[Federal Register Volume 87, Number 126 (Friday, July 1, 2022)]
[Proposed Rules]
[Pages 39411-39414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-14100]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No.: 220616-0136]
RIN 0691-AA93


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 2022 BE-12, Benchmark Survey of Foreign 
Direct Investment in the United States. The BE-12 survey is conducted 
every five years; the prior survey covered 2017. The benchmark survey 
covers the universe of foreign direct investment in the United States 
and is BEA's most detailed survey of such investment. For the 2022 BE-
12 survey, BEA proposes changes in data items collected, the design of 
the survey forms, and the reporting requirements for the survey to 
satisfy changing data needs and to improve data quality and the 
effectiveness and efficiency of data collection.

DATES: Comments on this proposed rule will receive consideration if 
submitted in writing on or before August 30, 2022.

ADDRESSES: You can submit comments, identified by RIN 0691-AA93, and 
referencing the agency name (Bureau of Economic Analysis), by any of 
the following methods:
    <bullet> Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. For Keyword or ID, 
enter ``EAB-2022-0003.''
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#a2e9cbd0d1d6c7cc8ce0d0c7d5e2c0c7c38cc5cdd4"><span class="__cf_email__" data-cfemail="90dbf9e2e3e4f5febed2e2f5e7d0f2f5f1bef7ffe6">[email protected]</span></a>.
    <bullet> Mail: Multinational Operations Branch, Direct Investment 
Division, U.S. Department of Commerce, Bureau of Economic Analysis, BE-
49, Washington, DC 20233.
    <bullet> Hand Delivery/Courier: Multinational Operations Branch, 
Direct Investment Division, U.S. Department of Commerce, Bureau of 
Economic Analysis, BE-49, 4600 Silver Hill Road, Suitland, MD 20746.
    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 
above and to the Office of Management and Budget (OMB) by submitting 
comments at www.reginfo.gov/public/do/PRAMain. Find this particular 
information collection by selecting ``Currently under Review'' or by 
using the search function and entering the title of the collection.
    Public Inspection: All comments received are a part of the public 
record and will generally be posted to https://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).

FOR FURTHER INFORMATION CONTACT: Kirsten Brew, Chief, Multinational 
Operations Branch (BE-49), Bureau of Economic Analysis, U.S. Department 
of Commerce, Washington, DC 20233; email <a href="/cdn-cgi/l/email-protection#fcb7958e8f889992d2be8e998bbc9e999dd29b938a"><span class="__cf_email__" data-cfemail="fcb7958e8f889992d2be8e998bbc9e999dd29b938a">[email protected]</span></a> or phone 
(301) 278-9152.

SUPPLEMENTARY INFORMATION: The BE-12, Benchmark Survey of Foreign 
Direct

[[Page 39412]]

