User Fees for Export and Investment Promotion Services/Events, 31752-31756 [2017-14238]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 82, Number 130 (Monday, July 10, 2017)]
[Notices]
[Pages 31752-31756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14238]


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DEPARTMENT OF COMMERCE

International Trade Administration

[Docket No.: 161020988-6988-02]
RIN 0625-XC026


User Fees for Export and Investment Promotion Services/Events

AGENCY: International Trade Administration, Department of Commerce.

ACTION: Notice of implementation of user fees.

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SUMMARY: The International Trade Administration (ITA) solicited public 
feedback on its proposal to adjust export and investment promotion user 
fees in light of an independent cost study which concluded that ITA is 
not fully covering its costs for providing services under the current 
fee structure. Federal agencies are directed by Office of Management 
and Budget (OMB) Circular A-25 to ensure they recoup their costs when 
providing certain services. ITA provides a wide range of export and 
investment promotion information and services to U.S. individuals and 
entities. The services announced here assist U.S. individuals and 
entities with their exporting needs and help attract foreign direct 
investment. These services are a subset of ITA activities that involve 
relatively more intensive time engagements with particular client 
firms. ITA will continue to provide information and services that are 
less intensive and/or benefit the general public without charge. In 
response to public feedback, amendments have been made to the proposed 
adjusted user fees. As part of this announcement, ITA announces the 
final user fees schedule and revised standards related to company size 
for determining the fees to be charged.

DATES: The user fees schedule will be effective on October 1, 2017.

FOR FURTHER INFORMATION CONTACT: Ms. Aditi Palli, International Trade 
Administration, Office of Strategic Planning, 1400 Constitution Avenue 
NW., Rm. 21022, Washington, DC 20230, Phone: (202) 482-2025.

SUPPLEMENTARY INFORMATION: 

Background

    OMB Circular A-25 requires the recovery of an appropriate share of 
the full cost through user fees for goods and services provided to 
recipients of benefits beyond those accruing to the general public. 
Specifically, section 6 of Circular A-25 states that ``when a service 
(or privilege) provides special benefits to an identifiable recipient

[[Page 31753]]

beyond those that accrue to the general public, a charge will be 
imposed (to recover the full cost to the Federal Government for 
providing the special benefit, or the market price).'' A ``user fee'' 
is the amount paid by a recipient of a special benefit beyond those 
benefits accruing to the general public. A ``special benefit'' may 
accrue and a user fee be imposed when a government service: (a) enables 
the beneficiary to obtain more immediate or substantial gains or values 
than those that accrue to the general public; (b) is performed at the 
request or for the convenience of the recipient, and is beyond the 
services regularly received by members of the same industry or group or 
by the general public; or (c) provides business stability or 
contributes to public confidence in the business activity of the 
beneficiary. For a summary of the export and investment promotion 
services pricing determination and business size standards, please 
refer to Federal Register notice 81 FR 93660.

