[Federal Register Volume 82, Number 238 (Wednesday, December 13, 2017)]
[Rules and Regulations]
[Pages 58551-58553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26887]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 170322304-7557-01]
RIN 0691-AA86


Direct Investment Surveys: BE-12, 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 of the Department of 
Commerce's Bureau of Economic Analysis (BEA) to set forth the reporting 
requirements for the 2017 BE-12, Benchmark Survey of Foreign Direct 
Investment in the United States. The BE-12 survey is conducted every 
five years; the prior survey covered 2012. The benchmark survey covers 
the universe of foreign direct investment in the United States and is 
BEA's most detailed survey of such investment. For the 2017 benchmark 
survey, BEA will make changes in data items collected, the design of 
the survey forms, and the reporting requirements for the survey to 
satisfy changing data needs and to improve data quality and the 
effectiveness and efficiency of data collection.

DATES: This final rule is effective January 12, 2018.

FOR FURTHER INFORMATION CONTACT: Patricia Abaroa, Chief, Direct 
Investment Division (BE-49), Bureau of Economic Analysis, U.S. 
Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; 
phone (301) 278-9591; or via email at [email protected].

SUPPLEMENTARY INFORMATION: On July 27, 2017, BEA published a notice of 
proposed rulemaking that set forth revised reporting criteria for the 
BE-12, Benchmark Survey of Foreign Direct Investment in the United 
States (82 FR 34894). No comments on the proposed rule were received.
    This final rule amends 15 CFR part 801 to set forth the reporting 
requirements for the BE-12, Benchmark Survey of Foreign Direct 
Investment in the United States.
    BEA conducts the BE-12 survey once every five years under the 
authority of the International Investment and Trade in Services Survey 
Act (22 U.S.C. 3101-3108).
    In 2012, BEA issued a rule (77 FR 24373) that established 
guidelines for collecting data on international trade in services and 
direct investment through notices, rather than through rulemaking. 
Persons are required to respond to other BEA surveys conducted under 
these guidelines only when they are contacted by BEA. Under this final 
rule, however, persons subject to the reporting requirements of the BE-
12, Benchmark Survey of Foreign Direct Investment in the United States, 
will be required to respond whether or not they are contacted by BEA.
    The benchmark survey covers the universe of foreign direct 
investment in the United States in terms of value and is BEA's most 
detailed survey of such investment. Foreign direct investment in the 
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 non-benchmark years. In 
particular, they serve as benchmarks for the quarterly direct 
investment estimates included in the U.S. international transactions, 
international investment position, and national income and product 
accounts, and for annual estimates of the foreign direct investment 
position in the United States and of the activities of the U.S. 
affiliates of foreign companies.

Description of Changes

    This final rule amends the regulations (15 CFR part 801) and the 
survey forms for the BE-12 benchmark survey. These amendments include 
changes in data items collected, the design of the survey forms, and 
the reporting requirements for the survey.
    BEA changes the reporting requirements for certain private funds 
that file the BE-12 survey. BEA, in cooperation with the U.S. 
Department of the Treasury, instructs reporters of investments in 
private funds that meet the definition of direct investment (that is, 
ownership by one person of 10 percent or more of the voting interest of 
a business enterprise) but display characteristics of portfolio 
investment (specifically, investors who do not intend to control or 
influence the management of an operating company) to report through the 
Treasury International Capital (TIC) reporting system, where other 
related portfolio investments are already being reported, and not to 
report on BEA's direct investment surveys. Direct investment in 
operating companies, including investment by and through private funds, 
will continue to be reported to BEA.
    BEA adds, deletes, and modifies some items on the benchmark survey 
forms. The following items are added to the benchmark survey:
    (1) Expand sales of services breakdown on the BE-12A form to 
include sales of services to other U.S. affiliates of the same 
affiliated foreign group, sales to unaffiliated U.S. persons or 
entities, sales to the affiliated foreign group, sales to foreign 
affiliates owned by the U.S. affiliate responding to the survey, and 
sales to all other foreign persons or entities.
    (2) Expand state-level data items on the BE-12A and BE-12B forms to 
include manufacturing employment; gross book value of property, plant, 
and equipment; and the portion of the gross book value that is 
commercial property.
    (3) Add state of location to the BE-12C form, Part I.
    (4) Add a question to collect the 20-digit Legal Entity Identifier 
of the U.S. affiliate on the BE-12A and BE-12B forms.
    (5) Add a question asking whether the U.S. affiliate is a publicly 
traded company, and if it is, collect the stock exchange on which it is 
listed and the ticker symbol on the BE-12A and BE-12B forms.
    (6) Add questions separating payables, receivables, interest 
payments, and interest receipts by foreign parents and foreign 
affiliates of foreign parents (FAFPs) on the BE-12B form.
    (7) Add a Part III to the BE-12C form to expand information 
collected on foreign ownership to better align the data collected on 
the BE-12 benchmark

