[Federal Register Volume 65, Number 243 (Monday, December 18, 2000)]
[Rules and Regulations]
[Pages 78920-78923]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 00-32089]
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DEPARTMENT OF COMMERCE
Bureau of Economic Analysis
15 CFR Part 806
[Docket No. 000714208-0208-01]
RIN 0691-AA40
Direct Investment Surveys: BE-11, Annual Survey of U.S. Direct
Investment Abroad
AGENCY: Bureau of Economic Analysis, Commerce.
ACTION: Final rule.
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SUMMARY: These final rules amend the reporting requirements for the BE-
11, Annual Survey of U.S. Direct Investment Abroad.
The BE-11 survey is a mandatory survey and is conducted annually by
the Bureau of Economic Analysis (BEA), U.S. Department of Commerce,
under the International Investment and Trade in Services Survey Act.
BEA will send the annual survey to potential respondents in March of
each year; responses will be due by May 31. The last BE-11 annual
survey was conducted for 1998. (A BE-11 survey is not conducted in a
year, such as 1999, when a BE-10 Benchmark Survey of U.S. Direct
Investment Abroad is conducted.) The survey is a cut-off sample survey
that obtains financial and operating data covering the overall
operations of nonbank U.S. parent companies and their nonbank foreign
affiliates.
These final rules increase the exemption level for reporting on the
BE-11B(SF) short form and the BE-11C form from $20 million to $30
million; increase the exemption level for reporting on the BE-11B(LF)
long form from $50 million to $100 million; and direct U.S. Reporters
with total assets, sales or gross operating revenues, and net income
less than or equal to $100 million (positive or negative) to report
only selected items on the BE-11A form. These changes will reduce the
number of reports that otherwise must be filed, thus reducing
respondent burden, particularly for small companies.
EFFECTIVE DATE: These final rules will be effective January 17, 2001.
[[Page 78921]]
FOR FURTHER INFORMATION CONTACT: R. David Belli, Chief, International
Investment Division (BE-50), Bureau of Economic Analysis, U.S.
Department of Commerce, Washington, DC 20230; phone (202) 606-9800.
SUPPLEMENTARY INFORMATION: On September 21, 2000, the Bureau of
Economic Analysis (BEA), U.S. Department of Commerce, published in the
Federal Register, volume 65, No. 184, FR 57123-57126, a notice of
proposed rulemaking setting forth revised reporting requirements for
the BE-11, Annual Survey of U.S. Direct Investment Abroad. No comments
on the proposed rules were received. Thus, these final rules are the
same as the proposed rules.
These final rules amend 15 CFR part 806.14 to set forth the
reporting requirements for the BE-11, Annual Survey of U.S. Direct
Investment Abroad. BEA will conduct the survey under the International
Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108),
hereinafter, ``the Act.'' Section 4(a) of the Act requires that with
respect to United States direct investment abroad, the President shall,
to the extent he deems necessary and feasible--
(1) 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 and trade in services position of the United States; and
(2) Conduct such studies and surveys as may be necessary to prepare
reports in a timely manner on specific aspects of international
investment which may have significant implications for the economic
welfare and national security of the United States.
In Section 3 of Executive Order 11961, the President delegated
authority granted under the Act as concerns direct investment to the
Secretary of Commerce, who has redelegated it to BEA.
The annual survey of U.S. direct investment abroad provides a
variety of measures of the overall operations of U.S. parent companies
and their foreign affiliates, including total assets, sales, net
income, employment and employee compensation, research and development
expenditures, and exports and imports of goods. The BE-11 is a cut-off
sample survey that covers all foreign affiliates (and their U.S. parent
companies) above a size-exemption level. The sample data are used to
derive universe estimates in nonbenchmark years by extrapolating
forward similar data reported in the BE-10, Benchmark Survey of U.S.
Direct Investment Abroad, which is taken every five years. 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. The data are disaggregated by
country and industry of the foreign affiliate and by industry of the
U.S. parent.
The survey consists of an instruction booklet, a claim for not
filing the BE-11, and the following report forms:
1. Form BE-11A--Report for nonbank U.S. Reporters;
2. Form BE-11B(LF) (Long Form)--Report for majority-owned nonbank
foreign affiliates with assets, sales, or net income greater than $100
million (positive or negative);
3. Form BE-11B(SF) (Short Form)--Report for majority-owned nonbank
foreign affiliates with assets, sales, or net income greater than $30
million, but not greater than $100 million (positive or negative); and
4. Form BE-11C--report for minority-owned nonbank foreign
affiliates with assets, sales, or net income greater than $30 million
(positive or negative).