Amendments to Original User Fee Proposal in Response to Public Comments

    ITA solicited public comment on the proposed revisions to the user 
fees during a 30-day period from December 21, 2016 to January 21, 2017. 
Almost 100 comments were received in response to the proposal. The 
individual comments can be viewed on the Federal eRulemaking Portal: 
www.Regulations.gov. The identification number is ITA-2016-0012. All 
comments received during this time were reviewed and considered with 
respect to the final user fee schedule. A summary of the comments is 
provided below:
    Comments that generally support ITA's export and investment 
promotion services:
     Government programs and export assistance are important as 
competitor nations offer similar trade programs and assistance to their 
domestic companies. ITA provides invaluable assistance to small and 
medium size enterprises (SMEs), allowing them to access a network of 
foreign markets, generate export sales, and gain a competitive edge in 
the international marketplace, which they could not otherwise do on 
their own.
     The current fees for services are affordable.
    Response: ITA appreciates the support for its export and investment 
promotion services and is continuing to offer and enhance the menu of 
services.
    General opposition to price increases based on the following 
reasons:
     Respondents indicated that fees should not be charged at 
all for government benefits and services. In the international 
marketplace, U.S. companies face competition from foreign companies who 
receive comparable services from their governments for little to no 
fee. Some expressed that the Government should increase appropriated 
funds and not charge businesses fees.
    Response: Federal regulation requires user fees for ITA's export 
and investment promotion services. Per OMB Circular A-25, fees must be 
assessed to cover the cost for government services that convey special 
benefits to recipients beyond those accrued to the general public. 
Therefore, services provided by ITA beyond general counseling and 
publically available information are considered to be special benefits 
and therefore subject to this federal rule.
     Small business opposition to price increases:
    [cir] Small companies already encounter a variety of barriers when 
exporting.
    [cir] Could discourage small businesses from using investment and 
promotion services.
    Response: ITA has minimized the fee increases for small and medium-
sized enterprises. ITA has conducted survey research and focus groups 
in order to set the fees for SMEs based on their level of price 
sensitivity in order to minimize the impact on their usage of export 
promotion and investment services. As a result, the percentage increase 
in fees to be charged SMEs for such services is below the percentage 
increase in ITA's costs to deliver the service. For example, the cost 
to deliver a Gold Key Service for large entities increased by 48% since 
2007 ($3,400 versus $2,300) whereas the fee set for small companies in 
2007 is proposed to increase by 36% ($950 versus $700).
     Small businesses generally disagree with the increased 
cost of the International Company Profile (ICP) and Gold Key Service 
(GKS).
    Response: ITA has introduced new services to help reduce the costs 
for SMEs. Many companies utilize the Gold Key Service and other 
services that involve international travel as a means of exploring the 
potential of a foreign market. To minimize the expense of traveling for 
this purpose, ITA's recently launched Initial Market Check service 
enables a company to explore their market potential without incurring 
the travel expenses. As a result, companies can minimize their travel 
expenditures by only pursuing those markets that have significant 
potential for their products/services. In addition, ITA is introducing 
a new service called the International Company Profile (ICP) Partial. 
The ICP Partial allows companies to opt for a less in-depth background 
check on a foreign company, and is proposed at a fee that is 
significantly lower than the full ICP. This will enable companies to 
access less in-depth information on a potential foreign business 
partner at a lower cost. The IMC and ICP Partial enable U.S. companies, 
particularly SMEs, to access market intelligence at a lower cost.
    A few respondents support increased fees based on the following 
reasons:
    [cir] The value of the services is worth the cost as it yields 
successful outcomes.
    [cir] Only if the fees are used for promoting trade and 
specifically supporting staffing and resources.
    [cir] Only if the increase in fees improves the quality and 
timeliness of services.
    [cir] Moderate increases are acceptable as the current fees do not 
reflect inflation over the past several years.
    [cir] Moderate increases are acceptable as the current fees are 
quite reasonable.
    Response: ITA appreciates the feedback and will continue to provide 
quality services with reasonable fees.
    In response to received feedback and to ensure SME usage of 
services, the following changes were made to the original proposal:
     Reduced the fee for the Initial Market Check for SMEs 
(from $450 to $350 for small companies and from $1,000 to $900 for 
medium companies) to ensure affordability of pursuing a foreign market. 
This reduction is in compliance with the annual waiver provided by OMB 
that allows ITA an exemption from charging SMEs the fully allocated 
cost in order to ensure accessibility of services.
     Introduced annual renewal fees, lower than the initial 
fees, for the Business Service Provider and Featured U.S. Exporter 
services in light of the reduced level of effort required to deliver 
the service after a company's initial enrollment.

User Fee Schedule

    The ITA offers export and investment promotion services to U.S. 
businesses that consist of Standardized Fee Services and Customized Fee 
Services. For each of these services, fees are collected according to 
the User Fee Schedule that is made available on the https://2016.export.gov/csuserfees/ Web site and agency publications. The 
``Standardized Fee Services'' listed in the User Fee Schedule are 
services that are performed in the same general manner by all field 
units. Other

[[Page 31754]]

