[Federal Register: November 16, 2006 (Volume 71, Number 221)]
[Proposed Rules]
[Page 66706-66708]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16no06-25]
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DEPARTMENT OF COMMERCE
Bureau of Economic Analysis
15 CFR Part 801
[Docket No. 061005257-6257-01]
RIN 0691-AA62
International Services Surveys: BE-185, Quarterly Survey of
Financial Services Transactions Between U.S. Financial Services
Providers and Foreign Persons
AGENCY: Bureau of Economic Analysis, Commerce.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This proposed rule amends regulations of the Bureau of
Economic Analysis, Department of Commerce (BEA) to set forth the
reporting requirements for the BE-185, Quarterly Survey of Financial
Services Transactions Between U.S. Financial Services Providers and
Foreign Persons. This rule would replace the rule for a similar but
more limited survey, the BE-85, Quarterly Survey of Financial Services
Transactions Between U.S. Financial Services Providers and Unaffiliated
Foreign Persons. A new agency form number and survey title are being
introduced because the survey program is being reconfigured to begin
collection of data on transactions with affiliated foreigners using the
same survey instruments as are used to collect information on
transactions with unaffiliated foreigners. This change will allow
respondents to report financial services transactions with foreign
persons on one quarterly survey, rather than on as many as three
different quarterly surveys. If adopted the BE-185 survey would be
conducted quarterly beginning with the first quarter of 2007.
The proposed BE-185 survey data would be used to update universe
estimates from similar data reported on the BE-80, Benchmark Survey of
Financial Services Transactions Between U.S. Financial Services
Providers and Unaffiliated Foreign Persons and on the benchmark and
quarterly direct investment surveys that were administered to collect
data on transactions with affiliated foreign persons.
DATES: Comments on this proposed rule will receive consideration if
submitted in writing on or before 5 p.m. January 16, 2007.
ADDRESSES: You may submit comments, identified by RIN 0691-AA62, and
referencing the agency name (Bureau of Economic Analysis), by any of
the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments. For agency, select
``Commerce Department--all.''
E-mail: Obie.Whichard@bea.gov.
Fax: Office of the Chief, International Investment
Division, (202) 606-5318.
Mail: Office of the Chief, International Investment
Division, U.S. Department of Commerce, Bureau of Economic Analysis, BE-
50, Washington, DC 20230.
Hand Delivery/Courier: Office of the Chief, International
Investment Division, U.S. Department of Commerce, Bureau of Economic
Analysis, BE-50, Shipping and Receiving, Section M100, 1441 L Street,
NW., Washington, DC 20005.
Public Inspection: Comments may be inspected at BEA's
offices, 1441 L Street, NW., Room 7006, between 8:30 a.m. and 5 p.m.,
eastern time Monday though Friday.
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; e-mail; or phone (202)
606-9890.
SUPPLEMENTARY INFORMATION: This proposed rule would amend 15 CFR 801.9
to replace the reporting requirements for the BE-85, Quarterly Survey
of Financial Services Transactions Between U.S. Financial Services
Providers and Unaffiliated Foreign Persons, with requirements for the
BE-185, Quarterly Survey of Financial Services Transactions Between
U.S. Financial Services Providers and Foreign Persons. The Department
of Commerce, as part of its continuing effort to reduce paperwork and
respondent burden, invites the general public and other Federal
agencies to comment on proposed and/or continuing information
collections, as required by the Paperwork Reduction Act of 1995.
Description of Changes
The proposed BE-185 survey would be a mandatory survey and would be
conducted, beginning with transactions for the first quarter of 2007,
by BEA under the International Investment and Trade in Services Survey
Act (22 U.S.C. 3101-3108), hereinafter, ``the Act.'' For the initial
quarter of coverage, BEA would send the survey to potential respondents
in March of 2007; responses would be due by May 15, 2007.
BEA maintains a continuing dialogue with respondents and with data
users, including its own internal users, to ensure that, as far as
possible, the required data serve their intended purposes and are
available from existing records, that instructions are clear, and that
unreasonable burdens are not imposed. In designing the BE-185 survey,
BEA contacted potential survey respondents to obtain their views on the
proposed quarterly survey. In reaching decisions on what questions to
include in the survey, BEA considered the Government's need for the
data, the burden imposed on respondents, the quality of the likely
responses (for example, whether the data are available on respondents'
books), and BEA's experience in previous related annual and quarterly
surveys.
