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[Federal Register Volume 76, Number 156 (Friday, August 12, 2011)]
[Proposed Rules]
[Pages 50158-50161]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-20418]

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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 110112021-1439-02]
RIN 0691-AA76

International Services Surveys: Amendments to the BE-120, 
Benchmark Survey of Transactions in Selected Services and Intangible 
Assets With Foreign Persons

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule would amend the regulations of the Bureau 
of Economic Analysis, Department of Commerce (BEA) to set forth the 
reporting requirements for the BE-120, Benchmark Survey of Transactions 
in Selected Services and Intellectual Property with Foreign Persons. 
The proposed BE-120 would include both definition changes and the 
addition of three schedules to better collect data in accordance with 
new international standards. In addition, this proposed rule would 
change the BE-120 survey title from ``Benchmark Survey of Transactions 
in Selected Services and Intangible Assets with Foreign Persons'' to 
``Benchmark Survey of Transactions in Selected Services and 
Intellectual Property with Foreign Persons'' because the term 
``intellectual property'' is better understood by U.S. respondents.
    The proposed BE-120 survey is intended to cover transactions in 
selected services and intellectual property with foreign persons in 
benchmark years. In non-benchmark years, the universe estimates for 
these transactions would be derived from sample data reported on BEA's 
follow-on survey, which is the Quarterly Survey of Transactions in 
Selected Services and Intangible Assets with Foreign Persons (BE-125).
    The data will be used by BEA to estimate the trade in services 
component of the U.S. International Transactions Accounts and other 
economic accounts compiled by BEA. The data are also needed by the U.S. 
government to monitor U.S. exports and imports of selected services and 
intellectual property; analyze their impact on the U.S. and foreign 
economies; support U.S. international trade policy for selected 
services and intellectual property; and assess and promote U.S. 
competitiveness in international trade in services. In addition, the 
data will improve the ability of U.S. businesses to identify and 
evaluate market opportunities.

DATES: Comments on this proposed rule will receive consideration if 
submitted in writing on or before 5 p.m. October 11, 2011.

ADDRESSES: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. For agency, select 
``Commerce Department--all.''
     E-mail: Christopher.Emond@bea.gov.
     Fax: Chris Emond, Chief, Special Surveys Branch, (202) 
606-5318.
     Mail: Chris Emond, Chief, Special Surveys Branch, Balance 
of Payments Division, U.S. Department of Commerce, Bureau of Economic 
Analysis, BE-50, Washington, DC 20230.
     Hand Delivery: Chris Emond, Chief, Special Surveys Branch, 
Balance of Payments Division, U.S. Department of Commerce, Bureau of 
Economic Analysis, BE-50, Shipping and Receiving Section, M100, 1441 L 
Street, NW., Washington, DC 20005.
    Please include in your comment a reference to RIN 0691-AA76 in the 
subject line.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in the 
proposed rule should be sent both to BEA, through any of the methods 
listed above, and to the Office of Management and Budget, O.I.R.A., 
Paperwork Reduction Project, Attention PRA Desk Officer for BEA, via e-
mail at pbugg@omb.eop.gov, or by FAX at 202-395-7245.
    Public Inspection: All comments received are a part of the public 
record and will generally be posted to http://www.regulations.gov 
without change. All personal identifying information (for example, 
name, address, etc.) voluntarily submitted by the commentator may be 
publicly accessible. Do not submit confidential business information or 
other sensitive or protected information. BEA will accept anonymous 
comments.

FOR FURTHER INFORMATION CONTACT: Chris Emond, Chief, Special Surveys 
Branch, Balance of Payments Division (BE-50), Bureau of Economic 
Analysis, U.S. Department of Commerce, Washington, DC 20230; e-mail 
Christopher.Emond@bea.gov; or phone (202) 606-9826.

SUPPLEMENTARY INFORMATION: This proposed rule would amend 15 CFR 801.10 
to update certain reporting requirements for the BE-120, Benchmark 
Survey of Transactions in Selected Services and Intangible Assets with 
Foreign Persons. The proposed BE-120 would include both definition 
changes and the addition of three schedules to better collect data in 
accordance with new international standards. In addition, this proposed 
rule would change the title of the BE-120 survey and make other 
nonsubstantive format changes to the regulations.
    The Department of Commerce, as part of its continuing effort to 
reduce paperwork and respondent burden, invites the general public and 
other Federal agencies to comment on proposed and/or continuing 
information collections, as required by the Paperwork Reduction Act of 
1995.