Investment in the United States, is a mandatory survey and is conducted 
once every five years by BEA under the authority of the International 
Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108), 
hereinafter, ``the Act.'' The data reported to BEA through this survey 
are confidential and may be used only for analytical and statistical 
purposes. A response is required from persons subject to the reporting 
requirements of the BE-12, whether or not they are contacted by BEA.
    The BE-12 survey covers the universe of foreign direct investment 
in the United States in terms of value and is BEA's most detailed 
survey of such investment. Foreign direct investment in the United 
States is defined as the ownership or control, directly or indirectly, 
by one foreign person (foreign parent) of 10 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 BE-12 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 non-benchmark years. In 
particular, they serve as benchmarks for the quarterly direct 
investment estimates included in the U.S. international transactions, 
international investment position, and national income and product 
accounts, and for annual estimates of the foreign direct investment 
position in the United States and of the activities of the U.S. 
affiliates of foreign companies.
    This proposed rule would amend 15 CFR 801 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 would amend the regulations and the survey 
forms for the BE-12 benchmark survey. These amendments include changes 
in data items collected and the design of the survey forms.
    BEA proposes to add, delete, and modify some items on the BE-12 
survey forms. Most of the additions are proposed in response to 
suggestions from data users and to provide more information about 
foreign direct investment in the United States. The following items 
would be added to, or modified on, the BE-12 survey:
    (1) A question will be added to collect the city of each foreign 
parent and ultimate beneficial owner (UBO) on all forms. This will be 
used to validate the countries of foreign investors and provide 
additional information on the location of investors.
    (2) The balance sheet and income statement sections on the BE-12A 
form will be modified to separately collect the investment in, and 
income from, (a) ``unconsolidated U.S. affiliates'' and (b) ``foreign 
entities,'' which were previously collected as a combined total. This 
will assist in ensuring complete coverage of unconsolidated U.S. 
affiliates and in better aligning the BE-12 survey data with other 
direct investment surveys.
    (3) Supplemental sections A and B, which collect identification 
information on business enterprises owned by the U.S. affiliate, will 
be modified on all BE-12 forms to request more information on the 
reasons the U.S. business enterprises changed since the last report. 
This will include options for ``newly acquired'' or ``newly 
established'' if an enterprise is being reported on a supplement for 
the first time, and options to report U.S. business enterprises that 
had a name change, were sold, merged or liquidated. A follow-up 
question will be added requesting the date of the corporate change for 
new enterprises. This information will allow BEA to inform entities 
about potential reporting requirements on other surveys of foreign 
direct investment in the United States.
    (4) Questions will be added on the BE-12A form to collect sales 
data for certain service types where there is no clear link between the 
industry of sales and the type of services supplied. Those service 
types are (1) intellectual property (IP) rights and (2) advertising. 
These questions will contribute to BEA's efforts to develop a more 
complete and consistent picture of the types of services supplied by 
U.S. companies worldwide.
    (5) Questions will be added to collect sales data on the BE-12A 
form related to the provision of selected services generally recognized 
as prevalent in the digital economy. These selected services are (1) 
cloud computing and data storage and (2) digital intermediation 
services. In addition, checkboxes will be added to the BE-12A for 
respondents to identify the percentage of their sales of services 
delivered remotely, sales of services that were digitally ordered, and 
sales of goods that were digitally ordered, along with checkboxes to 
identify if this information was sourced from their accounting records 
or from recall/general knowledge. These questions will contribute to 
BEA's efforts to measure the digital economy.
    BEA also proposes to eliminate the following items from the 
benchmark survey:
    (1) Expensed petroleum and mining expenditures will be removed from 
the BE-12A form.
    (2) Commercial property will be removed from the state schedule of 
the BE-12A and BE-12B forms. Respondents have been confused by this 
concept, which can vary by state or industry, and have indicated that 
the information may not be readily available from their records.
    (3) Part III of the BE-12A and BE-12B forms, which collects 
information on investment and transactions between the U.S. affiliate 
and the affiliated foreign group will be scaled back to include only 
the following items:
    <bullet> Foreign parent ownership and classification information
    <bullet> A question on reverse investment
    <bullet> Intercompany debt balances for U.S. affiliates with less 
than $60 million in assets, sales, or net income.
    BEA will also modify the survey forms to improve question wording, 
layout, and instructions.
    This proposed rule would amend 15 CFR part 801 by modifying Sec.  
801.10 to clarify the timing of this benchmark survey. The next BE-12 
survey will apply to the 2022 fiscal reporting year, and will be 
conducted once every five years thereafter, for reporting years ending 
in 2 and 7.
    Each time a benchmark survey is to be conducted, BEA will describe 
any proposed changes to the information collected through the survey 
(including the addition, deletion, and/or modification of existing 
questions and definitions) in a public notice and will solicit comments 
as part of the requirements of the Paperwork Reduction Act (PRA). Any 
changes to reporting requirements or significant

[[Page 39413]]

expansions in scope of the surveys would be conducted by rulemaking.

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.
    The BE-12 survey, as proposed, is expected to result in the filing 
of reports from approximately 26,400 U.S. affiliates. Total annual 
burden is calculated by multiplying the estimated number of submissions 
of each form (A, B, C, and Claim for Not Filing) by the average hourly 
burden per form and summing the results for the four forms. The total 
respondent burden for this survey is estimated at 276,441 hours, 
compared to 249,625 hours for the previous (2017) benchmark survey. An 
increase in the number of foreign-owned companies accounts for nearly 
all of the increase in the estimated respondent burden, while the 
addition of new questions and the deletion of previous questions had a 
marginal impact on the estimated respondent burden. The respondent 
burden will vary from one company to another. The estimated average 
time per respondent is 10.5 hours (276,441 hours/26,400 respondents) 
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.
    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.
    Most of the U.S. business enterprises that are required to file the 
survey are units of multinational enterprises. To qualify as a small 
business, the multinational enterprise as a whole must be evaluated 
when determining if the business meets the size standards set by the 
Small Business Administration. While BEA only collects information on 
the U.S. portion of the multinational enterprise, the size 
determination takes into account the sizes of both the U.S. businesses 
and their foreign parents. BEA estimates that approximately 15 percent 
of the U.S. businesses that will be required to respond to the BE-12 
survey are considered small businesses based on the SBA size standards.
    For the relatively few small businesses that meet the reporting 
requirements of the survey, BEA has attempted to keep burden to a 
minimum by asking a limited number of questions. 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. The reporting thresholds for Form BE-12A (the longest form) 
and Form BE-12B are $300 million and $60 million, respectively. All 
affiliates below $60 million will file on Form BE-12C (the shortest 
form). The smallest affiliates, those below $20 million, are only 
required to report a few items on Form BE-12C. These data items are 
likely to be readily available from existing business records. 
Compliance with the survey should take less than one hour. Because few 
small businesses are required to file the survey and because those 
impacted are subject to only minimal reporting burden, 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 801

