross-border services transactions between 
affiliated parties will no longer be collected on the benchmark survey 
because they are now collected on BEA's surveys of international 
services (BE-45, BE-120, BE-125, and BE-185). For foreign affiliates, 
the items that will no longer be collected are: (a) Receipts from and 
payments to a U.S. Reporter for royalties, license fees, and other fees 
for the use of intangible property, charges for use of tangible 
property (including film and television tape rentals), and allocated 
expenses and sales of services (total and by type of service); and (b) 
receipts from and payments to U.S. persons other than a U.S. Reporter 
for

[[Page 50152]]

royalties, license fees, and other fees for the use, sale, or purchase 
of intangible property. For U.S. Reporters, the items that will no 
longer be collected are receipts from and payments to foreign persons 
other than the U.S. Reporter's foreign affiliates for royalties, 
license fees, and other fees for the use, sale, or purchase of 
intangible property. This change allows BEA to collect information 
about services transactions with affiliated foreign persons on the same 
forms and with the same level of detail as it collects information 
about these transactions with unaffiliated foreign persons.
    BEA proposes to add a question to Form BE-10A so it can continue to 
identify U.S. Reporters that are banks even if the majority of their 
revenues are generated by nonbanking activities. In addition, BEA 
proposes to add a question that would identify U.S. parent companies 
that use foreign manufacturing services to process or further 
manufacture goods that they own. The information collected will help 
BEA to align its statistics with current international statistical 
standards, which now recommend that these services be separately 
identified and reported as services rather than reflected 
indistinguishably in statistics on trade in goods.

Survey Background

    The BEA conducts the BE-10, Benchmark Survey of U.S. Direct 
Investment Abroad under the International Investment and Trade in 
Services Survey Act, 22 U.S.C. 3101-3108. Section 3103(b) of the Act 
provides that ``with respect to United States direct investment abroad, 
the President shall conduct a benchmark survey covering year 1982, a 
benchmark survey covering year 1989, and benchmark surveys covering 
every fifth year thereafter.'' In Section 3 of Executive Order 11961, 
as amended by Executive Orders 12318 and 12518, the President delegated 
responsibility for performing functions under the Act concerning direct 
investment to the Secretary of Commerce, who has redelegated it to BEA. 
Section 3103(b) also instructs the BEA to:
    (1) Identify the location, nature, and magnitude of, and changes in 
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.
    The benchmark survey covers the U.S. direct investment abroad 
universe, and is BEA's most comprehensive survey of such investment in 
terms of subject matter. U.S. direct investment abroad is defined as 
the ownership or control, directly or indirectly, by one U.S. person of 
10 percent or more of the voting securities of an incorporated foreign 
business enterprise or an equivalent interest in an unincorporated 
foreign business enterprise, including a branch.
    The purpose of the benchmark survey is to obtain universe data on 
the financial and operating characteristics of, and on positions and 
transactions between, U.S. parent companies and their foreign 
affiliates. The data are needed to measure the size and economic 
significance of U.S. direct investment abroad, measure changes in such 
investment, and assess its impact on the U.S. and foreign economies. 
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 U.S. direct investment position abroad 
and of the operations of U.S. parent companies and their foreign 
affiliates.

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 OMB under the PRA. The requirement 
will be submitted to OMB for approval as a reinstatement, with change, 
of a previously approved collection for which approval has expired 
under OMB control number 0608-0049.
    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.
    The BE-10 survey, as proposed, is expected to result in the filing 
of reports from approximately 3,800 respondents. The respondent burden 
for this collection of information will vary from one company to 
another, but is estimated to average 121 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 
2009 survey is estimated at 459,400 hours, compared to 428,750 hours 
estimated for the previous, 2004 survey. The increase in burden hours 
is associated with an increase in the respondent universe, and is 
largely offset by changes in survey form design and reporting criteria 
and information to be collected.
    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.

[[Page 50153]]

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 
(RFA), 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. A BE-10 report is required of any U.S. company that had a 
foreign affiliate--that is, that had direct or indirect ownership or 
control of at least 10 percent of the voting stock of an incorporated 
foreign business enterprise, or an equivalent interest in an 
unincorporated foreign business enterprise, including a branch--at any 
time during the U.S. company's 2009 fiscal year. U.S. companies that 
have direct investments abroad tend to be quite large, and few small 
U.S. businesses are subject to the reporting requirements of this 
survey. Also, U.S. businesses that meet the SBA small business 
standards tend to have few foreign affiliates and the foreign 
affiliates that they do own are small. BEA estimates that approximately 
500 of the approximately 3,800 U.S. parent companies that will be 
required to respond to the BE-10 benchmark survey are small businesses 
according to the standards established by the SBA. The number of items 
required to be reported for a foreign affiliate is determined by the 
size of the affiliate's assets, sales, and net income. In the BE-10 
survey, for the smallest foreign affiliates--those with total assets, 
sales or gross operating revenues, and net income of less than or equal 
to $25 million (positive or negative)--only a few selected items would 
be reported on a schedule-type form, Form BE-10D. To further ease the 
reporting burden on smaller U.S. companies, U.S. Reporters with total 
assets, sales or gross operating revenues, and net income less than or 
equal to $300 million (positive or negative) are required to report 
only selected items on the BE-10A 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

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

    Dated: August 19, 2009.
Rosemary D. Marcuss,
Acting Director, Bureau of Economic Analysis.

    For the reasons set forth in the preamble, BEA proposes to revise 
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 806.16 is revised to read as follows:


Sec.  806.16  Rules and regulations for BE-10, Benchmark Survey of U.S. 
Direct Investment Abroad--2009.

