Bureau of Economic Analysis, Commerce.
Notice of proposed rulemaking.
This proposed rule amends regulations of the Bureau of Economic Analysis, Department of Commerce (BEA) to set forth the reporting requirements for the BE-120, Benchmark Survey of Transactions in Selected Services and Intangible Assets with Foreign Persons. This rule would replace the rule for a similar but more limited survey, the BE-20, Benchmark Survey of Selected Services Transactions with Unaffiliated Foreign Persons. The agency form number and survey title are being changed because the survey is being reconfigured to reflect changes in BEA's survey program for international services that have occurred since the previous BE-20 survey was conducted, as well as to begin collection of data on transactions with affiliated foreigners and unaffiliated foreigners using the same survey instruments. If adopted the BE-120 survey would be conducted once every five years beginning with fiscal year 2006.
The proposed BE-120 survey is intended to cover the universe of selected services transactions and transactions in intangible assets with foreign persons. In nonbenchmark years, universe estimates covering these transactions would be derived from the sample data reported on BEA's follow-on quarterly survey, by extrapolating forward the universe data collected on the BE-120 benchmark survey.
Comments on this proposed rule will receive consideration if submitted in writing on or before 5 p.m. November 14, 2006.
You may submit comments, identified by RIN 0691-AA60, 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. For agency, select “Commerce Department-B all.”
- 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, U.S. Department of Commerce, Bureau of Economic Analysis, BE-50, Washington, DC 20230.
- Hand Delivery/Courier: Office of the Chief, International Investment Division, U.S. Department of Commerce, Bureau of Economic Analysis, BE-50, Shipping and Receiving, Section M100, 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., Eastern Time Monday though Friday.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Obie G. Whichard, Chief, International Investment Division (BE-50), Bureau of Economic Analysis, U.S. Department of Start Printed Page 54449Commerce, Washington, DC 20230; e-mail Obie.Whichard@bea.gov; or phone (202) 606-9890.End Further Info End Preamble Start Supplemental Information
This proposed rule would amend 15 CFR Part 801.10 to replace the reporting requirements for the BE-20, Benchmark Survey of Selected Services Transactions with Unaffiliated Foreign Persons with requirements for the BE-120, Benchmark Survey of Transactions in Selected Services and Intangible Assets with 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 proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
Description of Changes
The proposed BE-120 survey would be a mandatory survey and would be conducted, beginning with transactions for fiscal year 2006, once every 5 years by BEA under the International Investment and Trade in Services Survey Act (22 U.S.C. 3101C3108), hereinafter, “the Act.” BEA would send the survey to potential respondents in January of 2007; responses would be due by March 31, 2007.
BEA maintains a continuing dialogue with respondents and with data users, including its own internal users, to ensure that, as far as possible, the required data serve their intended purposes and are available from existing records, that instructions are clear, and that unreasonable burdens are not imposed. In designing the survey, BEA contacted Government and non-Government data users outside the Bureau and potential survey respondents to obtain their views on the proposed benchmark survey. In reaching decisions on what questions to include in the survey, BEA considered the Government's need for the data, the burden imposed on respondents, the quality of the likely responses (for example, whether the data are available on respondents' books), and BEA's experience in previous benchmark and related annual and quarterly surveys.
BEA proposes the following five changes to the Code of Federal Regulations: (1) Include services transactions that were previously collected on two annual surveys that have been discontinued—the BE-47, Annual Survey of Construction, Engineering, Architectural, and Mining Services Provided by U.S. Firms to Unaffiliated Foreign Persons and the BE-93, Annual Survey of Royalties, License Fees, and Other Receipts and Payments for Intangible Rights Between U.S. and Unaffiliated Foreign Persons. BEA is currently collecting these transactions on the surveys—the BE-22, Annual Survey of Selected Services Transactions Between U.S. and Unaffiliated Foreign Persons and the BE-25, Quarterly Survey of Transactions between U.S. and Unaffiliated Foreign Persons in Selected Services and in Intangible Assets—for which the BE-120 survey is designed to provide benchmark coverage. (2) Include services transactions with affiliated parties (i.e., with foreign affiliates, foreign parents, and foreign affiliates of foreign parents). BEA is currently collecting these transactions on its quarterly direct investment surveys (the BE-577, Direct Transactions of U.S. Reporter with Foreign Affiliate, the BE-605, Transactions of U.S. Affiliate, except a U.S. Banking Affiliate, with Foreign Parent, and the BE-605 Bank, Transactions of U.S. Banking Affiliate with Foreign Parent). BEA proposes to remove quarterly collection of data on these affiliated services transactions from these surveys beginning with reports for the first quarter of calendar year 2007, and move them to a redesigned quarterly survey of transactions in selected services and in intangible assets (which will replace the current BE-22 and BE-25 surveys). (3) Raise the exemption level for reporting sales from $1 million to $2 million. (The exemption level for purchases, for which transactions for a given firm may often be smaller than sales, will remain at $1 million). (4) Combine several services into one “other selected services” category, which will include any services not individually covered by the survey or available from other sources. (5) Eliminate several schedules from the prior benchmark survey that collected additional detail on computer and data processing services; data base and other information services (receipts only); telecommunications services; financial services (payments only); and operational leasing services (receipts only).
