[Federal Register Volume 73, Number 177 (Thursday, September 11, 2008)]
[Proposed Rules]
[Pages 52800-52802]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-21070]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 73, No. 177 / Thursday, September 11, 2008 / 
Proposed Rules

[[Page 52800]]



DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 080219210-8245-01]
RIN 0691-AA65


Direct Investment Surveys: BE-15, Annual 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 amends regulations of the Bureau of 
Economic Analysis, Department of Commerce (BEA) to set forth reporting 
requirements for the BE-15, Annual Survey of Foreign Direct Investment 
in the United States. The BE-15 is conducted annually and is a sample 
survey that obtains financial and operating data on U.S. affiliates of 
foreign companies. BEA proposes the addition and deletion of items on 
the survey forms and changes to the reporting criteria. The changes to 
the BE-15 annual survey will: Reduce detail and raise reporting 
thresholds; extend the coverage of the survey to include banks; and 
bring the survey forms and instructions into conformity with the 2007 
BE-12, Benchmark Survey of Foreign Direct Investment in the United 
States.

DATES: Comments on this proposed rule will receive consideration if 
submitted in writing on or before 5 p.m. November 10, 2008.

ADDRESSES: You may submit comments, identified by RIN 0691-AA65, and 
referencing the agency name (Bureau of Economic Analysis), by any of 
the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. For agency, select 
``Commerce Department--all.''
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#2165405748450f66404d4d4453614344400f464e57"><span class="__cf_email__" data-cfemail="aaeecbdcc3ce84edcbc6c6cfd8eac8cfcb84cdc5dc">[email protected]</span></a>.
    <bullet> Fax: Office of the Chief, Direct Investment Division, 
(202) 606-5318.
    <bullet> Mail: Office of the Chief, Direct Investment Division, 
U.S. Department of Commerce, Bureau of Economic Analysis, BE-50, 
Washington, DC 20230.
    <bullet> 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, O.I.R.A., Paperwork 
Reduction Project 0608-0034, Attention PRA Desk Officer for BEA, via e-
mail at <a href="/cdn-cgi/l/email-protection#76061403111136191b145813190658111900"><span class="__cf_email__" data-cfemail="2e5e4c5b49496e41434c004b415e00494158">[email protected]</span></a>, 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.

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: This proposed rule would amend 15 CFR 806.15 
to set forth the reporting requirements for the BE-15, Annual 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.

Description of Revisions

    The BE-15, Annual Survey of Foreign Direct Investment in the United 
States, is a mandatory survey and is conducted annually by BEA, under 
the International Investment and Trade in Services Survey Act (22 
U.S.C. 3101-3108)--hereinafter, ``the Act.'' BEA will send the survey 
to potential respondents in March of each year; responses will be due 
by May 31.
    The proposed changes to the 2008 annual survey are of three types: 
(1) Changes that will reduce detail and raise reporting thresholds, (2) 
changes that will extend the coverage of the survey to include banks, 
and (3) changes that align the BE-15 forms and instructions with those 
of the 2007 BE-12, Benchmark Survey of Foreign Direct Investment in the 
United States. The BE-15 survey forms have been revised and, in some 
cases, renamed to facilitate these proposed changes. The proposed 
survey is comprised of four forms: Form BE-15A (currently named Form 
BE-15(LF)), Form BE-15B (currently named Form BE-15(SF)), Form BE-
15(EZ) (name unchanged), and BE-15 Claim for Exemption (currently named 
BE-15 Supplement C).
    In order to align BEA's survey program with available resources, 
which have declined as a result of a recent reduction in BEA's budget, 
some data items will be dropped from the forms, reporting thresholds 
will be raised, and use of statistical sampling will be expanded. The 
following data items will no longer be collected: 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; research & development employees; imports of goods intended 
for further manufacture; manufacturing employment by state; gross 
property, plant, and equipment by state; commercial property by state; 
and wholesale and retail trade items. Reporting thresholds will be 
raised and greater use will be made of sampling, allowing smaller 
companies to file every other year rather than annually. BEA proposes 
to (1) increase the threshold for reporting on Form BE-15A from $125 
million to $275 million; (2)

