01-21646. International Services Surveys: BE-20, Benchmark Survey of Selected Services Transactions With Unaffiliated Foreign Persons

AGENCY:

Bureau of Economic Analysis, Commerce.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

This document sets forth proposed rules to amend the reporting requirements for the BE-20, Benchmark Survey of Selected Services Transactions with Unaffiliated Foreign Persons.

The BE-20 survey is conducted by the Bureau of Economic Analysis (BEA), U.S. Department of Commerce, under the International Investment and Trade in Services Survey Act. The data are needed to support U.S. trade policy initiatives; compile the U.S. international transactions, national income and product, and input-output accounts; assess U.S. competitiveness in international trade in services; and improve the ability of U.S. businesses to identify and evaluate market opportunities.

BEA proposes to raise the exemption level for the BE-20 survey to $1 million in covered sales or purchases transactions from $500,000 on the previous (1996) survey. Raising the exemption level will reduce respondent burden, particularly for small companies.

The proposed rule also: creates new categories for other trade-related services, auxiliary insurance services, and waste treatment and depollution services; adds coverage of transcription services to “other” private services; and amends several other service categories. These proposed changes will close some statistical gaps in the coverage of cross-border services transactions and bring the survey into better compliance with international standards for compilation of statistics on trade in services.

DATES:

Comments on these proposed rules will receive consideration if submitted in writing on or before October 29, 2001.

ADDRESSES:

Mail comments to the Office of the Chief, International Investment Division (BE-50), Bureau of Economic Analysis, U.S. Department of Commerce, Washington DC 20230, or hand deliver them to room M-100, 1441 L Street, NW., Washington, DC 20005. Comments will be available for public inspection in room 7005, 1441 L Street, NW., between 8:30 a.m. and 4:30 p.m., Monday through Friday.

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 [phone].

SUPPLEMENTARY INFORMATION:

These proposed rules amend 15 CFR part 801 by revising Section 801.10 to set forth revised reporting requirements for the BE-20, Benchmark Survey of Selected Services Transactions with Unaffiliated Foreign Persons. The survey is conducted by the Bureau of Economic Analysis (BEA), U.S. Department of Commerce, under the International Investment and Trade in Services Survey Act (P.L. 94-472, 90 Stat. 2059, 22 U.S.C. 3101-3108, as amended). Section 3103(a) of the Act provides that “The President shall, to the extent he deems necessary and feasible—* * *(1) conduct a regular data collection program to secure current information * * * related to international investment and trade in services * * *”. In Section 3 of Executive Order 11961, as amended by Executive Order 12518, the President delegated the authority under the Act as concerns international trade in services to the Secretary of Commerce, who has redelegated it to BEA.

The BE-20 is a benchmark survey of selected services transactions with unaffiliated foreign persons. The data are needed to support U.S. trade policy initiatives; compile the U.S. international transactions, national income and product, and input-output accounts; assess U.S. competitiveness in international trade in services; and improve the ability of U.S. businesses to identify and evaluate market opportunities.

Under the proposed rule, reporting in the BE-20 benchmark survey would be required from all U.S. persons whose covered services transactions (either sales or purchases) were in excess $1 million with unaffiliated foreign persons during the reporting year. The proposed exemption level is an increase from the current level of $500,000. The increase is intended to reduce respondent burden, particularly for small companies, but will not make the published results any less comprehensive. Respondents that fall below the proposed $1 million dollar exemption level account for a small share of transactions and will, nonetheless, be required to indicate their total receipts and payments for all services covered by the survey combined in claiming exemption, and to list the primary service provided. BEA will allocate these small amounts by country and by type of service, based on the distribution of reported transactions, for inclusion in the published totals. Thus, the estimates will cover the universe of transactions.

Executive Order 12866

These proposed rules have been determined to be not significant for purposes of E.O. 12866.

Executive Order 13132

These proposed rules do not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under E.O. 13132.

Paperwork Reduction Act

These proposed rules contain a collection of information requirement subject to the Paperwork Reduction Act. A request for review of the forms has been submitted to the Office of Management and Budget under section 3507 of the Paperwork Reduction Act.

Notwithstanding any other provision of law, no person is required to respond to, nor shall a 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.

Public reporting burden for this collection of information is estimated to vary from less than four hours to 500 hours, with an overall average burden of 12 hours. This includes time for reviewing the 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 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. Comments 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 0608-0058, 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, 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.

While the survey does not collect data on total sales or other measures of the overall size of businesses that respond to the survey, historically the respondent universe has been comprised mainly of major U.S. corporations. With the proposed increase in the exemption level for the survey from $500,000 to $1 million in covered receipts or payments, even fewer small businesses can be expected to be subject to reporting than in the past. Of those smaller businesses that must report, most will tend to have specialized operations and activities and thus will be likely to report only one type of service transaction, often limited to transactions with a single partner country; therefore, the burden on them can be expected to be small.

List of Subjects in 15 CFR Part 801

• Economic statistic
• Balance of payments
• Foreign trade
• Penalties
• Reporting and recordkeeping requirements

Dated: July 19, 2001.

