Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Rules and Regulations 11843 

local, and tribal governments. 2. U.S.C. 

1534. 

This final rule will not impose a 

Federal mandate on State, local and 

tribal governments or on the private 

sector. Accordingly, no assessment or 

analysis is required under the Unfunded 

Mandates Reform Act of 1995. 

H. Review Under the Treasury and 

General Government Appropriations 

Act, 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999 (Pub. L. 105–277) requires 

Federal agencies to issue a Family 

Policymaking Assessment for any rule 

that may affect family well-being. This 

final rule will not have any impact on 

the autonomy or integrity of the family 

as an institution. Accordingly, DOE has 

concluded that it is not necessary to 

prepare a Family Policymaking 

Assessment. 

I. Review Under the Treasury and 

General Government Appropriations 

Act, 2001 

The Treasury and General 

Government Appropriations Act, 2001 

(44 U.S.C. 3516 note) provides for 

agencies to review most disseminations 

of information to the public under 

guidelines established by each agency 

pursuant to general guidelines issued by 

OMB. OMB’s guidelines were published 

at 67 FR 8452 (February 22, 2002), and 

DOE’s guidelines were published at 67 

FR 62446 (October 7, 2002). DOE has 

reviewed today’s notice under the OMB 

and DOE guidelines and has concluded 

that it is consistent with applicable 

policies of those guidelines. 

J. Review Under Executive Order 13211 

Executive Order 13211, ‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use,’’ 66 FR 28355 (May 

22, 2001) requires Federal agencies to 

prepare and submit to the Office of 

Information and Regulatory Affairs 

(OIRA), Office of Management and 

Budget, a Statement of Energy Effects for 

any proposed significant energy action. 

A ‘‘significant energy action’’ is defined 

as any action by an agency that 

promulgated or is expected to lead to 

promulgation of a final rule, and that: 

(1) Is a significant regulatory action 

under Executive Order 12866, or any 

successor order; and (2) is likely to have 

a significant adverse effect on the 

supply, distribution, or use of energy, or 

(3) is designated by the Administrator of 

OIRA as a significant energy action. For 

any proposed significant energy action, 

the agency must give a detailed 

statement of any adverse effects on 

energy supply, distribution, or use 

should the proposal be implemented, 

and of reasonable alternatives to the 

action and their expected benefits on 

energy supply, distribution, and use. 

Today’s regulatory action is not a 

significant energy action. Accordingly, 

DOE has not prepared a Statement of 

Energy Effects. 

K. Congressional Notification 

As required by 5 U.S.C. 801, DOE will 

report to Congress on the promulgation 

of this rule prior to its effective date. 

The report will state that it has been 

determined that the rule is not a ‘‘major 

rule’’ as defined by 5 U.S.C. 804. 

List of Subjects in 10 CFR Part 820 

Administrative practice and 

procedure, Government contracts, 

Penalties, Radiation protection. 

Issued in Washington, DC. 

Glenn S. Podonsky, 

Chief Health, Safety and Security Officer, 

Office of Health, Safety and Security. 

■ For the reasons stated in the preamble, 

DOE hereby amends Chapter III of title 

10 of the Code of Federal Regulations to 

read as follows: 

PART 820—PROCEDURAL RULES 

FOR DOE NUCLEAR ACTIVITIES 

■ 1. The authority citation for part 820 

continues to read as follows: 

Authority: 42 U.S.C. 2201; 2282(a); 7191; 

28 U.S.C. 2461 note; 50 U.S.C. 2410. 

■ 2. Section 820.20 is amended by 

revising paragraphs (c) and (d) and by 

adding new paragraphs (e) and (f) to 

read as follows: 

§ 820.20 Purpose and scope. 

* * * * * 

(c) Exemptions. With respect to a 

violation occurring under a contract 

entered into before August 8, 2005, the 

following contractors, and 

subcontractors and suppliers to that 

prime contract only, are exempt from 

the assessment of civil penalties under 

this subpart with respect to the 

activities specified below: 

(1) The University of Chicago for 

activities associated with Argonne 

National Laboratory; 

(2) The University of California for 

activities associated with Los Alamos 

National Laboratory, Lawrence 

Livermore National Laboratory, and 

Lawrence Berkeley National Laboratory; 

(3) American Telephone and 

Telegraph Company and its subsidiaries 

for activities associated with Sandia 

National Laboratories; 

(4) University Research Association, 

Inc. for activities associated with FERMI 

National Laboratory; 

(5) Princeton University for activities 

associated with Princeton Plasma 

Physics Laboratory; 

(6) The Associated Universities, Inc. 

for activities associated with the 

Brookhaven National Laboratory; and 

(7) Battelle Memorial Institute for 

activities associated with Pacific 

Northwest Laboratory. 

