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Proposed Rule

International Services Surveys: BE-80, Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Unaffiliated Foreign Persons

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Information about this document as published in the Federal Register.

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AGENCY:

Bureau of Economic Analysis, Commerce.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

This proposed rule would amend regulations that set forth reporting requirements 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 conducted once every five 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 proposed benchmark survey will be conducted for 2004. The data are needed to compile the U.S. international transactions, national income and product, and input-output accounts; support U.S. economic policy; assess U.S. competitiveness in international trade in services; and improve the ability of U.S. businesses to identify and evaluate market opportunities.

The proposed rule would change the reporting of data on international transactions in financial services by: Creating a new category for brokerage services related to equities transactions; collecting total receipts and total payments for financial services transactions with affiliated foreign parties (that is, with foreign affiliates and foreign parents); and revising the definition of a financial services provider to more fully align the definition with the North American Industry Classification System—2002.

DATES:

Comments on this proposed rule will receive consideration if submitted in writing on or before October 26, 2004.

ADDRESSES:

You may submit comments, identified by RIN 0691-AA51, and referencing the agency name (Bureau of Economic Analysis), by any of the following methods:

  • Federal eRulemaking Portal: HTTP://www.regulations.gov. Follow the instructions for submitting comments.
  • E-mail: obie.whichard@bea.gov.
  • Fax: Office of the Chief, International Investment Division, (202) 606-5318.
  • Mail: Office of the Chief, International Investment Division (BE-50), Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230.
  • Hand Delivery/Courier: U.S. Department of Commerce, Bureau of Economic Analysis (BE-50), Shipping and Receiving Section, room M-100, 1441 L Street, NW., Washington, DC 20005.

Public Inspection: Comments may be inspected at BEA's offices, 1441 L Street, NW., Room 7006, between 8:30 a.m. and 5 p.m., Monday through Friday.

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FOR FURTHER INFORMATION CONTACT:

Obie G. Whichard, Chief, International Investment Division (BE-50), Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230; phone (202) 606-9800.

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SUPPLEMENTARY INFORMATION:

This proposed rule would amend 15 CFR part 801.11 to set forth reporting requirements for the BE-80, Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Unaffiliated Foreign Persons. The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on the proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.

Description of Revisions

The BE-80, Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Unaffiliated Foreign Persons, is mandatory and is conducted 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 (22 U.S.C. 3101-3108)—hereinafter, “the Act,” and under Section 5408 of the Omnibus Trade and Competitiveness Act of 1998 (15 U.S.C. 4908). BEA will send the survey to potential respondents in January 2005, and a response will be due by March 31, 2005. BEA proposes the following changes to the Code of Federal Regulations: (1) Break the category for brokerage services into two categories, by collecting information on services related to equities transactions separately from other brokerage services; (2) add questions covering total receipts and total payments for transactions in financial services with affiliated foreign parties (i.e., foreign affiliates and foreign parents); and (3) revise the definition of a financial services provider to more fully align the definition with the 2002 version of North American Industry Classification System. The forms and instructions for the 2004 benchmark survey would be amended to reflect these proposed changes to the Code of Federal Regulations.

Survey Background

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 1998 (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 the 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 Start Printed Page 52614Secretary of Commerce, who has redelegated it to BEA.

The major purposes of the survey are to compile the U.S. international transactions, national income and product, and input-output accounts; support U.S. international economic policy; assess U.S. competitiveness in international trade in financial services; and improve the ability of U.S. businesses to identify and evaluate market opportunities.

The survey is intended to cover the universe of financial services transactions between U.S. financial services providers and foreign persons. Reporting is required from U.S. financial services providers who have sales to or purchases from unaffiliated foreign persons in all financial services combined in excess of $3 million during the reporting year. Financial services providers meeting these criteria must supply data on the amount of their sales or purchases with unaffiliated foreign persons for each type of covered service, disaggregated by country, and must report transactions with foreign affiliates and foreign parents at the global level for both total sales and total purchases of the covered financial services. U.S. financial services providers that have covered transactions of $3 million or less during the reporting year are asked to provide voluntary estimates of their total sales and total purchases of each type of financial service.

