International Services Surveys: BE-82 Annual Survey of Financial Services Transactions Between U.S. Financial Services Providers and Unaffiliated Foreign Persons

DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 950710174-5174-01]

RIN 0691-AA26

International Services Surveys: BE-82 Annual Survey of Financial

Services Transactions Between U.S. Financial Services Providers and

Unaffiliated Foreign Persons

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document sets forth proposed rules relating to

international services surveys to institute a new mandatory survey, the

BE-82, Annual Survey of Financial Services Transactions Between U.S.

Financial Services Providers and Unaffiliated Foreign Persons, to be

conducted by the Bureau of Economic Analysis (BEA), U.S. Department of

Commerce. The survey will update information collected on the

quinquennial BE-80, Benchmark Survey of Financial Services Transactions

Between U.S. Financial Services Providers and Unaffiliated Foreign

Persons, which was first conducted for 1994. Together, the two surveys

will produce continuous annual time series of data on financial

services that are out of scope of other international services surveys.

The information is needed, among other purposes, to support trade

policy initiatives, including trade negotiations, on financial services

and to compile the U.S. balance of payments and national income and

product accounts.

The survey will be conducted under the International Investment and

Trade in Services Survey Act and the Omnibus Trade and Competitiveness

Act of 1988.The first survey will cover 1995.

DATES: Comments on these proposed rules will receive consideration if

submitted in writing on or before September 22, 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

Room M-100, 1441 L Street, N.W., Washington, DC 20005. Comments 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) 606-9805.

SUPPLEMENTARY INFORMATION: These proposed rules will amend existing 15

CFR 801.9 to set forth reporting requirements for the BE-82, Annual

Survey of Financial Services Transactions Between U.S. Financial

Services Providers and Unaffiliated Foreign Persons. The survey will be

conducted by the Bureau of Economic Analysis (BEA), U.S. Department of

Commerce, under the International Investment and Trade in Services

Survey Act (P.L. 94-472, 90 Stat. 2059, 22 U.S.C. 3101-3108, as

amended) and the Omnibus Trade and Competitiveness Act of 1988 (P.L.

100-418, 15 U.S.C. 4908). Section 3103(a) of the International

Investment and Trade in Services Survey Act provides that ``The

President shall, to the extent he deems necessary and feasible-- . . .

(1) conduct a regular data collection program to secure current

information . . . related to international investment and trade in

services . . .; and (5) publish for the use of the general public and

United States Government agencies periodic, regular, and comprehensive

statistical information collected pursuant to this subsection * * *''

In Section 3 of Executive Order 11961, as amended by Executive Order

12518, the President delegated the authority under the Act as concerns

international trade in services to the Secretary of Commerce, who has

redelegated it to BEA. The Omnibus Trade and Competitiveness Act of

1988 directs that ``The Secretary (of Commerce) shall ensure that * * *

there is included in the Data Bank information on service sector

activity that is as complete and timely as information on economic

activity in the merchandise sector. The Secretary shall undertake a new

benchmark survey of services transactions, including transactions with

respect to * * * banking services; (and) brokerage services. * * * The

Secretary shall (also) provide, not less than once a year,

comprehensive information on the service sector of the economy.''

The major purposes of the survey are to provide the information on

financial services needed in monitoring U.S. services trade, analyzing

its effects on the U.S. economy, formulating U.S. international trade

policy, supporting bilateral and multilateral trade negotiations,

compiling the U.S. balance of payments and national income and product

accounts, developing U.S. international price indexes for services,

assessing U.S. competitiveness in international trade in services, and

improving the ability of U.S. businesses to identify and evaluate

foreign market opportunities.

As proposed, the BE-82 survey will be conducted in years in which a

BE-80 benchmark survey, or census, is not conducted; the first BE-80

survey was for 1994 and the first BE-82 survey would be for 1995. The

BE-82 survey will update the data provided on the universe of financial

services transactions between U.S. financial services providers and

unaffiliated foreign persons derived from the BE-80 survey. It covers

the same types of financial services that are covered by the BE-80

survey, but the exemption level below which reporting is not required

has been raised to $5 million compared with $1 million in the BE-80

survey. Reporting in the BE-82 is required from U.S. financial services

providers who have sales to or purchases from unaffiliated foreign

persons in all covered financial services combined in excess of $5

million during the reporting year. Those financial services providers

meeting this criteria must supply data on the amount of their sales or

purchases of each covered type of service, disaggregated by country.

U.S. financial services providers that have covered transactions of

less than $5 million during the reporting year are asked to provide, on

a voluntary basis, estimates only of their total sales or purchases of

each type of financial service.

Executive Order 12612

These proposed rules do not contain policies with Federalism

implications sufficient to warrant preparation of a Federalism

assessment under E.O. 12612.

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Executive Order 12866

These proposed rules have been determined to be not significant for

purposes of E.O. 12866.

Paperwork Reduction Act

These proposed rules contain 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.

Public reporting burden for this collection of information is

estimated to vary from 4 to 150 hours, with an overall average burden

of 7.5 hours. This includes time for reviewing the instructions,

searching existing data sources, gathering and maintaining the data

needed, and completing and reviewing the collection of information.

Send comments regarding this burden estimate or any other aspect of

this collection of information, including suggestions for reducing this

burden, 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 this proposed

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

a substantial number of small entities. The exemption level for the

survey excludes most small businesses from mandatory reporting.