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

Paul W. Farello,
Associate Director of International Economics, Bureau of Economic 
Analysis

    For 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 AND SURVEYS OF DIRECT INVESTMENT

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; 
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.  801.3 to read as follows:


Sec.  801.3  Reporting requirements.

    Except for surveys subject to rulemaking in Sec. Sec.  801.7, 
801.8, 801.9, and 801.10, reporting requirements for all other surveys 
conducted by the Bureau of Economic Analysis shall be as follows:
    (a) Notice of specific reporting requirements, including who is 
required to report, the information to be reported, the manner of 
reporting, and the time and place of filing reports, will be published 
by the Bureau of Economic Analysis in the Federal Register prior to the 
implementation of a survey;
    (b) In accordance with section 3104(b)(2) of title 22 of the United 
States Code, persons notified of these surveys and subject to the 
jurisdiction of the United States shall furnish, under oath, any report 
containing information that is determined to be necessary to carry out 
the surveys and studies provided for by the Act; and
    (c) Persons not notified in writing of their filing obligation by 
the Bureau of Economic Analysis are not required to complete the 
survey.
0
3. Amend Sec.  801.10 to read as follows:


Sec.  801.10  Rules and regulations for BE-12, Benchmark Survey of 
Foreign Direct Investment in the United States.

    A BE-12, Benchmark Survey of Foreign Direct Investment in the 
United States, will be conducted once every

[[Page 39414]]

five years and covers years ending in 2 and 7. BEA will describe the 
proposed information collection in a public notice and will solicit 
comments accounting to the requirements of the Paperwork Reduction Act 
(44 U.S.C. 3501-3520). All legal authorities, provisions, definitions, 
and requirements contained in Sec. Sec.  801.1 through 801.2 and 
Sec. Sec.  801.4 through 801.6 are applicable to this survey. Specific 
additional rules and regulations for the BE-12 survey are given in 
paragraphs (a) through (e) of this section. More detailed instructions 
are given on the report forms and instructions.
    (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, 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 in 
writing pursuant this section. This may be accomplished by filing a 
properly completed BE-12 report (BE-12A, BE-12B, BE-12C, or BE-12 Claim 
for Not Filing);
    (b) Who must report. A BE-12 report is required for each U.S. 
affiliate (except certain private funds as described below), 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 the calendar year covered by the survey. Certain private funds 
are exempt from reporting on the BE-12 survey. If a U.S. business meets 
ALL of the following 3 criteria, it is not required to file any BE-12 
form except to indicate exemption from the survey if contacted by BEA: 
(1) The U.S. business enterprise is a private fund; (2) the private 
fund does not own, directly or indirectly through another business 
enterprise, an ``operating company''--i.e., a business enterprise that 
is not a private fund or a holding company--in which the foreign parent 
owns at least 10 percent of the voting interest; AND (3) if the foreign 
parent owns the private fund indirectly (through one or more other U.S. 
business enterprises), there are no U.S. ``operating companies'' 
between the foreign parent and the indirectly-owned private fund.
    (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, if 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 the calendar year covered by the survey:
    (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 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 the calendar year covered by the survey.
    (ii) A minority-owned U.S. affiliate (for purposes of this survey, 
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) 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 the 
calendar year covered by the survey.
    (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 the calendar year covered by 
the survey.
    (4) Any U.S. person that is contacted by BEA concerning the BE-12 
survey, but is not subject to the reporting requirements, must file a 
BE-12 Claim for Not Filing. This requirement is necessary to ensure 
compliance with reporting requirements and efficient administration of 
the Act by eliminating unnecessary follow-up contact.
    (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 of the year after the year covered by the survey (or 
by June 30 for reporting companies that use BEA's eFile system).

[FR Doc. 2022-14100 Filed 6-30-22; 8:45 am]
BILLING CODE 3510-06-P


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