Direct Investment Surveys: BE-10, Benchmark Survey of U.S. Direct Investment Abroad, 47599-47603 [2014-18623]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Economic Analysis

[Federal Register Volume 79, Number 157 (Thursday, August 14, 2014)]
[Proposed Rules]
[Pages 47599-47603]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-18623]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 140613502-4502-01]
RIN 0691-XC026


Direct Investment Surveys: BE-10, Benchmark 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 reinstate reporting 
requirements for the 2014 BE-10, Benchmark Survey of U.S. Direct 
Investment Abroad. Benchmark surveys are conducted every five years; 
the prior survey covered 2009. The benchmark survey covers the universe 
of U.S. direct investment abroad, and is BEA's most comprehensive 
survey of such investment in terms of subject matter. For the 2014 
benchmark survey, BEA proposes changes in the data items collected. No 
changes are proposed to the reporting requirements for the survey. This 
mandatory survey would be conducted under the authority of the 
International Investment and Trade in Services Survey Act (the Act). 
Unlike most other BEA surveys conducted pursuant to the Act, a response 
would

[[Page 47600]]

be required from persons subject to the reporting requirements of the 
BE-10, Benchmark Survey of U.S. Direct Investment Abroad, whether or 
not they are contacted by BEA, in order to insure that respondents 
subject to the requirements for U.S. direct investment abroad are 
identified.

DATES: Comments on this proposed rule will receive consideration if 
submitted in writing on or before 5:00 p.m. October 14, 2014.

ADDRESSES: You may submit comments, identified by RIN 0691-XC026, and 
referencing the agency name (Bureau of Economic Analysis), by any of 
the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. For Keyword or ID, 
enter ``EAB-2014-0002.''
     Email: Barbara.Hubbard@bea.gov.
     Fax: Office of the Chief, Direct Investment Division, 
(202) 606-2894.
     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), OIRA, Paperwork 
Reduction Project 0608-0049, Attention PRA Desk Officer for BEA, via 
email at pbugg@omb.eop.gov, 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 https://www.regulations.gov 
without change. All personal identifying information (for example, 
name, address, etc.) voluntarily submitted by the commenter 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, or Adobe portable document file (pdf) formats 
only.

FOR FURTHER INFORMATION CONTACT: Barbara K. Hubbard, Acting Chief, 
Direct Investment Division (BE-50), Bureau of Economic Analysis, U.S. 
Department of Commerce, Washington, DC 20230; phone (202) 606-9846.

SUPPLEMENTARY INFORMATION: The BE-10, Benchmark Survey of U.S. Direct 
Investment Abroad, is a mandatory survey and is conducted once every 
five years by BEA under the International Investment and Trade in 
Services Survey Act, 22 U.S.C. 3101-3108 (the Act). Section 3103(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 Section 3 of Executive Order 
11961, as amended by Executive Orders 12318 and 12518, the President 
delegated responsibility for performing functions under the Act 
concerning direct investment to the Secretary of Commerce, who has 
redelegated it to BEA.
    Section 3103(b) also instructs BEA to:
    (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.
    By rule issued in 2012 (77 FR 24373), BEA established guidelines 
for collecting data on international trade in services and direct 
investment through notices, rather than through rulemaking. This 
proposed rule would amend the regulations to require a response from 
persons subject to the reporting requirements of the BE-10, whether or 
not they are contacted by BEA, in order to ensure complete coverage of 
U.S. direct investment abroad.
    The benchmark survey covers the U.S. direct investment abroad 
universe and is BEA's most comprehensive survey of such investment in 
terms of subject matter. 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. 
These data are used to derive current universe estimates of direct 
investment from sample data collected in other BEA surveys in non-
benchmark years. In particular, they would serve as benchmarks for the 
quarterly direct investment estimates included in the U.S. 
international transactions, international investment position, and 
national income and product accounts, and for annual estimates of the 
operations of U.S. parent companies and their foreign affiliates.
    This proposed rule would amend 15 CFR part 801 by adding a new 
section 801.8 to set forth the reporting requirements for the BE-10, 
Benchmark 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 would amend the regulations and the survey 
forms for the BE-10 benchmark survey. These amendments include changes 
in the data items collected and questionnaire design.
    If this proposed rule is made final, unlike most other BEA surveys

