International Services Surveys: BE-80, Benchmark 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. 9906111599276-02]

RIN 0691-AA35

International Services Surveys: BE-80, Benchmark Survey of

Financial Services Transactions Between U.S. Financial Services

Providers and Unaffiliated Foreign Persons

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Final rule.

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SUMMARY: These final rules revise regulations for the BE-80, Benchmark

Survey of Financial Services Transactions Between U.S. Financial

Services Providers and Unaffiliated Foreign Persons.

The BE-80 survey is mandatory and is conducted once every 5 years

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

under the International Investment and Trade in Services Survey Act,

and under the Omnibus Trade and Competitiveness Act of 1988. The

benchmark survey will be conducted for 1999. BEA will send the survey

to potential respondents in January of the year 2000; responses will be

due by March 31, 2000. The last benchmark survey was conducted for

1994. The benchmark survey will obtain universe data on trade in

financial services, by type and by country, between U.S. financial

services providers and unaffiliated foreign persons. Data from the BE-

80 survey (and the follow-on annual survey, the BE-82) are needed to

monitor trade in financial services, analyze its impact on the U.S. and

foreign economies, compile and improve the U.S. economic accounts,

support U.S. commercial policy on financial services, conduct trade

promotion, improve the ability of U.S. businesses to identify and

evaluate market opportunities, and for other Government uses.

The revised rules raise the exemption level for the 1999 survey to

$3 million in covered sales or purchases transactions, from $1 million

on the previous (1994) survey. Raising the exemption level will reduce

respondent burden, particularly for small companies. The revised rules

also combine private placement services with underwriting services,

combine foreign exchange brokerage services with other brokerage

services, and create a separate category for electronic funds

transfers. Finally, the revised

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rules restate the definition of ``financial services provider'' using

the nomenclature of the new North American Industry Classification

System that has replaced the U.S. Standard Industrial Classification

System.

The changes in the types of services to be reported separately

reflect BEA's experience in collecting data on financial services

transactions over the past 5 years. Data collected for both private

placement and foreign exchange brokerage services have been very small

and do not justify the continuation of separate reporting. Electronic

funds transfer services, in contrast appear to account for a large

fraction of both total receipts and total payments for ``other

financial services,'' in which electronic funds transfers were

previously included.

EFFECTIVE DATE: These final rules are effective December 2, 1999.

FOR FURTHER INFORMATION CONTACT: R. David Belli, 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 July 9, 1999 Federal Register, volume

64, No. 131, 64 FR 37049-37051, BEA published a notice of proposed

rulemaking setting forth revised reporting requirements for the BE-80,

Benchmark Survey of Financial Services Transactions Between U.S.

Financial Services Providers and Unaffiliated Foreign Persons. No

comments on the proposed rules were received. Thus, these final rules

are the same as the proposed rules.

These final rules amend 15 CFR part 801 to set forth revised

reporting requirements for the BE-80, Benchmark Survey of Financial

Services Transactions Between Financial Services Providers and

Unaffiliated Foreign Persons. The Bureau of Economic Analysis (BEA),

U.S. Department of Commerce, will conduct the survey under the

International Investment and Trade in Services Survey Act (22 U.S.C.

3101-3108), hereinafter ``the Act'', and under Section 5408 of the

Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 4908). Section

4(a) of the Act (22 U.S.C. 3103(a)) provides that the President shall,

to the extent he deems necessary and feasible, conduct a regular data

collection program to secure current information related to

international investment and trade in services, and 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, the

President delegated authority granted under the Act as concerns

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

redelegated it to BEA.

The major purposes of the survey are to monitor trade in financial

services, analyze its impact on the U.S. and foreign economics, compile

and improve the U.S. economic accounts, support U.S. commercial policy

on financial services, conduct trade promotion, and improve the ability

of U.S. businesses to identify and evaluate market opportunities.

BEA will conduct the BE-80 survey once every 5 years. They last

survey was conducted for 1994. The survey is intended to cover the

universe of financial services transactions between U.S. financial

services providers and unaffiliated foreign persons. Reporting 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 $3 million during the reporting year.

Financial services providers meeting these criteria must apply data on

the amount of their sales or purchases for each covered type of

service, disaggregate by country. U.S. financial services providers

that have covered transactions of less than $3 million during the

reporting year are asked to provide voluntary estimates of their total

sales or purchases of each type of financial service.

The information from the benchmark survey is updated in

nonbenchmark years by an annual follow on survey, the BE-82. Currently,

the annual survey covers only those U.S. financial services providers

that have covered transaction in excess of $5 million during the

reporting year.

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 significant for

purposes of E.O. 12866.

Paperwork Reduction Act

The collection of information required in these final rules has

been approved by OMB (OMB No. 0608-0062) under the Paperwork Reduction

Act. Notwithstanding any other provisions of the law, no person is

required to respond to, nor shall any person be subject to a penalty

for failure to comply with, a collection-of-information subject to the

requirements of the Paperwork Reduction Act unless that collection

displays a currently valid Office of Management and Budget Control

Number.