Description of Changes

    The BE-120 survey as proposed in this rule would be conducted by 
BEA every five years beginning with transactions occurring in fiscal 
year 2011, under the authority provided by the International Investment 
and Trade in Services Survey Act (Pub. L. 94-472, 90 Stat. 2059, 22 
U.S.C. 3101-3108), hereinafter, ``the Act,'' and would be mandatory for 
those U.S. persons that engage in the covered transactions in amounts 
that exceed the exemption level. The proposed BE-120 survey is intended 
to cover sales to foreign persons of any of the 36 types of services or 
intellectual property listed in proposed paragraph 801.10(c) in 
benchmark years. In non-benchmark years, the universe estimates for 
these transactions would be derived from sample data reported on BEA's 
follow-on survey, which is the Quarterly Survey of Transactions in 
Selected Services and Intangible Assets with Foreign Persons (BE-125). 
If this proposed rule is implemented, BEA would send the survey to 
potential respondents in March of 2012; responses would be due by June 
30, 2012.

[[Page 50159]]

    As proposed, the BE-120 will collect data on a mandatory basis for 
the same services categories that were covered by the previous version 
of the survey. However, some of the services categories that were 
included in the ``other selected services'' category in the prior 
survey will now be collected separately. These services include 
agricultural services; disbursements to fund production costs of motion 
pictures; disbursements to fund news-gathering costs and production 
costs of program material other than news; and waste treatment and 
depollution services.
    In addition, the proposed survey would include three new schedules, 
Schedules D, E and F, to collect, on a voluntary basis, additional 
information related to intellectual property, contract manufacturing 
services, and merchanting services. The regulations at 15 U.S.C. 
801.10(b)(ii) are amended to describe the three new schedules and to 
indicate the entity who is to complete each schedule and to provide 
instructions for the type of data to be reported. For example, Schedule 
D is to be completed by a U.S. person who engages in contract 
manufacturing services transactions with foreign persons. Schedule E is 
to be completed by a U.S. person who engages in intellectual property 
transactions with foreign persons. Schedule F is to be completed by 
U.S. persons who engage in merchanting services transactions with 
foreign persons. Responses from these schedules will help BEA determine 
whether respondents are able to supply data in a manner that would 
allow BEA to publish statistics on international services transactions 
in accordance with international economic accounting guidelines.
    Finally, this proposed rule would change the BE-120 survey title 
from ``Benchmark Survey of Transactions in Selected Services and 
Intangible Assets with Foreign Persons'' to ``Benchmark Survey of 
Transactions in Selected Services and Intellectual Property with 
Foreign Persons'' because the term ``intellectual property'' is better 
understood by U.S. respondents.
    BEA maintains a continuing dialogue with respondents and with data 
users, including its own internal users, to ensure that, as far as 
possible, the required data serve their intended purposes and are 
available from existing records, that instructions are clear, and that 
unreasonable burdens are not imposed. In reaching decisions about the 
questions to include in the survey, BEA considered the Government's 
need for the data, the burden imposed on respondents, the quality of 
the likely responses (for example, whether the data are available on 
respondents' books), and BEA's experience in previous benchmark, 
annual, and quarterly surveys.

Survey Background

    The Bureau of Economic Analysis (BEA), U.S. Department of Commerce, 
would conduct the survey under the International Investment and Trade 
in Services Survey Act (22 U.S.C. 3101-3108), which provides that the 
President shall, to the extent he deems necessary and feasible, conduct 
a regular data collection program to secure current information related 
to international investment and trade in services and publish for the 
use of the general public and United States Government agencies 
periodic, regular, and comprehensive statistical information collected 
pursuant to this subsection.
    In Section 3 of Executive Order 11961, as amended by Executive 
Orders 12318 and 12518, the President delegated the responsibilities 
under the Act for performing functions concerning international trade 
in services to the Secretary of Commerce, who has redelegated them to 
BEA.
    Data from the proposed survey are needed to monitor U.S. exports 
and imports of selected services and intellectual property; analyze 
their impact on the U.S. and foreign economies; compile and improve the 
U.S. international transactions, national income and product, and 
input-output accounts; support U.S. international trade policy for 
services and intellectual property; assess and promote U.S. 
competitiveness in international trade in services; and improve the 
ability of U.S. businesses to identify and evaluate market 
opportunities.

