[Federal Register Volume 64, Number 232 (Friday, December 3, 1999)]
[Rules and Regulations]
[Pages 67716-67719]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31412]
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DEPARTMENT OF COMMERCE
Bureau of Economic Analysis
15 CFR Part 806
[Docket No. 9908102129310-02]
RIN 0691-AA36
Direct Investment Surveys: BE-10, Benchmark Survey of U.S. Direct
Investment Abroad--1999
AGENCY: Bureau of Economic Analysis, Commerce.
ACTION: Final rule.
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SUMMARY: These final rules revise regulations for the BE-10, Benchmark
Survey of U.S. Direct Investment Abroad.
The BE-10 survey is mandatory and is conducted once every 5 years
by the Bureau of Economic Analysis (BEA), U.S. Department of Commerce,
under the International Investment and Trade in Services Survey Act.
The benchmark survey will be conducted for 1999. BEA will send the
survey to potential respondents in March of the year 2000; responses
will be due by May 31, 2000 for respondents required to file fewer than
50 forms and by June 30, 2000 for those required to file 50 or more
forms. The last benchmark survey was conducted for 1994. The benchmark
survey covers virtually the entire universe of U.S. direct investment
abroad in terms of value, and is BEA's most comprehensive survey of
such investment in terms of subject matter.
The revised rules increase the exemption level for reporting on the
BE-10B(SF) short form and the BE-10B BANK form from $3 million to $7
million; direct that minority-owned nonbank foreign affiliates,
regardless of size, be reported on the BE-10B(SF) short form; increase
the exemption level for reporting on the BE-10B(LF) long form from $50
million to $100 million; and direct U.S. reporters with total assets,
sales or gross operating revenues, and net income less than or equal to
$100 million (positive or negative) to report only selected items.
EFFECTIVE DATE: These final rules will be effective January 3, 2000.
FOR FURTHER INFORMATION CONTACT:
R. David Belli, Chief, International Investment Division (BE-50),
Bureau of Economic Analysis, U.S. Department of Commerce, Washington,
DC 20230; phone (202) 606-9800.
SUPPLEMENTARY INFORMATION: On September 7, 1999, the Bureau of Economic
Analysis (BEA) published in the Federal Register, volume 64, No. 172,
64 FR 48568-48572, a notice of
[[Page 67717]]
proposed rulemaking setting forth revised reporting requirements for
the BE-10, Benchmark Survey of U.S. Direct Investment Abroad--1999. No
comments on the proposed rules were received. Thus, these final rules
are the same as the proposed rules.
These final rules amend 15 CFR part 806 to set forth revised
reporting requirements for the BE-10, Benchmark Survey of U.S. Direct
Investment Abroad--1999. The Bureau of Economic Analysis, 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(b) of the Act requires that with
respect to United States direct investment abroad, the President shall
conduct a benchmark survey covering year 1982, a benchmark survey
covering year 1989, and benchmark surveys covering every fifth year
thereafter. In conducting surveys pursuant to this subsection, the
President shall, among other things and to the extent he determines
necessary and feasible--
(1) Identify the location, nature, and magnitude of, and changes in
total investment by any parent in each of its affiliates and the
financial transactions between any parent and each of its affiliates;
(2) Obtain (A) information on the balance sheet of parents and
affiliates and related financial data, (B) income statements, including
the gross sales by primary line of business (with as much product line
detail as is necessary and feasible) of parents and affiliates in each
country in which they have significant operations, and (C) related
information regarding trade, including trade in both goods and
services, between a parent and each of its affiliates and between each
parent or affiliate and any other person;
(3) Collect employment data showing both the number of United
States and foreign employees of each parent and affiliate and the
levels of compensation, by country, industry, and skill level;
(4) Obtain information on tax payments by parents and affiliates by
country; and
(5) Determine, by industry and country, the total dollar amount of
research and development expenditures by each parent and affiliate,
payments or other compensation for the transfer of technology between
parents and their affiliates, and payments or other compensation
received by parents or affiliates from the transfer of technology to
other persons.
In section 3 of Executive Order 11961, the President delegated
authority granted under the Act as concerns direct investment to the
Secretary of Commerce, who has redelegated it to BEA.
The benchmark surveys are BEA's censuses, intended to cover the
universe of U.S. direct investment abroad in terms of value. U.S.
direct investment abroad is defined as the ownership or control,
directly or indirectly, by one U.S. person of 10 percent or more of the
voting securities of an incorporated foreign business enterprise or an
equivalent interest in an unincorporated foreign business enterprise,
including a branch.