J. Steven Landefeld,

Director, Bureau of Economic Analysis.

For the 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

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, and E.O. 11961 (3 CFR, 1977 Comp., p. 860 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 801.10 is revised to read as follows:

§ 801.10

Rules and Regulations for the BE-20, Benchmark Survey of Selected Services Transactions With Unaffiliated Foreign Persons.

The BE-20, Benchmark Survey of Selected Services Transactions with Unaffiliated Foreign Persons, will be conducted covering companies' 2001 fiscal year and every fifth year thereafter. All legal authorities, provisions, definitions, and requirements contained in §§ 801.1 through 801.9(a) are applicable to this survey. Additional rules and regulations for the BE-20 survey are given in this section. More detailed instructions and descriptions of the individual types of services covered are given on the report from itself.

(a) The BE-20 survey consists of two parts and seven schedules. Part I requests information needed to determine whether a report is required and which schedules apply. Part II requests information about the reporting entity. Each of the seven schedules covers one or more types of services and is to be completed only if the U.S. Reporter has transactions of the type(s) covered by the particular schedule.

(b) Who must report. (1) Mandatory reporting. A BE-20 report is required from each person who had transactions (either sales or purchases) in excess of $1 million with unaffiliated foreign persons in any of the services listed in paragraph (c) of this section during its fiscal year covered by the survey.

(i) The determination of whether a U.S. person is subject to this mandatory reporting requirement may be judgmental, that is, based on the judgment of knowledgeable persons in a company who can identify reportable transactions on a recall basis, with a reasonable degree of certainty, without conducting a detailed records search. Because the $1 million threshold applies separately to sales and purchases, the mandatory reporting requirement may apply only to sales, only to purchases, or to both sales and purchases.

(ii) Reporters who file pursuant to this mandatory reporting requirement must complete Parts I and II of Form BE-20 and all applicable schedules. The total amounts of transactions applicable to a particular schedule are to be entered in the appropriate column(s) on line 1 of the schedule. In addition, except for sales of merchanting services, these amounts must be distributed below line 1 to the country(ies) involved in the transactions). For sales of merchanting services, the data by individual foreign country are not required to be reported, although these data may be reported voluntarily.

(iii) Application of the $1 million exemption level to each covered service is indicated on the schedule for that particular service. It should be noted that an item other than sales or purchases may be used as the measure of a given service for purposes of determining whether the threshold for mandatory reporting of the service is exceeded.

(2) Voluntary reporting. If, during the fiscal year covered, the U.S. person's total transaction (either sales or purchases) in any of the types of services listed in paragraph (c) of this section are $1 million or less, the U.S. person is requested to provide an estimate of the total for the each type of service.

(i) Provision of this information is voluntary. The estimates may be judgmental, that is, based on recall, without conducting a detailed manual records search. Because the $1 million threshold applies separately to sales and purchases, the voluntary reporting option may apply only to sales, only to purchases, or to both sales and purchases.

(ii) The amounts of transactions reportable on a particular schedule are to be entered in the appropriate column(s) in the voluntary reporting section of the schedule; they are not required to be disaggregated by country. Reporters filing voluntary information only should also complete Parts I and II of the form.

(3) Any U.S. person that receives the BE-20 survey form from BEA, but is not reporting data in either the mandatory or voluntary section of the form, must nevertheless complete and return the Exemption Claim included with the form to BEA. This requirement is necessary to ensure compliance with reporting requirements and efficient administration of the Act by eliminating unnecessary followup contact.

(c) Covered types of services. Only the services listed in this paragraph are covered by the BE-20 survey. Other services, such as transportation and reinsurance, are not covered. Covered services are Agricultural services; research, development, and testing services; management, consulting, and public relations service; management of health care facilities; accounting, auditing, and bookkeeping services; legal services; educational and training services; mailing, reproduction, and commercial art; employment agencies and temporary help supply services; industrial engineering services; industrial-type maintenance, installation, alteration, and training services; performing arts, sports, and other live performances, presentations, and events; sale and purchase of rights to natural resources, and lease bonus payments; use or lease of rights to natural resources, excluding lease bonus payments; disbursements to fund news-gathering costs of broadcasters; disbursements to fund news-gathering costs of print media; disbursements to fund production costs of motion pictures; disbursements to fund production costs of broadcast program material other than news; disbursements to maintain government tourism and business promotion offices; disbursements for sales promotion and representation; disbursements to participate in foreign trade shows (purchases only); premiums paid on purchases of primary insurance; losses recovered on purchases of primary insurance; construction services (purchases only); engineering, architectural, and surveying services (purchases only); mining services (purchases only); merchanting services (sales only); financial services (purchases only, by companies or parts of companies that are not financial services providers); advertising services; computer and data processing services; data base and other information services; telecommunications services; operational leasing services; other trade-related services; auxiliary insurance services; waste treatment and depollution services; and “other” private services. “Other” private services covers transactions in the following types of services: Language translation services, salvage services, security services, collection services, satellite photography and remote sensing/satellite imagery services, transport (includes satellite launches, transport of goods and people for scientific experiments, and space passenger transport), and transcription services.