[Federal Register: December 26, 2007 (Volume 72, Number 246)]
[Rules and Regulations]
[Page 72917-72920]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26de07-4]
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DEPARTMENT OF COMMERCE
Bureau of Economic Analysis
15 CFR Part 806
[Docket No. 070301044-7814-02]
RIN 0691-AA64
Direct Investment Surveys: BE-12, 2007 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 concerning the reporting
requirements for the BE-12, Benchmark Survey of Foreign Direct
Investment in the United States. The BE-12 survey is conducted once
every 5 years and covers virtually the entire universe of foreign
direct investment in the United States in terms of value. The benchmark
survey will be conducted for 2007. BEA is changing the reporting
requirements on the BE-12 Benchmark survey to: Increase the exemption
level for reporting on the BE-12(LF) (Long Form) from $125 million to
$175 million; increase the exemption level for reporting on the BE-
12(SF) (Short Form) from $10 million to $40 million; and increase the
exemption level for reporting on the BE-12 Bank Form from
[[Page 72918]]
$10 million to $15 million. In addition, BEA is amending Form BE-12(X)
by: Re-naming it the Form BE-12 Claim for Not Filing and deleting
several questions, which will be moved to a new Form BE-12 Mini. The
Claim for Not Filing will be completed only 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. The BE-12 Mini is
an abbreviated form for reporting U.S. affiliates with total assets,
sales or gross operating revenues, and net income (loss) less than or
equal to $40 million.
DATES: This final rule will be effective January 25, 2008.
FOR FURTHER INFORMATION CONTACT: David H. Galler, Chief, Direct
Investment Division (BE-50), Bureau of Economic Analysis, U.S.
Department of Commerce, Washington, DC 20230; phone (202) 606-9835 or
e-mail (david.galler@bea.gov).
SUPPLEMENTARY INFORMATION: In the September 21, 2007, Federal Register,
72 FR 53970-53973, BEA published a notice of proposed rulemaking
setting forth revised reporting requirements for the BE-12, Benchmark
Survey of Foreign Direct Investment in the United States. No comments
on the proposed rule were received. Thus, the proposed rule is adopted
without change. This final rule amends 15 CFR 806.17 to set forth the
reporting requirements for the BE-12, 2007 Benchmark Survey of Foreign
Direct Investment in the United States, and 15 CFR 806.18 to list the
OMB control number for this survey.
Description of Changes
The BE-12 benchmark survey is a mandatory survey and is conducted
once every five years by BEA under the authority of the International
Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108),
hereinafter, ``the Act.'' BEA will send the survey to potential
respondents in March 2008; responses will be due by May 31, 2008. This
final rule (1) increases the exemption level for reporting on the BE-
12(LF) (Long Form) from $125 million to $175 million; (2) increases the
exemption level for reporting on the BE-12(SF) (Short Form) from $10
million to $40 million; and (3) increases the exemption level for
reporting on the BE-12 Bank form from $10 million to $15 million. In
addition, it amends Form BE-12(X) by: (1) Re-naming it the Form BE-12
Claim for Not Filing; and (2) deleting several questions, which have
been moved to a new Form BE-12 Mini. The Claim for Not Filing will be
completed only 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. The BE-12 Mini is a new abbreviated
form for reporting U.S. affiliates with total assets, sales or gross
operating revenues, and net income (loss) less than or equal to $40
million. U.S. affiliates with assets, sales, and net income (loss) less
than or equal to $15 million are required to report only selected items
on the BE-12 Mini.
In addition to these changes in the reporting criteria, this final
rule adds questions to the BE-12(LF) (Long Form), BE-12(SF) (Short
Form), and BE-12 Bank form to: (1) Collect detail on the broad
occupational structure of employment; (2) identify companies that
engage in cross-border services transactions; and (3) identify the
financial reporting standards used to compile and report the survey.
For the BE-12(LF) (Long Form), this rule adds questions to collect
additional detail on the composition of external finances, trade, and
research and development. For the BE-12(SF) (Short Form), this rule
adds questions to collect sales of goods, sales of services, and
investment income for majority-owned U.S. affiliates, including sales
of services to U.S. persons and to foreign persons. For the BE-12 Bank
form, this rule adds questions to make it easer to integrate data
collected for banks with data collected for nonbank U.S affiliates. The
items to be collected on this form include those needed to calculate
value added as well as expenditures for property, plant, and equipment;
sales of goods; and sales of services to the foreign parent group(s),
to foreign affiliates owned by the U.S. affiliate, and to other foreign
persons.
