[Federal Register Volume 87, Number 188 (Thursday, September 29, 2022)]
[Rules and Regulations]
[Pages 58953-58955]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21113]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 220922-0196]
RIN 0691-AA93


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: The final rule amends regulations of the Department of 
Commerce's Bureau of Economic Analysis (BEA) to set forth the reporting 
requirements for the 2022 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 2017. 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 2022 BE-12 
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 October 31, 2022.

FOR FURTHER INFORMATION CONTACT: Kirsten Brew, Chief, Multinational 
Operations Branch, Direct Investment Division (BE-49), Bureau of 
Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, 
Washington, DC 20233; phone (301) 278-9152; or via email at 
[email protected].

SUPPLEMENTARY INFORMATION: 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. Under this final rule 
15 CFR 801.10 is modified to clarify the timing of this benchmark 
survey. The next BE-12 survey will apply to the 2022 fiscal reporting 
year, and will be conducted once every five years thereafter, for 
reporting years ending in 2 and 7.
    BEA conducts the BE-12 survey under the authority of the 
International Investment and Trade in Services Survey Act (22 U.S.C. 
3101-3108).
    The BE-12 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 BE-12 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

    The final rule amends the regulations (15 CFR part 801) and the 
survey forms for the BE-12 survey. These amendments include changes in 
data items collected, the design of the survey forms, and the reporting 
requirements for the survey.
    BEA adds, deletes, and modifies some items on the BE-12 survey 
forms. The following items will be added to the BE-12 survey:
    (1) A question to collect the city of each foreign parent and 
ultimate beneficial owner (UBO) on all forms.
    (2) The balance sheet and income statement sections on the BE-12A 
form will be modified to separately collect the investment in, and 
income from, (a) ``unconsolidated U.S. affiliates'' and (b) ``foreign 
entities,'' which were previously collected as a combined total.
    (3) Supplemental sections A and B, which collect identification 
information on business enterprises owned by the U.S. affiliate, will 
be modified on all BE-12 forms to request more information on the 
reasons the U.S. business enterprises changed since the last report. 
This will include options for ``newly acquired'' or ``newly 
established'' if an enterprise is being reported on a supplement for 
the first time, and options to report U.S. business enterprises that 
had a name change, were sold, merged or liquidated. A follow-up 
question will be added requesting the date of the corporate change for 
new enterprises.
    (4) Questions will be added on the BE-12A form to collect sales 
data for certain service types where there is no clear link between the 
industry of sales and the type of services supplied. These service 
types are (1) intellectual property (IP) rights and (2) advertising.
    (5) Questions will be added to collect sales data on the BE-12A 
form related to the provision of selected services generally recognized 
as prevalent in the digital economy. These selected services are (1) 
cloud computing and data storage and (2) digital intermediation

[[Page 58954]]

services. In addition, checkboxes will be added to the BE-12A for 
respondents to identify the percentage of their sales of services 
delivered remotely, sales of services that were digitally ordered, and 
sales of goods that were digitally ordered, along with checkboxes to 
identify if this information was sourced from their accounting records 
or from recall/general knowledge.
    The final rule also eliminates the following items from the 
benchmark survey:
    (1) Expensed petroleum and mining expenditures from the BE-12A 
form.
    (2) Commercial property from the state schedule of the BE-12A and 
BE-12B forms.
    (3) Part III of the BE-12A and BE-12B forms, which collects 
information on investment and transactions between the U.S. affiliate 
and the affiliated foreign group, will be scaled back to include only 
the following items:
    (1) Foreign parent ownership and classification information
    (2) A question on reverse investment
    (3) Intercompany debt balances for U.S. affiliates with less than 
$60 million in assets, sales, or net income.
    The final rule will also modify the survey forms to improve 
question wording, layout, and instructions.
    On July 1, 2022, 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 (87 FR 39411). No 
comments on the proposed rule were received.

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 was submitted to 
the Office of Management and Budget (OMB) pursuant to the requirements 
of the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520 (PRA). OMB 
approved the information collection for the 2022 Benchmark Survey of 
Foreign Direct Investment in the United States 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 26,400 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 10.5 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 276,441 hours, compared to 249,625 hours for the 
previous (2017) benchmark survey. An increase in the number of foreign-
owned companies accounts for nearly all of the increase in the 
estimated respondent burden, while the addition of new questions and 
the deletion of previous questions had a marginal impact on the 
estimated respondent burden.
    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 OMB, Office of Information and Regulatory 
Affairs (OIRA), 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 
at the proposed rule stage 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 final 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 certification or the economic impact of the rule. 
Therefore, a final regulatory flexibility analysis is not required and 
none has been prepared.

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.

Paul W. Farello,
Associate Director of International Economics, 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.  801.10 to read as follows:


Sec.  801.10  Rules and regulations for BE-12, 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 once every five years and covers years 
ending in 2 and 7. BEA will describe the proposed information 
collection in a public notice and will solicit comments accounting to 
the requirements of the Paperwork Reduction Act (44 U.S.C. 3501-3520). 
All legal authorities, provisions, definitions, and requirements 
contained in Sec. Sec.  801.1 and 801.2 and 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, 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 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 in paragraphs 
(b)(1) through (3) of this section), 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

[[Page 58955]]

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 the calendar year covered by the 
survey. 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 the calendar year covered by the survey:
    (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 the calendar year covered by the survey.
    (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 the 
calendar year covered by the survey .
    (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 the calendar year covered by 
the survey.
    (4) Any U.S. person that is contacted by BEA concerning the BE-12 
survey, but is not subject to the reporting requirements, must file a 
BE-12 Claim for Not Filing. The requirement in this paragraph (c)(4) is 
necessary to ensure compliance with reporting requirements and 
efficient administration of the Act by eliminating unnecessary follow-
up contact.
    (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 of the year after the year covered by the survey (or 
by June 30 for reporting companies that use BEA's eFile system).

[FR Doc. 2022-21113 Filed 9-28-22; 8:45 am]
BILLING CODE 3510-06-P