(d) Nonprofit educational institutions. 

With respect to a violation occurring 

under a contract entered into before 

August 8, 2005, any educational 

institution that is considered nonprofit 

under the United States Internal 

Revenue Code shall receive automatic 

remission of any civil penalty assessed 

under this part. 

(e) Limitation for not-for-profits. With 

respect to any violation occurring under 

a contract entered into on or after 

August 8, 2005, in the case of any notfor-profit contractor, subcontractor, or 

supplier, the total amount of civil 

penalties paid under this part may not 

exceed the total amount of fees paid by 

DOE to that entity within the U.S. 

Government fiscal year in which the 

violation occurs. 

(f) Not-for-profit. For purposes of this 

part, a ‘‘not-for-profit’’ contractor, 

subcontractor, or supplier is one for 

which no part of the net earnings of the 

contractor, subcontractor, or supplier 

inures to the benefit of any natural 

person or for-profit artificial person. 

[FR Doc. E9–6134 Filed 3–19–09; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9438] 

RIN 1545–BI50 

Guidance Regarding Foreign Base 

Company Sales Income; Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correction to final and 

temporary regulations. 

SUMMARY: This document contains 

corrections to final and temporary 

regulations that were published in the 

Federal Register on Monday, December 

29, 2008 (73 FR 79334) relating to 

foreign base company sales income. 

DATES: The corrections are effective July 

1, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Ethan Atticks, (202) 622–3840 (not a 

toll-free number). 

11844 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Rules and Regulations 

SUPPLEMENTARY INFORMATION: 

Background 

The final and temporary regulations 

that are subject to these corrections are 

under section 954 of the Internal 

Revenue Code. 

Need for Correction 

As published the final and temporary 

regulations (TD 9438) contain errors that 

may prove to be misleading and are in 

need of correction. 

Correction of Publication 

Accordingly, the publication of the 

final and temporary regulations (TD 

9438) that were the subject of FR Doc. 

E8–30727 is corrected as follows: 

1. On page 79340, column 2, in the 

preamble under paragraph caption 

Determination of Hypothetical Effective 

Tax Rate, the first paragraph, line 8 of 

the paragraph, the language ‘‘effective 

tax rate of tax.’’ is corrected to read 

‘‘effective tax rate.’’. 

2. On page 79340, column 3, in the 

preamble under paragraph caption 

Determination of Hypothetical Effective 

Tax Rate, lines 2, 3, and 4, the language 

‘‘In contrast, if a sales affiliate in the 

country of manufacturing can 

theoretically receive certain tax relief 

by’’ is corrected to read ‘‘In contrast, if 

a manufacturing branch could receive 

tax relief with respect to sales income 

derived from sources within the country 

in which the manufacturing branch is 

located by’’. 

3. On page 79341, column 3, in the 

preamble, the first paragraph, the 

language ‘‘Under the temporary 

regulations, if a demonstrably greater 

amount of manufacturing activity with 

respect to the personal property occurs 

in jurisdictions without tax rate 

disparity relative to the sales or 

purchase branch, the location of the 

sales or purchase branch will be deemed 

to be the location of manufacture of the 

personal property. In that case, the 

purchase or sales activities with respect 

to the property purchased or sold by or 

through the sales or purchase branch of 

the CFC will not, for purposes of 

determining FBCSI in connection with 

the sale of that property, be deemed to 

have substantially the same tax effect as 

if a branch were a wholly owned 

subsidiary corporation of the CFC. 

Otherwise, the location of manufacture 

of the personal property will be deemed 

to be the location of a manufacturing 

branch (or remainder) that has tax rate 

disparity relative to the sales or 

purchase branch. In that case, the 

purchase or sales activities with respect 

to the property purchased or sold by or 

through the sales or purchase branch of 

the CFC will be deemed to have 

substantially the same tax effect as if a 

branch were a wholly owned subsidiary 

corporation of the CFC, and that branch 

will be treated as a separate corporation 

for purposes of applying the 

regulations.’’ is corrected to read 

‘‘Under the temporary regulations, if a 

demonstrably greater amount of 

manufacturing activity with respect to 

the income derived by a sales or 

purchase branch with respect to the 

personal property occurs in 

jurisdictions without tax rate disparity 

relative to that sales or purchase branch, 

the location of that sales or purchase 

branch will be deemed to be the 

location of manufacture of the personal 

property with respect to the income 

derived by that sales or purchase branch 

from the purchase or sale of the 

property. In that case, the use of the 

purchase or sales branch for purchase or 

sales activities with respect to the 

property purchased or sold by or 

through that sales or purchase branch of 

the CFC will not, for purposes of 

determining FBCSI in connection with 

the income derived by that sales or 

purchase branch from the purchase or 

sale of that property, be deemed to have 

substantially the same tax effect as if a 

branch were a wholly owned subsidiary 

corporation of the CFC. Otherwise, the 

location of manufacture of the personal 

property with respect to the income 

derived by that sales or purchase branch 

from the purchase or sale of that 

property will be deemed to be the 

location of a manufacturing branch (or 

remainder) that has tax rate disparity 

relative to that sales or purchase branch. 

