Direct Investment Surveys: BE-15, Annual Survey of Foreign Direct Investment in the United States, 8002-8004 [E9-3705]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Economic Analysis

[Federal Register Volume 74, Number 34 (Monday, February 23, 2009)]
[Rules and Regulations]
[Pages 8002-8004]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-3705]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 080219210-8245-01]
RIN 0691-AA65


Direct Investment Surveys: BE-15, Annual Survey of Foreign Direct 
Investment in the United States

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Final rule.

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SUMMARY: This final rule amends regulations of the Bureau of Economic 
Analysis, Department of Commerce (BEA) to change the reporting 
requirements for the BE-15, Annual Survey of Foreign Direct Investment 
in the United States. The BE-15 survey is conducted annually and is a 
sample survey that obtains financial and operating data on U.S. 
affiliates of foreign companies. BEA is adding and deleting items on 
the survey forms and changing the reporting criteria. The changes to 
the BE-15 annual survey will: reduce detail and raise reporting 
thresholds; extend the coverage of the survey to include banks; bring 
the survey forms and instructions into conformity with the 2007 BE-12, 
Benchmark Survey of Foreign Direct Investment in the United States; and 
implement changes related to new accounting standards.

DATES: This final rule will be effective March 25, 2009.

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 or 
e-mail (david.galler@bea.gov).

SUPPLEMENTARY INFORMATION: In the September 11, 2008, Federal Register, 
73 FR 52800-52802, BEA published a notice of proposed rulemaking 
setting forth revised reporting criteria for the BE-15, Annual Survey 
of Foreign Direct Investment in the United States. BEA received four 
comments on the proposed rule, requesting reinstatement of data items 
that BEA had proposed to remove from the survey due to reduced 
resources. One comment addressed the proposed deletion of an item that 
collects data on the number of employees engaged in research and 
development. The commenter highlighted the important uses of these data 
and urged BEA to retain the item. In response, BEA has decided to 
retain this item, which does not greatly add to the cost of conducting 
the survey and processing the results. The other three comments urged 
BEA to retain state-level data on manufacturing employees, gross 
property, plant, and equipment, and commercial property, citing the 
uses of these data in connection with tracking and analyzing foreign 
investment in individual states, planning international trade missions 
and economic development activities, and justifying funding for state 
investment promotion programs. BEA recognizes the utility and 
importance of these data items, but due to resource constraints, it is 
unable to reinstate these items at this time.
    In reviewing the data provided by respondents on the 2007 BE-12, 
Benchmark Survey of Foreign Direct Investment in the United States, BEA 
has become aware of the use of new financial accounting standards that 
allow companies to report certain financial assets and liabilities at 
fair value. In order to maintain the accuracy and consistency of the 
economic accounts, BEA requires information on whether a respondent 
company is using the fair value option, and if so, what portion of its 
assets and liabilities are reported at fair value. Questions will be 
added to the 2008 BE-15 annual survey to collect this information from 
the largest respondent companies. The additional questions related to 
research and development employees and to the use of fair value 
accounting will be reflected in the final versions of the forms. This 
final rule amends 15 CFR Part 806.15 to set forth the reporting 
requirements for the BE-15, Annual Survey of Foreign Direct Investment 
in the United States.

Description of Changes

    The BE-15, Annual Survey of Foreign Direct Investment in the United 
States, is a mandatory survey and is conducted annually 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 of each year; responses will be due 
by May 31.

[[Page 8003]]