[[Page 58552]]

survey with the BE-605 quarterly survey and to assist in updating the 
statistics on foreign direct investment to include the benchmark survey 
results. Part III will include new questions on whether each parent has 
a direct or indirect ownership interest in the U.S. affiliate being 
reported, and if direct, the equity percentage of the parent's 
ownership in the affiliate. Part III will also include existing 
questions that were in Part II of the 2012 BE-12 survey about the name 
and industry of each foreign parent and the name, country, and industry 
of each ultimate beneficial owner. Part III will be preceded by a 
request at the end of Part II to enter the number of foreign parents 
and instructions to file a Part III for each foreign parent. Part III 
will only be completed by larger BE-12C filers (those with assets, 
sales, or net income greater than $20 million).
    (8) Add a private funds exemption option to the BE-12 Claim for Not 
Filing.
    (9) Add U.S. tax withheld on dividends to the BE-12B Part III to 
better align the data collected on the BE-12 benchmark survey with the 
BE-605 quarterly survey and assist in updating the statistics on 
foreign direct investment to include the benchmark survey results.
    (10) Add intercompany debt payables and receivables to the BE-12C 
Part I to provide information on debt transactions of smaller 
affiliates.
    (11) Add questions to the BE-12C form to determine if the U.S. 
affiliate has consolidated and unconsolidated affiliates. Add 
Supplement A (list of the U.S. business enterprises consolidated) and 
Supplement B (list of U.S. business enterprises not consolidated) to 
the BE-12C form.
    This final rule eliminates the following items from the benchmark 
survey:
    (1) Questions on contract manufacturing services (BE-12A, items 24, 
25, 26, and 27);
    (2) Questions on wholesale and retail trade industry activities 
(BE-12A, items 63a, 63b, and 63c); and
    (3) A question on prior year closing balance for voting interest 
(BE-12C).
    In addition, this final rule makes the following modifications to 
the survey forms:
    (1) Modify instructions on the BE-12B form for employment by 
location to explain the expanded state-level data items (see Item 2. in 
Additions).
    (2) Modify question 87 on the BE-12A form to separate amounts 
reported for ``change in entity'' and ``change in accounting methods or 
principles.''
    (3) Add a checkbox asking if the change in accounting methods or 
principles is due in whole or in part to early implementation of FASB 
ASU No. 2016-02, Leases (Topic 842).

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 Executive Order 13132.

Paperwork Reduction Act

    The collection-of-information in this final rule was submitted to 
the Office of Management and Budget (OMB) pursuant to the requirements 
of the Paperwork Reduction Act (PRA). OMB approved the information 
collection under OMB control number 0608-0042.
    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-12 survey is expected to result in the filing of reports 
from approximately 22,700 U.S. affiliates. The respondent burden for 
this collection of information will vary from one company to another. 
The estimated average time per respondent is 11.0 hours, 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 this 
survey is estimated at 249,625 hours, compared to 194,150 hours for the 
previous (2012) benchmark survey. An increase in the number of foreign-
owned companies accounts for over 80 percent of the increase in the 
estimated respondent burden, and the new survey questions account for 
the rest of the increase.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in the 
final rule should be sent to both BEA via email at 
[email protected], and to OMB, O.I.R.A., Paperwork Reduction 
Project 0608-0042, Attention PRA Desk Officer for BEA, via email at 
[email protected].

Regulatory Flexibility Act

    The Chief Counsel for Regulation, Department of Commerce, 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 action 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 final regulatory flexibility analysis was prepared, as no 
comments were received regarding the determination that this action 
will not have a significant economic impact on a substantial number of 
small entities.

List of Subjects in 15 CFR Part 801

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

    Dated: December 7, 2017.
Brian Moyer,
Director, Bureau of Economic Analysis.

    For reasons set forth in the preamble, BEA amends 15 CFR part 801 
as follows:

PART 801--SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S. 
AND FOREIGN PERSONS AND SURVEYS OF DIRECT INVESTMENT

0
1. The authority citation for 15 CFR part 801 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 15 U.S.C. 4908; 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. Revise Sec.  801.3 to read as follows:


Sec.  801.3  Reporting requirements.