If implemented the BE-185 would collect all the same information as
the BE-85 but would also include financial services transactions with
affiliated parties (i.e., with foreign affiliates, foreign parents, and
foreign affiliates of foreign parents). BEA is currently collecting
these transactions on its quarterly direct investment surveys (the BE-
577, Direct Transactions of U.S. Reporter with Foreign Affiliate, the
BE-605, Transactions of U.S. Affiliate, except a U.S. Banking
Affiliate, with Foreign Parent, and the BE-605 Bank, Transactions of
U.S. Banking Affiliate with Foreign Parent). These transactions with
affiliated parties that are collected on BEA's quarterly direct
investment surveys would now be collected on the BE-185. In addition,
the BE-185 would also bifurcate the category for brokerage services
into two categories, by collecting information on services related to
equities transactions separately from other brokerage services.
Survey Background
The Bureau of Economic Analysis (BEA), U.S. Department of Commerce,
would conduct the BE-185 survey under the International Investment and
Trade in Services Survey Act (22 U.S.C. 3101-3108), hereinafter, ``the
Act'' and
[[Page 66707]]
Section 5408 of the Omnibus Trade and Competitiveness Act of 1988 (Pub.
L. 100-418, 15 U.S.C. 4908(b)). Section 4(a) of the Act (22 U.S.C.
3103(a)) provides that the President shall, to the extent he deems
necessary and feasible, conduct a regular data collection program to
secure current information related to international investment and
trade in services and publish for the use of the general public and
United States Government agencies periodic, regular, and comprehensive
statistical information collected pursuant to this subsection.
In Section 3 of Executive Order 11961, as amended by Executive
Orders 12318 and 12518, the President delegated the responsibilities
under the Act for performing functions concerning international trade
in services to the Secretary of Commerce, who has redelegated them to
BEA. The survey would provide a basis for updating estimates of the
universe of financial services transactions between U.S. and foreign
persons. The data are needed to monitor trade in financial services;
analyze their impact on the U.S. and foreign economies; compile and
improve the U.S. international transactions, national income and
product, and input-output accounts; support U.S. commercial policy on
financial services; assess and promote U.S. competitiveness in
international trade in services; and improve the ability of U.S.
businesses to identify and evaluate market opportunities.
Executive Order 12866
This proposed rule has been determined to be not significant for
purposes of E.O. 12866.
Executive Order 13132
This proposed rule does not contain policies with federalism
implications sufficient to warrant preparation of a federal assessment
under E.O. 13132.
Paperwork Reduction Act
This proposed rule contains a collection-of-information requirement
subject to review and approval by the Office of Management and Budget
(OMB) under the Paperwork Reduction Act. The requirement will be
submitted to OMB as a request for a revision of a currently approved
collection under OMB control number 0608-0065.
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 BE-185 quarterly survey, as proposed, is expected to result in
the filing of reports containing mandatory data from approximately 175
respondents on a quarterly basis, or 700 annually. The respondent
burden for this collection of information would vary from one
respondent to another, but is estimated to average 10 hours per
response (40 hours annually), 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
BE-185 survey is estimated at 7,000 hours, compared to 5,000 hours
estimated for the previous BE-85 survey. The increase in burden is a
result of the inclusion of transactions with affiliated foreign
persons.
Comments are requested concerning: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions 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, fax: 202-
606-5311; and the Office of Management and Budget, O.I.R.A., Paperwork
Reduction Project 0608-0065, Attention PRA Desk Officer for BEA, via e-
mail 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 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. The information collection excludes most small businesses
from mandatory reporting. Companies that engage in international
transactions in financial services tend to be relatively large, thereby
excluding them from the definition of small entity. In addition, the
reporting threshold for this survey is set at a level that will exempt
most small businesses from reporting. The proposed BE-185 quarterly
survey will be required only from U.S. financial services providers
whose sales of financial services to foreign persons exceeded $20
million for the previous fiscal year or are expected to exceed that
amount during the current fiscal year, or whose purchases of financial
services from foreign persons exceeded $15 million for the previous
fiscal year or are expected to exceed that amount during the current
fiscal year. This amount is applied to the combined total of the
individual types of transactions covered by the survey. The exemption
level will exclude most small businesses from mandatory coverage. Of
those smaller businesses that must report, most will tend to have
specialized operations and activities, so they would likely report only
one type of transaction, often limited to transactions with a single
partner country; therefore, the burden on them should be small. In
addition, this survey mailing is a targeted mailing. Thus, since small
businesses tend not to be involved in the transactions to be covered by
the BE-185 survey, few small businesses should receive the survey.
However, those receiving the survey are expected to incur a minimal
burden in completing the exemption form.
List of Subjects in 15 CFR Part 801
International transactions, Economic statistics, Financial
services, Foreign trade, Penalties, Reporting and recordkeeping
requirements.