The survey is expected to result in the filing of reports,

containing mandatory or voluntary data, from about 500 respondents. The

average burden for completing the BE-80--both the mandatory and

voluntary sections--is estimated to be 7 hours. Thus, the total

respondent burden of the survey is estimated at 3,500 hours (500

respondents times 7 hours average burden). The actual burden will vary

from reporter to reporter, depending upon the number and variety of

their financial services transactions and the ease of assembling the

data. Thus, it may range from 4 hours for a reporter that has a small

number and variety of transactions and easily accessible data, or that

reports only in the voluntary section of the form, to 150 hours for a

very large reporter that engages in a large number and variety of

financial services transactions and has difficulty in locating and

assembling the required data. This estimate includes time for reviewing

instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information.

Comments 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, O.I.R.A., Paperwork

Reduction Project 0608-0062, Washington, DC 20503 (Attention PRA Desk

Officer for BEA).

Regulatory Flexibility Act

The Chief Counsel for Regulation, Department of Commerce, has

certified to the Chief Counsel for Advocacy, Small Business

Administration, under 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

information collection excludes most small businesses from mandatory

reporting. Companies that engage in international financial services

transactions tend to be quite large. In addition, the reporting

threshold for this survey is set at a level that will exempt most small

businesses from reporting. The BE-80 benchmark survey will be

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required only from U.S. persons with sales to, or purchases from,

unaffiliated foreign persons in excess of $3,000,000 during the

reporting year, in all covered financial services transactions

combined; the exemption level for the previous benchmark survey,

covering 1994, was $1,000,000. Thus, the exemption level will exclude

most small businesses from mandatory coverage. Of those smaller

businesses that must report, most will tend to have specialized

operations and activities, so they will likely report only one type of

transaction; therefore, the burden on them should be small.

List of Subjects in 15 CFR Part 806

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

Reporting and recordkeeping requirements.

Dated: October 8, 1999.

J. Steven Landefeld,

Director, Bureau of Economic Analysis.

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

801, as follows:

PART 801--SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S.

AND FOREIGN PERSONS

1. The authority citation for part 801 continues 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 801.11 is revised to read as follows:

Sec. 801.11 Rules and regulations for the BE-80, Benchmark Survey of

Financial Services Transactions Between U.S. Financial Services

Providers and Unaffiliated Foreign Persons.

A BE-80, Benchmark Survey of Financial Services Transactions

Between U.S. Financial Services Providers and Unaffiliated Foreign

Persons, will be conducted covering 1999 and every fifth year

thereafter. All legal authorities, provisions, definitions, and

requirements contained in Secs. 801.1 through 801.9 are applicable to

this survey. Additional rules and regulations for the BE-80 survey are

given in paragraphs (a) through (d) of this section. More detailed

instructions are given on the report forms and instructions.

(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 $3,000,000 during its fiscal year

covered by the survey. The $3,000,000 threshold should be applied to

financial services transactions with unaffiliated foreign persons by

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

financial services providers or intermediaries. Because the $3,000,000

threshold applies separately to sales and purchases, the mandatory

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

both.

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

or intermediary is subject to this mandatory reporting requirement may

be 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 $3,000,000 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 $3,000,000 threshold applies

separately to sales and purchases, this voluntary reporting option may

apply only to sales, only to purchases, or to both.

(b) BE-80 definition of financial services provider. Except for

Monetary Authorities (i.e. Central Banks), the definition of financial

services provider used for this survey is identical in coverage to

Sector 52--Finance and Insurance--of the North American Industry

Classification System, United States, 1997. For example, companies and/

or subsidiaries and other separable parts of companies in the following

industries are defined as financial services providers: Depository

credit intermediation and related activities (including commercial

banking, holding companies, savings institutions, check cashing, and

debit card issuing); nondepository credit intermediation (including

credit card issuing, sales financing, and consumer lending);

securities, commodity contracts, and other financial investments and

related activities (including security and commodity futures brokers,

dealers, exchanges, traders, underwriters, investment bankers, and

providers of securities custody services); insurance carriers and

related activities (including agents, brokers, and services providers);

investment advisors and managers and funds, trusts, and other financial

vehicles (including mutual funds, pension funds, real estate investment

trusts, investors, stock quotation services, etc.).

(c) Covered types of services. The BE-80 survey covers the

following types of financial services transactions (purchases and/or

sales) between U.S. financial services providers and unaffiliated

foreign persons: Brokerage, including foreign exchange brokerage

services; underwriting and private placement services; financial

management services; credit-related services, except credit care

services; credit card services; financial advisory and custody

services; securities lending services; electronic funds transfer

services; and other financial services.

(d) What to file. (1) The BE-80 survey consists of Forms BE-80 (A)

and BE-80(B). Before completing a form BE-80 (B), a consolidated U.S.

enterprise (including the top U.S. parent and all of its subsidiaries

and parts combined) must complete Form BE-80(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, it should either:

(i) File a separate Form BE-80(B) for each separately organized

financial services subsidiary or part of a consolidated U.S.

enterprise; or

(ii) File a single BE-80(B) representing the sum of all covered

transactions by all financial services subsidiaries or parts of the

enterprise combined.

(2) Reporters who receive the BE-80 survey from BEA but are not

subject to the mandatory reporting requirements and choose not to

report data voluntarily must complete and return to BEA the Exemption

Claim.

[FR Doc. 99-28576 Filed 11-1-99; 8:45 am]

BILLING CODE 3510-06-M