[Federal Register: August 13, 2004 (Volume 69, Number 156)]
[Rules and Regulations]
[Page 50062-50064]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13au04-4]
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DEPARTMENT OF COMMERCE
Bureau of Economic Analysis
15 CFR Part 801
[Docket No. 030929241-4172-02]
RIN 0691-AA55
International Services Surveys: BE-9, Quarterly Survey of Foreign
Airline Operators' Revenues and Expenses in the United States
AGENCY: Bureau of Economic Analysis, Commerce.
ACTION: Final rule.
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SUMMARY: This final rule amends regulations to set forth the reporting
requirements for the BE-9, Quarterly Survey of Foreign Airline
Operators' Revenues and Expenses in the United States.
The survey is mandatory and will be conducted under the
International Investment and Trade in Services Survey Act. Data from
the BE-9 survey are needed for the compilation of the U.S. balance of
payments accounts. The information collected in this survey will be
used in developing the ``transportation'' portion of the U.S. balance
of payments accounts. The balance of payments accounts, which are
published quarterly in the Survey of Current Business, are one of the
major statistical products of BEA. They are used extensively by both
government and private organizations. Without the information collected
in this survey, quarterly data needed for estimating an integral
component of the transportation account would be unavailable. The data
are utilized by private organizations and numerous government agencies
for analyzing economic trends. The data collected are also used for
compiling the U.S. national income and product accounts, and for
reporting to international organizations such as the International
Monetary Fund.
The survey will cover the transactions currently covered on the BE-
36, Foreign Airline Operators' Revenues and Expenses in the United
States, which is collected annually. The BE-36 will be discontinued
following the final data collection for 2003.
DATES: Effective Date: This final rule will be effective September 13,
2004.
FOR FURTHER INFORMATION CONTACT: Edward Dozier, Balance of Payments
Division (BE-58), Bureau of Economic Analysis, U.S. Department of
Commerce, Washington, DC 20230; via the Internet at
edward.dozier@bea.gov; or via telephone at (202) 606-9559.
SUPPLEMENTARY INFORMATION: In the October 17, 2003, Federal Register
(68 FR 59750-59751), BEA published a notice of proposed rulemaking that
set forth the reporting requirements for the BE-9, Quarterly Survey of
Foreign Airline Operators' Revenues and Expenses in the United States.
The major purpose of the survey is for the compilation of the U.S.
balance of payments accounts. The information collected in this survey
is used in developing the ``transportation'' portion of the U.S.
balance of payments accounts. The balance of payments accounts, which
are published quarterly in the Survey of Current Business, are one of
the major statistical products of BEA. They are used extensively by
both Government and private organizations. Without the information
collected in this survey, quarterly data needed for estimating an
integral component of the transportation account would be unavailable.
The data are utilized by private organizations and numerous government
agencies for analyzing economic trends. The data collected are also
used for compiling the U.S. national income and product accounts, and
for reporting to international organizations such as the International
Monetary Fund.
The BE-9 survey is mandatory and will be conducted under the
International Investment and Trade in Services Survey Act. The survey
requests information from foreign air carriers operating in the United
States. Information is collected on a quarterly basis from foreign air
carriers with total annual covered revenues or total annual covered
expenses incurred in the United States of $5 million or more. Foreign
air carriers with total annual covered revenues and expenses below $5
million are exempt from reporting. The exemption criterion is based on
the annual revenues or expenses covered by the survey for both the
current and previous year. Thus, if a foreign airline operator had
revenues or expenses covered by the survey of $5 million or more during
the previous year or if the company expects its revenues or expenses
will be $5 million or more during the current year, then it must
complete the survey for each of the four quarters of the current year.
The BE-9 quarterly survey will cover the transactions currently
covered on the BE-36, Foreign Airline Operators' Revenues and Expenses
in the United States, which is collected annually. The BE-36 survey
will be discontinued following a final data collection for 2003.
In response to the proposed rule published on October 17, 2003,
three organizations commented on the proposed rule. As a result of
these comments, BEA made one change in issuing this final rule.
Specifically, the estimated average number of hours per response was
increased from 5 hours to 8 hours, which increased the estimated annual
reporting burden from 1,120 hours to 1,792 hours. BEA addressed all
comments on the proposed rule in a December 23, 2003 letter that was
sent to all organizations that provided comments and to OMB. Below is a
summary of the comments received and BEA's response.
