[Federal Register: December 7, 2004 (Volume 69, Number 234)]
[Rules and Regulations]               
[Page 70543-70546]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07de04-6]                         

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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 040907254-4254-01]
RIN 0691-AA52

 
Direct Investment Surveys: BE-10, Benchmark Survey of U.S. Direct 
Investment Abroad--2004

AGENCY: Bureau of Economic Analysis, Commerce

ACTION: Final rule.

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SUMMARY: This final rule amends regulations for the BE-10, Benchmark 
Survey of U.S. Direct Investment Abroad.
    The BE-10 survey is conducted once every five 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 2004. 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. It obtains universe data on 
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 final rule: Increases the exemption level for reporting on the 
BE-10B(SF) short form from $7 million to $25 million and on the BE-10B 
Bank form from $7 million to $10 million; increases the exemption level 
for reporting on the BE-10B(LF) long form from $100 million to $150 
million; and increases the exemption level for reporting only selected 
items on the BE-10A form from $100 million to $150 million. In 
conjunction with these increases in exemption levels, BEA is 
introducing an abbreviated short form, Form BE-10B Mini, for reporting 
nonbank foreign affiliates with assets, sales or gross operating 
revenues, and net income (loss) less than or equal to $25 million but 
greater than $10 million.

DATES: This final rule will be effective January 6, 2005.

FOR FURTHER INFORMATION CONTACT: Obie G. Whichard, Chief, International 
Investment Division (BE-50), Bureau of Economic Analysis, U.S. 
Department of Commerce, Washington, DC 20230; phone (202) 606-9890 or 
e-mail (obie.whichard@bea.gov).

SUPPLEMENTARY INFORMATION: In the August 17, 2004, Federal Register, 69 
FR 51020-51024, BEA published a notice of proposed rulemaking setting 
forth revised reporting requirements for the BE-10, Benchmark 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 806.16 to set forth the reporting 
requirements for the BE-10, Benchmark Survey of U.S. Direct Investment 
Abroad--2004.

Description of Changes

    The BE-10, Benchmark Survey of U.S. Direct Investment Abroad, is a 
mandatory survey and is conducted once every 5 years 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 2005; responses will be due by May 31, 
2005, for respondents required to file fewer than 50 foreign affiliate 
report forms and by June 30, 2005 for those required to file 50 or more 
forms.
    This final rule: (1) Increases the exemption level for reporting on 
the BE-10B(SF) short form from $7 million to $25 million and on the BE-
10B Bank form from $7 million to $10 million; (2) increases the 
exemption level for reporting on the BE-10B(LF) long form from $100 
million to $150 million; and (3) increases the exemption level for 
reporting only selected items on the BE-10A form from $100 million to 
$150 million. In conjunction with these increases in exemption levels, 
an abbreviated short form is introduced for reporting nonbank foreign 
affiliates with assets, sales or gross operating revenues, and net 
income (loss) less than or equal to $25 million but with at least one 
of these items greater than $10 million.
    In addition to the changes in the reporting criteria mentioned 
above, BEA will expand reporting requirements on the BE-10B(SF) so that 
certain items that previously had been reportable only for majority-
owned affiliates with assets, sales or gross operating revenues, or net 
income (loss) over $50 million will now be reportable for all majority-
owned affiliates being filed on the BE-10B(SF).
    BEA will add questions to the BE-10A form and BE-10B(LF) long form 
to collect detail on: (1) The broad occupational structure of 
employment; (2) premiums earned and claims paid for U.S. Reporters and 
foreign affiliates operating in the insurance industry; (3)

[[Page 70544]]

finished goods purchased for resale for U.S. Reporters and foreign 
affiliates operating in the wholesale and retail trade industries; and 
(4) research and development performed for affiliated persons or for 
others. In addition, BEA will expand the income statement on the BE-
10B(SF) short form to include items on the long form and to add 
questions to the BE-10A Bank and BE-10B Bank forms to collect 
information on sales of services and on interest received and paid.
    To offset the burden imposed by these additional questions, BEA 
will remove questions on: (1) U.S. trade in goods by product; (2) U.S. 
Reporter exports to unaffiliated foreign persons by country of 
destination; and (3) composition of external finances for the U.S. 
Reporter. In addition, BEA will replace sales by country of destination 
on the BE-10B(LF) with sales by major countries/regions.