The purpose of the benchmark survey is to obtain universe data on
the financial and operating characteristics of, and on positions and
transactions between, U.S. parent companies and their foreign
affiliates. The data are needed to measure the size and economic
significance of U.S. direct investment abroad, measure changes in such
investment, and assess its impact on the U.S. and foreign economies.
The data will provide benchmarks for deriving current universe
estimates of direct investment from sample data collected in other BEA
surveys in nonbenchmark years. In particular, they will serve as
benchmarks for the quarterly direct investment estimates included in
the U.S. international transactions and national income and product
accounts, and for annual estimates of the U.S. direct investment
position abroad and of the operations of U.S. parent companies and
their foreign affiliates.
The survey consists of an instruction booklet, a claim for not
filing the BE-10, and the following report forms:
1. Form BE-10A--Report for U.S. Reporters that are not banks;
2. Form BE-10A BANK--Report for U.S. Reporters that are banks;
3. Form BE-10B(LF) (Long Form)--Report for majority-owned nonbank
foreign affiliates of nonbank U.S. parents with assets, sales, or net
income greater than $100 million (positive or negative);
4. Form BE-10B(SF) (Short Form)--Report for majority-owned nonbank
foreign affiliates with assets, sales, or net income greater than $7
million, but not greater than $100 million (positive or negative),
minority-owned nonbank foreign affiliates of nonbank parents with
assets, sales, or net income greater than $7 million (positive or
negative); and all nonbank affiliates of bank parents; and
5. Form BE-10B BANK--Report for foreign affiliates that are banks.
Although the survey is intended to cover the universe of U.S.
direct investment abroad, in order to minimize the reporting burden,
foreign affiliates with assets, sales, and net income each equal to or
less than $7 million (positive or negative) are exempt from being
reported on Form BE-10B(SF) or BE-10B BANK (but must be listed, along
with selected identification information and data, on Form BE-10A
SUPPLEMENT or BE-10A BANK SUPPLEMENT).
Executive Order 12612
These final rules do not contain policies with Federalism
implications sufficient to warrant preparation of a Federalism
assessment under E.O. 12612.
Executive Order 12866
These final rules have been determined to be not significant for
purposes of E.O. 12866.
Paperwork Reduction Act
The collection of information required in these final rules has
been approved by OMB (OMB No. 0608-0049) under the Paperwork Reduction
Act. 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 survey is expected to result in the filing of reports from
about 3,500 respondents. The respondent burden for this collection of
information is estimated to vary from 14 to 8,500 hours per response,
with an average of 130 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 458,000 hours (3,500 respondents times 130 hours
average burden).
Comments regarding the burden estimate of any aspect of this
collection of information should be addressed to: Director, Bureau of
Economic Analysis (BE-1), U.S. Department of Commerce, Washington, DC
20230; and to the Office of Management and Budget, O.I.R.A., Paperwork
Reduction Project 0608-0049, Washington, DC 20503 (Attention PRA Desk
Officer for BEA).
Regulatory Flexibility Act
The Chief Counsel for Regulation, Department of Commerce, has
certified to the Chief Counsel for Advocacy,
[[Page 67718]]
Small Business Administration, under the provision of the Regulatory
Flexibility Act (5 U.S.C. 605(b)), that these final rules will not have
a significant economic impact on a substantial number of small
entities. A BE-10 report is required of any U.S. company that had a
foreign affiliate--that is, that had direct or indirect ownership or
control of at least 10 percent of the voting stock of an incorporated
foreign business enterprise, or an equivalent interest in an
unincorporated foreign business enterprise--at any time during the U.S.
company's 1999 fiscal year. Companies that have direct investment
abroad tend to be quite large. To minimize the reporting burden on
smaller U.S. companies, U.S. Reporters with total assets, sales or
gross operating revenues, and net income less than or equal to $100
million (positive or negative) are required to report only selected
items on the BE-10A form for U.S. Reporters in addition to forms they
may be required to file for their foreign affiliates.
List of Subjects in 15 CFR Part 806
Balance of payments, Economic statistics, U.S. investment abroad,
Penalties, Reporting and recordkeeping requirements.
Dated: November 17, 1999.
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; and E.O. 11961 (3
CFR, 1977 Comp., p. 86), as amended by E.O. 12013 (3 CFR, 1977
Comp., p. 147), E.O. 12318 (3 CFR, 1981 Comp., p. 173), and E.O.
12518 (3 CFR, 1985 Comp., p. 348).
2. Section 806.16 is revised to read as follows:
Sec. 806.16 Rules and regulations for BE-10, Benchmark Survey of U.S.
Direct Investment Abroad--1999.