Under these final rules, BEA is increasing the exemption level for
reporting on the BE-11B(SF) short form and BE-11C form from $20 million
to $30 million and the exemption level for reporting on the BE-11B(LF)
long form from $50 million to $100 million. The exemption level for
these forms is the level of a foreign affiliate's assets, sales, or net
income at or below which a form is not required. In addition to raising
the exemption levels, BEA is directing U.S. Reporters with total
assets, sales, or gross operating revenues, and net income less than or
equal to $100 million (positive or negative) to report only selected
items on the BE-11A form.
For fiscal year 2002 only, these final rules will require the
largest nonbank foreign affiliates owned between 10 and 20 percent to
be reported on Form BE-11C, along with affiliates owned between 20 and
50 percent. In all years, reporting on Form BE-11C is required if an
affiliate is owned between 20 and 50 percent by all U.S. Reporters
combined and if its assets, sales, or net income exceed $30 million
(positive or negative). Primarily to reduce reporting burden of the
survey, affiliates owned less than 20 percent do not have to be
reported annually. However, U.S. direct investment abroad is defined by
law to include all foreign business enterprises owned 10 (not 20)
percent or more, directly or indirectly, by a U.S. person. BEA conducts
periodic benchmark surveys of U.S. direct investment abroad (the BE-
10), covering all foreign affiliates owned 10 percent or more. A
benchmark survey for the year 1999 is now being conducted; the next
benchmark survey will cover the year 2004. In order to maintain
reliable estimates of data for the universe of all foreign affiliates
in nonbenchmark years, reporting for the largest affiliates owned
between 10 and 20 percent is needed for at least one year between
benchmark surveys. Although the U.S. ownership percentages in these
affiliates are low, some of the affiliates are very large and have a
sizable impact on the estimates. Under these final rules, submission of
Form BE-11C for nonbank foreign affiliates owned directly and/or
indirectly, at least 10 percent by one U.S. Reporter, but less than 20
percent by all U.S. Reporters of the affiliate combined, and for which
assets, sales, or net income exceed $100 million (positive or negative)
would be required for fiscal year 2002 only.
These new rules will first apply to the survey covering fiscal year
2000. The 2000 forms will be mailed out in March 2001 and will be due
May 31, 2001.
BEA has made a few changes to the report forms themselves. These
changes, however, did not require rule changes and are not reflected in
the final rules. BEA is extending the use of the North American
Industry Classification System (NAICS) to the annual survey. NAICS is
already being used on all BEA surveys of foreign direct investment in
the United States and BEA used NAICS to collect industry information on
the 1999 BE-10 benchmark survey of U.S. direct investment abroad.
In addition to the change in industry classification, BEA is adding
equity ownership, interest received, and interest paid to the BE-
11B(LF); expanding the owner's equity section on the BE-11B(LF);
reducing the detail collected on the composition of external finances
of the foreign affiliate on the BE-11B(LF); and deleting production
royalty payments on the BE-11B(LF). Finally, BEA is making improvements
in the layout of the survey forms, and in the placement and clarify of
instructions. The design follows that used for the BE-10 benchmark
survey.
Executive Order 12866
These final rules are not significant for purposes of E.O. 12866.
[[Page 78922]]
Executive Order 13132
These final rules do 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 required in these final rules has
been approved by OMB (OMB No. 0608-0053) under the Paperwork Reduction
Act. 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 Paperwork Reduction Act unless that collection
displays a currently valid Office of Management and Budget control
number.
The survey is expected to result in the filing of reports from
about 1,500 respondents. The respondent burden for this collection of
information is estimated to vary from 4 to 3,000 hours per response,
with an average of 68.4 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 of the
survey is estimated at 102,600 hours (1,500 respondents times 68.4
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; and to the Office of Management and Budget, O.I.R.A., Paperwork
Reduction Project 0608-0053, Washington, DC 20503 (Attention PRA Desk
Officer for BEA).
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 these final rules will not have a significant
economic impact on a substantial number of small entities. Few, if any,
small U.S. businesses are subject to the reporting requirements of this
survey. U.S. companies that have direct investments abroad tend to be
quite large. The exemption level for the BE-11 survey is set in terms
of the size of a U.S. company's foreign affiliates (foreign companies
owned 10 percent or more by the U.S. company); if a foreign affiliate
has assets, sales, or net income greater than the exemption level, it
must be reported on Form BE-11B(LF), BE-11B(SF), or BE-11C. Usually,
the U.S. parent company that is required to file the report is many
times larger than its largest foreign affiliate. With the increase in
the exemption level for the BE-11 survey from $20 million to $30
million, even fewer small U.S. businesses will be required to file. To
further reduce the reporting burden on small businesses, U.S. Reporters
with total assets, sales or gross operating revenues, and net income
less than or equal to $100 million (positive or negative) are required
to report only selected items on the BE-11A form for U.S. Reporters in
addition to forms they may be required to file for their foreign
affiliates.