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(b) of the Act provides 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 are used to derive 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 will consist of an instruction booklet, a claim for not 
filing the BE-10, and a number of report forms. The amount and type of 
data required to be reported vary according to the size of the U.S. 
Reporters or foreign affiliates, whether they are banks or nonbanks 
and, for foreign affiliates, whether or not they are majority-owned by 
U.S. direct investors. For purposes of the BE-10 survey, a ``bank'' is 
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, bank holding companies, and financial holding companies. 
The report forms that will be used in the survey consist of the 
following:
    1. Form BE-10A--Report for nonbank U.S. Reporters;
    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 $150 million (positive or negative);
    4. Form BE-10B(SF) (Short Form)--Report for majority-owned nonbank 
foreign affiliates of nonbank U.S. parents with assets, sales, or net 
income greater than $25 million but not greater than $150 million 
(positive or negative); minority-owned nonbank foreign affiliates of 
nonbank U.S. parents with assets, sales, or net income greater than $25 
million (positive or negative); and nonbank affiliates of U.S. bank 
parents with assets, sales, or net income greater than $25 million 
(positive or negative);
    5. Form BE-10B Mini--Report for nonbank foreign affiliates with 
assets, sales, or net income greater than $10 million but not greater 
than $25 million (positive or negative); and
    6. 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, to reduce respondent burden, foreign 
affiliates with assets, sales, and net income each equal to or less 
than $10 million (positive or negative) are exempt from being reported 
on Form BE-10B(SF), BE-10B Mini, or BE-10B BANK (but must be listed, 
along with selected identification information and data, on Form BE-10A 
SUPPLEMENT A or BE-10A BANK SUPPLEMENT A).

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 required in this final rule has been 
approved by the Office of Management and Budget

[[Page 70545]]

(OMB) under the Paperwork Reduction Act (PRA).
    Notwithstanding any other provision 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 OMB control number 
for the BE-10 is 0608-0049; the collection will display this number.
    The survey is expected to result in the filing of reports from 
approximately 3,875 respondents. The respondent burden for this 
collection of information will vary from one company to another, but is 
estimated to average 110 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 for the 
2004 survey is estimated at 428,750 hours.
    Comments regarding the burden estimate or any other 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 (Fax: 202-606-5311); and Office of Management and Budget, 
O.I.R.A., Paperwork Reduction Project 0608-0049, Attention PRA Desk 
Officer for BEA, via the Internet at pbugg@omb.eop.gov, 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 final rule 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 2004 fiscal 
year. Companies that have direct investments abroad tend to be quite 
large. To reduce 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 $150 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.
    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

    International transactions, Economic statistics, U.S. investment 
abroad, Penalties, Reporting and recordkeeping requirements.

J. Steven Landefeld,
Director, Bureau of Economic Analysis.

0
For the reasons set forth in the preamble, BEA amends 15 CFR Part 806 
as follows:

PART 806--DIRECT INVESTMENT SURVEYS

0
1. The authority citation for 15 CFR Part 806 is revised 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); E.O. 12518 (3 CFR, 1985 Comp., p. 348).


0
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--2004.

    A BE-10, Benchmark Survey of U.S. Direct Investment Abroad will be 
conducted covering 2004. All legal authorities, provisions, 
definitions, and requirements contained in Sec.  806.1 through Sec.  
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--2004, contained in this section, whether or 
not they are contacted by BEA. Also, a person, or their agent, that 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. This may be accomplished by:
    (1) Certifying in writing, by the due date of the survey, 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'' by 
the due date of the survey; 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), BE-10B Mini and/or 
BE-10B BANK) by May 31, 2005, or June 30, 2005, 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 2004 fiscal year.
    (2) If the U.S. person had no foreign affiliates during its 2004 
fiscal year, a ``BE-10 Claim for Not Filing'' must be filed by the due 
date of the survey; no other forms in the survey are required. If the 
U.S. person had any foreign affiliates during its 2004 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 if the foreign business enterprise 
was established, acquired, seized, liquidated, sold, expropriated, or 
inactivated during the U.S. person's 2004 fiscal year.
    (4) The amount and type of data required to be reported vary 
according to the size of the U.S. Reporters or foreign affiliates, 
whether they are banks or nonbanks, and, for foreign affiliates, 
whether they are majority-owned or minority-owned by U.S. direct 
investors. For purposes of the BE-10 survey, a ``majority-owned'' 
foreign affiliate is one in which the combined direct and indirect 
ownership interest of all U.S. parents of the foreign affiliate exceeds 
50 percent; all other affiliates are referred to as ``minority-owned'' 
affiliates. In addition, a ``bank'' is a business entity engaged in 
deposit banking or closely related functions, including commercial 
banks, Edge Act corporations, foreign branches and agencies of U.S. 
banks whether or not they accept deposits abroad, savings and loans, 
savings banks, bank holding companies, and financial holding companies. 
Elsewhere in this section, when ``bank'' is used, it refers to all such 
organizations.
    (c) Forms for nonbank U.S. Reporters and foreign affiliates. (1) 
Form BE-10A (Report for nonbank 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. However, where a U.S. 
Reporter's primary line of business is not in banking (or related 
financial activities), but the Reporter also has