In that case, the use of the purchase or 

sales branch for purchase or sales 

activities with respect to the property 

purchased or sold by or through that 

sales or purchase branch of the CFC 

will, for purposes of determining FBCSI 

in connection with the income derived 

by that sales or purchase branch from 

the purchase or sale of that property, be 

deemed to have substantially the same 

tax effect as if a branch were a wholly 

owned subsidiary corporation of the 

CFC, and that branch will be treated as 

a separate corporation for purposes of 

applying the regulations.’’. 

4. On page 79342, column 1, in the 

preamble under the paragraph caption 

Clarifying Application of the Rule for 

Determining the Remainder of the CFC 

When Activities are Performed in 

Multiple Locations, the first paragraph, 

line 18 of the paragraph, the language 

‘‘the CFC when activities are 

preformed’’ is corrected to read ‘‘the 

CFC when activities are performed’’. 

§ 1.954–3 [Corrected] 

■ 5. On page 79344, column 1, under 

amendatory instruction paragraph 2, 

item 3, line 5, the language ‘‘Example 

(3).’’ is corrected to read ‘‘Examples (3), 

(6), and (7).’’. 

■ 6. On page 79345, column 3, 

paragraph (a)(4)(iv)(d), Example 1 (ii), 

line 3, the language ‘‘to sale were 

undertaken by FS through the’’ is 

corrected to read ‘‘to sale had been 

undertaken by FS through the’’. 

■ 7. On page 79346, column 1, 

paragraph (a)(4)(iv)(d), Example 2 (ii), 

line 3, the language ‘‘to sale were 

undertaken by FS through the’’ is 

corrected to read ‘‘to sale had been 

undertaken by FS through the’’. 

■ 8. On page 79346, column 1, 

paragraph (a)(4)(iv)(d), Example 3 (i), 

line 11, the language ‘‘FS for use outside 

of FS’s country of’’ is corrected to read 

‘‘FS to a related person for use outside 

of FS’s country of’’. 

■ 9. On page 79346, column 1, 

paragraph (a)(4)(iv)(d), Example 3 (ii), 

line 3, the language ‘‘to sale were 

undertaken by FS through the’’ is 

corrected to read ‘‘to sale had been 

undertaken by FS through the’’. 

■ 10. On page 79346, column 2, 

paragraph (a)(4)(iv)(d), Example 4 (ii), 

line 3, the language ‘‘to sale were 

undertaken by FS through the’’ is 

corrected to read ‘‘to sale had been 

undertaken by FS through the’’. 

■ 11. On page 79346, column 3, 

paragraph (a)(4)(iv)(d), Example 5 (ii), 

line 3, the language ‘‘to sale were 

undertaken by FS through the’’ is 

corrected to read ‘‘to sale had been 

undertaken by FS through the’’. 

■ 12. On page 79346, column 3, 

paragraph (a)(4)(iv)(d), Example 6 (ii), 

line 3, the language ‘‘to sale were 

undertaken by FS through the’’ is 

corrected to read ‘‘to sale had been 

undertaken by FS through the’’. 

■ 13. On page 79347, column 1, 

paragraph (a)(4)(iv)(d), Example 7 (ii), 

line 3, the language ‘‘to sale were 

undertaken by FS through the’’ is 

corrected to read ‘‘to sale had been 

undertaken by FS through the’’. 

■ 14. On page 79347, column 2, 

paragraph (a)(4)(iv)(d), Example 8 (ii), 

line 1, the language ‘‘to sale were 

undertaken by FS through the’’ is 

corrected to read ‘‘to sale had been 

undertaken by FS through the’’. 

■ 15. On page 79347, column 2, 

paragraph (a)(4)(iv)(d), Example 8 (ii), 

line 9, the language ‘‘X, it is irrelevant 

to the substantial’’ is corrected to read 

‘‘X, it is not important to the 

substantial’’. 

■ 16. On page 79347, column 2, 

paragraph (a)(4)(iv)(d), Example 9 (ii), 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Rules and Regulations 11845 

line 3, the language ‘‘to sale were 

undertaken by FS1 or FS2’’ is corrected 

to read ‘‘to sale had been undertaken by 

FS1 or FS2’’. 