Executive Order 12866

This proposed rule has been determined to be not significant for purposes of E.O. 12866.

Executive Order 13132

This proposed rule does not contain policies with Federalism implications as that term is defined in E.O. 13132.

Paperwork Reduction Act

This proposed rule contains a collection-of-information requirement subject to review and approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA). The requirement has been submitted to OMB for approval as a reinstatement, with change, of a previously approved collection for which approval has expired under OMB control number 0608-0062.

Notwithstanding any other provision of law, no person is required to respond to, nor shall a 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, as proposed, is expected to result in the filing of reports from approximately 375 respondents. The respondent reporting burden for this collection of information is estimated to vary from less than four hours to 150 hours, with an overall average burden of 8 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. Thus, the total respondent burden of the survey is estimated at 3,000 hours (375 responses times 8 hours average burden).

Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the agency, including whether the information will have practical utility; (b) the accuracy of the burden estimate; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Comments should be addressed to: Director, Bureau of Economic Analysis (BE-1), U.S. Department of Commerce, Washington, DC 20230; and either faxed (202-395-7245) or e-mailed (pbugg@omb.eop.gov) to the Office of Management and Budget, O.I.R.A. (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 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. Although BEA does not collect data on total sales or other measures of the overall size of the businesses that respond to the survey, historically the respondent universe has been comprised mainly of major U.S. corporations. With the exemption level for the survey being $3 million for all covered receipts or for all covered payments, the reporting threshold for this survey is set at a level that will exempt most small businesses from reporting. Of those smaller businesses that must report, most will tend to have specialized operations and activities and thus will be likely to report only one type of service transaction, often limited to transactions with a single partner country; therefore, the burden on them can be expected to be small.

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List of Subjects in 15 CFR Part 801

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Dated: July 30, 2004.

J. Steven Landefeld,

Director, Bureau of Economic Analysis.

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For the reasons set forth in the preamble, BEA proposes to amend 15 CFR Part 801, as follows:

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PART 801—SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S. AND FOREIGN PERSONS

1. The authority citation for 15 CFR Part 801 is revised to read as follows:

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Authority: 5 U.S.C. 301; 15 U.S.C. 4908; 22 U.S.C. 3101-3108; and E.O. 11961, January 19,1977 (as amended by E.O. 12318, August 21, 1981, and E.O. 12518, June 3, 1985).

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2. Section 801.11(b) and (c) are revised to read as follows:

(b) BE-80 definition of financial services provider. The definition of financial services provider used for this survey is identical in coverage to Sector 52—Finance and Insurance, and holding companies that own or influence, and are principally engaged in making management decisions for these firms (part of Sector 55—Management of Companies and Enterprises, of the North American Industry Classification System, United States, 2002). 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, savings institutions, credit unions, and other depository credit intermediation); nondepository credit intermediation (including credit card issuing, sales financing, and other nondepository credit intermediation); activities related to credit intermediation (including mortgage and nonmortgage loan brokers, financial transactions processing, reserve, and clearinghouse activities, and other activities related to credit intermediation); securities and commodity contracts intermediation and brokerage (including investment banking and securities dealing, securities brokerage, commodity contracts dealing, and commodity contracts brokerage); securities and commodity exchanges; other financial investment activities (including miscellaneous intermediation, portfolio Start Printed Page 52615management, investment advice, and all other financial investment activities); insurance carriers; insurance agencies, brokerages, and other insurance related activities; insurance and employee benefit funds (including pension funds, health and welfare funds, and other insurance funds); other investment pools and funds (including open-end investment funds, trusts, estates, and agency accounts, real estate investment trusts, and other financial vehicles); and holding companies that own, or influence the management decisions of, firms principally engaged in the aforementioned activities.

(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 services related to equities transactions; other brokerage services; underwriting and private placement services; financial management services; credit-related services, except credit card services; credit card services; financial advisory and custody services; securities lending services; electronic funds transfer services; and other financial services. The BE-80 also covers total receipts and total payments for the above-listed types of financial services transactions with affiliated foreign parties (foreign affiliates and foreign parents).

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[FR Doc. 04-19561 Filed 8-26-04; 8:45 am]

BILLING CODE 3510-06-P