``Customized Services,'' not shown in the user fee schedule, entail 
substantive variation of the scope of work with fees based on the level 
of effort required and direct costs incurred. As part of its revisions 
to the user fee schedule, ITA turns more Customized Fee Services into 
Standardized Fee Services to improve the consistency and clarity of 
fees to be charged.
    ITA is also modifying the user fees for both Standardized Fee 
Services and Customized Fee Services. The final User Fee Schedule 
provided below lists each standardized fee service. To determine the 
large company fee for any service, a flat hourly rate of $46 for 
locally employed staff, $150 for commercial officers and $80 for U.S.-
based staff is multiplied by the estimated workload hours for each 
employee type. To determine the fees for a small business and medium-
sized business, price sensitivity survey results were analyzed to 
determine the discount to be applied. Direct costs, such as 
transportation or an interpreter, will be discussed with the client and 
assessed in addition to the user fee. For Customized Fee Services, the 
estimated workload hours will vary, but the user fee is calculated 
based on the weighted average hourly rate of $90 per hour for large 
companies, $70 per hour for medium-sized enterprises, and $30 per hour 
for small businesses. The services included in this schedule are 
described below.
    1. Business Service Provider: A listing of U.S. and foreign 
business service providers that offer export/investment assistance; 
such as consultants, lawyers, freight forwarders, etc. The fee is paid 
for by the business service provider to be listed on ITA Web sites.
    2. Certified Trade/Investment Mission: Provides a group of U.S. 
companies or economic development organizations with a market briefing, 
networking reception and Gold Key Service (see description below) in-
country as part of a mission organized by an economic development 
organization or CS office/team. The fees for these missions are 
separate from Department of Commerce Executive-led Missions, which are 
organized by Industry and Analysis/Trade Promotion Programs.
    3. Featured U.S. Exporter: Provides U.S. companies with an 
opportunity to enhance their international marketing efforts through 
improved search engine optimization via .gov link-backs to their 
company's Web site. The service entails listing their goods/services 
overseas on a trusted U.S. government Web site with a brief description 
and contact information.
    4. Gold Key Service: Provides U.S. companies with matchmaking 
appointments with up to five interested partners in a foreign market. 
The service includes identification and outreach to potential matching 
firms, sending client's information to identified matching firms, 
preparing a profile of interested firms, and providing a report with 
the profile and contact information for interested firms.
    5. Initial Market Check: Provides U.S. firms with a report 
containing information needed to evaluate the potential of their 
product or service offering in a specific target market, including a 
snapshot of the market potential of the product/service; feedback from 
up to five local contacts on their level of interest in the product/
service; and analysis and recommendations for next steps.
    6. International Company Profile--Full Report: Provides U.S. 
companies and economic development organizations with a comprehensive 
background report on a specific foreign company, including information 
on company size, sales data, business activities, corporate structure, 
shareholders and directors, references, financial data creditworthiness 
and market outlook; site visit and interviews with principals; 
information sources consulted in preparing the report; and analysis of 
information collected.
    7. International Company Profile--Partial Report: Provides U.S. 
companies and economic development organizations with a partial 
background report on a specific foreign company, including information 
on company size, sales data, business activities, references, corporate 
structure, and shareholders/directors; information sources consulted in 
preparing the report; and brief analysis of information collected.
    8. International Partner Search: Provides U.S. companies with a 
list of up to five partners/distributors that have expressed an 
interest in the client's goods/services. The service includes 
identification and outreach to potential matching firms, sending 
client's information to identified matching firms, preparing a profile 
of interested firms, and providing a report with the profile and 
contact information for interested firms.
    9. International Partner Search + Virtual Introductions: Provides 
the same as above, but also includes virtual introductions via 
conference calls with up to five of the contacts identified.
    10. Other Customized Services/Events: Includes all other services/
events not listed.
    11. Single Company or Location Promotion: Provides a U.S. firm or 
locality with a promotional event (such as a technical seminar, press 
conference, luncheon, dinner, cocktail reception, etc.) to help 
increase awareness of their locality or existing/new products/services 
in a specific market, including organizing the event logistics/venue; 
conducting a targeted direct mail or email campaigns; managing the 
promotional campaign and event-related logistics; providing logistical 
and promotional support on-site during the event; and providing a post-
event de-briefing to discuss next steps.
    12. Trade Show Representation: Provides U.S. companies and economic 
development organizations with the ability to increase their marketing 
exposure at a trade show when they are unable to attend in-person. The 
service entails conducting pre-trade show promotions via Internet/
social media/email campaign, representing the client at the trade show, 
displaying the client's promotional materials at the trade show, 
conducting outreach to foreign buyers/distributors in attendance at the 
trade show, and providing contact information for each overseas company 
that expressed interest in the client's products/services at the trade 
show.
    13. Verified Contact List: Provides U.S. firms with a basic contact 
list of up to five to 10 agents, distributors and partners in a foreign 
market. The information included in the contact list will have been 
reviewed and verified for accuracy only and no information will be 
provided on the level of interest in the client's products/services.
    14. Webinar: Provides U.S. firms and economic development 
organizations with export knowledge and/or market intelligence from 
experts located around the globe via an online webinar. The webinars 
are archived on export.gov.
    15. Web Site Globalization: provides U.S. companies with services 
to enhance the strength of their Web site for attracting foreign 
partners/business.

