E9-463. Direct Investment Surveys: BE-11, Annual Survey of U.S. Direct Investment Abroad

AGENCY:

Bureau of Economic Analysis, Commerce.

ACTION:

Final rule.

SUMMARY:

This final rule amends regulations of the Bureau of Economic Analysis, Department of Commerce (BEA) to change the reporting requirements for the BE-11, Annual Survey of U.S. Direct Investment Abroad. The BE-11 survey is conducted annually and is a sample survey that obtains financial and operating data covering the overall operations of U.S. parent companies and their foreign affiliates. BEA is making changes in the reporting criteria that will raise the thresholds for reporting on the survey.

DATES:

This final rule will be effective February 12, 2009.

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 [phone] or e-mail ([e-mail]).

SUPPLEMENTARY INFORMATION:

In the September 11, 2008, Federal Register, 73 FR 52802-52804, BEA published a notice of proposed rulemaking setting forth revised reporting criteria for the BE-11, Annual Survey of U.S. Direct Investment Abroad. No comments on the proposed rule were received. Thus, the proposed rule is adopted without change. This final rule amends 15 CFR 806.14 to set forth the reporting requirements for the BE-11, Annual Survey of U.S. Direct Investment Abroad.

Description of Changes

The BE-11 survey 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.

This final rule changes the reporting criteria on the BE-11 annual survey as follows: (a) The threshold for reporting on the BE-11B(SF) short form and BE-11C form increases from $40 million to $60 million, and (b) the threshold for reporting on the BE-11B(LF) long form increases from $150 million to $225 million. Majority-owned nonbank affiliates with assets, sales or gross operating revenues, or net income (loss) over $60 million but less than or equal to $225 million will be filed on the BE-11B(SF) short form; majority-owned nonbank affiliates with assets, sales or gross operating revenues, or net income (loss) over $225 million will be filed on the BE-11B(LF) long form. Minority-owned nonbank affiliates with assets, sales or gross operating revenues, or net income (loss) over $60 million will be filed on the BE-11C form. Two reporting thresholds remain unchanged—the threshold for reporting on Form BE-11B(FN) remains at $250 million and the threshold for reporting only selected items on Form BE-11A remains at $150 million.

Survey Background

The Bureau of Economic Analysis (BEA), U.S. Department of Commerce, conducts the BE-11 survey under the authority of the International Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108), hereinafter, “the Act.” Section 4(a) of the Act requires that the President shall, to the extent he deems necessary and feasible, conduct a regular data collection program to secure current information on international financial 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 of U.S. direct investment abroad is a sample survey that collects information on a variety of measures of the overall operations of U.S. parent companies and their foreign affiliates, including total assets, sales, net income, employment and employee compensation, research and development expenditures, and exports and imports of goods. The sample data are used to derive universe estimates in nonbenchmark years from similar data reported in the BE-10, Benchmark Survey of U.S. Direct Investment Abroad, which is taken every five years. The data are needed to measure the size and economic significance of direct investment abroad, measure changes in such investment, and assess its impact on the U.S. and foreign economies. The data are disaggregated by country and industry of the foreign affiliate and by industry of the U.S. parent.

Executive Order 12866

This final rule has been determined to be not significant for purposes of E.O. 12866.

Executive Order 13132

This final rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under E.O. 13132.

Paperwork Reduction Act

The collection-of-information in this final rule was submitted to the Office of Management and Budget (OMB) for review and approval under the Paperwork Reduction Act (PRA). OMB approved the information collection under control number 0608-0053. 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 OMB control number.

The BE-11 survey is expected to result in the filing of reports from approximately 1,550 respondents. The respondent burden for this collection of information will vary from one company to another, but is estimated to average 99.3 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 of the survey is estimated at 153,850 hours (1,550 respondents times 99.3 hours average burden). Although the amendments to the reporting rules lower respondent burden, the total estimated burden hours are higher than the currently estimated hours of 122,900 for this survey in the OMB inventory, due to growth in the number and size of U.S. parent companies and foreign affiliates since the survey was last cleared.

Written comments regarding the burden-hour estimates or any other aspect of the information-of-collection requirements contained in the final rule should be sent to (1) the Bureau of Economic Analysis via mail to U.S. Department of Commerce, Bureau of Economic Analysis, Office of the Chief, Direct Investment Division, BE-50, Washington, DC 20230; via e-mail at [e-mail]; or by FAX at 202-606-5311 and (2) the Office of Management and Budget, O.I.R.A., Paperwork Reduction Project 0608-0053, Attention PRA Desk Officer for BEA, via e-mail at [e-mail], or by FAX at 202-395-7245.

Regulatory Flexibility Act

The Chief Counsel for Regulation, Department of Commerce, has certified to the Chief Counsel for Advocacy, Small Business Administration, under the provisions of the Regulatory Flexibility Act (5 U.S.C. 605(b)), that this rule will not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding the economic impact of the rule. As a result, no final regulatory flexibility analysis was prepared.

List of Subjects in 15 CFR Part 806

• Economic statistics
• Multinational corporations
• Penalties
• Reporting and recordkeeping requirements
• US investment abroad

Dated: December 16, 2008.

J. Steven Landefeld,

Director, Bureau of Economic Analysis.

For the reasons set forth in the preamble, BEA amends 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 806.14(f)(3)(ii) introductory text, (f)(3)(ii)(A) and (B), (f)(3)(iv), (f)(3)(v) introductory text, and (f)(3)(v)(A) are revised to read as follows:

§ 806.14

U.S. direct investment abroad.

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(f) * * *

(3) * * *

(ii) Forms BE-11B(LF), (SF), and (EZ) (Report for Majority-owned Nonbank Foreign Affiliate of Nonbank U.S. Reporter).

(A) A BE-11B(LF)(Long Form) must be filed for each majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter for which any one of the three items—total assets, sales or gross operating revenues excluding sales taxes, or net income after provision for foreign income taxes—was greater than $225 million (positive or negative) at the end of, or for, the affiliate's fiscal year, unless the nonbank foreign affiliate is selected to be reported on Form BE-11B(EZ).

(B) A BE-11B(SF)(Short Form) must be filed for each majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter for which any one of the three items listed in paragraph (f)(3)(ii)(A) of this section was greater than $60 million (positive or negative), but for which no one of these items was greater than $225 million (positive or negative), at the end of, or for, the affiliate's fiscal year, unless the nonbank foreign affiliate is selected to be reported on Form BE-11B(EZ).

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(iv) Form BE-11C (Report for Minority-owned Nonbank Foreign Affiliate of Nonbank U.S. Reporter) must be filed for each minority-owned nonbank foreign affiliate of a nonbank U.S. Reporter that is owned at least 20 percent, but not more than 50 percent, directly and/or indirectly, by all U.S. Reporters of the affiliate combined, and for which any one of the three items listed in paragraph (f)(3)(ii)(A) of this section was greater than $60 million (positive or negative) at the end of, or for, the affiliate's fiscal year.

(v) Based on the preceding, an affiliate is exempt from being reported if it meets any one of the following criteria:

(A) For nonbank affiliates of nonbank U.S. Reporters, none of the three items listed in paragraph (f)(3)(ii)(A) of this section exceeds $60 million (positive or negative). However, affiliates that were established or acquired during the year and for which at least one of these items was greater than $10 million but not over $60 million must be listed, and key data items reported, on a supplement schedule on Form BE-11A.

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