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. 9050206037-5037-01]

RIN 0691-AA23

Direct Investment Surveys: Raising Exemption Level for Quarterly

Report Form BE-577

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Final rule.

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SUMMARY: This final rule amends regulations on direct investment

surveys 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 final rule, the exemption level for the survey--the level below

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

million. This change will reduce the number of respondents that

otherwise must report in the survey.

EFFECTIVE DATE: This rule will be effective March 29, 1995.

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: In the December 12, 1994 Federal Register,

59 FR 63941, BEA published a notice of proposed rulemaking that would

increase the exemption level for filing the BE-577, Direct Transactions

of U.S. Reporter With Foreign Affiliate. No comments on the proposed

rule itself were received. (As noted below, one comment on changes to

the survey forms that did not require rule changes was received.) Thus,

this final rule is the same as the proposed rule.

The quarterly BE-577 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 final rule, the exemption level for the

BE-577 survey is 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. If the affiliate does not meet

these criteria, a report is not required. 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 changes in exemption level will be implemented beginning

with the reports for the first quarter of 1995.

BEA has made changes to the BE-577 survey form in addition to the

raising of the exemption level. These changes, however, did not require

rule changes and are not reflected in the final 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. 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.

Also, changes in the survey instructions are being made primarily for

purposes of clarification and to reflect the combination or addition of

items.

In response to the notice of proposed rulemaking, one letter of

comment was received. It expressed concern that the new items on

services transactions would impose additional burden by requiring

modification of information systems and more time to complete the

survey forms. The new items must be completed only annually, and the

first time they will need to be completed will not be until the second

quarter following the end of affiliates' fiscal year 1995, which in

most cases will be mid-1996. This will give companies at least a year

to implement program changes necessary to report this information.

Executive Order 12612

This final rule does not contain policies with Federalism

implications sufficient to warrant preparation of a Federalism

assessment under E.O. 12612.

Executive Order 12866

This final rule has been determined to be not significant for

purposes of E.O. 12866.

Paperwork Reduction Act

The collection of information required in this final rule has been

approved by OMB (OMB No. 0608-0004).

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. 606(b)), that this final rule 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, Foreign investments in

United States, Penalties, Reporting and [[Page 10490]] recordkeeping

requirements, United States investments abroad.

Dated: February 2, 1995.

Carol S. Carson,

Director, Bureau of Economic Analysis.

For the reasons set forth in the preamble, BEA amends 15 CFR Part

806 as follows:

PART 806--DIRECT INVESTMENT SURVEYS

1. The authority citation for 15 CFR Part 806 is revised 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. Section 806.14(e) is amended by removing ``$15,000,000'' and

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

[FR Doc. 95-4631 Filed 2-24-95; 8:45 am]

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