[Federal Register Volume 59, Number 144 (Thursday, July 28, 1994)] [Unknown Section] [Page ] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-18094] [Federal Register: July 28, 1994] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE Bureau of Economic Analysis 15 CFR Part 801 [Docket No. 940795-4195] RIN 0691-AA24 International Services Surveys: BE-80 Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Unaffiliated Foreign Persons AGENCY: Bureau of Economic Analysis, Commerce. ACTION: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: This notice sets forth proposed rules relating to international service surveys to institute a new survey, the BE-80, Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Unaffiliated Foreign Persons, to be conducted by the Bureau of Economic Analysis (BEA), U.S. Department of Commerce. The survey will, for the first time, collect comprehensive information on trade in financial services between U.S. financial services providers and unaffiliated foreign persons. It is intended to cover the universe of such transactions by type and by country. The information is needed to support trade policy initiatives, including trade negotiations, on financial services and to compile the U.S. balance of payments and national income and product accounts. The survey will be conducted once every 5 years under the International Investment and Trade in Services Survey Act and the Omnibus Trade and Competitiveness Act of 1988. The first survey will cover 1994. DATES: Comments on these proposed rules will receive consideration if submitted in writing on or before September 12, 1994. ADDRESSES: Comments may be mailed to the Office of the Chief, International Investment Division (BE-50), Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230, or hand delivered to Room M-100, 1441 L Street NW., Washington, DC 20005. Comments will be available for public inspection in Room 7006, 1441 L Street NW., between 8:30 a.m. and 4:30 p.m., Monday through Friday. FOR FURTHER INFORMATION CONTACT: Betty L. Barker, Chief, International Investment Division (BE-50), Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230; phone (202) 606-9805. SUPPLEMENTARY INFORMATION: These proposed rules amend existing 15 CFR 801.9 and add new 15 CFR 801.11 to set forth reporting requirements for the BE-80, Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Unaffiliated Foreign Persons. The survey will be conducted by the Bureau of Economic Analysis (BEA), U.S. Department of Commerce, under the International Investment and Trade in Services Survey Act (P.L. 94-472, 90 Stat. 2059, 22 U.S.C. 3101-3108, as amended) and the Omnibus Trade and Competitiveness Act of 1988 (P.L. 100-418, 15 U.S.C. 4908(b)). Section 4(a) of the International Investment and Trade in Services Survey Act provides that ``The President shall, to the extent he deems necessary and feasible--. . . (4) conduct . . . benchmark surveys with respect to trade in services between unaffiliated United States persons and foreign persons . . .'' In Section 3 of Executive Order 11961, as amended by Executive Order 12518, the President delegated the authority under the Act as concerns international trade in services to the Secretary of Commerce, who has redelegated it to BEA. The Omnibus Trade and Competitiveness Act of 1988 directs that ``The Secretary (of Commerce) shall ensure that . . . there is included in the Data Bank information on service sector activity that is as complete and timely as information on economic activity in the merchandise sector. The Secretary shall undertake a new benchmark survey of services transactions, including transactions with respect to . . . banking services; (and) brokerage services.'' The major purposes of the survey are to provide the information on financial services needed in monitoring U.S. services trade, analyzing its effects on the U.S. economy, formulating U.S. international trade policy, supporting bilateral and multilateral trade negotiations, compiling the U.S. balance of payments and national income and product accounts, developing U.S. international price indexes for services, assessing U.S. competitiveness in international trade in services, and improving the ability of U.S. businesses to identify and evaluate market opportunities. As proposed, the BE-80 survey will be conducted once every 5 years, and the first survey will be for 1994. The survey is intended to cover the universe of financial services transactions between U.S. financial services providers and unaffiliated foreign persons. Reporting is required from U.S. financial services providers who have sales to or purchases from unaffiliated foreign persons in all covered financial services combined in excess of $1 million during the reporting year. Those financial services providers meeting this criteria must supply data on the amount of their sales or purchases of each covered type of service, disaggregated by country. U.S. financial services providers that have covered transactions of less than $1 million during the reporting year are asked to provide, on a voluntary basis, estimates only of their total sales or purchases of each type of financial service. It is anticipated that the information from the benchmark survey will be updated in nonbenchmark years by an annual follow-on survey that is more limited in scope and that will cover only a sample of companies reporting in the BE-80 survey. Executive Order 12612 These proposed rules do not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under E.O. 12612. Executive Order 12866 This proposed rule has been determined to be not significant for purposes of E.O. 12866. Paperwork Reduction Act These proposed rules contain a collection of information requirement subject to the Paperwork Reduction Act. A request for review of the forms has been submitted to the Office of Management and Budget under section 3504(h) of the Paperwork Reduction Act. Public reporting burden for this collection of information is estimated to vary from 4 to 150 hours, with an overall average burden of 7.5 hours. This includes time for reviewing the instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Comments from the public 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, Washington, DC 20503, Attention: Desk Officer for the Department of Commerce. Regulatory Flexibility Act The General Counsel, 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. The exemption level for the survey excludes most small businesses from mandatory reporting. Reporting is required only if total sales or total purchases transactions in financial services with unaffiliated foreign persons by U.S. persons who are financial services providers, or by U.S. persons whose consolidated enterprise includes a separately organized subsidiary or part that is a financial services provider, exceed $1 million during the year. In addition, international business tends to be conducted mainly by