To offset the burden imposed by these additional questions, this
final rule amends the BE-12 survey to discontinue collecting
information on U.S. trade in goods by product, which had been collected
on previous versions of the BE-12(LF) (Long Form), and to reduce the
amount of detail collected for minority-owned U.S. affiliates on the
BE-12(SF) (Short Form) and BE-12 Bank form. In addition, questions on
services transactions between U.S. affiliates and their foreign parent
group(s) are dropped from the BE-12 survey because collection of this
information has been shifted to BEA's surveys of cross-border
transactions in services and intangible assets (the BE-120, BE-125, and
BE-185).
Survey Background
The Bureau of Economic Analysis (BEA), U.S. Department of Commerce,
conducts the BE-12 survey under the authority of the International
Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108),
hereinafter, ``the Act.'' Section 4(b) of the Act provides that with
respect to foreign direct investment in the United States, the
President shall conduct a benchmark survey covering year 1980, a
benchmark survey covering year 1987, and benchmark surveys covering
every fifth year thereafter. In conducting surveys pursuant to this
subsection, the President shall, among other things and to the extent
he determines necessary and feasible--
(1) Identify the location, nature, and magnitude of, and changes in
the total investment by any parent in each of its affiliates and the
financial transactions between any parent and each of its affiliates;
(2) Obtain (A) information on the balance sheet of parents and
affiliates and related financial data, (B) income statements, including
the gross sales by primary line of business (with as much product line
detail as is necessary and feasible) of parents and affiliates in each
country in which they have significant operations, and (C) related
information regarding trade, including trade in both goods and
services, between a parent and each of its affiliates and between each
parent or affiliate and any other person;
(3) Collect employment data showing both the number of United
States and foreign employees of each parent and affiliate and the
levels of compensation, by country, industry, and skill level;
(4) Obtain information on tax payments by parents and affiliates by
country; and
(5) Determine, by industry and country, the total dollar amount of
research and development expenditures by each parent and affiliate,
payments or other compensation for the transfer of technology between
parents and their affiliates, and payments or other compensation
received by parents or affiliates from the transfer of technology to
other persons.
In Section 3 of Executive Order 11961, as amended by Executive
Orders 12318 and 12518, the President delegated the responsibility for
performing functions under the Act concerning direct investment to the
Secretary of Commerce, who has redelegated it to BEA.
The benchmark surveys are BEA's censuses, intended to cover the
universe of foreign direct investment in the United States in terms of
value, and are BEA's most comprehensive surveys of such investment in
terms of subject matter. Foreign direct investment in the
[[Page 72919]]
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 nonbenchmark years. In
particular, they would serve as benchmarks for the quarterly direct
investment estimates included in the U.S. international transactions
and national income and product accounts, and for annual estimates of
the foreign direct investment position in the United States and of the
operations of the U.S. affiliates of foreign companies.
The survey consists of a number of report forms and a claim for not
filing. The amount and type of data required to be reported will vary
according to the size of the U.S. affiliate, whether it is a bank or a
nonbank, and whether or not it is majority-owned by foreign direct
investors. The report forms to be used in the survey consist of the
following:
1. Form BE-12(LF) (Long Form)--Report for a majority-owned nonbank
U.S. affiliate (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) with total assets, sales or
gross operating revenues, or net income greater than $175 million
(positive or negative);
2. Form BE-12(SF) (Short Form)--Report for (1) a majority-owned
nonbank U.S. affiliate with total assets, sales or gross operating
revenues, or net income greater than $40 million (positive or
negative), but not greater than $175 million (positive or negative),
and (2) a minority-owned nonbank U.S. affiliate (owned 50 percent or
less) with total assets, sales or gross operating revenues, or net
income greater than $40 million (positive or negative);
3. Form BE-12 Bank--Report for a U.S. affiliate that is a bank; and
4. Form BE-12 Mini--Report for a nonbank U.S. affiliate with total
assets, sales or gross operating revenues, and net income (positive or
negative) less than or equal to $40 million.
The Form 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.
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 has been approved
by the Office of Management and Budget (OMB) under the Paperwork
Reduction Act (PRA).
Not withstanding 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 OMB control number. The OMB number for the
BE-12 is 0608-0042; the collection will display this control number.
The BE-12 survey is expected to result in the filing of reports
from approximately 18,550 respondents. The respondent burden for this
collection of information is estimated to vary from 20 minutes to 715
hours per response, with an average of 11.3 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 for the survey is estimated at 209,650 hours (18,550 times 11.3
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; Fax: 202-606-5311; and to the Office of Management and Budget,
O.I.R.A., Paperwork Reduction Project 0608-0042, Attention PRA Desk
Officer for BEA, via e-mail at pbugg@omb.eop.gov, or by Fax at 202-395-
7245.
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 this 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 economic impact
of the rule. As a result, no final regulatory flexibility analysis was
prepared.
List of Subjects in 15 CFR Part 806
International transactions, Economic statistics, Foreign investment
in the United States, Penalties, Reporting and record keeping
requirements.
Dated: December 6, 2007.
