[Federal Register Volume 75, Number 181 (Monday, September 20, 2010)]
[Proposed Rules]
[Pages 57217-57220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-23428]
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DEPARTMENT OF COMMERCE
Bureau of Economic Analysis
15 CFR Part 806
[Docket No. 100217100-0362-01]
RIN 0691-AA74
Direct Investment Surveys: BE-11, Annual Survey of U.S. Direct
Investment Abroad
AGENCY: Bureau of Economic Analysis, Commerce.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This proposed rule would amend regulations of the Department
of Commerce's Bureau of Economic Analysis (BEA) to set forth the
reporting requirements for the BE-11, Annual Survey of U.S. Direct
Investment Abroad. The survey is conducted annually and is a sample
survey that obtains financial and operating data covering the overall
operations of U.S. parent companies and their foreign affiliates. BEA
proposes to amend the BE-11 forms and instructions to bring them into
conformity with the 2009 BE-10, Benchmark Survey of U.S. Direct
Investment Abroad. These amendments include changes in form design and
reporting thresholds, as well as changes in the data items collected.
The proposed changes also include a change in the reporting criteria
for foreign affiliates with U.S. Parent (U.S. Reporter) ownership
between 10 and 20 percent.
DATES: Comments on this proposed rule will receive consideration if
submitted in writing on or before 5 p.m. November 19, 2010.
ADDRESSES: You may submit comments, identified by RIN 0691-AA74, 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 Keyword or ID,
enter ``EAB-2010-0002.''
E-mail: [email protected].
Fax: Office of the Chief, Direct Investment Division,
(202) 606-5318.
Mail: Office of the Chief, Direct Investment Division,
U.S. Department of Commerce, Bureau of Economic Analysis, BE-50,
Washington, DC 20230.
Hand Delivery/Courier: Office of the Chief, Direct
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.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in the
proposed rule should be sent to both BEA through any of the methods
above, and to the Office of Management and Budget (OMB), O.I.R.A.,
Paperwork Reduction Project 0608-0053, Attention PRA Desk Officer for
BEA, via e-mail at [email protected], or by FAX at 202-395-7245.
Public Inspection: All comments received are a part of the public
record and will generally be posted to http://www.regulations.gov
without change.
[[Page 57218]]
All personal identifying information (for example, name, address, etc.)
voluntarily submitted by the commentator may be publicly accessible. Do
not submit confidential business information or otherwise sensitive or
protected information. BEA will accept anonymous comments (enter N/A in
required fields if you wish to remain anonymous). Attachments to
electronic comments will be accepted in Microsoft Word, Excel,
WordPerfect, or Adobe portable document file (pdf) formats only.
FOR FURTHER INFORMATION CONTACT: David H. Galler, Chief, Direct
Investment Division (BE-50), Bureau of Economic Analysis, U.S.
Department of Commerce, Washington, DC 20230; phone (202) 606-9835.
SUPPLEMENTARY INFORMATION: In Section 3 of Executive Order 11961, as
amended by Executive Orders 12318 and 12518, the President delegated
the responsibility for performing functions under the Act concerning
direct investment to the Secretary of Commerce, who has redelegated it
to BEA. The BE-11 survey of U.S. direct investment abroad is a
mandatory annual survey conducted by BEA under the International
Investment and Trade in Services Survey Act, 22 U.S.C. 3101-3108 (the
Act).
The survey is a sample survey that collects information on a
variety of measures of the overall operations of U.S. parent companies
and their foreign affiliates, including total assets, sales, net
income, employment and employee compensation, research and development
expenditures, and exports and imports of goods. The sample data are
used to derive universe estimates in nonbenchmark years from similar
data reported in the BE-10, Benchmark Survey of U.S. Direct Investment
Abroad, which is taken every five years. The data are needed to measure
the size and economic significance of direct investment abroad, to
measure the changes in such investment, and to assess their impact on
the U.S. and foreign economies. The data are disaggregated by country
and industry of the foreign affiliate and by industry of the U.S.
parent. BEA sends survey forms to potential respondents in March of
each year; responses are due by May 31.
This proposed rule would amend 15 CFR 806.14 to set forth the
reporting requirements for the BE-11, Annual Survey of U.S. Direct
Investment Abroad. 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, 44 U.S.C. 3501-3520 (PRA).
Description of Changes
The proposed changes revise the regulations for the BE-11 survey
and bring the BE-11 forms and instructions into conformity with the
2009 BE-10, Benchmark Survey of U.S. Direct Investment Abroad. These
amendments include changes in reporting thresholds and data items
collected, as well as changes in form design. Several of these
amendments are part of a larger program to align the data collection
program for multinationals with available resources. BEA is also
proposing to expand the use of sampling to help align the data
collection program with resources.