■ 17. On page 79347, column 3, 

paragraph (a)(4)(iv)(d), Example 10 (ii), 

line 3, the language ‘‘to sale were 

undertaken by FS through the’’ is 

corrected to read ‘‘to sale had been 

undertaken by FS through the’’. 

■ 18. On page 79348, column 1, 

paragraph (a)(4)(iv)(d), Example 11 (ii), 

line 3, the language ‘‘to sale were 

undertaken by FS through the’’ is 

corrected to read ‘‘to sale had been 

undertaken by FS through the’’. 

■ 19. On page 79348, column 1, 

paragraph (b)(2)(i)(d), the language 

‘‘[Reserved]. For further guidance, see 

§ 1.954–3(b)(2)(i)(d).’’ is corrected to 

read ‘‘[Reserved].’’. 

■ 20. On page 79348, column 2, 

following the language ‘‘Example (3). 

[Reserved]. For further guidance, see 

§ 1.954–3(b)(4) Example (3).’’, the 

language ‘‘Example (6). [Reserved].’’ is 

added on the next line. 

■ 21. On page 79348, column 2, 

following the new language ‘‘Example 

(6). [Reserved].’’, the language ‘‘Example 

(7). [Reserved].’’ is added on the next 

line. 

■ 22. On page 79348, column 2, 

paragraph (d), the last two lines, the 

language ‘‘subsequent taxable years of 

the taxpayer.’’ is corrected to read 

‘‘subsequent taxable years.’’. 

§ 1.954–3T [Corrected] 

■ 23. On page 79349, column 2, in 

paragraph (b)(1)(ii)(c)(2), Example (i), 

line 18, the language ‘‘effective rate 

imposed in Country M on the’’ is 

corrected to read ‘‘effective rate of tax 

imposed in Country M on the’’. 

■ 24. On page 79349, column 3, 

paragraph (b)(1)(ii)(c)(3)(i), a new 

sentence is added after the first sentence 

to read ‘‘This paragraph (b)(1)(ii)(c)(3) is 

applied separately with respect to the 

income derived by each purchasing or 

selling branch (or similar establishment) 

or purchasing or selling remainder of 

the controlled foreign corporation as 

provided under paragraphs (b)(1)(i) and 

(b)(1)(ii) of this section and §§ 1.954– 

3(b)(1)(i) and (b)(1)(ii).’’. 

■ 25. On page 79350, column 2, line 2, 

in paragraph (b)(1)(ii)(c)(3)(iii), the 

language ‘‘construction with respect to 

that’’ is corrected to read ‘‘construction 

with respect to the income derived by 

a purchasing or selling branch (or 

similar establishment) or the purchasing 

or selling remainder of the controlled 

foreign corporation in connection with 

the purchase or sale of that’’. 

■ 26. On page 79350, column 2, line 15, 

in paragraph (b)(1)(ii)(c)(3)(iii), the 

language ‘‘any, and that would, after 

applying’’ is corrected to read ‘‘any, that 

would, after applying’’. 

■ 27. On page 79350, column 2, the 

second full sentence, in paragraph 

(b)(1)(ii)(c)(3)(iii), the language ‘‘The 

tested sales location is the location 

where the branch (or similar 

establishment) or the remainder of the 

controlled foreign corporation 

purchases or sells the personal 

property.’’ is corrected to read ‘‘The 

tested sales location is the location of 

the purchasing or selling branch (or 

similar establishment) or the remainder 

of the controlled foreign corporation by 

or through which the purchasing or 

selling activities are carried on with 

respect to the personal property.’’. 

■ 28. On page 79350, column 2, the last 

line, in paragraph (b)(1)(ii)(c)(3)(iii), the 

language ‘‘(b)(1)(ii)(c)(3)(v) Examples 4, 

5, and 6 of’’ is corrected to read 

‘‘(b)(1)(ii)(c)(3)(v) Examples 3, 4, 5, and 

6 of’’. 

■ 29. On page 79350, column 3, lines 

13, 14, and 15, in paragraph 

(b)(1)(ii)(c)(3)(iii), the language ‘‘apply 

with respect to the sales income related 

to that property and the use of the 

purchasing or selling branch (or’’ is 

corrected to read ‘‘apply with respect to 

the income derived by the tested sales 

location in connection with the 

purchase or sale of that property and the 

use of that purchasing or selling branch 

(or’’. 

■ 30. On page 79351, column 1, line 4, 

in paragraph (b)(1)(ii)(c)(3)(v), Example 

1 (i), the language ‘‘branches. Employees 

of FS located in’’ is corrected to read 

‘‘branches. The activities of the 

remainder of FS in Country M do not 

independently satisfy § 1.954–3(a)(4)(i). 

Employees of FS located in’’. 