    A BE-10, Benchmark Survey of U.S. Direct Investment Abroad will be 
conducted covering 2009. All legal authorities, provisions, 
definitions, and requirements contained in Sec.  806.1 through Sec.  
806.13 and Sec.  806.14(a) through (d) are applicable to this survey. 
Specific additional rules and regulations for the BE-10 survey are 
given in paragraphs (a) through (d) of this section. More detailed 
instructions are given on the report forms and instructions.
    (a) Response required. A response is required from persons subject 
to the reporting requirements of the BE-10, Benchmark Survey of U.S. 
Direct Investment Abroad--2009, contained herein, whether or not they 
are contacted by BEA. Also, a person, or their agent, that is contacted 
by BEA about reporting in this survey, either by sending them a report 
form or by written inquiry, must respond in writing pursuant to Sec.  
806.4. This may be accomplished by:
    (1) Certifying in writing, by the due date of the survey, to the 
fact that the person had no direct investment within the purview of the 
reporting requirements of the BE-10 survey;
    (2) Completing and returning the ``BE-10 Claim for Not Filing'' by 
the due date of the survey; or
    (3) Filing the properly completed BE-10 report (comprising Form BE-
10A and Form(s) BE-10B, BE-10C, and/or BE-10D) by May 28, 2010, or June 
30, 2010, as required.
    (b) Who must report. (1) A BE-10 report is required of any U.S. 
person that had a foreign affiliate--that is, that had direct or 
indirect ownership or control of at least 10 percent of the voting 
stock of an incorporated foreign business enterprise, or an equivalent 
interest in an unincorporated foreign business enterprise, including a 
branch--at any time during the U.S. person's 2009 fiscal year.
    (2) If the U.S. person had no foreign affiliates during its 2009 
fiscal year, a ``BE-10 Claim for Not Filing'' must be filed by the due 
date of the survey; no other forms in the survey are required. If the 
U.S. person had any foreign affiliates during its 2009 fiscal year, a 
BE-10 report is required and the U.S. person is a U.S. Reporter in this 
survey.
    (3) Reports are required even if the foreign business enterprise 
was established, acquired, seized, liquidated, sold, expropriated, or 
inactivated during the U.S. person's 2009 fiscal year.
    (4) The amount and type of data required to be reported vary 
according to the size of the U.S. Reporters or foreign affiliates, and, 
for foreign affiliates, whether they are majority-owned or minority-
owned by U.S. direct investors. For purposes of the BE-10 survey, a 
``majority-owned'' foreign affiliate is one in which the combined 
direct and indirect ownership interest of all U.S. parents of the 
foreign affiliate exceeds 50 percent; all other affiliates are referred 
to as ``minority-owned'' affiliates.
    (c) Forms to be filed.--(1) Form BE-10A must be completed by a U.S. 
Reporter. If the U.S. Reporter is a corporation, Form BE-10A is 
required to cover the fully consolidated U.S. domestic business 
enterprise.
    (i) 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 
$300 million (positive or negative) at any time during the Reporter's 
2009 fiscal year, the U.S. Reporter must file a complete Form BE-10A. 
It must also file Form(s) BE-10B, C, and/or D, as appropriate, for its 
foreign affiliates.
    (ii) If for a U.S. Reporter none of the three items listed in 
paragraph (c)(1)(i) of this section was greater than $300 million 
(positive or negative) at any time during the Reporter's 2009 fiscal 
year, the U.S. Reporter is required to file on Form BE-10A only certain 
items as designated on the form. It must also file Form(s) BE-10B, C, 
and/or D for its foreign affiliates.
    (2) Form BE-10B must be reported for each majority-owned foreign 
affiliate, whether held directly or indirectly, for which any of the 
following three items--total assets, sales or gross

[[Page 50154]]

operating revenues excluding sales taxes, or net income after provision 
for foreign income taxes--was greater than $80 million (positive or 
negative) at any time during the affiliate's 2009 fiscal year. 
Affiliates with assets, sales, or net income greater than $300 million 
(positive or negative) would file additional items.
    (3) Form BE-10C must be reported:
    (i) For each majority-owned foreign affiliate, whether held 
directly or indirectly, for which any one of the three items listed in 
paragraph (c)(2) of this section was greater than $25 million but for 
which none of these items was greater than $80 million (positive or 
negative), at any time during the affiliate's 2009 fiscal year, and
    (ii) For each minority-owned foreign affiliate, whether held 
directly or indirectly, for which any one of the three items listed in 
(c)(2) of this section was greater than $25 million (positive or 
negative), at any time during the affiliate's 2009 fiscal year.
    (4) Form BE-10D must be reported for majority- or minority-owned 
foreign affiliates, whether held directly or indirectly, for which all 
of the three items listed in paragraph (c)(2) of this section were less 
than or equal to $25 million (positive or negative) at any time during 
the affiliate's 2009 fiscal year. Form BE-10D is a schedule; a U.S. 
Reporter would submit one or more pages of the form depending on the 
number of affiliates that are required to be filed on this form.
    (d) Due date. A fully completed and certified BE-10 report 
comprising Form BE-10A and Form(s) BE-10B, C, and/or D (as required) is 
due to be filed with BEA not later than May 28, 2010 for those U.S. 
Reporters filing fewer than 50, and June 30, 2010 for those U.S. 
Reporters filing 50 or more, foreign affiliate Forms BE-10B, C, and/or 
D. If the U.S. person had no foreign affiliates during its 2009 fiscal 
year, it must file a BE-10 Claim for Not Filing by May 28, 2010.

[FR Doc. E9-23586 Filed 9-29-09; 8:45 am]
BILLING CODE 3510-06-P