Beginning with the 2010 annual survey, if this proposed rule is
made final, U.S. Reporters would report data on all their foreign
affiliates, regardless of industry, on one of four foreign affiliate
forms--BE-11B, BE-11C, BE-11D, or BE-11E. Data on foreign affiliates of
U.S. Reporters that are banks, bank holding companies, or financial
holding companies would be collected on the same survey forms as data
on other foreign affiliates. All U.S. Reporters would report data on
all domestic operations, on a fully consolidated basis, on Form BE-11A,
Report for U.S. Reporter. Also, under the proposed rule, U.S. Reporters
with total assets, sales or gross operating revenues, or net incomes
less than or equal to $300 million would be required to report only
certain items on Form BE-11A. This reporting threshold is an increase
from the previous threshold of $225 million.
Additionally, BEA proposes to require U.S. Reporters to file
reports annually for foreign affiliates in which they own a 10 to 20
percent voting interest. These affiliates, some of which are very
large, fall under both U.S. and international definitions for foreign
direct investment and must be represented in the statistics, but in the
past they have been required to be reported in the annual survey only
in the third year following a benchmark survey. Annual reporting will
ensure that the activities of these affiliates are accurately reflected
in the statistics derived from the survey.
As the survey is proposed, the four foreign affiliate forms are--
(a) Form BE-11B--Report for majority-owned foreign affiliates with
total assets, sales or gross operating revenues, or net income greater
than $60 million, positive or negative; filing of additional items
would be required for affiliates with assets, sales, or net income
greater than $300 million, positive or negative. (For 2008, this
threshold was $250 million.) Form BE-11B would replace 2008 annual
survey Forms BE-11B(LF) long form, BE-11B(SF) short form, and BE-
11B(FN) for reporting majority-owned foreign affiliates. The proposed
reporting threshold on the 2010 BE-11B form is $60 million, unchanged
from that for reporting the smallest foreign affiliates on the 2008 BE-
11B forms;
(b) Form BE-11C--Report for minority-owned foreign affiliates with
total assets, sales or gross operating revenues, or net income greater
than $60 million, positive or negative. This threshold is unchanged
from that on the 2008 BE-11C form;
(c) Form BE-11D--Schedule for foreign affiliates established or
acquired by the U.S. Reporter during the current reporting year with
total assets, sales or gross operating revenues, or net income greater
than $25 million, positive or negative, but for which no one of these
items is greater than $60 million, positive or negative. Form BE-11D
would replace the 2008 BE-11A Supplement A schedule for reporting newly
established or acquired foreign affiliates. The reporting threshold
would increase from $10 million to $25 million; and
(d) Form BE-11E--Report for foreign affiliates selected by BEA to
be reported on this form in lieu of Form BE-11B. Form BE-11E would
replace 2008 Form BE-11B(EZ). BEA would statistically divide into
panels, affiliates with total assets, sales or gross operating
revenues, and net income (positive or negative) between $60 million and
$300 million. At the direction of BEA, U.S. Reporters would alternate
reporting these affiliates on Form BE-11B and Form BE-11E.
A Form BE-11B, BE-11C, or BE-11E must be filed for a foreign
affiliate of the U.S. Reporter that owns another non-exempt foreign
affiliate even if the foreign affiliate parent is otherwise exempt.
That is, all affiliates upward in the chain of ownership must be
reported.
In addition to the changes in the reporting criteria, BEA proposes
adding, combining, or deleting some items on the annual survey forms.
Specifically, BEA proposes to no longer collect selected balance sheet
items--cash, other current assets, other noncurrent assets, other
current liabilities and long-term debt, and other noncurrent
liabilities--as separate items. BEA also proposes to discontinue
collecting a breakdown of the number of employees and amount of
employee compensation by occupational classification; the
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composition of external finances; and wholesale and retail trade items
(specifically, the cost of goods purchased for resale and inventory of
goods purchased for resale).
BEA also proposes to add several items. First, BEA proposes to add
an item on Form BE-11C to collect total liabilities. This information
will enable BEA to calculate equity positions in minority-owned
affiliates. BEA proposes to add an item on Form BE-11E to collect
property, plant, and equipment expenditures, which is one of three key
indicators that BEA publishes in its advance summary estimates of
operations of U.S. multinational companies. BEA also proposes to add a
schedule on Form BE-11B to collect a list of foreign affiliates in
which the affiliate being reported has a direct equity interest, but
which are not fully consolidated into the reported foreign affiliate.