■ 31. On page 79351, column 2, 

paragraph (b)(1)(ii)(c)(3)(v), Example 3 

(ii), lines 14, 15, 16, and 17, the 

language ‘‘(b)(1)(ii)(c)(3)(iii) of this 

section The tested sales location is 

Country M because the remainder of FS 

performs the selling activities with 

respect to Product X. The’’ is corrected 

to read ‘‘(b)(1)(ii)(c)(3)(iii) of this 

section. The tested sales location is 

Country M because the selling activities 

with respect to Product X are carried on 

by the remainder of FS. The’’. 

■ 32. On page 79351, column 3, 

paragraph (b)(1)(ii)(c)(3)(v), Example 4, 

the paragraph heading, the language 

‘‘Manufacturing activities performed by 

multiple branches, no branch 

independently satisfies § 1.954– 

3(a)(4)(i), selling activities performed by 

remainder of the controlled foreign 

corporation, remainder contribution 

includes branch manufacturing 

activities.’’ is corrected to read 

‘‘Manufacturing activities performed by 

multiple branches, no branch 

independently satisfies § 1.954– 

3(a)(4)(i), selling activities carried on by 

remainder of the controlled foreign 

corporation, remainder contribution 

includes branch manufacturing 

activities.’’. 

■ 33. On page 79351, column 3, 

paragraph (b)(1)(ii)(c)(3)(v), Example 4 

(ii), the fourth sentence, the language 

‘‘The tested sales location is Country M 

because the remainder of FS performs 

the selling activities with respect to 

Product X.’’ is corrected to read ‘‘The 

tested sales location is Country M 

because the selling activities with 

respect to Product X are carried on by 

the remainder of FS.’’. 

■ 34. On page 79351, column 3, 

paragraph (b)(1)(ii)(c)(3)(v), Example 4 

(ii), the last sentence, the language 

‘‘Therefore, the rules of paragraph 

(b)(1)(ii)(a) of this section will not apply 

and neither Branch A nor Branch B will 

be treated as a separate corporation for 

purposes of paragraph (b)(2)(ii) of this 

section and § 1.954–3(b)(2)(ii).’’ is 

corrected to read ‘‘Therefore, the rules 

of paragraph (b)(1)(ii)(a) of this section 

will not apply with respect to the 

income derived by the remainder of FS 

in connection with the sale of Product 

X, and neither Branch A nor Branch B 

will be treated as a separate corporation 

for purposes of paragraph (b)(2)(ii) of 

this section and § 1.954–3(b)(2)(ii).’’. 

■ 35. On page 79351, column 3, 

paragraph (b)(1)(ii)(c)(3)(v), Example 5, 

the paragraph heading, the language 

‘‘Manufacturing activities performed by 

multiple branches, no branch 

independently satisfies § 1.954– 

3(a)(4)(i), selling activities performed by 

remainder of the controlled foreign 

corporation and a sales branch.’’ is 

corrected to read ‘‘Manufacturing 

activities performed by multiple 

branches, no branch independently 

satisfies § 1.954–3(a)(4)(i), selling 

activities carried on by remainder of the 

controlled foreign corporation and a 

sales branch.’’. 

■ 36. On page 79352, column 1, 

paragraph (b)(1)(ii)(c)(3)(v), Example 5 

(i), the first sentence, the language ‘‘The 

facts are the same as Example 3, except 

that selling activities are also performed 

by Branch D in Country D, and Country 

D imposes a 16% effective rate of tax on 

sales income.’’ is corrected to read ‘‘The 

facts are the same as Example 3, except 

that sales of Product X are also carried 

on through Branch D in Country D, and 

Country D imposes a 16% effective rate 

of tax on sales income.’’. 

■ 37. On page 79352, column 1, 

paragraph (b)(1)(ii)(c)(3)(v), Example 5 

(ii), the fifth sentence, the language 

11846 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Rules and Regulations 

‘‘The results with respect to the 

remainder of FS in this Example 6 are 

the same as in Example 3.’’ is corrected 

to read ‘‘The results with respect to 

income derived by the remainder of FS 

in connection with the sale of Product 

X in this Example 5 are the same as in 

Example 3.’’. 

■ 38. On page 79352, column 1, in 

paragraph (b)(1)(ii)(c)(3)(v), Example 5 

(ii), the sixth sentence, the language 

‘‘However, paragraph (b)(1)(ii)(c)(3)(iii) 

of this section must also be applied with 

respect to Branch D because Branch D 

performs selling activities with respect 

to Product X.’’ is corrected to read 

‘‘However, paragraph (b)(1)(ii)(c)(3)(iii) 

of this section must also be applied with 

respect to Branch D because the sale of 

Product X is also carried on through 

Branch D.’’. 