Comment: BEA has not demonstrated the need for a quarterly
collection of data.
Response: The Bureau of Economic Analysis (BEA) is responsible for
compiling the quarterly U.S. balance of payments (BOP) accounts, which
are published in the Survey of Current Business. U.S. exports and
imports of transportation services, which are derived in part from BEA
surveys such as the BE-36, are major components of these accounts. The
BOP accounts are used extensively by Government and by private
organizations, for supporting U.S. international economic policy,
including trade negotiations, and for analyzing the impact of that
policy and the policy of foreign countries on international trade in
services. The accounts also are included in the quarterly national
income and product (or GDP) accounts.
Annual information on transportation services are now collected by
BEA on annual form BE-36. Quarterly estimates of transportation
services currently must be made by extrapolating forward data
pertaining to the prior year (as reported on form BE-36 for the prior
year) through the use of indicator series, such as on the number of
travelers or on the
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value or weight of goods imports and exports. In addition to these
quarterly estimates, monthly estimates must also be prepared from these
data through indicator series; these estimates are included in broader
aggregates in the joint BEA-Census Bureau monthly news release on trade
in goods and services.
More current and accurate reported data on trade in services are
needed in periods, such as now, when trade in such services may be
experiencing sharp movements. One organization remarked about the sharp
business downswing now being experienced by the airline industry. For
BEA's quarterly estimates of international trade and GDP to accurately
reflect the extent of the downswing, quarterly data are essential. For
example, data on 2003 transactions are not reported to BEA until annual
form BE-36 is filed, which was in the spring of 2004. At that time,
only annual data was provided, which are not of significant help in
monitoring changes in business conditions or for compiling the
quarterly GDP or balance of payments accounts. The quality of the
transportation estimates in international transactions accounts and
national income and product accounts will substantially improve with
the collection of accurate quarterly data on a quarterly survey.
Quarterly surveys also will provide more accurate current information
on U.S. trade in transportation services for use in connection with
trade negotiations and for other international economic policy uses. In
addition, they would provide the solid basis needed for assuring
accuracy of the monthly goods and services trade estimates.
Comment: BEA's estimate of time and cost associated with filing the
survey is substantially understated.
Response: BEA had estimated 5.0 hours as the average reporting
burden on respondents for reviewing instructions and completing the
report form. BEA first developed this estimate many years ago, based on
conversations with a number of companies that file the annual BE-36
survey, and has periodically since then looked into its accuracy. For
example, on April 2, 2003, BEA sent a letter and a description of the
proposed BE-9 survey to 5 foreign air carriers, and requested comments
and suggestions from the recipients on the proposed survey. BEA did not
receive any comments on the burden estimate at that time.
Some of the concerns about the time needed to complete the survey
may be based on a misunderstanding of some of the reporting
requirements. For example, one organization commented that many of
aircraft maintenance items are incurred and paid overseas and should be
attributed to expenses contemplated in this survey. In fact, the report
form is designed to capture transactions between U.S. and foreign
persons, and so, for example, expenditures made overseas for aircraft
maintenance (and all other overseas expenses) should be excluded (see
instructions for item 3 of the report form). BEA would be pleased to
talk or to meet with any respondent to discuss survey reporting
requirements, and would welcome suggestions for improving the clarity
of survey instructions.
Also, it should be noted that estimates are acceptable where exact
accounting figures are unavailable. Proposed form BE-9 has relatively
few data items (consisting of just 9 data items). Basically, BEA is
looking to see what foreign airlines spent in the United States (which
are U.S. exports to foreigners), and what U.S. persons paid to foreign
airlines (which are U.S. imports of services from foreigners),
excluding passenger fares (which are estimated by BEA using other
means).
Despite the above comments, BEA agrees that the estimate of average
respondent burden for form BE-9 is probably too low. Based on the
comments received, BEA increased the estimate of average reporting
burden from 5.0 hours to 8.0 hours. Furthermore, BEA will consult with
respondents after they have experience with form BE-9, and if it is
determined that the burden estimate should be revised again at that
time, BEA will do so.
Comment: The quality of reported data may be poor.
Response: One organization commented that many expenditures
incurred during the year will not be booked in an airline's accounting
system until the end of the year; before then, the expenditures may be
placed in a pending account. They expressed a similar concern about
actual commissions--these may be known with certainty only after final
auditing is completed, which is at or after the end of the year.