Completion of this list would be required only for foreign affiliates
with total assets, sales or gross operating revenues, or net income
greater than $300 million at the end of, or for, the fiscal year.
Previously this schedule has been collected only once every five years
on the BE-10 benchmark survey. However, ownership structures of
multinational companies change frequently, and more frequent data
collection is required to track them accurately.
The proposed changes to the BE-11A, U.S. Reporter annual survey
form, largely parallel the above-described changes to the foreign
affiliate forms. For the BE-11A, BEA proposes to no longer collect the
breakdown of number of employees and amount of employee compensation by
occupational classification and to no longer collect wholesale and
retail trade items (specifically, the cost of goods purchased for
resale and inventory of goods purchased for resale). BEA also proposes
to add a question to Form BE-11A that was introduced in the most recent
BE-10 benchmark survey, asking if the Reporter is a bank. In addition,
BEA proposes to add questions to the form to collect information on
assets, liabilities, and interest receipts and payments that are
related to banking activities.
Survey Background
The BEA conducts the BE-11 survey under the authority of the
International Investment and Trade in Services Survey Act (22 U.S.C.
3101-3108), hereinafter, ``the Act.'' Section 4(a) of the Act (22
U.S.C. 3103(a)) requires that, with respect to United States direct
investment abroad, the President shall, to the extent he deems
necessary and feasible, conduct a regular data collection program to
secure current information on international capital flows and other
information related to international investment and trade in services,
including (but not limited to) such information as may be necessary for
computing and analyzing the United States' balance of payments, the
employment and taxes of United States parents and affiliates, and the
international investment and trade in services position of the United
States.
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 Federalism
assessment under E.O. 13132.
Paperwork Reduction Act
This proposed rule contains a collection-of-information requirement
subject to review and approval by OMB under the PRA. The requirement
will be submitted to OMB for approval as a revision to a collection
currently approved under OMB control number 0608-0053.
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 PRA unless that collection displays a currently
valid OMB control number.
The BE-11 survey, as proposed, is expected to result in the filing
of reports from approximately 1,750 respondents, which is an increase
from the 1,550 respondents that were required to file reports for the
2008 BE-11 annual survey. The respondent burden for this collection of
information will vary from one company to another, but is estimated to
average 86 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. The total respondent burden of the proposed
survey is estimated at 150,550 hours, which is a decrease from the
153,800 hours estimated for the 2008 BE-11 annual survey. The decrease
in overall burden is due to a decrease in the estimated average hours
per response that resulted from the proposed changes in reporting
requirements.
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.
Written comments regarding the burden-hour estimates or other
aspects of the collection of information requirements contained in the
proposed rule should be sent to both BEA and OMB following the
instructions given in the ADDRESSES section above.
Regulatory Flexibility Act
The Chief Counsel for Regulation, Department of Commerce, has
certified to the Chief Counsel for Advocacy, Small Business
Administration (SBA), 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. U.S. companies that have direct investments
abroad tend to be quite large, and few small U.S. businesses are
subject to the reporting requirements of this survey. SBA size
standards are for the most part expressed in either number of employees
or average annual receipts. SBA has established two widely used size
standards--500 employees for most manufacturing and mining industries,
and $7 million in average annual receipts (i.e., sales or gross
operating revenues) for most nonmanufacturing industries.
BEA estimates that of the 1,750 U.S. parent companies that will be
required to respond to the BE-11 annual survey, approximately 200 (or
10%) of them are small businesses as defined by the SBA. The proposed
changes in reporting requirements would limit the amount of information
that would be reported on Form BE-11A by U.S. Reporters with total
assets, sales or gross operating revenues, and net income less than or
equal to $300 million (positive or negative). In addition, U.S.
businesses that meet the SBA small business standards tend to have few
foreign affiliates, and the foreign affiliates that they do own are
small. The number of items required to be reported for a foreign
affiliate is determined by the size of the affiliate's assets, sales,
and net income. The smallest foreign affiliates would be reported on an
abbreviated Form BE-11B. The
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estimated burden hours for a small business is about 10 to 25 hours.
Because a substantial number of small businesses are not impacted
by this rule, and because those small businesses that are impacted are
subject to only minimal recordkeeping burdens, the Chief Counsel for
Regulation certifies that this proposed rule will not have a
significant economic impact on a substantial number of small entities.
List of Subjects in 15 CFR Part 806
Economic statistics, Multinational corporations, Penalties,
Reporting and recordkeeping requirements, U.S. investment abroad.
J. Steven Landefeld,
Director, Bureau of Economic Analysis.