A BE-10, Benchmark Survey of U.S. Direct Investment Abroad will be
conducted covering 1999. All legal authorities, provisions,
definitions, and requirements contained in Secs. 806.1 through 806.13
and Sec. 806.14(a) through (d) are applicable to this survey. Specific
additional rules and regulations for the BE-10 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-10, Benchmark Survey of U.S.
Direct Investment Abroad--1999, contained in this section, whether or
not they are contacted by BEA. Also, a person, or their agent, who is
contacted by BEA about reporting in this survey, either by sending them
a report form or by written inquiry, must respond in writing pursuant
to Sec. 806.4. They may respond by:
(1) Certifying in writing, within 30 days of being contacted by
BEA, to the fact that the person had no direct investment within the
purview of the reporting requirements of the BE-10 survey;
(2) Completing and returning the ``BE-10 Claim for Not Filing''
within 30 days of receipt of the BE-10 survey report forms; or
(3) Filing the properly completed BE-10 report (comprising Form BE-
10A or BE-10A BANK and Forms BE-10B(LF), BE-10B(SF), and/or BE-10B
BANK) by May 31, 2000, or June 30, 2000, as required.
(b) Who must report. (1) A BE-10 report is required of any U.S.
person that had a foreign affiliate--that is, that had direct or
indirect ownership or control of at least 10 percent of the voting
stock of an incorporated foreign business enterprise, or an equivalent
interest in an unincorporated foreign business enterprise--at any time
during the U.S. person's 1999 fiscal year.
(2) If the U.S. person had no foreign affiliates during its 1999
fiscal year, a ``BE-10 Claim for Not Filing'' must be filed within 30
days of receipt of the BE-10 survey package; no other forms in the
survey are required. If the U.S. person had any foreign affiliates
during its 1999 fiscal year, a BE-10 report is required and the U.S.
person is a U.S. Reporter in this survey.
(3) Reports are required even though the foreign business
enterprise was established, acquired, seized, liquidated, sold,
expropriated, or inactivated during the U.S. person's 1999 fiscal year.
(c) Forms for nonbank U.S. Reporters and foreign affiliates.--(1)
Form BE-10A (Report for the U.S. Reporter). A BE-10A report must be
completed by a U.S. Reporter that is not a bank. If the U.S. Reporter
is a corporation, Form BE-10A is required to cover the fully
consolidated U.S. domestic business enterprise.
(i) If for a nonbank U.S. Reporter any one of the following three
items--total assets, sales or gross operating revenues excluding sales
taxes, or net income after provision for U.S. income taxes--was greater
than $100 million (positive or negative) at any time during the
Reporter's 1999 fiscal year, the U.S. Reporter must file a complete
Form BE-10A and, as applicable, a BE-10A SUPPLEMENT listing each, if
any, foreign affiliate that is exempt from being reported on Form BE-
10B(LF), BE-10B(SF), or BE-10B BANK. It must also file a Form BE-
10B(LF), BE-10B(SF), or BE-10B BANK, as appropriate, for each nonexempt
foreign affiliate.
(ii) If for a nonbank U.S. Reporter no one of the three items
listed in paragraph (c)(1)(i) of this section was greater than $100
million (positive or negative) at any time during the Reporter's 1999
fiscal year, the U.S. Reporter is required to file on Form BE-10A only
items 1 through 27 and items 30 through 35 and, as applicable, a BE-10A
SUPPLEMENT listing each, if any, foreign affiliate that is exempt from
being reported on Form BE-10B(LF), BE-10B(SF), or BE-10B BANK. It must
also file a Form BE-10B(LF), BE-10B(SF), or BE-10B BANK, as
appropriate, for each nonexempt foreign affiliate.
(2) Form BE-10B(LF) or (SF) (Report for nonbank foreign affiliate).
(i) A BE-10B(LF) (Long Form) must be filed for each majority-owned
nonbank foreign affiliate of a nonbank U.S. Reporter, whether held
directly or indirectly, 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 $100
million (positive or negative) at any time during the affiliate's 1999
fiscal year.
(ii) A BE-10B(SF) (Short Form) must be filed:
(A) For each majority-owned nonbank foreign affiliate of a nonbank
U.S. Reporter, whether held directly or indirectly, for which any one
of the three items listed in paragraph (c)(2)(i) of this section was
greater than $7 million but for which no one of these items was greater
than $100 million (positive or negative), at any time during the
affiliate's 1999 fiscal year, and
(B) For each minority-owned nonbank foreign affiliate of a nonbank
U.S. Reporter, whether held directly or indirectly, for which any one
of the three items listed in paragraph (c)(2)(i) of this section was
greater than $7 million (positive or negative), at any time during the
affiliate's 1999 fiscal year, and
(C) For each nonbank foreign affiliate of a U.S. bank Reporter,
whether held directly or indirectly, for which any one
[[Page 67719]]
of the three items listed in paragraph (c)(2)(i) of this section was
greater than $7 million (positive or negative), at any time during the
affiliate's 1999 fiscal year.