[[Page 52801]]

increase the threshold for reporting on Form BE-15B from $30 million to 
$120 million; and (3) increase the threshold for reporting on Form BE-
15(EZ) from $30 million to $40 million. Also, filing on Form BE-15(EZ) 
would be required only every other year. In alternate years, potential 
respondents would receive a letter indicating that they are not 
required to file for that year and asking them to update their contact 
information with BEA. The new reporting thresholds will still allow BEA 
to produce high quality statistics; however, some reduction in 
published detail will be necessary because of insufficient coverage in 
some cells.
    BEA proposes to collect data on bank affiliates on the BE-15 annual 
survey. Currently, collection of data on the BE-15 annual survey is 
limited to that of nonbank U.S. affiliates. Data for bank affiliates is 
collected once every five years on BEA's BE-12, Benchmark Survey of 
Foreign Direct Investment in the United States. This expansion in 
coverage of the BE-15 to include collection of data on bank affiliates 
is called for by the BEA Strategic Plan and is required to close a gap 
in BEA's data on multinational companies. (Data for banks are being 
collected on the BE-11, Annual Survey of U.S. Direct Investment Abroad, 
beginning with the survey for 2007). To collect data for a U.S. 
affiliate that is a bank, BEA plans to use the same forms that will be 
used for nonbank affiliates.
    In order to align the BE-15 annual survey with the 2007 BE-12 
benchmark survey, some detail that is no longer required will be 
eliminated from the BE-15A and several items will be added to the BE-
15B. The BE-15A will no longer ask companies to identify expenditures 
for property, plant, and equipment as either new or used. On the BE-
15B, items will be added to collect information on sales of goods, 
investment income, and sales of services for majority-owned U.S. 
affiliates. A further breakout of sales of services will be added to 
collect sales of services to U.S. persons and sales of services to 
foreign persons. Due to the proposed increase in the reporting 
threshold for the BE-15B, it is necessary to add these items to ensure 
adequate coverage at the industry and investing country level.

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), hereinafter, ``the Act.'' 
Section 4(a) of the Act provides that with respect to foreign direct 
investment in the United States, the President shall, to the extent he 
deems necessary and feasible, conduct a regular data collection program 
to secure current information on international capital flows and other 
information related to international investment and trade in services, 
including (but not limited to) such information as may be necessary for 
computing and analyzing the United States balance of payments, the 
employment and taxes of United States parents and affiliates, and the 
international investment and trade in services position of the United 
States.
    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 annual survey is a sample survey that collects data on the 
financial structure and operations of U.S. affiliates of foreign 
companies needed to update similar data for the universe of U.S. 
affiliates collected once every 5 years in the BE-12 benchmark survey. 
The sample data are used to derive universe estimates of the operations 
of U.S. affiliates of foreign companies, including their balance 
sheets; income statements; property, plant, and equipment; employment 
and employee compensation; merchandise trade; sales of goods and 
services; taxes; and research and development activity. The 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. 
The data are disaggregated by industry of U.S. affiliate, by country 
and industry of foreign parent or ultimate beneficial owner, and, for 
employment data, by State.

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 as that term is defined in E.O. 13132.

Paperwork Reduction Act

    This proposed rule contains a collection-of-information requirement 
subject to review and approval by the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act (PRA). The requirement will be 
submitted to OMB for approval as a revision to a collection currently 
approved under OMB control number 0608-0034.
    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 BE-15 survey, as proposed, is expected to result in the filing 
of reports from approximately 3,650 U.S. affiliates. The respondent 
burden for this collection of information is expected to vary from 20 
minutes for the smallest and least complex company reporting on the BE-
15 Claim for Exemption to 470 hours for the largest and most complex 
company reporting on Form BE-15A, with an average burden of 18.6 hours 
per response. Thus the total respondent burden for this survey--
including time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information--is estimated at 68,000 hours 
(3,650 responses times 18.6 hours average burden). Total respondent 
burden for the previous (2006) annual survey was estimated at 107,900 
hours. The decrease in respondent burden is due to (1) increased 
reporting thresholds which reduce the total number of respondents and 
allow more respondents to file on shorter forms, (2) increased use of 
sampling which allows BE-15(EZ) filers to submit forms only in 
alternate years, and (3) a reduction in the number of data items on the 
form which reduces the average burden per form.
    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