For the reasons set forth in the preamble, BEA proposes to amend 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; 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 paragraphs (b)(1) and (f)(3) of Sec. 806.14 to read as
follows: 806.14 U.S. direct investment abroad.
* * * * *
(b) * * *
(1) The affiliates are in the same BEA 4-digit industry as defined
in the Guide to Industry Classifications for International Surveys,
2007; or
* * * * *
(f) * * *
(3) BE-11--Annual Survey of U.S. Direct Investment Abroad: A
report, consisting of Form BE-11A and Form(s) BE-11B, BE-11C, BE-11D
and/or BE-11E, is required of each U.S. Reporter that, at the end of
the Reporter's fiscal year, had a foreign affiliate reportable on Form
BE-11B, BE-11C, BE-11D or BE-11E. Forms required and the criteria for
reporting on each are as follows:
(i) Form BE-11A (Report for U.S. Reporter) must be filed by each
U.S. person having a foreign affiliate reportable on Form BE-11B, BE-
11C, BE-11D or BE-11E. If the U.S. Reporter is a corporation, Form BE-
11A is required to cover the fully consolidated U.S. domestic business
enterprise.
(A) If for a 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
$300 million (positive or negative) at the end of, or for, the
Reporter's fiscal year, the U.S. Reporter must file a complete Form BE-
11A. It must also file a Form BE-11B, BE-11C, BE-11D or BE-11E, as
applicable, for each nonexempt foreign affiliate.
(B) If for a U.S. Reporter no one of the three items listed in
paragraph (f)(3)(i)(A) of this section was greater than $300 million
(positive or negative) at the end of, or for, the Reporter's fiscal
year, the U.S. Reporter is required to file on Form BE-11A only items 1
through 26 and Part IV. It must also file a Form BE-11B, BE-11C, BE-
11D, or BE-11E as applicable, for each nonexempt foreign affiliate.
(ii) Forms BE-11B, BE-11C, BE-11D, and BE-11E (Report for Foreign
Affiliate).
(A) Form BE-11B must be reported for each majority-owned foreign
affiliate, whether held directly or indirectly, for which any one of
the following three items--total assets, sales or gross operating
revenues excluding sales taxes, or net income after provision for
foreign income taxes--was greater than $60 million (positive or
negative) at the end of, or for, the affiliate's fiscal year, unless
the foreign affiliate is selected to be reported on Form BE-11E.
(B) Form BE-11C must be reported for each minority-owned foreign
affiliate, whether held directly or indirectly, for which any one of
the three items listed in paragraph (f)(3)(ii)(A) of this section was
greater than $60 million (positive or negative) at the end of, or for,
the affiliate's fiscal year.
(C) Form BE-11D must be reported for majority- or minority-owned
foreign affiliates, whether held directly or indirectly, established or
acquired during the year for which any one of the three items listed in
paragraph (f)(3)(ii)(A) of this section was greater than $25 million
(positive or negative), but for which no one of these items was greater
than $60 million (positive or negative), at the end of, or for, the
affiliate's fiscal year. Form BE-11D is a schedule; a U.S. Reporter
would submit one or more pages of the form depending on the number of
affiliates that are required to be filed on this form.
(D) Form BE-11E must be reported for each foreign affiliate that is
selected by BEA to be reported on this form in lieu of Form BE-11B. BEA
statistically divides into panels, affiliates for which any one of the
three items listed in paragraph (f)(3)(ii)(A) of this section was
greater than $60 million (positive or negative), but for which no one
of these items was greater than $300 million (positive or negative), at
the end of, or for, the affiliate's fiscal year. At the direction of
BEA, U.S. Reporters would alternate reporting these affiliates on Form
BE-11B and Form BE-11E.
(iii) Based on the preceding, an affiliate is exempt from being
reported if none of the three items listed in paragraph (f)(3)(ii)(A)
of this section exceeds $60 million (positive or negative). However,
affiliates that were established or acquired during the year and for
which at least one of the items was greater than $25 million but not
over $60 million must be listed, and key items reported, on schedule-
type form BE-11D.
(iv) Notwithstanding paragraph (f)(3)(iii) of this section, a Form
BE-11B, BE-11C, or BE-11E must be filed for a foreign affiliate of the
U.S. Reporter that owns another non-exempt foreign affiliate of that
U.S. Reporter, even if the foreign affiliate parent is otherwise
exempt. That is, all affiliates upward in the chain of ownership must
be reported.
* * * * *
[FR Doc. 2010-23428 Filed 9-17-10; 8:45 am]
BILLING CODE 3510-06-P