[[Page 70546]]

ownership in a bank, the bank, including all of its domestic 
subsidiaries or units, must file on the BE-10A BANK form and the 
nonbanking U.S. operations not owned by the bank must file on the BE-
10A.
    (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 $150 million (positive or negative) at any time during the 
Reporter's 2004 fiscal year, the U.S. Reporter must file a complete 
Form BE-10A and, as applicable, a BE-10A SUPPLEMENT A listing each, if 
any, foreign affiliate that is exempt from being reported on Form BE-
10B(LF), BE-10B(SF), BE-10B Mini, or BE-10B BANK. It must also file a 
Form BE-10B(LF), BE-10B(SF), BE-10B Mini, or BE-10B BANK, as 
appropriate, for each nonexempt foreign affiliate.
    (ii) If for a nonbank U.S. Reporter none of the three items listed 
in paragraph (c)(1)(i) of this section was greater than $150 million 
(positive or negative) at any time during the Reporter's 2004 fiscal 
year, the U.S. Reporter is required to file on Form BE-10A only certain 
items as designated on the form and, as applicable, a BE-10A SUPPLEMENT 
A listing each, if any, foreign affiliate that is exempt from being 
reported on Form BE-10B(LF), BE-10B(SF), BE-10B Mini, or BE-10B BANK. 
It must also file a Form BE-10B(LF), BE-10B(SF), BE-10B Mini, or BE-10B 
BANK, as appropriate, for each nonexempt foreign affiliate.
    (2) Form BE-1OB(LF), (SF), or Mini (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 $150 million (positive or negative) at any time during the 
affiliate's 2004 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 $25 million but for which none of these items was greater 
than $150 million (positive or negative), at any time during the 
affiliate's 2004 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 $25 million (positive or negative), at any time during the 
affiliate's 2004 fiscal year, and
    (C) For each nonbank foreign affiliate of a U.S. bank 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 
$25 million (positive or negative), at any time during the affiliate's 
2004 fiscal year.
    (iii) A BE-10B Mini must be filed for each nonbank foreign 
affiliate, 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 $10 million but for which none of these items was greater 
than $25 million (positive or negative), at any time during the 
affiliate's 2004 fiscal year.
    (iv) Notwithstanding paragraphs (c)(2)(i), (c)(2)(ii), and 
(c)(2)(iii) of this section, a Form BE-10B(LF), (SF), or Mini 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), 
Mini, 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, 
bank holding companies, or financial holding companies. (1) 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 2004 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 $10 
million (positive or negative) at any time during the affiliate's 2004 
fiscal year, the U.S. Reporter must file a Form BE-10A BANK and, as 
applicable, a BE-10A BANK SUPPLEMENT A listing each, if any, foreign 
affiliate, whether bank or nonbank, that is exempt from being reported 
on Form BE-10B(SF), BE-10B Mini, or BE-10B BANK. It must also file a 
Form BE-10B(SF) or BE-10B Mini 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 $10 million (positive or negative) at any time 
during the affiliate's 2004 fiscal year, the U.S. Reporter must file a 
Form BE-10A BANK and a BE-10A BANK SUPPLEMENT A, listing all foreign 
affiliates exempt from being reported on Form BE-10B(SF), BE-10B Mini, 
or BE-10B BANK.
    (2) 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 $10 million 
(positive or negative) at any time during the affiliate's 2004 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), Mini, 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 A.
    (e) Due date. A fully completed and certified BE-10 report 
comprising Form BE-10A or 10A BANK and Form(s) BE-10B(LF), (SF), Mini, 
or BANK (as required) is due to be filed with BEA not later than May 
31, 2005 for those U.S. Reporters filing fewer than 50, and June 30, 
2005 for those U.S. Reporters filing 50 or more, Forms BE-10B(LF), 
(SF), Mini, or BANK.

[FR Doc. 04-26764 Filed 12-6-04; 8:45 am]

BILLING CODE 3510-06-P