    Except for surveys subject to rulemaking in Sec. Sec.  801.7, 
801.8, 801.9, and 801.10, reporting requirements for all other surveys 
conducted by the Bureau of Economic Analysis shall be as follows:
    (a) Notice of specific reporting requirements, including who is 
required to report, the information to be reported, the manner of 
reporting, and the time and place of filing reports, will be published 
by the Director of the Bureau of Economic Analysis in the Federal 
Register prior to the implementation of a survey;
    (b) In accordance with section 3104(b)(2) of title 22 of the United 
States Code, persons notified of these surveys and subject to the 
jurisdiction of the United States shall furnish, under oath,

[[Page 58553]]

any report containing information which is determined to be necessary 
to carry out the surveys and studies provided for by the Act; and
    (c) Persons not notified in writing of their filing obligation by 
the Bureau of Economic Analysis are not required to complete the 
survey.

0
3. Add Sec.  801.10 to read as follows:


Sec.  801.10  Rules and regulations for BE-12, Benchmark Survey of 
Foreign Direct Investment in the United States--2017.

    A BE-12, Benchmark Survey of Foreign Direct Investment in the 
United States, will be conducted covering 2017. All legal authorities, 
provisions, definitions, and requirements contained in Sec. Sec.  801.1 
through 801.2 and Sec. Sec.  801.4 through 801.6 are applicable to this 
survey. Specific additional rules and regulations for the BE-12 survey 
are given in paragraphs (a) through (e) 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-12, Benchmark Survey of Foreign 
Direct Investment in the United States--2017, contained in this 
section, whether or not they are contacted by BEA. Also, a person, or 
their agent, contacted by BEA about reporting in this survey, either by 
sending them a report form or a written inquiry, must respond in 
writing pursuant to this section. This may be accomplished by filing a 
properly completed BE-12 report (BE-12A, BE-12B, BE-12C, or BE-12 Claim 
for Not Filing);
    (b) Who must report. A BE-12 report is required for each U.S. 
affiliate (except certain private funds as described below), 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 2017. Certain private funds are exempt from 
reporting on the BE-12 survey. If a U.S. business meets ALL of the 
following 3 criteria, it is not required to file any BE-12 report 
except to indicate exemption from the survey if contacted by BEA: (1) 
The U.S. business enterprise is a private fund; (2) the private fund 
does not own, directly or indirectly through another business 
enterprise, an ``operating company''--i.e., a business enterprise that 
is not a private fund or a holding company--in which the foreign parent 
owns at least 10 percent of the voting interest; AND (3) if the foreign 
parent owns the private fund indirectly (through one or more other U.S. 
business enterprises), there are no U.S. ``operating companies'' 
between the foreign parent and the indirectly-owned private fund.
    (c) Forms to be filed. (1) Form BE-12A 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, 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 $300 
million (positive or negative) at the end of, or for, its fiscal year 
that ended in calendar year 2017:
    (i) Total assets (do not net out liabilities);
    (ii) Sales or gross operating revenues, excluding sales taxes; or
    (iii) Net income after provision for U.S. income taxes.
    (2) Form BE-12B must be completed by:
    (i) A majority-owned U.S. affiliate if, 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) of this 
section (not just the foreign parent's share), was greater than $60 
million (positive or negative) but none of these items was greater than 
$300 million (positive or negative) at the end of, or for, its fiscal 
year that ended in calendar year 2017.
    (ii) A minority-owned U.S. affiliate (for purposes of this survey, 
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) if, 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) of this section (not just 
the foreign parent's share), was greater than $60 million (positive or 
negative) at the end of, or for, its fiscal year that ended in calendar 
year 2017.
    (3) Form BE-12C must be completed by a U.S. affiliate if, 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) 
of this section for a U.S. affiliate (not just the foreign parent's 
share), was greater than $60 million (positive or negative) at the end 
of, or for, its fiscal year that ended in calendar year 2017.
    (4) 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-12A, BE-12B, 
BE-12C, or BE-12 Claim for Not Filing is due to be filed with BEA not 
later than May 31, 2018 (or by June 30, 2018 for reporting companies 
that use BEA's eFile system).

[FR Doc. 2017-26887 Filed 12-12-17; 8:45 am]
BILLING CODE 3510-06-P