    The changes to the 2008 annual survey are of four types: (1) 
Changes that will reduce detail and raise reporting thresholds, (2) 
changes that will extend the coverage of the survey to include banks, 
(3) changes that align the BE-15 forms and instructions with those of 
the 2007 BE-12, Benchmark Survey of Foreign Direct Investment in the 
United States, and (4) changes related to new accounting standards. 
These changes are described in more detail below. The BE-15 survey 
forms have been revised and, in some cases, renamed to facilitate these 
changes. The revised survey is comprised of four forms: Form BE-15A 
(formerly named Form BE-15(LF)), Form BE-15B (formerly named Form BE-
15(SF)), Form BE-15(EZ) (name unchanged), and BE-15 Claim for Exemption 
(formerly named BE-15 Supplement C).
    Changes that reduce detail. In order to align BEA's survey program 
with available resources, which have declined as a result of a recent 
reduction in BEA's budget, some data items will be dropped from the 
forms, reporting thresholds will be raised, and use of statistical 
sampling will be expanded. The following data items will no longer be 
collected: Selected balance sheet items; the breakdown of sales of 
services to foreign persons into sales of services to the foreign 
parent group, to foreign affiliates, and to other foreign persons; the 
breakdown of employment and employee compensation by occupational 
classification; the breakdown of total employee compensation into wages 
and salaries and employee benefit plans; data on the composition of 
external finances; imports of goods intended for further manufacture; 
manufacturing employment by state; gross property, plant, and equipment 
by state; commercial property by state; and wholesale and retail trade 
items.
    Changes that raise reporting thresholds. Reporting thresholds will 
be raised and greater use will be made of sampling, allowing smaller 
companies to file every other year rather than annually. BEA will (1) 
increase the threshold for reporting on Form BE-15A from $125 million 
to $275 million; (2) increase the threshold for reporting on Form BE-
15B from $30 million to $120 million; and (3) increase the threshold 
for reporting on Form BE-15(EZ) from $30 million to $40 million. Also, 
filing on Form BE-15(EZ) will be required only every other year. In 
alternate years, potential respondents will be mailed a letter 
confirming that they are not required to file and asking them to update 
their contact information with BEA. The new reporting thresholds will 
still allow BEA to produce high quality statistics; however, some 
reduction in published detail will be necessary because of insufficient 
coverage in some cells.
    Changes that extend the coverage of the survey to include banks. 
BEA extends the coverage of the survey to collect data on bank U.S. 
affiliates of foreign direct investors on the BE-15 annual survey. Data 
collected on previous annual surveys was limited to that of nonbank 
U.S. affiliates. BEA will continue to collect data for bank affiliates 
on its quinquennial BE-12, Benchmark Survey of Foreign Direct 
Investment in the United States. This expansion in coverage of the BE-
15 survey to include bank affiliates is required to close a gap in 
BEA's data on multinational companies and parallels recent changes in 
the BE-11, Annual Survey of U.S. Direct Investment Abroad.
    Changes that align the BE-15 forms and instructions with those of 
the 2007 BE-12. To align the BE-15 annual survey with the 2007 BE-12 
benchmark survey, some detail that is no longer required will be 
eliminated from Form BE-15A and several items will be added to Form BE-
15B. The BE-15A will no longer ask companies to identify expenditures 
for property, plant, and equipment as either new or used. On the BE-
15B, items will be added to collect information on sales of goods, 
investment income, and sales of services for majority-owned U.S. 
affiliates. A further breakout of sales of services will be added to 
collect sales of services to U.S. persons and sales of services to 
foreign persons. Due to the increase in the reporting threshold for the 
BE-15B, it is necessary to add these items to ensure adequate coverage 
at the industry and investing country level.
    Changes related to new accounting standards. Another change to the 
BE-15 survey is the addition of data items that will aid in analyzing 
the effect on BEA's statistics of recent changes in financial 
accounting standards that allow companies to report certain financial 
assets and liabilities at fair value. In order to maintain the accuracy 
and consistency of the economic accounts, BEA needs information on 
whether a respondent company is using the fair value option, and if so, 
what portion of its assets and liabilities are reported at fair value. 
A check-the-box item and two data items will be added to Form BE-15A to 
collect this information. Companies that choose the fair value option 
are required to separately identify the amount of assets and of 
liabilities that are stated at fair value in their own financial 
statements. Therefore, the data are readily accessible from existing 
financial records.

Survey Background

    The Bureau of Economic Analysis (BEA), U.S. Department of Commerce, 
conducts the BE-15 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 requires that the 
President shall, to the extent he deems necessary and feasible, conduct 
a regular data collection program to secure current information on 
international financial 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.
    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 annual survey is a sample survey that collects data on the 
financial structure and operations of U.S. affiliates of foreign 
companies needed to update similar data for the universe of U.S. 
affiliates collected once every 5 years in the BE-12 benchmark survey. 
The sample data are used to derive universe estimates of the operations 
of U.S. affiliates of foreign companies, including their balance 
sheets; income statements; property, plant, and equipment; employment 
and employee compensation; merchandise trade; sales of goods and 
services; taxes; and research and development activity. The data are 
needed to measure the size and economic significance of foreign direct 
investment in the United States, measure changes in such investment, 
and assess its impact on the U.S. economy. Such data are generally 
found in enterprise-level accounting records of respondent companies. 
The data are disaggregated by industry of U.S. affiliate, by country 
and industry of foreign parent or ultimate beneficial owner, and, for 
employment data, by state.

