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[Federal Register Volume 76, Number 245 (Wednesday, December 21, 2011)]
[Rules and Regulations]
[Pages 79054-79057]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32461]

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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 110822526-1715-02]
RIN 0691-AA80

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: This final rule amends regulations of the Department of 
Commerce's Bureau of Economic Analysis (BEA) to set forth the reporting 
requirements for the 2012 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 2007. 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 2012 benchmark 
survey, BEA is changing reporting thresholds and data items collected, 
as well as changing the names and design of the survey forms. The 
changes are intended to align the data collection program for 
multinational companies with available resources and align the 
statistics on multinational companies with recent changes in financial 
accounting standards and international statistical standards.

DATES: This final rule will be effective January 20, 2012.

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; email 
David.Galler@bea.gov or phone (202) 606-9835.

SUPPLEMENTARY INFORMATION: On September 21, 2011, 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 (76 FR 58420-58424). 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, Benchmark Survey of Foreign Direct Investment in the 
United States.
    The 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), hereinafter, ``the Act.'' Section 3103(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.''
    The benchmark 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 ten 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 serve as benchmarks for

[[Page 79055]]

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.
    BEA will make the survey available via eFile, BEA's electronic 
filing system, in March 2012, for the convenience of respondents who 
may wish to file as soon as their 2012 fiscal year ends. BEA will send 
printed survey forms to potential respondents in March 2013; responses 
will be due by May 31.

Description of Changes

    The changes revise the regulations and the survey forms for the BE-
12 benchmark survey. These amendments include changes in reporting 
thresholds and data items collected, as well as changes in the names 
and design of the survey forms. Several of these amendments are part of 
a larger program to align the data collection program for multinational 
companies with available resources.
    Under the revised regulations, U.S. affiliates report their 
information, regardless of industry, on one of four forms--BE-12A, BE-
12B, BE-12C, or BE-12 Claim for Not Filing. Data on U.S. affiliates 
that are banks, bank holding companies, or financial holding companies 
are collected on the same survey forms as data on other U.S. 
affiliates.
    The amount of information required to be reported by each U.S. 
affiliate is determined by the size of the affiliate's assets, sales or 
gross operating revenue, and net income. The reporting requirements for 
the four forms are--
    (a) Form BE-12(A)--Report for majority-owned U.S. affiliates with 
total assets, sales or gross operating revenues, or net income greater 
than $300 million, positive or negative.
    (b) Form BE-12B--Report for majority-owned U.S. affiliates with 
total assets, sales or gross operating revenues, or net income greater 
then $60 million, positive or negative, but not greater than $300 
million, positive or negative, and minority-owned U.S. affiliates with 
total assets, sales or gross operating revenues, or net income greater 
than $60 million, positive or negative.
    (c) Form BE-12(C)--Report for U.S. affiliates with total assets, 
sales or gross operating revenues, or net income less than or equal to 
$60 million, positive or negative. The smallest U.S. affiliates--those 
with total assets, sales or gross operating revenues, or net income 
less than or equal to $20 million, positive or negative--file only a 
few items on Form BE-12(C).
    (d) Form BE-12 Claim for Not Filing--Report to be filed by U.S. 
persons who are not subject to the reporting requirements for the BE-12 
benchmark survey, but have been contacted by BEA concerning their 
reporting status.
    In addition to the changes in the reporting criteria, BEA hereby 
adds and deletes some items on one of the benchmark survey forms. The 
following items are added to Form BE-12A (no additions are made to the 
other BE-12 forms):
    (1) Questions are added regarding the use of fair value accounting 
on the balance sheet. Companies that indicate that they used fair value 
accounting are asked to provide the amount of: net property, plant, and 
equipment; of total assets; and of total liabilities recorded at fair 
value.
    (2) Questions are added to collect information on assets, 
liabilities, and interest receipts and payments that are related to 
banking activities.
    (3) Several check-box questions are added asking whether U.S. 
affiliates purchased contract manufacturing services from others or 
performed contract manufacturing services for others. They are also 
asked whether they owned the materials used in contract manufacturing 
and if the company that performed or purchased the service was located 
in the United States or abroad.
    (4) A question is added asking if the U.S. affiliate has equity in 
its foreign parent(s) (reverse investment). An item is added to collect 
voting percentage, equity percentage, and the dollar amount of the 
investment.
    (5) Several check-box questions are added to ensure that certain 
types of finance companies do not report intercompany debt to BEA that 
is already reported on Treasury International Capital surveys.
    BEA also eliminates the following items from the benchmark survey: 
selected balance sheet items (BE-12A); the breakdown of sales of 
services to foreign persons into sales of services to the foreign 
parent group, to foreign affiliates owned by the affiliate, and to 
other foreign persons (BE-12A); the breakdown of employment and 
employee compensation by occupational classification (BE-12A, BE-12B); 
the breakdown of total employee compensation into wages and salaries 
and employee benefit plans (BE-12A); data on the composition of 
external finances (BE-12A); manufacturing employment by state (BE-12A, 
BE-12B); gross property, plant, and equipment by state (BE-12A, BE-
12B); commercial property by state (BE-12A, BE-12B); the location of 
the primary U.S. headquarters of the U.S. affiliate (BE-12A, BE-12B, 
BE-12C); number of employees covered by collective bargaining 
agreements (BE-12A); acres of U.S. land owned (BE-12A, BE-12B, BE-12C); 
basis (shipped or charged) for trade data (check-box questions) (BE-
12A); exports/imports shipped to/by foreign affiliates owned by U.S. 
affiliate by country of origin/destination (as in the benchmark surveys 
for 2002 and earlier years, these columns will be combined with the 
columns ``shipped to/by all other foreign persons;'' BE-12A); and 
withholding taxes on intercompany interest payments and interest 
receipts (BE-12A).
    In addition, BEA renames and redesigns the survey forms. The new 
design incorporates improvements made to other BEA surveys. Survey 
instructions and data item descriptions are changed to improve clarity, 
make the benchmark survey forms more consistent with those of other BEA 
surveys, and provide updated information on accounting standards.