The Bureau of Economic Analysis (BEA), U.S. Department of Commerce, would conduct the survey under the International Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108), hereinafter, “the Act.” 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, as amended by Executive Orders 12318 and 12518, the President delegated his responsibilities under the Act for performing functions concerning international trade in services to the Secretary of Commerce, who has redelegated them to BEA. The survey would update and broaden data provided on the universe of transactions between U.S. and foreign persons in selected services and intangible assets. The data are needed to monitor trade in services and intangible assets; analyze their impact on the U.S. and foreign economies; compile and improve the U.S. international transactions, national income and product, and input-output accounts; support U.S. commercial policy on services and intangible assets; assess and promote U.S. competitiveness in international trade in services; and improve the ability of U.S. businesses to identify and evaluate market opportunities.
Executive Order 12866
This proposed rule has been determined to be not significant for purposes of E.O. 12866.
This proposed rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federal assessment under 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. The requirement will be submitted to OMB as a request for a reinstatement, with change, of a previously approved collection for which approval has expired under OMB control number 0608-0058.
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 BE-120 benchmark survey, as proposed, is expected to result in the filing of reports containing mandatory data from approximately 5,000 Start Printed Page 54450respondents. The respondent burden for this collection of information will vary from one respondent to another, but is estimated to average 12 hours per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Thus, the total respondent burden for the 2006 BE-120 survey is estimated at 60,000 hours, compared to 13,200 hours estimated for the previous, 2001, BE-20 survey. The increase in burden is a result of several factors: more U.S. persons with transactions in international services, the inclusion of transactions with affiliated foreign persons, and the coverage of transactions in intangible assets and in construction and related services.
Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions 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, fax: 202-606-5311; and the Office of Management and Budget, O.I.R.A., Paperwork Reduction Project 0608-0058, Attention PRA Desk Officer for BEA, via e-mail at firstname.lastname@example.org. or by fax at 202-395-7245.
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 this proposed rulemaking, if adopted, 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 transactions in covered services or intangible assets tend to be relatively large. In addition, the reporting threshold for this survey is set at a level that will exempt most small businesses from reporting. The proposed BE-120 benchmark survey will be required from U.S. persons whose sales to foreign persons in any of the covered transactions exceeded $2 million during the fiscal year covered, or whose purchases from foreign persons in any of the covered transactions exceeded $1 million during the fiscal year covered. This amount is applied separately to each of the individual types of transactions covered by the survey. 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, often limited to transactions with a single partner country; therefore, the burden on them should be small. In addition, BE survey mailings are targeted mailings. Thus, since small businesses tend not to be involved in the transactions to be covered by the BE-120 survey, few small businesses should receive the survey. However, those receiving the survey are expected to incur a minimal burden in completing the exemption form.Start List of Subjects
List of Subjects in 15 CFR Part 801
- International transactions
- Economic statistics
- Foreign trade
- Reporting and recordkeeping requirements
J. Steven Landefeld,
Director, Bureau of Economic Analysis.
For the reasons set forth in the preamble, BEA proposes to amend 15 CFR part 801, as follows:Start Part
PART 801—SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S. AND FOREIGN PERSONS
1. The authority citation for 15 CFR part 801 continues to read as follows:
2. Section 801.10 is revised to read as follows:
The BE-120, Benchmark Survey of Transactions in Selected Services and Intangible Assets with Unaffiliated Foreign Persons, will be conducted covering fiscal year 2006 and every fifth year thereafter. All legal authorities, provisions, definitions, and requirements contained in §§ 801.1 through 801.9(a) are applicable to this survey. Additional rules and regulations for the BE-120 survey are given in paragraphs (a) through (c) of this section. More detailed instructions and descriptions of the individual types of transactions covered are given on the report form itself.
(a) The BE-120 survey consists of two parts and three schedules. Part I requests information needed to determine whether a report is required and which schedules apply. Part II requests information about the reporting entity. Each of the three schedules covers one or more types of transactions and is to be completed only if the U.S. reporter has transactions of the type(s) covered by the particular schedule.