■ 39. On page 79352, column 1, 

paragraph (b)(1)(ii)(c)(3)(v), Example 5 

(ii), line 29, the language ‘‘rate of tax 

imposed on the Branch D’s sales’’ is 

corrected to read ‘‘rate of tax imposed 

on Branch D’s sales’’. 

■ 40. On page 79352, column 1, 

paragraph (b)(1)(ii)(c)(3)(v), Example 5 

(ii), the last sentence, the language 

‘‘Therefore, the rules of paragraph 

(b)(1)(ii)(a) of this section will not apply 

to Branch D and neither Branch A nor 

Branch D will be treated as a separate 

corporation for purposes of paragraph 

(b)(2)(ii) of this section and § 1.954– 

3(b)(2)(ii).’’ is corrected to read 

‘‘Therefore, the rules of paragraph 

(b)(1)(ii)(a) of this section will not apply 

with respect to the income derived by 

Branch D in connection with the sale of 

Product X and the use of Branch D to 

sell Product X will not result in a 

branch being treated as a separate 

corporation for purposes of paragraph 

(b)(2)(ii) of this section and § 1.954– 

3(b)(2)(ii).’’. 

■ 41. On page 79352, column 2, 

paragraph (b)(1)(ii)(c)(3)(v), Example 6 

(ii), the fourth sentence, the language 

‘‘The tested sales location is Country M 

because the remainder of FS performs 

the selling activities with respect to 

Product X.’’ is corrected to read ‘‘The 

tested sales location is Country M 

because the selling activities with 

respect to Product X are carried on by 

the remainder of FS.’’. 

■ 42. On page 79352, column 3, 

paragraph (b)(2)(i)(b) is corrected to read 

as follows: 

‘‘(b) Activities treated as performed on 

behalf of the remainder of corporation. 

(1) With respect to purchasing or selling 

activities performed by or through the 

branch or similar establishment, such 

purchasing or selling activities will, 

with respect to personal property 

manufactured, produced, constructed, 

grown, or extracted by the remainder of 

the controlled foreign corporation, be 

treated as performed on behalf of the 

remainder of the controlled foreign 

corporation. 

(2) With respect to purchasing or 

selling activities performed by or 

through the branch or similar 

establishment, such purchasing or 

selling activities will, with respect to 

personal property (other than property 

described in paragraph (b)(2)(i)(b)(1) of 

this section) purchased or sold, or 

purchased and sold, by the remainder of 

the controlled foreign corporation (or 

any branch treated as the remainder of 

the controlled foreign corporation), be 

treated as performed on behalf of the 

remainder of the controlled foreign 

corporation.’’. 

■ 43. On page 79352, column 3, 

paragraph (b)(2)(i)(c), the language ‘‘(c) 

[Reserved]. For further guidance, see 

§ 1.954–3(b)(2)(i)(c).’’ is corrected to 

read ‘‘(c) through (e) [Reserved]. For 

further guidance, see § 1.954– 

3(b)(2)(i)(c) and (e).’’. 

■ 44. On page 79352, column 3, 

paragraph (b)(2)(i)(d) is removed. 

■ 45. On page 79353, column 1, 

paragraph (b)(2)(i)(e) is removed. 

■ 46. On page 79353, columns 1 and 2, 

paragraph (b)(2)(ii)(b) is corrected to 

read as follows: 

‘‘(b) Activities treated as performed on 

behalf of the remainder of corporation. 

(1) With respect to purchasing or selling 

activities performed by or through the 

branch or similar establishment, such 

purchasing or selling activities will, 

with respect to personal property 

manufactured, produced, constructed, 

grown, or extracted by the remainder of 

the controlled foreign corporation, be 

treated as performed on behalf of the 

remainder of the controlled foreign 

corporation. 

(2) With respect to purchasing or 

selling activities performed by or 

through the branch or similar 

establishment, such purchasing or 

selling activities will, with respect to 

personal property (other than property 

described in paragraph (b)(2)(ii)(b)(1) of 

this section) purchased or sold, or 

purchased and sold, by the remainder of 

the controlled foreign corporation (or 

any branch treated as the remainder of 

the controlled foreign corporation), be 

treated as performed on behalf of the 

remainder of the controlled foreign 

corporation.’’. 

■ 47. On page 79353, column 3, 

paragraph (b)(4), Examples (4) through 

(7), the language ‘‘[Reserved]. For 

further guidance, see § 1.954–3(b)(4) 

Examples (4) through (7).’’ is corrected 

to read ‘‘[Reserved]. For further 

guidance, see § 1.954–3(b)(4) Examples 

(4) and (5).’’. 

