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[Federal Register Volume 76, Number 183 (Wednesday, September 21, 2011)]
[Proposed Rules]
[Pages 58420-58424]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-24267]

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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 110822526-1525-01]
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: Notice of proposed rulemaking.

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SUMMARY: This proposed rule would amend regulations of the Department 
of Commerce's Bureau of Economic Analysis (BEA) to set forth the 
reporting requirements for the 2012 BE-12,

[[Page 58421]]

Benchmark Survey of Foreign Direct Investment in the United States. 
Benchmark surveys are 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 comprehensive 
survey of such investment in terms of subject matter. For the 2012 
benchmark survey, BEA proposes changes in reporting thresholds and data 
items collected, as well as changes in form design.

DATES: Comments on this proposed rule will receive consideration if 
submitted in writing on or before 5 p.m. November 21, 2011.

ADDRESSES: You may submit comments, identified by RIN 0691-AA80, and 
referencing the agency name (Bureau of Economic Analysis), by any of 
the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. For Keyword or ID, 
enter ``EAB-2011-0002.''
     E-mail: David.Galler@bea.gov. 
     Fax: Office of the Chief, Direct Investment Division, 
(202) 606-2894.
     Mail: Office of the Chief, Direct Investment Division, 
U.S. Department of Commerce, Bureau of Economic Analysis, BE-50, 
Washington, DC 20230.
     Hand Delivery/Courier: Office of the Chief, Direct 
Investment Division, U.S. Department of Commerce, Bureau of Economic 
Analysis, BE-50, Shipping and Receiving, Section M100, 1441 L Street, 
NW., Washington, DC 20005.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in the 
proposed rule should be sent to both BEA through any of the methods 
above and to the Office of Management and Budget (OMB), 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.
    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 
otherwise sensitive or protected information. BEA will accept anonymous 
comments (enter N/A in required fields if you wish to remain 
anonymous). Attachments to electronic comments will be accepted in 
Microsoft Word, Excel, WordPerfect, or Adobe portable document file 
(pdf) formats only.

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.

SUPPLEMENTARY INFORMATION: 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 BE-12, Benchmark Survey of Foreign Direct Investment in the 
United States, is a mandatory survey and is conducted once every five 
years by BEA, under the International Investment and Trade in Services 
Survey Act, 22 U.S.C. 3101-3108 (the Act).
    The benchmark survey covers the universe of foreign direct 
investment in the United States in terms of value, and is BEA's most 
comprehensive survey of such investment in terms of subject matter. 
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 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.
    This proposed rule would amend 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 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, 44 U.S.C. 3501-3520 
(PRA).

Description of Changes

    The proposed 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 
form design. Several of these amendments are part of a larger program 
to align the data collection program for multinational companies with 
available resources.
    If this proposed rule is made final, U.S. affiliates would 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 would be collected on the same survey forms as data on other 
U.S. affiliates, and the 2007 benchmark survey form BE-12 Bank would be 
discontinued.
    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. To minimize the reporting 
burden on smaller U.S. companies that are foreign owned, BEA proposes 
to increase the reporting thresholds for each of the forms. The 
proposed 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. (For 2007, this threshold was 
$175 million.) Form BE-12A would replace 2007 benchmark survey form BE-
12 (Long Form) for reporting the largest majority-owned U.S. 
affiliates.
    (b) Form BE-12(B)--Report for majority-owned U.S affiliates with 
total assets, sales or gross operating revenues,

[[Page 58422]]