Executive Order 12866

    This proposed rule has been determined to be not significant for 
purposes of E.O. 12866.

Executive Order 13132

    This proposed rule does not contain policies with Federalism 
implications as that term is defined under E.O. 13132.

Paperwork Reduction Act

    This proposed rule contains a collection-of-information requirement 
subject to review and approval by the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act. The requirement will be 
submitted to OMB as a request to reinstate, with changes, a previously 
approved collection for which approval has expired under OMB Control 
Number 0608-0058.
    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 benchmark survey, as proposed, is expected to result in the 
filing of reports from approximately 15,000 respondents. Approximately 
7,500 respondents would report either mandatory or voluntary data on 
the survey and approximately 7,500 would file exemption claims. The 
respondent burden for this collection of information would vary from 
one respondent to another, but is estimated to average twelve hours for 
the respondents that file mandatory or voluntary data. This estimate 
includes time for reviewing the instructions, searching existing data 
sources, gathering and maintaining the required data, and completing 
and reviewing the collection of information. For other responses, the 
estimate is two hours. Thus, the total respondent burden for the survey 
is estimated at 105,000 hours.
    Comments are requested concerning: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (b) the accuracy of the burden estimate; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in the 
proposed rule should be sent both to BEA, through any of the methods 
listed above, and to the Office of Management and Budget, O.I.R.A., 
Paperwork Reduction Project, 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 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. A

[[Page 50160]]

description of the changes proposed by this rule is described in the 
preamble and is not repeated here.
    The proposed benchmark survey will be required from U.S. persons 
whose covered services and intellectual property transactions with 
foreign persons exceeded $2 million in sales or $1 million in purchases 
for fiscal year 2011. Although the survey does not collect data on 
total sales or other measures of the overall size of the businesses 
that respond to the survey, historically the respondents to the 
existing quarterly survey of transactions in the covered services and 
intellectual property and to the previous benchmark surveys have been 
comprised mainly of major U.S. corporations. Most small businesses 
would be excluded from responding to the survey because the exemption 
levels far exceed the threshold defined for a business to be considered 
``small'' under the Small Business Administration's size standards. Any 
small businesses that may be required to report would likely have 
engaged in only a small number of transactions covered by this survey 
and so the burden on them would be minimal. BEA estimates that the 
burden on small entities that may be required to report is 2 hours per 
respondent.

List of Subjects in 15 CFR Part 801

    International transactions, Economic statistics, Foreign trade, 
Penalties, Reporting and recordkeeping requirements.

     Dated: July 15, 2011.
J. Steven Landefeld,
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--SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S. 
AND FOREIGN PERSONS

    1. The authority citation for 15 CFR part 801 continues to read as 
follows:

    Authority:  5 U.S.C. 301; 15 U.S.C. 4908; 22 U.S.C. 3101-3108; 
and 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.

    2. Revise Sec.  801.10 to read as follows:

Sec.  801.10  Rules and regulations for the BE-120, Benchmark Survey of 
Transactions in Selected Services and Intellectual Property with 
Foreign Persons.