■ 48. On page 79353, column 3, 

paragraph (b)(4), Example 8 (i), line 13, 

the language ‘‘located in Country M 

perform only sales’’ is corrected to read 

‘‘located in Country M carry on only 

sales’’. 

■ 49. On page 79354, column 1, 

paragraph (b)(4), Example 9, the 

paragraph heading, the language 

‘‘Manufacturing activities performed by 

multiple branches, no branch 

independently satisfies § 1.954– 

3(a)(4)(i), selling activities performed by 

remainder of the controlled foreign 

corporation, branch manufacturing 

activities included in remainder 

contribution.’’ is corrected to read 

‘‘Manufacturing activities performed by 

multiple branches, no branch 

independently satisfies § 1.954– 

3(a)(4)(i), selling activities carried on by 

remainder of the controlled foreign 

corporation, some branch 

manufacturing activities included in 

remainder contribution.’’. 

■ 50. On page 79354, column 1, 

paragraph (b)(4), Example 9 (i), the first 

sentence, the language ‘‘FS, a controlled 

foreign corporation organized in 

Country M, has two branches, Branch A 

and Branch B, located in Country A and 

Country B respectively.’’ is corrected to 

read ‘‘FS, a controlled foreign 

corporation organized in Country M, has 

three branches, Branch A, Branch B, and 

Branch C, located in Country A, Country 

B, and Country C respectively.’’. 

■ 51. On page 79354, column 1, 

paragraph (b)(4), Example 9 (i), line 33, 

the language ‘‘Country B, provides 

quality control and’’ is corrected to read 

‘‘Country B, provides quality control. 

Branch C, through the activities of 

employees of FS located in Country C, 

provides’’. 

■ 52. On page 79354, column 1, 

paragraph (b)(4), Example 9 (i), the 

eleventh sentence, the language 

‘‘Country A imposes an effective rate of 

tax on sales income of 12%, and 

Country B imposes an effective rate of 

tax on sales income of 24%.’’ is 

corrected to read ‘‘Country A imposes 

an effective rate of tax on sales income 

of 12%, Country B imposes an effective 

rate of tax on sales income of 24%, and 

Country C imposes an effective rate of 

tax on sales income of 25%.’’. 

■ 53. On page 79354, column 1, 

paragraph (b)(4), Example 9 (i), the 

twelfth sentence, the language ‘‘None of 

the remainder of FS, Branch A, or 

Branch B independently satisfies 

§ 1.954–3(a)(4)(i).’’ is corrected to read 

‘‘None of the remainder of FS, Branch 

A, Branch B, or Branch C independently 

satisfies § 1.954–3(a)(4)(i).’’. 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Rules and Regulations 11847 

■ 54. On page 79354, column 1, 

paragraph (b)(4), Example 9 (i), the 

fourteenth sentence, the language 

‘‘Under the facts and circumstances of 

the business, the activities of the 

remainder of FS and Branch A, if 

considered together, would not provide 

a demonstrably greater contribution to 

the manufacture of Product X than the 

activities of Branch B.’’ is corrected to 

read ‘‘Under the facts and circumstances 

of the business, the activities of the 

remainder of FS and Branch A, if 

considered together, would not provide 

a demonstrably greater contribution to 

the manufacture of Product X than the 

activities of Branch B and Branch C, if 

considered together.’’. 

■ 55. On page 79354, columns 1 and 2, 

paragraph (b)(4), Example 9 (ii), the 

second sentence, the language ‘‘The 

remainder of FS, Branch A, and Branch 

B each provide a contribution through 

the activities of employees to the 

manufacture of Product X.’’ is corrected 

to read ‘‘The remainder of FS, Branch A, 

Branch B, and Branch C each provide a 

contribution through the activities of 

employees to the manufacture of 

Product X.’’. 

■ 56. On page 79354, column 2, 

paragraph (b)(4), Example 9 (ii), the 

fourth sentence, the language ‘‘The 

tested sales location is Country M 

because the remainder of FS performs 

the selling activities with respect to 

Product X.’’ is corrected to read ‘‘The 

tested sales location is Country M 

because the selling activities with 

respect to Product X are carried on by 

the remainder of FS.’’. 

■ 57. On page 79354, column 2, 

paragraph (b)(4), Example 9 (ii), the fifth 

sentence, the language ‘‘The location of 

Branch B is the tested manufacturing 

location because the effective rate of tax 

imposed on FS’s sales income by 

Country M (10%) is less than 90% of, 

and at least 5 percentage points less 

than, the effective rate of tax that would 

apply to such income in Country B 

(24%): and Branch B is the only 

manufacturing branch that would, after 

applying § 1.954–3(b)(1)(ii)(b), be 

treated as a separate corporation.’’ is 

corrected to read ‘‘The location of 

Branch B is the tested manufacturing 

location because the effective rate of tax 

imposed on FS’s sales income by 

Country M (10%) is less than 90% of, 

and at least 5 percentage points less 

than the effective rate of tax that would 

apply to such income in Country B 

(24%), and Country B has the lowest 

effective rate of tax among the 

manufacturing branches that would, 

after applying § 1.954–3(b)(1)(ii)(b), be 

treated as a separate corporation.’’. 