(iii) Notwithstanding paragraphs (c)(2)(i) and (c)(2)(ii) of this
section, a Form BE-10B(LF) or (SF) must be filed for a foreign
affiliate of the U.S. Reporter that owns another nonexempt foreign
affiliate of that U.S. Reporter, even if the foreign affiliate parent
is otherwise exempt, i.e., a Form BE-10B(LF), (SF), or BANK must be
filed for all affiliates upward in a chain of ownership.
(d) Forms for U.S. Reporters and foreign affiliates that are banks
or bank holding companies. (1) For purposes of the BE-10 survey,
``banking'' covers a business entity engaged in deposit banking or
closely related functions, including commercial banks, Edge Act
corporations engaged in international or foreign banking, foreign
branches and agencies of U.S. banks whether or not they accept deposits
abroad, savings and loans, savings banks, and bank holding companies,
i.e., holding companies for which over 50 percent of their total income
is from banks that they hold. If the bank or bank holding company is
part of a consolidated business enterprise and the gross operating
revenues from nonbanking activities of this consolidated entity are
more than 50 percent of its total revenues, then the consolidated
entity is deemed not to be a bank even if banking revenues make up the
largest single source of all revenues. (Activities of subsidiaries of a
bank or bank holding company that may not be banks but that provide
support to the bank parent company, such as real estate subsidiaries
set up to hold the office buildings occupied by the bank parent
company, are considered bank activities.)
(2) Form BE-10A BANK (Report for a U.S. Reporter that is a bank). A
BE-10A BANK report must be completed by a U.S. Reporter that is a bank.
For purposes of filing Form BE-10A BANK, the U.S. Reporter is deemed to
be the fully consolidated U.S. domestic business enterprise and all
required data on the form shall be for the fully consolidated domestic
entity.
(i) If a U.S. bank had any foreign affiliates at any time during
its 1999 fiscal year, whether a bank or nonbank and whether held
directly or indirectly, 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 $7
million (positive or negative) at any time during the affiliate's 1999
fiscal year, the U.S. Reporter must file a Form BE-10A BANK and, as
applicable, a BE-10A BANK SUPPLEMENT listing each, if any, foreign
affiliate, whether bank or nonbank, that is exempt from being reported
on Form BE-10B (SF), or BE-10B BANK. It must also file a Form BE-10B
(SF) for each nonexempt nonbank foreign affiliate and a Form BE-10B
BANK for each nonexempt bank foreign affiliate.
(ii) If the U.S. bank Reporter had no foreign affiliates for which
any one of the three items listed in paragraph (d)(2)(i) of this
section was greater than $7 million (positive or negative) at any time
during the affiliate's 1999 fiscal year, the U.S. Reporter must file a
Form BE-10A BANK and a BE-10A BANK SUPPLEMENT, listing all foreign
affiliates exempt from being reported on Form BE-10B (SF) or BE-10
BANK.
(3) Form BE-10B BANK (Report for a foreign affiliate that is a
bank). (i) A BE-10B BANK report must be filed for each foreign bank
affiliate of a bank or nonbank U.S. Reporter, whether directly or
indirectly held, 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 $7 million
(positive or negative) at any time during the affiliate's 1999 fiscal
year.
(ii) Notwithstanding paragraph (d)(3)(i) of this section, a Form
BE-10B BANK must be filed for a foreign bank affiliate of the U.S.
Reporter that owns another nonexempt foreign affiliate of that U.S.
Reporter, even if the foreign affiliate parent is otherwise exempt,
i.e., a Form BE-10B (LF), (SF), or BANK must be filed for all
affiliates upward in a chain of ownership. However, a Form BE-10B BANK
is not required to be filed for a foreign bank affiliate in which the
U.S. Reporter holds only an indirect ownership interest of 50 percent
or less and that does not own a reportable nonbank foreign affiliate,
but the indirectly owned bank affiliate must be listed on the BE-10A
BANK SUPPLEMENT.
(e) Due date. A fully completed and certified BE-10 report
comprising Form BE-10A or 10A BANK, BE-10A SUPPLEMENT (as required),
and Form(s) BE-10B (LF), (SF), or BANK (as required) is due to be filed
with BEA not later than May 31, 2000 for those U.S. Reporters filing
fewer than 50, and June 30, 2000 for those U.S. Reporters filing 50 or
more, Forms BE-10B (LF), (SF), or BANK.
[FR Doc. 99-31412 Filed 12-2-99; 8:45 am]
BILLING CODE 3510-06-M