User Fee Discounts

    The revised user fee schedule eliminates the SME incentive program, 
which offered an additional discount for first-time users of services. 
As part of the revised pricing, small businesses, economic development 
organizations and non-profit education institutions will benefit from 
an average approximate ~70 percent discount and medium-sized 
enterprises are provided an average approximate 30 percent discount.
    The final user fee schedule for export and investment promotion 
services are listed below.

[[Page 31755]]



                                 User Fee Schedule for Export Promotion Services
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                                                                        Fee \1\
            Service/Event             --------------------------------------------------------------------------
                                              Small \2\                  Medium                 Large \3\
----------------------------------------------------------------------------------------------------------------
Business Service Provider............  $150...................  $250...................  $350.
                                       + $50 for translation    + $50 for translation    + $50 for translation
                                        if needed.               if needed.               if needed.
                                       Annual renewal: $75....  Annual renewal: $125...  Annual renewal: $175.
Certified Trade Mission (Market        Full Package: $1,200...  Full Package: $2,800...  Full Package: $4,000.
 briefing and/or networking reception  Networking Reception     Networking Reception     Networking Reception
 and/or Gold Key Service--GKS).         and GKS: $1,100.         and GKS: $2,700.         and GKS: $3,900.
                                       Market Briefing and      Market Briefing and      Market Briefing and
                                        GKS: $1,000.             GKS: $2,400.             GKS: $3,500.
                                       Market Briefing and      Market Briefing and      Market Briefing and
                                        Networking Reception:    Networking Reception:    Networking Reception:
                                        $250.                    $500.                    $600.
                                       + any direct costs.....  + any direct costs.....  + any direct costs.
Featured U.S. Exporter listing (5      $150...................  $350...................  $500.
 markets).                             + $50 for translation    + $50 for translation    + $50 for translation
                                        if needed.               if needed.               if needed.
                                       Annual renewal: $75....  Annual renewal: $175...  Annual renewal: $250.
Gold Key Service.....................  $950...................  $2,300.................  $3,400.
                                       + $350 for 2nd day.....  + $1,000 for 2nd day...  + $1,200 for 2nd day.
Initial Market Check.................  $350...................  $900...................  $1,300.
International Company Profile--Full..  $700...................  $1,200.................  $2,000.
International Company Profile--        $350...................  $850...................  $1,100.
 Partial.
International Partner Search.........  $750...................  $1,400.................  $2,800.
International Partner Search +         $900...................  $1,750.................  $3,250.
 Virtual Introductions.
Other Customized Services and Events.  $30 per staff hour.....  $70 per staff hour.....  $90 per staff hour.
                                       + any direct costs.....  + any direct costs.....  + any direct costs.
Single Company Promotion.............  20 to 40 hours of staff  20 to 40 hours of staff  20 to 40 hours of staff
                                        time: $800.              time: $1,800.            time: $2,600.
                                       40 to 80 hours of staff  40 to 80 hours of staff  40 to 80 hours of staff
                                        time: $1,500.            time: $2,000.            time: $4,500.
                                       80 to 110 hours of       80 to 110 hours of       80 to 110 hours of
                                        staff time: $2,000.      staff time: $4,800.      staff time: $6,300.
                                       + any direct costs.....  + any direct costs.....  + any direct costs.
Trade Show Representation............  $400...................  $950...................  $1,350.
Verified Contact List................  $150...................  $350...................  $450.
Webinar..............................  $25 per webinar hour...  $25 per webinar hour...  $25 per webinar hour.
Website Globalization................  $100...................  $300...................  $400.
----------------------------------------------------------------------------------------------------------------
\1\ Other direct costs not included in the service description must be assumed by the client. Types of other
  direct costs include translation, transportation, use of contractors, venue rental, catering, etc.
\2\ Fees listed also apply to Economic Development Organizations and Non-profit Educational Institutions.
\3\ Fees listed also apply to Foreign Companies, regardless of their size, that use ITA services, particularly
  the Business Service Provider listing, to promote themselves to U.S. exporters.