    The BE-120, Benchmark Survey of Transactions in Selected Services 
and Intellectual Property with Foreign Persons, will be conducted 
covering fiscal year 2011 and every fifth year thereafter. All legal 
authorities, provisions, definitions, and requirements contained in 
section 801.1 through 801.9(a) are applicable to this survey. 
Additional rules and regulations for the BE-120 survey are given in 
paragraphs (a) through (c) of this section. More detailed instructions 
and descriptions of the individual types of transactions covered are 
given on the report form itself.
    (a) The BE-120 survey consists of two parts and six schedules. Part 
I requests information needed to contact the respondent and the 
reporting period. Part II requests information needed to determine 
whether a report is required and information about the reporting 
entity. Each of the six schedules covers one or more types of 
transactions and is to be completed only if the U.S. reporter has 
transactions of the type(s) covered by the particular schedule.
    (b) Who must report--(1) Mandatory reporting. A BE-120 report is 
required from each U.S. person that had sales to foreign persons that 
exceeded $2 million during the fiscal year covered of any of the types 
of services or intellectual property listed in paragraph (c) of this 
section, or had purchases from foreign persons that exceeded $1 million 
during the fiscal year covered of any of the types of services or 
intellectual property listed in paragraph (c) of this section. Because 
the reporting threshold ($2 million for sales and $1 million for 
purchases) 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. person 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 records search.
    (ii) U.S. persons that file pursuant to this mandatory reporting 
requirement must complete Parts I and II of Form BE-120 and all 
applicable schedules. The total values of transactions applicable to 
schedules A, B, and C are to be entered in the appropriate column(s) 
and, except for sales of merchanting services, these amounts must be 
distributed among the countries involved in the transactions. For sales 
of merchanting services, the data are not required to be reported by 
individual foreign country, although this information may be provided 
voluntarily. Schedule D is to be completed by a U.S. person who engages 
in contract manufacturing services transactions with foreign persons. 
Schedule E is to be completed by a U.S. person who engages in 
intellectual property transactions with foreign persons. Schedule F is 
to be completed by U.S. persons who engage in merchanting services 
transactions with foreign persons.
    (iii) Application of the exemption levels to each covered 
transaction is indicated on the schedule for that particular type of 
transaction. It should be noted that an item other than sales or 
purchases may be used as the measure of a given type of transaction for 
purposes of determining whether the threshold for mandatory reporting 
of the transaction is exceeded.
    (2) Voluntary reporting. If, during the fiscal year covered, the 
U.S. person's total transactions (either sales or purchases) in any of 
the types of transactions listed in paragraph (c) of this section are 
$2 million or less for sales or $1 million or less for purchases, the 
U.S. person is requested to provide an estimate of the total for each 
type of transaction. Provision of this information is voluntary. The 
estimates may be judgmental, that is, based on recall, without 
conducting a detailed records search. Because the exemption threshold 
applies separately to sales and purchases, the voluntary reporting 
option may apply only to sales, only to purchases, or to both sales and 
purchases.
    (3) Any U.S. person that receives the BE-120 survey form from BEA, 
but is not subject to the mandatory reporting requirements and chooses 
not to report voluntarily, must file an exemption claim by completing 
pages one through five of the BE-120 survey and returning it to BEA. 
This requirement is necessary to ensure compliance with reporting 
requirements and efficient administration of the Act by eliminating 
unnecessary follow-up contact.
    (c) Covered types of services. The services covered by the BE-120 
include sales and purchases for the following transactions (transaction 
types 1-8 include rights to use, rights to distribute, or outright 
sales or purchases): (1) Rights related to industrial processes and 
products; (2) rights related to books, CD's, digital music, etc.; (3) 
rights related to trademarks; (4) rights related to performances and 
events pre-recorded on motion picture film and TV tape (including 
digital recordings); (5) rights related to broadcast and recording of 
live performances and events; (6) rights related to general use 
computer software; (7) business format franchising fees; (8) other 
intellectual property; (9) accounting, auditing, and bookkeeping

[[Page 50161]]

services; (10) advertising services; (11) auxiliary insurance services; 
(12) computer and data processing services; (13) construction services; 
(14) data base and other information services; (15) educational and 
training services; (16) engineering, architectural, and surveying 
services; (17) financial services (purchases only); (18) industrial 
engineering services; (19) industrial-type maintenance, installation, 
alteration, and training services; (20) legal services; (21) 
management, consulting, and public relations services (includes 
expenses allocated to/from a parent and its affiliates); (22) 
merchanting services; (23) mining services; (24) operational leasing 
services; (25) trade-related services, other than merchanting services; 
(26) performing arts, sports, and other live performances, 
presentations, and events; (27) premiums paid on primary insurance 
(payments only); (28) losses recovered on primary insurance; (29) 
research and development services; (30) telecommunications services; 
(31) agricultural services; (32) contract manufacturing services; (33) 
disbursements to fund production costs of motion pictures; (34) 
disbursements to fund news-gathering costs and production costs of 
program material other than news; (35) waste treatment and depollution 
services; and (36) other selected services.
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[FR Doc. 2011-20418 Filed 8-11-11; 8:45 am]
BILLING CODE 3510-06-P
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