[Federal Register Volume 64, Number 42 (Thursday, March 4, 1999)] [Rules and Regulations] [Pages 10387-10389] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-5342] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE Bureau of Economic Analysis 15 CFR Part 806 [Docket No. 990106005-9055-02] RIN 0691-AA32 Direct Investment Surveys: Raising Exemption Level for Annual Survey of Foreign Direct Investment in the United States AGENCY: Bureau of Economic Analysis, Commerce. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: These final rules amend 15 CFR Part 806.15 by raising the exemption level for reporting in the Annual Survey of Foreign Direct [[Page 10388]] Investment in the United States (Form BE-15. The survey is a mandatory survey conducted by the Bureau of Economic Analysis (BEA), U.S. Department of Commerce, under the authority of the International Investment and Trade in Services Survey Act. These changes bring the survey into conformity with the Benchmark Survey of Foreign Direct Investment in the United States--1997 (Form BE-12) and reduce reporting burden on small respondents. The revised rules raise the exemption level for the survey to $30 million on the BE-15(SF) short form, up from $10 million (measured by the Company's total assets, sales, or net income or loss); on the survey's long form, the exemption level is raised to $100 million, up from $50 million. In addition, the revised survey bases industry coding on the North American Industry Classification System (NAICS) in place of the U.S. Standard Industrial Classification system that was formerly used, and modifies the detail collected on the composition of external financing of the reporting enterprise, on research and development expenditures, and on the operations of foreign-owned businesses in individual States. EFFECTIVE DATE: These rules will be effective April 5, 1999. 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: In the January 14, 1999 Federal Register, Volume 64, No. 9, pages 2454-2455, the Bureau of Economic Analysis published a notice of proposed rulemaking to amend 15 CFR part 806.15 by raising the exemption level for reporting in the annual survey of foreign direct investment in the United States. No comments on the proposed rule were received. Thus, this final rule is the same as the proposed rule. The Annual Survey of Foreign Direct Investment in the United States (Form BE-15) is part of BEA's regular data collection program for foreign direct investment in the United States. The surveys are mandatory and are conducted pursuant to the International Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108, as amended). The annual survey is necessary to provide reliable, useful, and timely measures of foreign direct investment in the United States. The survey covers all affiliates above a size-exemption level and collects annual data on the financial structure and operations of nonbank U.S. affiliates of foreign companies needed to update similar data for the universe of U.S. affiliates collected once every 5 years in the BE-12 benchmark survey. The data are used to derive annual estimates of the operations of U.S. affiliates of foreign companies, including their balance sheets; income statements; property, plant, and equipment; external financing; employment and employee compensation; merchandise trade; sales of goods and services; taxes; and research and development (R&D) activity. The data will also be used to measure the economic significance of foreign direct investment in the United States and to analyze its effect on the U.S. economy. Finally, they will be used in formulating, and assessing the impact of, U.S. policy on foreign direct investment. The revisions to the survey will bring it into conformity with the Benchmark Survey of Foreign Direct Investment in the United States-- 1997 (BE-12) and will be effective beginning with the 1998 annual survey. The BE-12 is BEA's quinquennial census of foreign direct investment in the United States; it collects annual data and is intended to cover the universe of U.S. affiliates. (A U.S. affiliate is a U.S. business enterprise in which a foreign person owns or controls ten percent or more of the voting stock, or an equivalent interest in an unincorporated business enterprise.) The new rules raise the exemption level for the survey to $30 million on the BE-15(SF) short form, up from $10 million (measured by the company's total assets, sales, or net income or loss), and increase the exemption level at which the long form is required to $100 million, up from $50 million. Both changes reduce burden for smaller companies. In addition, the survey bases industry coding on the North American Industry Classification System (NAICS) in place of the U.S. Standard Industrial Classification system, and modifies the detail collected on the composition of external financing of the reporting enterprise, on research and development expenditures, and on the operations of foreign-owned businesses in individual States. 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 These proposed rules have been determined to be not significant for purposes of E.O. 12866. Paperwork Reduction Act The collection of information required in these final rules has been approved by OMB (OMB No. 0608-0034). Notwithstanding any other provisions of 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; such a Control Number (0608-0034) has been displayed. Public reporting burden for this collection of information is estimated to vary from 2 hours to 550 hours per response with an average of 26 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. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden 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 0608-0034, Washington, DC 20503. Regulatory Flexibility Act The Assistant General Counsel for Legislation and Regulation, Department of Commerce, has certified to the Chief Counsel for Advocacy, Small Business Administration, under 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. Most small businesses are not foreign owned, and many that are will not be required to report because their assets, sales, and net income are each equal to or less than the $30 million exemption level at or below which reporting is not required. Also under these rules, companies with assets, sales, or net income above $30 million, but not above $100 million will report on the abbreviated BE-15(SF) short form, rather than on the BE-15(LF) long form. These provisions are intended to reduce the reporting burden on smaller companies. List of Subjects in 15 CFR Part 806 Balance of payments, Economic statistics, Foreign instruments in United [[Page 10389]] States, Reporting and recordkeeping requirements. J. Steven Landefeld, Director, Bureau of Economic Analysis. For the reasons set forth above, 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). Sec. 806.15 [Amended] 2. Section 806.15(i) is amended as follows: The exemption level of $10,000,000 in the first sentence is revised to read ``$30,000,000''; in the second sentence, the long form exemption level of $50,000,000 is revised to read ``$100,000,000''; and the short form exemption level ``at least one of the three items exceeds $10,000,000 but no one item exceeds $50,000,000 (positive or negative)'' is revised to read ``at least one of the three items exceeds $30,000,000 but no one item exceeds $100,000,000 (positive or negative).'' [FR Doc. 99-5342 Filed 3-3-99; 8:45 am] BILLING CODE 3510-06-M