Reporting is required only if total sales or total purchases

transactions in financial services with unaffiliated foreign persons by

U.S. persons who are financial services providers, or by U.S. persons

whose consolidated enterprise includes a separately organized

subsidiary or part that is a financial services provider, exceed $5

million during the year. In addition, international business tends to

be conducted mainly by the larger companies in a given industry; in the

financial services industry, this is particularly true, because of the

high degree of consolidation that has occurred in that industry in the

United States during the past several years. In any event, small

businesses tend to have specialized operations and activities, so those

with reportable transactions will likely not have significant amounts

of data to report; therefore, the burden on them will be relatively

small.

List of Subjects in 15 CFR Part 801

Economic statistics, Balance of payments, Foreign trade, Penalties,

Reporting and recordkeeping requirements.

Dated: July 3, 1995.

J. Steven Landefeld,

Acting Director, Bureau of Economic Analysis.

For the reasons set forth in the preamble, BEA proposes to amend 15

CFR part 801, as follows:

PART 801--[AMENDED]

1. The authority citation for 15 CFR part 801 is revised 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. 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.

2. Section 801.9 is amended by adding paragraph (b)(7) to read as

follows:

Sec. 801.9 Reports required.

* * * * *

(b) Annual surveys. * * *

(7) BE-82, Annual Survey of Financial Services Transactions Between

U.S. Financial Services Providers and Unaffiliated Foreign Persons:

(i) A BE-82, Annual Survey of Financial Services Transactions Between

U.S. Financial Services Providers and Unaffiliated Foreign Persons,

will be conducted covering companies' 1995 fiscal year and every year

thereafter except when a BE-80, Benchmark Survey of Financial Services

Transactions Between U.S. Financial Service Providers and Unaffiliated

Foreign Persons, is conducted (see Sec. 801.11). All legal authorities,

provisions, definitions, and requirements contained in Sec. 801.1

through Sec. 801.8 are applicable to this survey. Additional rules and

regulations for the BE-82 survey are given in paragraphs (b) (7)(i) (A)

through (D) of this section. More detailed instructions are given on

the report form itself.

(A) Who must report. (1) Mandatory reporting. Reports are required

from each U.S. person who is a financial services provider or

intermediary, or whose consolidated U.S. enterprise includes a

separately organized subsidiary or part that is a financial services

provider or intermediary, and who had transactions (either sales or

purchases) directly with unaffiliated foreign persons in all financial

services combined in excess of $5,000,000 during its fiscal year

covered by the survey. The $5,000,000 threshold should be applied to

financial services transactions with unaffiliated foreign persons by

all parts of the consolidated U.S. enterprise combined that are

financial services providers or intermediaries. Because the $5,000,000

threshold applies separately to sales and purchases, the mandatory

reporting requirement may apply only to sales, only to purchases, or to

both sales and purchases.

(i) The determination of whether a U.S. financial services provider

or intermediary is subject to this mandatory reporting requirement may

be judgmental, that is, based on the judgment of knowledgeable persons

in a company who can identify reportable transactions on a recall

basis, with a reasonable degree of certainty, without conducting a

detailed manual records search.

(ii) Reporters who file pursuant to this mandatory reporting

requirement must provide data on total sales and/or purchases of each

of the covered types of financial services transactions and must

disaggregate the totals by country.

(2) Voluntary reporting. If, during the fiscal year covered, sales

or purchases of financial services by a firm that is a financial

services provider or intermediary, or by a firm's subsidiaries or parts

combined that are financial services providers or intermediaries, are

$5,000,000 or less, the U.S. person is requested to provide an estimate

of the total for each type of service. Provision of this information is

voluntary. Because the $5,000,000 threshold applies separately to sales

and purchases, this voluntary reporting option may apply only to sales,

only to purchases, or to both sales and purchases.

(B) BE-82 definition of financial services provider. The definition

of a financial services provider used for this survey is the same as

that used for the BE-80 benchmark survey, as defined in Sec. 801.11(b).

(C) Covered types of services. The BE-82 survey covers the same

types of financial services transactions that are covered by the BE-80

benchmark survey, as listed in Sec. 801.11(c).

(D) What to file. (i) The BE-82 survey consists of Forms BE-82(A)

and BE-82(B). Before completing a Form BE-82(B), a consolidated U.S.

enterprise (including the top parent and all of its subsidiaries and

parts combined) must complete Form BE-82(A) to determine its reporting

status. If the enterprise is

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subject to the mandatory reporting requirement, or if it is exempt from

the mandatory reporting requirement but chooses to report data

voluntarily, either a separate Form BE-82(B) may be filed for each

separately organized financial services subsidiary or part of the

consolidated U.S. enterprise, or a single BE-82(B) may be filed,

representing the sum of covered transactions by all financial services

subsidiaries or parts of the enterprise combined.

(ii) Reporters that receive the BE-82 survey from BEA, but that are

not reporting data in either the mandatory or voluntary section of any

Form BE-82(B), must return the Exemption Claim, attached to Form BE-

82(A), to BEA.

(ii) [Reserved].

* * * * *

[FR Doc. 95-18803 Filed 8-7-95; 8:45 am]

BILLING CODE 3510-06-M