SUTHERLAND ASBILL & BRENNAN LLP

700 Sixth Street, NW, Suite 700 

Washington, DC 20001-3980

TEL 202.383.0100 

FAX 202.637.3593

25800479.4

March 30, 2015

VIA ELECTRONIC SUBMISSION

Mr. Christopher Stein 

Chief, Services Surveys Branch

Bureau of Economic Analysis

Department of Commerce

1441 L Street, NW

Washington, DC 20005

Re: International Services Surveys: BE-180, Benchmark Survey of Financial 

Services Transactions Between U.S. Financial Services Providers and Foreign 

Persons (RIN: 0691-AA84)

Dear Mr. Stein:

I. INTRODUCTION

On behalf of The Commercial Energy Working Group (the “Working Group”), 

Sutherland Asbill & Brennan LLP hereby submits these comments in response to the Notice of 

Proposed Rulemaking, International Services Surveys: BE-180, Benchmark Survey of Financial 

Services Transactions Between U.S. Financial Services Providers and Foreign Persons 

(“BE-180 NOPR” or “Proposed Rule”) issued by the Bureau of Economic Analysis (“BEA”).1

 

The Working Group believes that the BEA does not intend for the BE-180 NOPR to 

apply to any member of the Working Group or commercial energy firm as they are not primarily 

engaged in intermediating or brokering financial transactions or otherwise providing financial 

services. As such, the comments and suggestions contained herein are limited in scope and 

designed to ensure that the BEA’s final rules reflect that intent.

The Working Group is a diverse group of commercial firms in the energy industry whose 

primary business activity is the physical delivery of one or more energy commodities to others, 

including industrial, commercial and residential consumers. Members of the Working Group are 

 1 Notice of Proposed Rulemaking, International Services Surveys: BE-180, Benchmark Survey of Financial 

Services Transactions Between U.S. Financial Services Providers and Foreign Persons, 80 Fed. Reg. 4,228 (Jan. 27, 

2015), available at http://www.gpo.gov/fdsys/pkg/FR-2015-01-27/pdf/2015-01491.pdf. 
Christopher Stein

March 30, 2015

Page 2

producers, processors, merchandisers and owners of energy commodities. Among the members 

of the Working Group are some of the largest users of energy derivatives in the United States 

and globally. The Working Group considers and responds to requests for comment regarding 

regulatory and legislative developments with respect to the trading of energy commodities, 

including derivatives and other contracts that reference energy commodities.

II. POTENTIAL APPLICATION OF THE BE-180 NOPR TO NON-FINANCIAL ENTITIES

As proposed, the BE-180 NOPR would require U.S. financial service providers to 

respond to Form BE-180 if, during their 2014 fiscal year, they had financial services transactions 

totaling $3 million or more on a consolidated basis directly with non-U.S. persons. This 

requirement would be a change from the prior construct, where entities became obligated to file a 

Form BE-180 only if solicited by the BEA. The consequences of being required to file Form 

BE-180 are not insignificant. Compiling the necessary data for a large corporate family to file 

the form could be both time consuming and costly. 

A central concern is that the definition of “financial service provider” is nebulous and 

may errantly capture commodity firms. Under the Proposed Rule, a financial services provider 

includes anyone engaged in “securities and commodity contracts intermediation and brokerage 

(including investment banking and securities dealing, securities brokerage, commodity contracts 

and dealing, and commodity contracts brokerage).”2 The concept of “commodity contracts 

dealing” captures “establishments primarily engaged in acting as principals (i.e., investors who 

buy or sell for their own account) in buying or selling spot or futures commodity contracts or 

options, such as precious metals, foreign currency, oil, or agricultural products, generally on a 

spread basis.”3

The scope of the definition of “commodity contracts dealing” and, therefore, “financial 

services provider,” is unclear. Is a commodity merchant that actively trades spot physical natural 

gas and makes profits on the change in value of the commodity primarily engaged in commodity 

contracts dealing? Is an entity that hedges the risks of its affiliates using commodity futures 

captured? 

Under an overly broad reading of the definition of “commodity contract dealing,” such 

entities might be viewed as financial services providers. However, we do not think that is the

BEA’s intent. Specifically, Form BE-180 is intended to capture data on purchases and sales of 

financial services by U.S. persons to and from foreign persons. The instructions to Form BE-180 

provide greater clarity on what amounts are reported as purchases or sales of financial services. 

The instructions require a filer to:

 2 See BE-180 NOPR at 4,231.

3 See the definition of “Commodity Contracts Dealing” for purposes of the North American Industry 

Classification System: http://www.census.gov/econ/isp/sampler.php?naicscode=52313&naicslevel=5#.
Christopher Stein

March 30, 2015

Page 3

“Report origination fees in connection with the over-the-counter derivative financial 

instruments only if the fees are separately identified in transaction documentation issued 

by the dealers in the instruments to the customers, and are not considered undifferentiated 

components of overall trading or market making gains. Do not report income where you 

were a dealer or other principal who was at risk of incurring a loss on the financial 

instruments rather than acting solely as the broker. For example, exclude income from 

marking positions to market and inherent earnings from dealer markups on buy and sell 

transactions (i.e., bid/ask price spreads in dealing in bonds, foreign currencies, and other 

financial instruments)...Do not report fees for commodity or merchandise brokerage 

services, real estate brokerages, and business services brokerage because they are not 

considered to be financial services (as opposed to fees for purchasing or selling 

commodity futures and other financial instruments that are reportable on this survey).”4

The instructions further state that “earnings of principals from buying and selling (including 

dealing, trading, holding, or arbitrage) of financial instruments...are considered to be ‘capital 

gains’ rather than payments for financial services, and are therefore not covered.”5

If the intent of Form BE-180 is to capture fees paid to and received from foreign persons 

in connection with financial services and not profits captured from, among other things, the 

trading of financial instruments including commodity swaps and futures or trading commodities 

for physical delivery, then the BEA should amend the definition of “financial services provider” 

to reflect that intent. Accordingly, the Working Group respectfully suggests that the BEA 

remove uncertainty with respect to who must file Form BE-180 by providing guidance that 

entities that are primarily in the business of generating revenue that would not be reportable on 

Form BE-180 (such as trading commodities physically or financially as principals) are not 

required to file Form BE-180.

In the absence of providing clarifying guidance, the BEA should revert to its prior 

method of collecting the data on Form BE-180. Specifically, the BEA should require only those 

entities notified by the BEA that they are obligated to file Form BE-180 to do so. This approach 

would allow the BEA to apply the definition of “financial services provider” in a manner that 

reflects its intent without creating uncertainty for the remainder of market participants. 

 

4 See Instructions to Form BE-180 at 11. Available at: https://www.bea.gov/surveys/pdf/be180_web.pdf. 

5 Id.
Christopher Stein

March 30, 2015

Page 4

III. CONCLUSION

The Working Group appreciates this opportunity to provide comments on the BE-180 

NOPR and respectfully requests the BEA’s consideration of these comments as it develops any 

final rulemaking in this proceeding. 

If you have any questions, please contact the undersigned. 

Respectfully submitted,

/s/ David T. McIndoe

David T. McIndoe

Alex S. Holtan

Counsel to The Commercial Energy Working Group