[[Page 52802]]

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 
(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. Few small U.S. businesses are subject to the reporting 
requirements of this survey. Under the proposed regulations, foreign-
owned U.S. businesses would be required to report on the BE-15 survey 
if they have total assets, sales or gross operating revenues, or net 
income that exceed $40 million. According the Small Business 
Administration's Table of Small Business Size Standards, in most 
industries, businesses with $40 million of assets are not considered 
small businesses. The only industry for which the reporting 
requirements for the BE-15 survey would affect small businesses, would 
be for certain types of banking and finance companies, where the 
threshold for being considered a small business is $175 million. BEA 
estimates that about 60 banking and finance affiliates would be 
considered small businesses and would have to report on the BE-15. 
About 20 of these small businesses would be required to file on the BE-
15B, and about 40 (half in alternate years) would be required to file 
on the BE-15(EZ). Based on average burden hours per response of 3.5 
hours for the BE-15B and 1.5 hours for the BE-15(EZ) in alternate 
years, BEA estimates the total respondent burden of the BE-15 on small 
companies to be 100 hours out of a total estimated respondent burden on 
all companies of 68,000 hours.
    Because few small businesses are subject to the reporting 
requirements and because those small businesses that are subject to 
reporting are subject to minimal recordkeeping burdens, the Chief 
Counsel for Regulation certifies that this proposed rule will not have 
a significant 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 recordkeeping 
requirements.

    Dated: July 30, 2008.
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. Section 806.15(i) is revised to read as follows:


Sec.  806.15  Foreign direct investment in the United States.

* * * * *
    (i) Annual report form. BE-15--Annual Survey of Foreign Direct 
Investment in the United States: One report is required for each 
consolidated U.S. affiliate exceeding an exemption level of $40 
million. Form BE-15A must be filed by each majority-owned U.S. 
affiliate (a ``majority-owned'' U.S. affiliate is one in which the 
combined direct and indirect ownership interests of all foreign parents 
of the U.S. affiliate exceed 50 percent) for which at least one of the 
three items--total assets, sales or gross operating revenues excluding 
sales taxes, or net income after provision for U.S. income taxes--
exceeds $275 million (positive or negative). Form BE-15B must be filed 
by each majority-owned U.S. affiliate for which at least one of the 
three items--total assets, sales or gross operating revenues excluding 
sales taxes, or net income after provision for U.S. income taxes--
exceeds $120 million (positive or negative) but no one item exceeds 
$275 million (positive or negative), and by each minority-owned U.S. 
affiliate (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) for which at least one of 
the three items--total assets, sales or gross operating revenues 
excluding sales taxes, or net income after provision for U.S. income 
taxes--exceeds $120 million (positive or negative). Form BE-15(EZ) must 
be filed every other year by each U.S. affiliate for which at least one 
of the three items--total assets, sales or gross operating revenues 
excluding sales taxes, or net income after provision for U.S. income 
taxes--exceeds $40 million (positive or negative) but no one item 
exceeds $120 million (positive or negative). U.S. affiliates will be 
mailed Form BE-15(EZ) in years when they are required to file; in 
alternate years, these U.S. affiliates will be mailed a letter 
confirming that they are not required to file and asking them to update 
their contact information with BEA. A BE-15 Claim for Exemption must be 
filed by each U.S. affiliate to claim exemption from filing a BE-15A, 
BE-15B, or BE-15(EZ). Following an initial filing, the BE-15 Claim for 
Exemption is not required annually from those U.S. affiliates that meet 
the stated exemption criteria from year to year.
* * * * *

[FR Doc. E8-21070 Filed 9-10-08; 8:45 am]
BILLING CODE 3510-06-P


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