or net income greater than $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. (For 
2007, this threshold was $40 million.) Form BE-12B would replace 2007 
benchmark survey form BE-12 (Short Form) for reporting smaller 
majority-owned U.S. affiliates and minority-owned U.S. affiliates that 
meet the reporting threshold stated above.
    (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. Form BE-12C would replace 2007 
benchmark survey form BE-12 Mini for reporting the smallest U.S. 
affiliates.
    (d) Form BE-12 Claim for Not Filing--Report to be filed by U.S. 
persons that are not subject to the reporting requirements for the BE-
12 benchmark survey, but have been contacted by BEA concerning their 
reporting status. The name of this form remains unchanged from the 2007 
benchmark survey.
    In addition to the changes in the reporting criteria, BEA proposes 
to add and delete some items on the benchmark survey forms. The 
following items would be added to the benchmark survey:
    (1) Questions will be added regarding the use of fair value 
accounting on the balance sheet. Companies that indicate that they did 
use fair value accounting will be asked to provide the amount of net 
property, plant, and equipment, of total assets, and of total 
liabilities that was recorded at fair value.
    (2) Questions will be added to collect information on assets, 
liabilities, and interest receipts and payments that are related to 
banking activities.
    (3) Several check-box questions will be added asking whether U.S. 
affiliates purchased contract manufacturing services from others or 
performed contract manufacturing services for others. They will also be 
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 will be added asking if the U.S. affiliate has 
equity in its foreign parent(s) (reverse investment). An item will be 
added to collect voting percent, equity percent, and the dollar amount 
of the investment.
    (5) Several check-box questions will be 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 proposes to eliminate several items from the benchmark survey. 
Many of these items were eliminated from the BE-15 Annual Survey of 
Foreign Direct Investment in the United States beginning with the 2008 
survey. Others are proposed for elimination because they are no longer 
used, because the information is collected on other surveys conducted 
by BEA, or because the quality of the data collected has been poor. The 
items proposed to be eliminated are: selected balance sheet items; 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; the breakdown of 
employment and employee compensation by occupational classification; 
the breakdown of total employee compensation into wages and salaries 
and employee benefit plans; data on the composition of external 
finances; manufacturing employment by state; gross property, plant, and 
equipment by state; commercial property by state; the location of the 
primary U.S. headquarters of the U.S. affiliate; number of employees 
covered by collective bargaining agreements; acres of U.S. land owned; 
basis (shipped or charged) for trade data (check-box questions); 
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''); and withholding 
taxes on intercompany interest payments and interest receipts.
    In addition, BEA plans to rename (as described above) and redesign 
the survey forms. The new design will incorporate improvements made to 
other BEA surveys. Survey instructions and data item descriptions will 
be changed to improve clarity, make the benchmark survey forms more 
consistent with those of other BEA surveys, and provide updated 
information on accounting standards.

Survey Background

    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.'' With respect to foreign direct 
investment in the United States, section 3103(b) also instructs the BEA 
to:
    (1) Identify the location, nature, and magnitude of, and changes in 
total investment by any foreign parent in each of its U.S. affiliates 
and the financial transactions between any foreign parent and each of 
its U.S. affiliates;
    (2) Obtain (A) information on the balance sheet U.S. affiliates of 
foreign parents 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 U.S. affiliates, 
and (C) related information regarding trade, including trade in both 
goods and services, between the foreign parent and each of its U.S. 
affiliates and between each U.S. affiliate and any other person;
    (3) Collect employment data showing both the number of United 
States employees of each U.S. affiliate and the levels of compensation 
by industry;
    (4) Obtain information on tax payments by U.S. affiliates; and
    (5) Determine, by industry, the total dollar amount of research and 
development expenditures by U.S. affiliate, payments or other 
compensation for the transfer of technology between foreign parents and 
their U.S. affiliates, and payments or other compensation received by 
U.S. affiliates from the transfer of technology to other persons.

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 sufficient to warrant preparation of a Federalism 
assessment under E.O. 13132.

Paperwork Reduction Act

    This proposed rule contains a collection-of-information requirement 
subject to review and approval by OMB under the PRA. The requirement 
will be submitted to OMB for approval as a reinstatement, with change, 
of a previously approved 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.

[[Page 58423]]

    The BE-12 survey, as proposed, 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 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.
    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 to both BEA and OMB following the 
instructions given in the ADDRESSES section above.

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 
(RFA), 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. The changes proposed in this rule are discussed in the 
preamble and are not repeated here.
    A BE-12 report is required of any U.S. company in which a foreign 
person owned or controlled, directly or indirectly, 10 percent or more 
of the voting securities if an incorporated U.S. business enterprise, 
or an equivalent interest if an unincorporated U.S. business 
enterprise. Most small business are not foreign owned and therefore 
would not be required to submit a BE-12 survey. However, for those 
small businesses that are foreign owned, the reporting burden is 
estimated to be small.
    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 net income or loss. To minimize the reporting burden on smaller U.S. 
companies that are foreign owned and are required to report, BEA 
proposes to increase the threshold for reporting on Form BE-12A (the 
longest form) from $175 million to $300 million and on Form BE-12B from 
$40 million to $60 million. All affiliates below $60 million will file 
on Form BE-12C (the shortest form). The smallest affiliates only file a 
few items on Form BE-12C; BEA proposes to raise the threshold for 
filing an abbreviated BE-12C from $15 million to $20 million.
    Because those small businesses that are impacted are subject to 
only minimal recordkeeping burdens, the Chief Counsel for Regulation 
certifies that this proposed rule will not have a significant economic 
impact on a substantial number of small entities.

List of Subjects in 15 CFR Part 806

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

    Dated: August 9, 2011.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.

    For reasons set forth in the preamble, BEA proposes to amend 15 CFR 
part 806 as follows:

PART 806--DIRECT INVESTMENT SURVEYS

    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).

    2. Revise Sec.  806.17 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

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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.
    (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. 2011-24267 Filed 9-20-11; 8:45 am]
BILLING CODE 3510-06-P
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