           User Fee Schedule for Investment Promotion Services
------------------------------------------------------------------------
                                           Fee for Economic Development
                Service                         Organizations \4\
------------------------------------------------------------------------
Certified Investment Mission (Market     Full Package: $1,200.
 briefing, networking reception and      + any direct costs.
 Gold Key Service).
Gold Key Service.......................  $950.
                                         + $350 for 2nd day.
International Company Profile--Full....  $700.
International Company Profile--Partial.  $350.
Other Customized Services/Events.......  $30 per staff hour.
                                         + any direct costs.
Single Location Promotion..............  20-40 hours of staff time:
                                          $800.
                                         40-80 hours of staff time:
                                          $1,500.
                                         80-110 hours of staff time:
                                          $2,000.
                                         + any direct costs.
------------------------------------------------------------------------
\4\ Other direct costs not included in the service description must be
  covered by the client in the form of additional user fees. Types of
  other direct costs include translation, transportation, use of
  contractors, venue rental, catering, etc.

    Notes:
     Business Service Provider: Individual category fee. To be 
listed in more than one category, there is an additional fee per 
category of $30 for small businesses, $50 for medium-sized enterprises 
and $70 for large companies. The annual renewal fee is $75 for small 
businesses, $125 for medium-sized enterprises and $175 for large 
companies.
     Certified Trade Mission: The fee is assessed on a per 
Post/city basis. Applicants will be charged a fee for an Initial Market 
Check if staff is uncertain about their market potential. The fee paid 
by the applicant is then applied to

[[Page 31756]]

their Certified Trade Mission fee if they participate in the mission.
     Featured U.S. Exporter: Listings are typically provided 
for up to 5 markets. However, they an additional individual market can 
be provided for $30 for small businesses, $50 for medium-sized 
enterprises and $70 for large companies. The annual renewal fee is $75 
for small businesses, $175 for medium-sized enterprises and $250 for 
large companies.
     Initial Market Check: Is a required precursor for more 
time intensive services if staff is uncertain about a client's market 
potential. Fees paid for the Initial Market Check will then be applied 
to any follow-on service if the results are positive. The fee is 
assessed on a per country basis.
     International Company Profile--Partial: Does not include a 
site visit.
     Webinars will be archived and made available to the 
general public, so the requirement to recover ITA's costs does not 
apply; however, a minimal fee is required to help ensure the 
suitability of participants and cover the cost of any special benefit 
that may derive from attending in real-time, such as question and 
answer opportunities. Uniform pricing is listed because the enforcement 
of pricing by size standards for each registrant creates an 
administrative burden. Some webinars will be provided at no charge when 
the purpose is primarily to promote ITA or other United States 
Government events, activities, etc.

Determining the Cost of Performing Each Service

    The cost of service methodology developed by ITA was designed to 
bring the organization closer to full cost recovery guidance set forth 
in OMB Circular A-25. To set user fees that are ``self-sustaining,'' 
ITA had to determine the true cost of providing various export and 
investment promotion services.
    Federal Accounting Standards permit ITA to use an activity-based 
costing model to determine the true cost of services listed in the 
proposed User Fee Schedule. The activities were defined in accordance 
with the list of services offered by ITA, including both standard and 
customized services.
    As part of the cost of service study, ITA conducted a workload 
survey to obtain a more accurate estimate of the true cost for delivery 
of specific services. The workload survey was designed and distributed 
to all ITA international and domestic field units. The data submitted 
by various field units was then aggregated to determine the global 
average of workload for each standard or customized service. Using 
FY2015 ITA budget data, fringe benefits and non-labor related costs 
(e.g., materials, supplies, rent, utilities, and equipment) were 
prorated to determine the burdening rate that was to be added to the 
hourly rate. This resulted in an hourly rate that accounts for all 
applicable labor and non-labor costs specifically related to the 
delivery of services, which is consistent with federal accounting 
standards.

Conclusion

    Based on the information provided above, ITA believes its fee 
schedules are consistent with both the mission to promote ``exports of 
goods and services from the United States, particularly by small 
businesses and medium-sized businesses,'' and the objective of OMB 
Circular A-25 to ``promote efficient allocation of the nation's 
resources by establishing charges for special benefits provided to the 
recipient that are at least as great as the cost to the U.S. Government 
of providing the special benefits.'' Public comments were reviewed, and 
addressed through amendments to the original proposal and are reflected 
in the current fee schedule. ITA will reassess the fee schedule after 
the first year of implementation and, in accordance with OMB Circular 
A-25, at least every two years thereafter.

    Dated: June 28, 2017.
Stephanie Smedile,
Acting Director, Office of Strategic Planning, International Trade 
Administration.
[FR Doc. 2017-14238 Filed 7-7-17; 8:45 am]
 BILLING CODE 3510-FP-P