Executive Order 12866

    This final rule has been determined to be not significant for 
purposes of E.O. 12866.

[[Page 8004]]

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 in this final rule has been submitted 
to the Office of Management and Budget (OMB) under the Paperwork 
Reduction Act (PRA). OMB approved the information collection under 
control number 0608-0034.
    Not withstanding 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 OMB control number.
    The BE-15 survey is expected to result in the filing of reports 
from approximately 3,650 U.S. affiliates of foreign direct investors. 
The respondent burden for this collection of information is expected to 
vary from 20 minutes for the smallest and least complex company 
reporting on the BE-15 Claim for Exemption to 470 hours for the largest 
and most complex company reporting on Form BE-15A, with an average 
burden of 18.8 hours per response. Thus, the total respondent burden 
for this survey--including time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information--is estimated at 
68,750 hours (3,650 responses times 18.8 hours average burden). Total 
respondent burden for the previous (2006) annual survey was estimated 
at 107,900 hours. The decrease in respondent burden is due to (1) 
increased reporting thresholds, which reduce the total number of 
respondents and allow more respondents to file on shorter forms, (2) 
increased use of sampling, which allows BE-15(EZ) filers to submit 
forms only in alternate years, and (3) a reduction in the number of 
data items on the form, which reduces the average burden per form.
    Comments regarding the burden-hour estimates or any other aspect of 
the collection-of-information requirements contained in the final rule 
should be sent to (1) The Bureau of Economic Analysis via mail to U.S. 
Department of Commerce, Bureau of Economic Analysis, Office of the 
Chief, Direct Investment Division, BE-50, Washington, DC 20230; via e-
mail at David.Galler@bea.gov; or by FAX at (202) 606-5311 and (2) the 
Office of Management and Budget, O.I.R.A., Paperwork Reduction Project 
0608-0034, 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 the 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. The factual basis for 
the certification was published in the proposed rule and is not 
repeated here. 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

    Economic statistics, Foreign investment in the United States, 
International transactions, 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 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).


0
2. Section 806.15(i) is revised to read as follows:


Sec.  806.15  Foreign direct investment in the United States.

* * * * *
    (i) Annual report form. BE-15--Annual Survey of Foreign Direct 
Investment in the United States: One report is required for each 
consolidated U.S. affiliate exceeding an exemption level of $40 
million. Form BE-15A must be filed by each majority-owned U.S. 
affiliate (a ``majority-owned'' U.S. affiliate is one in which the 
combined direct and indirect ownership interests of all foreign parents 
of the U.S. affiliate exceed 50 percent) for which at least one of the 
three items--total assets, sales or gross operating revenues excluding 
sales taxes, or net income after provision for U.S. income taxes--
exceeds $275 million (positive or negative). Form BE-15B must be filed 
by each majority-owned U.S. affiliate for which at least one of the 
three items--total assets, sales or gross operating revenues excluding 
sales taxes, or net income after provision for U.S. income taxes--
exceeds $120 million (positive or negative) but no one item exceeds 
$275 million (positive or negative), and by each minority-owned U.S. 
affiliate (a ``minority-owned'' U.S. affiliate is one in which the 
combined direct and indirect ownership interest of all foreign parents 
of the U.S. affiliate is 50 percent or less) for which at least one of 
the three items--total assets, sales or gross operating revenues 
excluding sales taxes, or net income after provision for U.S. income 
taxes--exceeds $120 million (positive or negative). Form BE-15(EZ) must 
be filed every other year by each U.S. affiliate for which at least one 
of the three items--total assets, sales or gross operating revenues 
excluding sales taxes, or net income after provision for U.S. income 
taxes--exceeds $40 million (positive or negative) but no one item 
exceeds $120 million (positive or negative). U.S. affiliates will be 
mailed Form BE-15(EZ) in years when they are required to file; in 
alternate years, these U.S. affiliates will be mailed a letter 
confirming that they are not required to file and asking them to update 
their contact information with BEA. A BE-15 Claim for Exemption must be 
filed by each U.S. affiliate to claim exemption from filing a BE-15A, 
BE-15B, or BE-15(EZ). Following an initial filing, the BE-15 Claim for 
Exemption is not required annually from those U.S. affiliates that meet 
the stated exemption criteria from year to year.
* * * * *

[FR Doc. E9-3705 Filed 2-20-09; 8:45 am]
BILLING CODE 3510-06-P