Direct Investment Surveys: Raising Exemption Level for Quarterly Report Form BE-577

DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 806

[Docket No. 94108-4308]

RIN 0691-AA23

Direct Investment Surveys: Raising Exemption Level for Quarterly

Report Form BE-577

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule will amend 15 CFR 806.14 to raise the

exemption level for filing quarterly Form BE-577, Direct Transactions

of U.S. Reporter With Foreign Affiliate. The BE-577 is a mandatory

survey of U.S. direct investment abroad conducted by the Bureau of

Economic Analysis (BEA), U.S. Department of Commerce. Under this

proposed rule, the exemption level for the survey--the level below

which reports are not required--would be raised from $15 million to $20

million. This change will reduce the number of respondents that

otherwise must report in the survey, thus reducing both the reporting

and processing burdens. (As noted below, however, BEA is proposing the

addition of a number of items to the survey form that do not require a

rule change and that will increase reporting burden, exactly offsetting

the reduction in burden due to raising the exemption level.)

DATES: Comments on this proposed rule will receive consideration if

submitted in writing on or before January 26, 1995.

ADDRESSES: Comments may be mailed to the Office of the Chief,

International Investment Division (BE-50), Bureau of Economic Analysis,

U.S. Department of Commerce, Washington, DC 20230, or hand delivered to

Shipping and Receiving, Section M-100, 1441 L Street, N.W., Washington,

DC 20005. Comments received will be available for public inspection in

Room 7006, 1441 L Street, N.W., between 8:30 a.m. and 4:30 p.m., Monday

through Friday.

FOR FURTHER INFORMATION CONTACT:

Betty L. Barker, Chief, International Investment Division (BE-50),

Bureau of Economic Analysis, U.S. Department of Commerce, Washington,

DC 20230; phone (202) 606-9800.

SUPPLEMENTARY INFORMATION: The BE-577, Direct Transactions of U.S.

Reporter With Foreign Affiliate, is part of BEA's regular data

collection program for U.S. direct investment abroad. The survey is

mandatory and is conducted pursuant to the International Investment and

Trade in Services Survey Act (Pub. L. 94-472, 90 Stat. 2059, 22 U.S.C.

3101-3108, as amended).

The exemption level is set in terms of the size of a U.S. company's

foreign affiliates. Under this proposed rule, the exemption level for

the BE-577 survey will be raised from $15 million to $20 million. Thus,

if an affiliate is owned 10 percent or more by the U.S. company and has

assets, sales, or net income greater than $20 million (positive or

negative), it will have to be reported. The last time the exemption

level was raised was May 1, 1986.

Raising the exemption level lowers the number of reports that

otherwise must be filed, thus reducing the reporting and processing

burdens. The proposed changes would be effective commencing on January

1, 1995 with the reports for the first quarter of 1995.

BEA is proposing changes to the BE-577 survey form in addition to

the raising of the exemption level. These changes, however, do not

require rule changes and are not reflected in the proposed rule. They

are a result of changes made to the related BE-10, Benchmark Survey of

U.S. Direct Investment Abroad--1994. They include the combination of

two items that appeared on the 1994 BE-577 survey and the addition of

other items that are on the 1994 BE-10 but were not on the 1994 BE-577.

Changes in the survey instructions are being made primarily for

purposes of clarification and to reflect the combination or addition of

items on the form.

Added to the form are items, to be completed annually, on services

transactions between U.S. Reporters and their foreign affiliates by

type and an item, to be completed quarterly by affiliates classified in

banking, on the U.S. Reporter's share of the affiliate's provision for

loan losses. The additional detail on services transactions by type

will move BEA's services data into closer conformity with international

guidelines in the fifth edition of the International Monetary Fund's

Balance of Payments Manual, which suggest that services transactions be

disaggregated by specific types of services. The item on the loan

losses of banks is needed by BEA to adjust net income of U.S.

multinational companies to an economic accounting basis, as required

for entry into the U.S. national income and product accounts.

The reporting burden for the 1995 BE-577 survey is estimated at

46,000 hours, 4,000 hours more than the estimate currently in the OMB

inventory. The increase reflects an adjustment in the hours currently

in the OMB inventory to account for an increase in the number of

respondents, due to natural growth in the affiliate sample, since the

estimate in the inventory was made. There is no net change in burden

hours due to program changes; the increase in burden due to the

addition of new items to the form is exactly offset by the decrease in

burden due to raising the exemption level.

A copy of the proposed survey forms may be obtained from: Office of

the Chief, Direct Investment Abroad Branch, International Investment

Division (BE-69(A), Bureau of Economic Analysis, U.S. Department of

Commerce, Washington, DC 20230; phone (202) 606-5566.

Executive Order 12612

The proposed rule does not contain policies with Federalism

implications sufficient to warrant preparation of a Federalism

assessment under E.O. 12612.

Executive Order 12866

The proposed rule has been determined to be not significant for

purposes of E.O. 12866.

Paperwork Reduction Act

The proposed rule contains a collection of information requirement

subject to the Paperwork Reduction Act. A request for review of the

forms has been submitted to the Office of Management and Budget under

section 3504(h) of the Paperwork Reduction Act.

The public reporting burden for this collection of information is

estimated to be 1.15 hours per response (form). The burden on the U.S.

Reporter will vary depending on the number of forms that must be

submitted in a given reporting period; this ranges from 1 to 225 forms.

The estimated burden of 1.15 hours per form includes the time for

reviewing instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information. Comments from the public regarding the

burden estimate or any other aspect of this collection of information

should be addressed to: Director, Bureau of Economic Analysis (BE-1),

U.S. Department of Commerce, Washington, DC 20230; and to the Office of

Management and Budget, Washington, DC 20503, Attention: Desk Officer

for the Department of Commerce.

Regulatory Flexibility Act

The Assistant General Counsel for Legislation and 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 the proposed rule,

if adopted, will not have a significant economic impact on a

substantial number of small entities. Because it raises the exemption

level for filing the survey, it will actually reduce the reporting

requirements of smaller entities.

List of Subjects in 15 CFR Part 806

Balance of payments, Economic statistics, U.S. investment abroad,

Penalties, Reporting and recordkeeping requirements.

Dated: October 27, 1994.

Carol S. Carson,

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; and E.O. 11961 (3

CFR, 1977 Comp., p. 86), as amended by E.O. 12013 (3 CFR, 1977

Comp., p. 147), E.O. 12318 (3 CFR, 1981 Comp., p. 173), and E.O.

12518 (3 CFR, 1985 Comp., p. 348).

Sec. 806.14 [Amended]

2. Sec. 806.14(e), is amended by deleting ``$15,000,000'' and

inserting ``$20,000,000'' in its place.

[FR Doc. 94-30393 Filed 12-9-94; 8:45 am]

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