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 submitted 
to the Office of Management and Budget (OMB) under the Paperwork 
Reduction Act (PRA). OMB approved the information collection 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 19,950 U.S. affiliates. The respondent burden for 
this collection of information will vary from one company to another, 
but is estimated to average 9.7 hours per response, including time for 
reviewing instructions, searching existing data

[[Page 79056]]

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 194,150 hours, compared to 
209,650 hours for the previous (2007) benchmark survey. The decrease in 
burden hours is due to a reduction in the number of data items on the 
form which reduces the average burden per form, and increased reporting 
thresholds which allow more respondents to file on shorter forms.
    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 David.Galler@bea.gov 
or by FAX at (202) 606-2894, and to OMB, O.I.R.A., Paperwork Reduction 
Project 0608-0042, Attention PRA Desk Officer for BEA, via email at 
pbugg@omb.eop.gov or by FAX at (202) 395-7245.

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 more 
generally. No final regulatory flexibility analysis was prepared.

List of Subjects in 15 CFR Part 806

    Economic statistics, Foreign investment in the United States, 
International transactions, Penalties, Reporting and recordkeeping 
requirements.

    Dated: November 28, 2011.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.

    For 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. Section 806.17 is revised to read as follows:

Sec.  806.17  Rules and regulations for BE-12, Benchmark Survey of 
Foreign Direct Investment in the United States--2012.

    A BE-12, Benchmark Survey of Foreign Direct Investment in the 
United States, will be conducted covering 2012. 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, Benchmark Survey of Foreign 
Direct Investment in the United States--2012, 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, either by 
sending them a report form or by written inquiry, must respond pursuant 
to Sec.  806.4. This may be accomplished by:
    (1) Certifying in writing, by the due date of the survey, 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;
    (2) Completing and returning the ``BE-12 Claim for Not Filing'' by 
the due date of the survey; or
    (3) Filing the properly completed BE-12 report--Form BE-12A, Form 
BE-12B, or Form BE-12C--by May 31, 2013.
    (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 2012. 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 
2012 reporting year.
    (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 calendar year 2012:
    (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 calendar year 2012.
    (ii) A minority-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) at the end of, or for, its fiscal year 
that ended in calendar year 2012. (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-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 calendar year 2012.
    (4) 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.

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    (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, 2013.

[FR Doc. 2011-32461 Filed 12-20-11; 8:45 am]
BILLING CODE 3510-06-P
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