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[Federal Register Volume 76, Number 234 (Tuesday, December 6, 2011)]
[Rules and Regulations]
[Pages 76029-76032]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30914]

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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 110112021-1680-03]
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: Final rule.

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SUMMARY: This final rule amends 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 amended regulations for the BE-120 include both definition changes 
and the addition of three schedules to better collect data in 
accordance with new international economic accounting standards. In 
addition, this rule changes 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 BE-120 survey covers transactions in selected services and 
intellectual property with foreign persons in benchmark years. In non-
benchmark years, the universe estimates for these transactions are 
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 collected by the BE-120 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: The final rule is effective January 5, 2012.

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; email 
Christopher.Emond@bea.gov; or phone (202) 606-9826.

SUPPLEMENTARY INFORMATION: This rule amends 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 revised

[[Page 76030]]

regulations for the BE-120 include both definition changes and the 
addition of three schedules to better collect data in accordance with 
new international standards. In addition, this rule would change the 
title of the BE-120 survey and make other non-substantive format 
changes to the regulations.
    In the August 12, 2011 Federal Register (76 FR 50158-50161), BEA 
published a notice of proposed rulemaking to amend 15 CFR 801.10 to set 
forth the reporting requirements for the BE 120, Benchmark Survey of 
Transactions in Selected Services and Intangible Assets with Foreign 
Persons. No comments were received on the proposed rule. Thus, the 
proposed rule is adopted without change.

Description of Changes

    Upon the effective date of this rule, BEA will conduct the revised 
BE-120 survey every five years, with the initial survey covering fiscal 
year 2011, pursuant to 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.'' The revised BE-
120 survey covers purchases from and sales to foreign persons of any of 
the 36 types of services or intellectual property listed in paragraph 
801.10(c) in benchmark years. In non-benchmark years, the universe 
estimates for these transactions are 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). BEA will send the survey to potential respondents in 
March of 2012; responses will be due by June 30, 2012.
    This rule revises the regulations for the BE-120 to collect data on 
a mandatory basis for the same services categories that were covered by 
the previous version of the survey. However, this rule revises the 
definition of covered services; some of the services categories that 
were included in the ``other selected services'' category in the prior 
survey will 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. This rule also makes non-substantive format 
changes to the definition of covered services for better organization. 
Specifically, this rule numbers the types of services or intellectual 
property into a list of 36 transactions.
    In addition, this rule revises the regulations for the BE-120 
survey to 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, to indicate the entity that 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 will allow BEA to publish statistics on 
international services transactions in accordance with international 
economic accounting guidelines.
    Finally, this rule changes 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, 
will 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 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 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 as that term is defined under E.O. 13132.

Paperwork Reduction Act

    The collection-of-information requirement in this final rule has 
been approved by the Office of Management and Budget (OMB) under 
Control Number 0608-0058 pursuant to the requirements of the Paperwork 
Reduction Act.
    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 is expected to result in the filing of reports 
from approximately 15,000 respondents. Approximately 7,500 respondents 
will report either mandatory or voluntary data on the survey and 
approximately 7,500 will file exemption claims. The respondent burden 
for this collection of information will vary from one respondent to 
another, but is estimated

[[Page 76031]]

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 
final rule should be sent both to Christopher.emond@bea.gov and to the 
Office of Management and Budget, O.I.R.A., Paperwork Reduction Project, 
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, 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 rule will not have a significant economic 
impact on a substantial number of small entities. The factual basis for 
this certification was published with the proposed rule and is not 
repeated here. No comments were received regarding the economic impact 
of this rule. As a result, final regulatory flexibility analysis is not 
required and none was prepared.

List of Subjects in 15 CFR Part 801

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

     Dated: November 22, 2011.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.

    For the reasons set forth in the preamble, BEA amends 15 CFR part 
801, as follows:

PART 801--SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S. 
AND FOREIGN PERSONS

0
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.

0
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

[[Page 76032]]

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 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.

[FR Doc. 2011-30914 Filed 12-5-11; 8:45 am]
BILLING CODE 3510-06-P
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