Rosemary D. Marcuss,
Acting Director, Bureau of Economic Analysis.
0
For the reasons set forth in the preamble, BEA amends 15 CFR part 806
as follows:
PART 806--DIRECT INVESTMENT SURVEYS
0
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; 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. Sections 806.17 and 806.18 are revised to read as follows:
Sec. 806.17 Rules and regulations for BE-12, 2007 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 covering 2007. All legal authorities,
provisions, definitions, and requirements contained in Sec. 806.1
through Sec. 806.13 and Sec. 806.15(a) through (g) are applicable to
this survey. Specific additional rules and regulations for the BE-12
survey are given in this section.
(a) Response required. A response is required from persons subject
to the reporting requirements of the BE-12, 2007 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
[[Page 72920]]
about reporting in this survey, either by sending them a report form or
by written inquiry, must respond pursuant to Sec. 806.4. This may be
accomplished by:
(1) Filing the properly completed BE-12 report--Form BE-12(LF),
Form BE-12(SF), Form BE-12 Mini, or Form BE-12 Bank, by May 31, 2008,
as required;
(2) Completing and returning the Form BE-12 Claim for Not Filing by
May 31, 2008; or
(3) Certifying in writing, by May 31, 2008, to the fact that the
person is not a U.S. affiliate of a foreign person and not subject to
the reporting requirements of the BE-12 survey.
(b) Who must report. A BE-12 report is required for each U.S.
affiliate, 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 2007. A BE-12
report is required even if the foreign person's ownership interest in
the U.S. business enterprise was established or acquired during the
2007 reporting year. Beneficial, not record, ownership is the basis of
the reporting criteria.
(c) Forms to be filed. (1)--Form BE-12(LF) (Long Form) 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:
(i) It is not a bank and is not owned directly or indirectly by a
U.S. bank holding company or financial holding company, and
(ii) 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 $175 million (positive or negative) at the end of, or for,
its fiscal year that ended in calendar year 2007:
(A) Total assets (do not net out liabilities);
(B) Sales or gross operating revenues, excluding sales taxes; or
(C) Net income after provision for U.S. income taxes.
(2) Form BE-12(SF) (Short Form) must be completed by a U.S.
affiliate if:
(i) It is not a bank and is not owned directly or indirectly by a
U.S. bank holding company or financial holding company, and
(ii) 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)(ii) of this section for a majority-owned U.S.
affiliate (not just the foreign parent's share), was greater than $40
million (positive or negative) but none of these items was greater than
$175 million (positive or negative) at the end of, or for, its fiscal
year that ended in calendar year 2007.
(iii) 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)(ii) of this section for a minority-owned U.S.
affiliate (not just the foreign parent's share), was greater than $40
million (positive or negative) at the end of, or for, its fiscal year
that ended in calendar year 2007. (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.)
(3) Form BE-12 Mini must be completed by a U.S. affiliate if:
(i) It is not a bank, and is not owned directly or indirectly by a
U.S. bank holding company or financial holding company, and
(ii) 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)(ii) of this section for a U.S. affiliate (not just the
foreign parent's share), was greater than $40 million (positive or
negative) at the end of, or for, its fiscal year that ended in calendar
year 2007.
(4) Form BE-12 Bank must be completed by a U.S. affiliate if:
(i) The U.S. affiliate is a bank. For purposes of the BE-12 survey,
a ``bank'' is a business entity engaged in deposit banking or closely
related functions, including commercial banks, Edge Act corporations
engaged in international or foreign banking, U.S. branches and agencies
of foreign banks whether or not they accept domestic deposits, savings
and loans, savings banks, bank holding companies and financial holding
companies under the Gramm-Leach-Bliley Act, including all subsidiaries
or units of a bank holding company or financial holding company, and
(ii) On a fully consolidated basis any one of the three items
listed in paragraph (c)(1)(ii) of this section for a U.S. affiliate
(not just the foreign parent's share), was greater than $15 million
(positive or negative) at the end of, or for, its fiscal year that
ended in calendar year 2007.
(5) Form 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-12(LF), BE-
12(SF), BE-12 Mini, BE-12 Bank, or Form BE-12 Claim for Not Filing is
due to be filed with BEA not later than May 31, 2008.
Sec. 806.18 OMB control numbers assigned to the Paperwork Reduction
Act.
(a) Purpose. This section complies with the requirements of section
3507 (f) of the Paperwork Reduction Act (PRA) which requires agencies
to display a current control number assigned by the Director of OMB for
each agency information collection requirement.
(b) Display.
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Current OMB
15 CFR section where identified and described control No.
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806.1 through 806.17....................................... 0608-0020
0024
0032
0004
0035
0030
0009
0023
0034
0042
0053
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[FR Doc. E7-24972 Filed 12-21-07; 8:45 am]
BILLING CODE 3510-06-P