BEA recognizes that final, audited data are often unavailable in
time for quarterly (or even annual) reporting on its surveys. Thus, as
noted above, respondents are encouraged to use estimates where precise
final data are unavailable from readily available accounting data.
BEA also believes that it can identify substantial errors in
reported data and obtain respondent cooperation in providing corrected
data. BEA believes that the quarterly estimates that it prepares will
therefore be substantially correct and, certainly, they will be much
more accurate than BEA estimates of quarterly transactions based on
extrapolations of the respondent's prior year data.
It should also be noted that expenses reported on the proposed
quarterly survey, as well as on the existing annual survey, must be
disaggregated by major category--fuel and oil; wages and salaries;
brokers' fees and commissions; aircraft handling and terminal expenses;
aircraft leasing expenses; and all other expenses. Data for most of
these categories should exhibit a relatively smooth trend from quarter
to quarter unless there were substantial changes in the U.S. operations
of the foreign air carrier. Thus, unusual quarterly changes in the
reported data can easily be spotted by BEA and would be brought to the
respondent's attention. If the respondent determined that the reported
data incorrectly excluded major categories of expenses (or that
expenses for the full year were incorrectly bunched in the fourth
quarter of that year), corrected estimates would be provided.
Finally, BEA notes that it has collected quarterly revenue and
expenses data from U.S. air carriers for many years, on quarterly form
BE-37. That is, U.S. carriers have been providing the information on
their foreign revenues and expenses for a considerable number of years,
and BEA's proposal for the BE-9 is to collect similar information from
foreign air carriers. While BEA agrees that the BE-9 entails some
increase in burden for respondents now reporting on the annual BE-36
survey, our experience in collecting information from U.S. air carriers
leads us to conclude that the quality of the quarterly data will be
high.
Executive Order 12866
This final rule is not significant for purposes of E.O. 12866.
Executive Order 13132
This final rule does not contain policies with Federalism
implications as that term is defined in E.O. 13132.
Paperwork Reduction Act
The collection of information required in this final rule was
approved by the Office of Management and Budget 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
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to the requirements of the Paperwork Reduction Act unless that
collection displays a currently valid Office of Management and Budget
Control Number; such a Control Number (0608-0068) will be displayed.
The BE-9 survey is expected to result in the filing of reports from
about 56 respondents on a quarterly basis, or about 224 responses
annually. The average number of hours per response is 8.0 hours, or an
annual reporting burden of 1,792 hours (224 responses multiplied by 8
hours average burden). This estimate includes time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. The actual burden may vary from reporter to
reporter, depending upon the number and variety of the respondent's
transactions and the ease of assembling the data.
Comments regarding the burden estimate or 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; or faxed (202) 395-7245) or e-mailed (pbugg@omb.eop.gov) to the
Office of Management and Budget, O.I.R.A. (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 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 as that term is
defined in the Regulatory Flexibility Act. The factual basis for the
certification was published with the proposed rule. 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 801
International transactions, Economic statistics, Foreign trade,
Penalties, Reporting and recordkeeping requirements.
Dated: August 5, 2004.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.
0
For the reasons set forth in the preamble, BEA amends 15 CFR part 801,
as follows:
PART 801--SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S.
AND FOREIGN PERSONS
0
1. The authority citation for 15 CFR Part 801 is revised 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, January 19,1977 (as amended by E.O. 12318, August
21, 1981; and E.O. 12518, June 3, 1985).
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2. Section 801.9 is amended by adding new paragraph (c)(3) to read as
follows:
Sec. 801.9 Reports required.
(c) Quarterly surveys. * * *
(3) BE-9, Quarterly Survey of Foreign Airline Operators' Revenues
and Expenses in the United States:
(i) Who must report. A BE-9 report is required from U.S. offices,
agents, or other representatives of foreign airlines that are engaged
in transporting passengers or freight and express to or from the United
States. If the U.S. office, agent, or other representative does not
have all the information required, it must obtain the additional
information from the foreign airline operator.
(ii) Exemption. A U.S. person otherwise required to report is
exempt from reporting if total annual covered revenues and total annual
covered expenses incurred in the United States were each less than $5
million during the previous year and are expected to be less than $5
million during the current year. If either total annual covered
revenues or total annual covered expenses were or are expected to be $5
million or more, a report must be filed.
* * * * *
[FR Doc. 04-18497 Filed 8-12-04; 8:45 am]
BILLING CODE 3510-06-P