[[Page 47601]]

conducted pursuant to the Act, persons subject to the reporting 
requirements of the BE-10, Survey of U.S. Direct Investment Abroad, 
would be required to respond whether or not they are contacted by BEA.
    BEA proposes to add and delete some items on the benchmark survey 
forms. Most of the additions are proposed in response to suggestions 
from data users. The following items would be added to the benchmark 
survey:
    (1) For U.S. parent companies, questions will be added to collect 
data on the U.S. imports of goods by the intended use of the goods and 
by whether the shipper of the goods is a foreign affiliate or an 
unaffiliated foreign entity.
    (2) For larger U.S. parent companies (those with assets, sales, or 
net income greater than $300 million), questions will be added to 
collect information on assets, liabilities, and interest receipts and 
payments that are related to banking activities. These questions are 
collected on the Annual Survey of U.S. Direct Investment Abroad (BE-
11).
    (3) A question will be added to identify the city in which each 
foreign affiliate is located.
    (4) For majority-owned foreign affiliates with assets, sales, or 
net income greater than $80 million, a question will be added to the 
balance sheet to collect data on cash and cash equivalents.
    (5) For larger majority-owned foreign affiliates (those with 
assets, sales, or net income greater than $300 million), questions will 
be added to the section to collect sales data on the top five countries 
(besides the U.S. and the country of the affiliate) to which the 
affiliates made sales. For each country, sales will be categorized by 
customer: ``other foreign affiliates of the U.S. Reporter(s)'' and 
``unaffiliated customers.'' An ``all other'' item will also be added 
after the top five countries. Questions on sales by region of 
destination will be retained.
    (6) For majority-owned foreign affiliates with assets, sales, or 
net income greater than $80 million, questions will be added to the 
section on royalties and license fees to collect receipts from U.S. 
parents, receipts from other U.S. persons, payments to U.S. parents, 
and payments to other U.S. persons. On the previous benchmark survey, 
this section only included receipts from and payments to foreign 
persons.
    (7) For foreign affiliates with assets, sales, or net income 
greater than $25 million, several check-box questions will be added to 
ensure that certain types of finance companies do not report 
intercompany debt to BEA that is already reported on Treasury 
International Capital surveys. Similar questions are included in the 
Quarterly Survey of U.S. Direct Investment Abroad (BE-577).
    (8) For foreign affiliates with assets, sales, or net income 
between $25 million and $80 million, a question will be added to 
collect expenditures for research and development performed by the 
foreign affiliate.
    Several questions will be modified:
    (1) Questions on contract manufacturing will be updated to 
incorporate improved wording.
    (2) The cash item on the balance sheet for U.S. parent companies 
will be modified to include cash equivalents.
    BEA proposes to eliminate the following items from the benchmark 
survey because they are no longer used:
    (1) Official foreign identification numbers issued by host-country 
governments to foreign affiliates on BE-10B.
    (2) Withholding taxes on interest received from and paid to U.S. 
parent companies by foreign affiliates on BE-10B.
    In addition, BEA plans to redesign the survey questionnaires. The 
new design will incorporate improvements made to other BEA surveys. 
Survey instructions and data item descriptions will be changed to 
improve clarity and make the benchmark survey forms more consistent 
with those of other BEA surveys.

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 reinstatement, with change, 
of a previously approved collection under OMB control number 0608-0049.
    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-10 survey, as proposed, is expected to result in the filing 
of reports from approximately 3,900 respondents. The respondent burden 
for this collection of information will vary from one company to 
another, but is estimated to average 144 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 
this survey is estimated at 561,100 hours, compared to 459,400 hours 
for the previous (2009) benchmark survey. The increase in burden hours 
is due to an increase in the size of the respondent universe.
    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, under the provisions of the Regulatory Flexibility Act 
(RFA), 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 changes proposed in this rule are discussed in the 
preamble and are not repeated here.
    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, including a branch--at any time during the 
U.S. company's 2014 fiscal year. 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. 
Also, U.S.

[[Page 47602]]

businesses that meet the SBA small business standards tend to have few 
foreign affiliates and the foreign affiliates that they do own are 
small. BEA estimates that approximately 800 of the approximately 3,900 
U.S. parent companies that will be required to respond to the BE-10 
benchmark survey are small businesses according to the standards 
established by the SBA. 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. In the BE-10 survey, for the smallest 
foreign affiliates--those with total assets, sales or gross operating 
revenues, and net income of less than or equal to $25 million (positive 
or negative)--only a few selected items would be reported on a 
schedule-type form, Form BE-10D. To further ease 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 $300 
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. Further, public 
reporting burden for the BE-10 collection of information is estimated 
to vary from 14 hours for the smallest and least complex U.S. Reporter 
with only one foreign affiliate, to approximately 18,000 hours for a 
very large U.S. Reporter with up to 800 affiliates with a wide range of 
activities. We estimate that most small reporters that will be subject 
to this rule will cluster around the 14 hour reporting burden.
    Because a very small percentage of the over 5 million U.S. small 
businesses are impacted by this rule (.016 percent or less than 2/100th 
of 1 percent of all small businesses), and because those small 
businesses that will be impacted will be subject to only minimal 
reporting 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 801

    Economic statistics, International transactions, Multinational 
companies, Penalties, Reporting and record keeping requirements, U.S. 
direct investment abroad.

