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. 95-0710174-5248-02]

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: Final rule.

-----------------------------------------------------------------------

SUMMARY: These final rules institute a new international services

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: These rules will be effective December 15, 1995.

FOR FURTHER INFORMATION CONTACT:

[[Page 57336]]

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: In the August 8, 1995 Federal Register,

volume 60, No. 152, 60 FR 40336, BEA published a notice of proposed

rulemaking setting forth reporting requirements for a new survey, the

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

Financial Services Providers and Unaffiliated Foreign Persons. No

comments on the proposed rules were received. As a result, the final

rules are the same as the proposed rules.

These final rules amend existing 15 CFR 801.9 to implement the new

survey. The survey will be conducted by BEA under the International

Investment and Trade in Services Survey Act (Pub. L. 94-472, 90 Stat.

2059, 22 U.S.C. 3101-3108, as amended) and the Omnibus Trade and

Competitiveness Act of 1988 (Pub. 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.

The BE-82 survey will be conducted in years in which the BE-80

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

was for 1994 and the first BE-82 survey will 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 obtained in the BE-80 survey. It covers

the same types of financial services as the BE-80 survey, but the

exemption level below which reporting is not required is $5 million,

compared with $1 million in the BE-80 survey. Thus, 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 apply 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 $5 million or less

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 final rules do not contain policies with Federalism

implications sufficient to warrant preparation of a Federalism

assessment under E.O. 12612.

Executive Order 12866

These final rules have been determined to be not sufficient for

purposes of E.O. 12866.

Paperwork Reduction Act

The collection of information requirement in these final rules has

been approved by OMB (OMB No. 0608-0063).

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.

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 these final rules

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. financial services providers

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

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

Reporting and recordkeeping requirements.

Dated: October 4, 1995.

J. Steven Landefeld,

Acting Director, Bureau of Economic Analysis.

For the reasons set forth in the preamble, BEA amends 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,

[[Page 57337]]

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 Services

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. (1) 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 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.

(2) 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. 95-28229 Filed 11-14-95; 8:45 am]

BILLING CODE 3510-EA-M