the larger companies in a given industry; in the financial services industry, this is particularly true, because of the high degrees of consolidation occurring in that industry in the United States during the past several years. In any event, small businesses tend to have specialized operations and activities, so those with reportable transactions will likely not have significant amounts of data to report; therefore, the burden on them will be relatively small. List of Subjects in 15 CFR Part 801 Economic statistics, Balance of payments, Foreign trade, Penalties, Reporting and recordkeeping requirements. Dated: June 30, 1994. Carol S. Carson, Director, Bureau of Economic Analysis. For the reasons set forth in the preamble, BEA proposes to amend 15 CFR part 801, as follows: PART 801--[AMENDED] 1. The authority citation for 15 CFR Part 801 is revised to read as follows: Authority: 5 U.S.C. 301; 15 U.S.C. 4908(b); 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 801.9 is amended by revising paragraph (a) to read as follows: Sec. 801.9 Reports required. (a) Benchmark surveys. Section 4(a)(4) of the Act (22 U.S.C. 3103) provides that benchmark surveys of trade in services between U.S. and unaffiliated foreign persons be conducted, but not more frequently than every 5 years. General reporting requirements, exemption levels, and the year of coverage of the BE-20 survey may be found in Sec. 801.10, and general reporting requirements, exemption levels, and the year of coverage of the BE-80 survey may be found in Sec. 801.11. More detailed instructions are given on the forms themselves. * * * * * * * 3. Section 801.11 is added to read as follows: Sec. 801.11 Rules and regulations for the BE-80, Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Unaffiliated Foreign Persons. A BE-80, Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Unaffiliated Foreign Persons, will be conducted covering companies' 1994 fiscal year and every fifth year thereafter. All legal authorities, provisions, definitions, and requirements contained in Sec. 801.1 through Sec. 801.9 are applicable to this survey. Additional rules and regulations for the BE-80 survey are given in paragraphs (a) through (d) of this section. More detailed instructions are given on the report form itself. (a) Who must report--(1) Mandatory reporting. Reports are required from each U.S. person who is a financial services provider or intermediary, or whose consolidated U.S. enterprise includes a separately organized subsidiary or part that is a financial services provider or intermediary, and who had transactions (either sales or purchases) directly with unaffiliated foreign persons in all financial services combined in excess of $1,000,000 during its fiscal year covered by the survey. The $1,000,000 threshold should be applied to financial services transactions with unaffiliated foreign persons by all parts of the consolidated U.S. enterprise combined that are financial services providers or intermediaries. Because the $1,000,000 threshold applies separately to sales and purchases, the mandatory reporting requirement may apply only to sales, only to purchases, or to both sales and purchases. (i) The determination of whether a U.S. financial services provider or intermediary is subject to this mandatory reporting requirement may be judgmental, that is, based on the judgment of knowledgeable persons in a company who can identify reportable transactions on a recall basis, with a reasonable degree of certainty, without conducting a detailed manual records search. (ii) Reporters who file pursuant to this mandatory reporting requirement must provide data on total sales and/or purchases of each of the covered types of financial services transactions and must disaggregate the totals by country. (2) Voluntary reporting. If, during the fiscal year covered, sales or purchases of financial services by a firm that is a financial services provider or intermediary, or by a firm's subsidiaries or parts combined that are financial services providers or intermediaries, are $1,000,000 or less, the U.S. person is requested to provide an estimate of the total for each type of service. Provision of this information is voluntary. Because the $1,000,000 threshold applies separately to sales and purchases, this voluntary reporting option may apply only to sales, only to purchases, or to both sales and purchases. (b) BE-80 definition of financial services provider. The definition of financial services provider used for this survey is analogous in coverage to the finance and insurance part of Division H of the 1987 Standard Industrial Classification Manual (SIC major groups 60 through 64, and major group 67). More specifically, companies and/or subsidiaries and other separable parts of companies in the following industries are defined as financial services providers: Depository institutions (including commercial banks and thrifts); nondepository credit institutions; security and commodity futures brokers, dealers, exchanges, traders, underwriters, and services providers (including investment bankers and providers of securities custody services); credit card companies; insurance carriers, agents, brokers and services providers; investment advisors and managers; mutual funds; pension funds; trusts; holding companies; investors; oil royalty traders; etc. (c) Covered types of services. The BE-80 survey covers the following types of financial services transactions (purchases and/or sales) between U.S. financial services providers and unaffiliated foreign persons: Brokerage, except foreign exchange brokerage services; private placement services; underwriting services; financial management services; credit-related services, except credit card services; credit card services; financial advisory and custody services; securities lending services; foreign exchange brokerage services; and other financial services. (d) What to file. (1) The BE-80 survey consists of Forms BE-80(A) and BE-80(B). Before completing a Form BE-80(B), a consolidated U.S. enterprise (including the top parent and all of its subsidiaries and parts combined) must complete Form BE-80(A) to determine its reporting status. If the enterprise is subject to the mandatory reporting requirement, or if it is exempt from the mandatory reporting requirement but chooses to report data voluntarily, either a separate Form BE-80(B) may be filed for each separately organized financial services subsidiary or part of the consolidated U.S. enterprise, or a single BE-80(B) may be filed, representing the sum of covered transactions by all financial services subsidiaries or parts of the enterprise combined. (2) Reporters that receive the BE-80 survey from BEA, but that are not reporting data in either the mandatory or voluntary section of any Form BE-80(B), must return the Exemption Claim, attached to Form BE- 80(A), to BEA. [FR Doc. 94-18094 Filed 7-27-94; 8:45 am] BILLING CODE 3510-24-P