    Dated: July 30, 2014.
Brian C. Moyer,
Acting Director, Bureau of Economic Analysis.
    For 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 AND SURVEYS OF DIRECT INVESTMENT

0
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; 
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. Revise Sec.  801.3 to read as follows:


Sec.  801.3  Reporting requirements.

    Except for surveys subject to rulemaking in Sec. Sec.  801.7 and 
801.8, reporting requirements for all other surveys conducted by the 
Bureau of Economic Analysis shall be as follows:
    (a) Notice of specific reporting requirements, including who is 
required to report, the information to be reported, the manner of 
reporting, and the time and place of filing reports, will be published 
by the Director of the Bureau of Economic Analysis in the Federal 
Register prior to the implementation of a survey;
    (b) In accordance with section 3104(b)(2) of title 22 of the United 
States Code, persons notified of these surveys and subject to the 
jurisdiction of the United States shall furnish, under oath, any report 
containing information which is determined to be necessary to carry out 
the surveys and studies provided for by the Act; and
    (c) Persons not notified in writing of their filing obligation by 
the Bureau of Economic Analysis are not required to complete the 
survey.
0
3. Add Sec.  801.8 to read as follows:


Sec.  801.8  Rules and regulations for the BE-10, Benchmark Survey of 
U.S. Direct Investment Abroad--2014.

    A BE-10, Benchmark Survey of U.S. Direct Investment Abroad will be 
conducted covering 2014. All legal authorities, provisions, 
definitions, and requirements contained in Sec. Sec.  801.1 through 
801.2 and Sec. Sec.  801.4 through 801.6 are applicable to this survey. 
Specific additional rules and regulations for the BE-10 survey are 
given in paragraphs (a) through (d) 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--2014, contained herein, 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 this 
section. 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 and Form(s) BE-10B, BE-10C, and/or BE-10D) by May 29, 2015, or June 
30, 2015, 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, including a 
branch--at any time during the U.S. person's 2014 fiscal year.
    (2) If the U.S. person had no foreign affiliates during its 2014 
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 2014 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 2014 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, 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.
    (c) Forms to be filed. (1) Form BE-10A must be completed by a U.S. 
Reporter. If the U.S. Reporter is a corporation, Form BE-10A is 
required to cover the fully consolidated U.S. domestic business 
enterprise. It must also file Form(s) BE-10B, C, and/or D for its 
foreign affiliates, whether held directly or indirectly.
    (2) Form BE-10B must be filed for each majority-owned foreign 
affiliate for

[[Page 47603]]

which any 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 $80 million (positive or 
negative) at any time during the affiliate's 2014 fiscal year.
    (3) Form BE-10C must be filed:
    (i) For each majority-owned foreign affiliate for which any one of 
the three items listed in paragraph (c)(2) of this section was greater 
than $25 million but for which none of these items was greater than $80 
million (positive or negative), at any time during the affiliate's 2014 
fiscal year, and
    (ii) For each minority-owned foreign affiliate for which any one of 
the three items listed in (c)(2) of this section was greater than $25 
million (positive or negative), at any time during the affiliate's 2014 
fiscal year.
    (4) Form BE-10D must be filed for majority- or minority-owned 
foreign affiliates for which none of the three items listed in 
paragraph (c)(2) of this section was greater than $25 million (positive 
or negative) at any time during the affiliate's 2014 fiscal year. Form 
BE-10D 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) Due date. A fully completed and certified BE-10 report 
comprising Form BE-10A and Form(s) BE-10B, C, and/or D (as required) is 
due to be filed with BEA not later than May 29, 2015, for those U.S. 
Reporters filing fewer than 50, and June 30, 2015, for those U.S. 
Reporters filing 50 or more, foreign affiliate Forms BE-10B, C, and/or 
D. If the U.S. person had no foreign affiliates during its 2014 fiscal 
year, it must file a BE-10 Claim for Not Filing by May 29, 2015.

[FR Doc. 2014-18623 Filed 8-13-14; 8:45 am]
BILLING CODE 3510-06-P