List of Subjects in 15 CFR Part 806
Balance of payments, Economic statistics, Penalties, Reporting and
recordkeeping requirements, United States investment abroad.
Dated: December 1, 2000.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.
For the reasons set forth in the preamble, BEA amends 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; and E.O. 11961 (3
CFR, 1977 Comp., p. 86), as amended by E.O. 12013 (3 CFR, 1977
Comp., p. 147), E.O. 12318 (3 CFR, 1981 Comp., p. 173), and E.O.,
12518 (3 CFR, 1985 Comp., p. 348).
2. Section 806.14(f)(3)(i), (f)(3)(ii), (f)(3)(iii), and
(f)(3)(iv)(A) through (C), are revised to read as follows:
Sec. 806.14 U.S. direct investment abroad.
* * * * *
(f) * * *
(3) * * *
(i) Form BE-11A (Report for U.S. Reporter) must be filed by each
nonbank U.S. person having a foreign affiliate reportable on form BE-
11B(LF), BE-11B(SF), or BE-11C. If the U.S. reporter is a corporation,
Form BE-11A is required to cover the fully consolidated U.S. domestic
business enterprise.
(A) If for a nonbank 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 $100 million (positive or negative) at the end of, or for, the
Reporter's fiscal year, the U.S. Reporter must file a complete Form BE-
11A. It must also file a Form BE-11B(LF), BE-11B(SF), or BE-11C, as
applicable, for each nonexempt foreign affiliate.
(B) If for a nonbank U.S. Reporter no one of the three items listed
in paragraph (f)(3)(i)(A) of this section was greater than $100 million
(positive or negative) at the end of, or for, the Reporter's fiscal
year, the U.S. Reporter is required to file on Form BE-11A only items 1
through 27 and Part IV. It must also file a Form BE-11B(LF), BE-
11B(SF), or BE-11C, as applicable, for each nonexempt foreign
affiliate.
(ii) (Form BE-11B(LF) or (SF) (Report for Majority-owned Foreign
Affiliate).
(A) A BE-11B(LF) (Long Form) is required to be filed for each
majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter for
which any one of the three items--total assets, sales or gross
operating revenues excluding sales taxes, or net income after provision
for foreign income taxes--was greater than $100 million (positive or
negative) at the end of, or for, for the affiliate's fiscal year.
(B) A BE-11B(SF)(Short Form) is required to be filed for each
majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter for
which any one of the three items listed in paragraph (f)(3)(ii)(A) of
this section was greater than $30 million (positive or negative), but
for which no one of these items was greater than $100 million (positive
or negative), at the end of, or for, the affiliate's fiscal year.
(iii) Form BE-11C (Report for Minority-owned Foreign Affiliate)
must be filed for each minority-owned nonbank foreign affiliate that is
owned at least 20 percent, but not more than 50 percent, directly and/
or indirectly, by all U.S. Reporters of the affiliate combined, and for
which any one of the three items listed in paragraph(f)(3)(ii)(A) of
this section was greater than $30 million (positive or negative) at the
end of, or for, the affiliate's fiscal year. In addition, for the
report covering fiscal year 2002 only, a Form BE-11C must be filed for
each minority-owned nonbank foreign affiliate that is owned, directly
or indirectly, at least 10 percent by one U.S. Reporter, but less than
20 percent by all U.S. Reporters of the affiliate combined, and for
which any one of the three items listed in paragraph (f)(3)(ii)(A) of
this section was greater than $100 million (positive or negative) at
the end of, or for, the affiliate's fiscal year.
(iv) * * *
[[Page 78923]]
(A) None of the three items listed in paragraph (f)(3)(ii)(A) of
this section exceeds $30 million (positive or negative).
(B) For fiscal year 2002 only, it is less than 20 percent owned,
directly or indirectly, by all U.S. Reporters of the affiliate combined
and none of the three items listed in paragraph (f)(3)(ii)(A) of this
section exceeds $100 million (positive or negative).
(C) For fiscal years other than 2002, it is less than 20 percent
owned, directly or indirectly by all U.S. Reporters of the affiliate
combined.
* * * * *
[FR Doc. 00-32089 Filed 12-15-00; 8:45 am]
BILLING CODE 3510-06-M