Dated: November 8, 2006.
Sumiyo O. Okumo,
Acting 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.86, as amended by E.O. 12318, 3
CFR, 1981 Comp., p. 173, and E.O. 12518, 3 CFR, 1985 Comp., p. 348.
2. Revise Sec. 801.9(c)(4). to read as follows:
Sec. 801.9 Reports required.
(c) Quarterly surveys. * * *
(4) BE-185, Quarterly Survey of Financial Services Transactions
Between U.S. Financial Services Providers and Foreign Persons:
[[Page 66708]]
(i) A BE-185, Quarterly Survey of Financial Services Transactions
Between U.S. Financial Services Providers and Foreign Persons, will be
conducted covering the first quarter of the 2007 calendar year and
every quarter thereafter.
(A) Who must report--(1) Mandatory reporting. Reports are required
from each U.S. person who is a financial services provider or
intermediary, or whose consolidated U.S. enterprise includes a
separately organized subsidiary or part that is a financial services
provider or intermediary, and that had sales of covered services to
foreign persons that exceeded $20 million for the previous fiscal year
or expects sales to exceed that amount during the current fiscal year,
or had purchases of covered services from foreign persons that exceeded
$15 million for the previous fiscal year or expects purchases to exceed
that amount during the current fiscal year These thresholds should be
applied to financial services transactions with foreign persons by all
parts of the consolidated U.S. enterprise combined that are financial
services providers or intermediaries. Because the thresholds are
applied separately to sales and purchases, the mandatory reporting
requirement may apply only to sales, only to purchases, or to both
sales and purchases. Quarterly reports for a year may be required
retroactively when it is determined that the exemption level has been
exceeded.
(i) The determination of whether a U.S. financial services provider
or intermediary is subject to this mandatory reporting requirement may
be based on the judgement 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.
(ii) Reporters who file pursuant to this mandatory reporting
requirement must provide data on total sales and/or purchases of each
of the covered types of financial services transactions and must
disaggregate the totals by country.
(2) Voluntary reporting. If a financial services provider or
intermediary, or all of a firm's subsidiaries or parts combined that
are financial services providers or intermediaries, had covered sales
of $20 million or less, or covered purchases of $15 million or less
during the previous fiscal year, and if covered sales or purchases are
not expected to exceed these amounts in the current fiscal year, a
person is requested to provide an estimate of the total for each type
of service for the most recent quarter. Provision of this information
is voluntary. The estimates may be based on the reasoned judgement of
the reporting entity. Because these thresholds apply separately to
sales and purchases, voluntary reporting may apply only to sales, only
to purchases, or to both.
(B) BE-185 definition of financial services provider. The
definition of financial services provider used for this survey is
identical in coverage to Sector 52 B Finance and Insurance, and holding
companies that own or influence, and are principally engaged in making
management decisions for these firms (part of Sector 55 B Management of
Companies and Enterprises) of the North American Industry
Classification System, United States, 2002. For example, companies and/
or subsidiaries and other separable parts of companies in the following
industries are defined as financial services providers: Depository
credit intermediation and related activities (including commercial
banking, savings institutions, credit unions, and other depository
credit intermediation); nondepository credit intermediation (including
credit card issuing, sales financing, and other nondepository credit
intermediation); activities related to credit intermediation (including
mortgage and nonmortgage loan brokers, financial transactions
processing, reserve, and clearinghouse activities, and other activities
related to credit intermediation); securities and commodity contracts
intermediation and brokerage (including investment banking and
securities dealing, securities brokerage, commodity contracts dealing,
and commodity contracts brokerage); securities and commodity exchanges;
other financial investment activities (including miscellaneous
intermediation, portfolio management, investment advice, and all other
financial investment activities); insurance carriers; insurance
agencies, brokerages, and other insurance related activities; insurance
and employee benefit funds (including pension funds, health and welfare
funds, and other insurance funds); other investment pools and funds
(including open-end investment funds, trusts, estates, and agency
accounts, real estate investment trusts, and other financial vehicles);
and holding companies that own, or influence the management decisions
of, firms principally engaged in the aforementioned activities.
(C) Covered types of services. The BE-185 survey covers the
following types of financial services transactions (purchases and/or
sales) between U.S. financial services providers and foreign persons:
Brokerage services related to equities transactions; other brokerage
services; underwriting and private placement services; financial
management services; credit-related services, except credit card
services; credit card services; financial advisory and custody
services; securities lending services; electronic funds transfer
services; and other financial services.
(ii) [Reserved]
* * * * *
[FR Doc. E6-19409 Filed 11-15-06; 8:45 am]
BILLING CODE 3510-06-P