(b) Who must report—(1) Mandatory reporting. A BE-120 report is required from each U.S. person that had sales to foreign persons that exceeded $2 million during the fiscal year covered of any of the types of services or intangible assets listed in paragraph (c) of this section, or had purchases from foreign persons that exceeded $1 million during the fiscal year covered of any of the types of services or intangible assets listed in paragraph (c) of this section.
(i) The determination of whether a U.S. person 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 records search. Because the reporting threshold ($2 million for sales and $1 million for purchases) applies separately to sales and purchases, the mandatory reporting requirement may apply only to sales, only to purchases, or to both sales and purchases.
(ii) U.S. persons that file pursuant to this mandatory reporting requirement must complete Parts I and II of Form BE-120 and all applicable schedules. The total amounts of transactions applicable to a particular schedule are to be entered in the appropriate column(s) and, except for sales of merchanting services, these amounts must be distributed among the countries involved in the transactions. For sales of merchanting services, the data are not required to be reported by individual foreign country, although this information may be provided voluntarily.
(iii) Application of the exemption levels to each covered transaction is indicated on the schedule for that particular type of transaction. It should be noted that an item other than sales or purchases may be used as the measure of a given type of transaction for purposes of determining whether the threshold for mandatory reporting of the transaction is exceeded. Start Printed Page 54451
(2) Voluntary reporting. If, during the fiscal year covered, the U.S. person's total transactions (either sales or purchases) in any of the types of transactions listed in paragraph (c) of this section are $2 million or less for sales or $1 million or less for purchases, the U.S. person is requested to provide an estimate of the total for each type of transaction. Provision of this information is voluntary. The estimates may be judgmental, that is, based on recall, without conducting a detailed records search. Because the exemption threshold applies separately to sales and purchases, the voluntary reporting option may apply only to sales, only to purchases, or to both sales and purchases.
(3) Any U.S. person that receives the BE-120 survey form from BEA, but is not reporting data in either the mandatory or voluntary section of the form, must nevertheless complete and return the “Basis for not reporting data” included with the form to BEA. This requirement is necessary to ensure compliance with reporting requirements and efficient administration of the Act by eliminating unnecessary follow-up contact.
(c) Covered types of services and intangible assets. The BE-120 survey is intended to collect information on U.S. international trade in all types of services and intangible assets for which information is not collected in other BEA surveys and is not available to BEA from other sources. The major types of services transactions not covered by the BE-120 survey are travel, transportation, insurance (except for purchases of primary insurance), financial services (except for purchases by non-financial firms), and expenditures by students and medical patients who are studying or seeking treatment in a country different from their country of residence. Covered services are: Advertising services; accounting, auditing, and bookkeeping services; auxiliary insurance services; computer and data processing services; construction services; data base and other information services; educational and training services; engineering, architectural, and surveying services; financial services (purchases only, by companies or parts of companies that are not financial services providers); industrial engineering services; industrial-type maintenance, installation, alteration, and training services; legal services; management, consulting, and public relations services (including allocated expenses); merchanting services (sales only); mining services; operational leasing services; other trade-related services; performing arts, sports, and other live performances, presentations, and events; premiums paid on purchases of primary insurance; losses recovered on purchases of primary insurance; research, development, and testing services; telecommunications services; and other selected services. “Other selected services” includes, but is not limited to: Account collection services; disbursements to fund news-gathering costs of broadcasters; disbursements to fund news-gathering costs of print media; disbursements to fund production costs of motion pictures; disbursements to fund production costs of broadcast program material other than news; disbursements to maintain government tourism and business promotion offices; disbursements for sales promotion and representation; disbursements to participate in foreign trade shows (purchases only); employment agencies and temporary help supply services; language translation services; mailing, reproduction, and commercial art; medical services (non-patient B e.g., laboratory or diagnostic services); salvage services; satellite photography and remote sensing/satellite imagery services; security services; space transport (includes satellite launches, transport of goods and people for scientific experiments, and space passenger transport); transcription services; and waste treatment and depollution services. The intangible assets covered by the BE-120 survey are rights related to: Industrial processes and products; books, compact discs, audio tapes and other copyrighted material and intellectual property; trademarks, brand names, and signatures; performances and events pre-recorded on motion picture film and television tape, including digital recording; broadcast and recording of live performances and events; general use computer software; business format franchising fees; and other intangible assets, including indefeasible rights of users.
[FR Doc. E6-15304 Filed 9-14-06; 8:45 am]
BILLING CODE 3510-06-P