■ 58. On page 79354, column 2, 

paragraph (b)(4), Example 9 (ii), line 

nineteen from the top of the column, the 

language ‘‘Country A will be included 

in the’’ is corrected to read ‘‘Country A 

by Branch A, will be included in the’’. 

■ 59. On page 79354, column 2, 

paragraph (b)(4), Example 9 (ii), a new 

sentence is added between the sixth and 

seventh sentences to read ‘‘The 

manufacturing activities performed in 

Country C by Branch C will be included 

in the contribution of Branch B for 

purposes of determining the location of 

manufacture of Product X because the 

effective rate of tax imposed on the sales 

income by Country M (10%) is less than 

90% of, and at least 5 percentage points 

less than, the effective rate of tax that 

would apply to such income in Country 

C (25%).’’. 

■ 60. On page 79354, column 2, 

paragraph (b)(4), Example 9 (ii), the 

seventh sentence, the language ‘‘Under 

the facts and circumstances of the 

business, the manufacturing activities of 

the remainder of FS and Branch A, 

considered together, would not provide 

a demonstrably greater contribution to 

the manufacture of Product X than the 

activities of Branch B.’’ is corrected to 

read ‘‘Under the facts and circumstances 

of the business, the manufacturing 

activities of the remainder of FS and 

Branch A, considered together, would 

not provide a demonstrably greater 

contribution to the manufacture of 

Product X than the activities of Branch 

B and Branch C, considered together.’’ 

Guy R. Traynor, 

Federal Register Liaison, Publications & 

Regulations Br., Associate Chief Counsel, 

Procedure & Administration. 

[FR Doc. E9–5894 Filed 3–19–09; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Part 2550 

RIN 1210–AB13 

Investment Advice—Participants and 

Beneficiaries 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Final rule; delay of effective 

date and applicability date. 

SUMMARY: This document delays the 

effective and applicability dates of final 

rules under the Employee Retirement 

Income Security Act, and parallel 

provisions of the Internal Revenue Code 

of 1986, relating to the provision of 

investment advice to participants and 

beneficiaries in individual account 

plans, such as 401(k) plans, and 

beneficiaries of individual retirement 

accounts (and certain similar plans). 

These rules were published in the 

Federal Register on January 21, 2009. 

This document postpones the effective 

and applicability dates of these final 

rules from March 23, 2009 until May 22, 

2009, to allow additional time for the 

Department to evaluate questions of law 

and policy concerning the rules. 

DATES: The effective and applicability 

date of the rule amending 29 CFR part 

2550, published January 21, 2009, at 74 

FR 3822, is delayed until May 22, 2009. 

FOR FURTHER INFORMATION CONTACT: Fred 

Wong, Office of Regulations and 

Interpretations, Employee Benefits 

Security Administration (EBSA), (202) 

693–8500. This is not a toll-free number. 

SUPPLEMENTARY INFORMATION: 

A. Background 

On January 21, 2009, the Department 

of Labor published final rules on the 

provision of investment advice to 

participants and beneficiaries of 

participant-directed individual account 

plans and to beneficiaries of individual 

retirement accounts (74 FR 3822). The 

rules contain regulations implementing 

a statutory prohibited transaction 

exemption under ERISA Sec. 408(b)(14) 

and Sec. 408(g) and an administrative 

class exemption granting additional 

relief. As published, these rules were to 

be effective on March 23, 2009. 

Paragraph (g) of Sec. 2550.408g–1 

provided that the rule would apply to 

covered transactions occurring on or 

after March 23, 2009. 

By memorandum dated January 20, 

2009, Rahm Emanuel, Assistant to the 

President and Chief of Staff, directed 

Agency Heads to consider extending for 

60 days the effective date of regulations 

that have been published in the Federal 

Register but not yet taken effect. The 

memorandum further advised that, 

where such regulations are extended, 

agencies should allow 30 days for 

interested persons to comment on issues 

of law and policy raised by the rules. In 

accordance with that memorandum, and 

taking into account the considerations 

listed in the Memorandum of January 

21, 2009, from Peter R. Orszag, Director 

of the Office of Management and 

Budget, the Department published in 

the Federal Register on February 4, 

2009, a document seeking comment on 

a proposed 60 day extension to the 

effective dates for these rules until May 

22, 2009, and a proposed conforming 

amendment to the applicability date of