Direct Investment Surveys: BE-13, Survey of New Foreign Direct Investment in the United States

AGENCY:

Bureau of Economic Analysis, Commerce.

ACTION:

Final rule.

SUMMARY:

This final rule amends regulations of the Department of Commerce's Bureau of Economic Analysis (BEA) to reinstate the reporting requirements for the BE-13, Survey of New Foreign Direct Investment in the United States, which was discontinued in 2009. This survey will better measure Commerce Department efforts through the “Build It Here, Sell It Everywhere” initiative to expand foreign business investment in the United States and ensure complete coverage of BEA's other foreign direct investment statistics. This survey collects information on the acquisition or establishment of U.S. business enterprises by foreign investors, which was collected on the previous BE-13 survey, and information on expansions by existing U.S. affiliates of foreign companies, which was not previously collected. This mandatory survey will be conducted under the authority of the International Investment and Trade in Services Survey Act (the Act). Unlike other BEA surveys conducted pursuant to the Act, a response would be required from persons subject to the reporting requirements of the BE-13, Survey of New Foreign Direct Investment in the United States, whether or not they are contacted by BEA, in order to insure that respondents subject to the requirements for foreign direct investments in the U.S. are identified.

DATES:

This final rule is effective September 15, 2014.

FOR FURTHER INFORMATION CONTACT:

Barbara Hubbard, Chief, Direct Transactions and Positions Branch (BE-49NI), Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230; phone (202) 606-9846.

SUPPLEMENTARY INFORMATION:

On May 28, 2014, BEA published a notice of proposed rulemaking that set forth revised reporting criteria for the BE-13, Survey of New Foreign Direct Investment in the United States (79 FR 30503-30506). No comments on the proposed rule were received. Thus the proposed rule is adopted without change. This final rule adds 15 CFR 801.7 to set forth the reporting requirements for the BE-13, Survey of New Foreign Direct Investment in the United States.

BEA conducts the BE-13 survey under the authority of the International Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108).

By rule issued in 2012 (77 FR 24373), BEA established guidelines for collecting data on international trade in services and direct investment through notices, rather than through rulemaking. This final rule amends the regulations to provide for a revised BE-13 survey and requires a response from persons subject to the reporting requirements of the BE-13, whether or not they are contacted by BEA, in order to ensure complete coverage of new foreign direct investments.

The BE-13 survey collects data on the acquisition or establishment of U.S. business enterprises by foreign investors and the expansion of existing U.S. affiliates of foreign companies to establish new production facilities. The data collected on the survey are used to measure the amount of new foreign direct investment in the United States, assess the impact on the U.S. economy, and based on this assessment, make informed policy decisions regarding foreign direct investment in the United States. Foreign direct investment in the United States is defined as the ownership or control, directly or indirectly, by one foreign person (foreign parent) of 10 percent or more of the voting securities of an incorporated U.S. business enterprise, or an equivalent interest of an unincorporated U.S. business enterprise, including a branch.

BEA will make the survey available via eFile, BEA's electronic filing system. Survey respondents will be notified of their obligation to file in November 2014 and BEA will collect data retroactively back to January 1, 2014. Thereafter, notifications will be mailed to respondents as BEA becomes aware of a potentially reportable investment or when annual cost updates are needed. The forms are due no later than 45 days after the acquisition is completed, the new legal entity is established, the expansion is begun, or the cost update is requested.

Description of Changes

The changes amend the regulations and the survey forms for the BE-13 survey. These amendments include changes in reporting requirements and questionnaire design as well as data items collected.

Under the revised regulations, U.S. affiliates report information on expansions, acquisitions, and establishments of U.S. business enterprises by foreign investors. Unlike other BEA surveys conducted pursuant to the Act, persons subject to the reporting requirements of the BE-13, Survey of New Foreign Direct Investment in the United States, are required to respond whether or not they are contacted by BEA.

Depending on the type of investment transaction, U.S. affiliates shall report their information on one of six forms—BE-13A, BE-13B, BE-13C, BE-13D, BE-13E, or BE-13 Claim for Exemption. The reporting requirements for the six forms are:

a. Form BE-13A—Report for a U.S. business enterprise when a foreign entity acquires a voting interest (directly, or indirectly through an existing U.S. affiliate) in that enterprise, segment, or operating unit and (i) the total cost of the acquisition is greater than $3 million, (ii) the U.S. business enterprise will operate as a separate legal entity, and (iii) by this acquisition, at least 10 percent of the voting interest in the acquired entity is now held (directly or indirectly) by the foreign entity.

b. Form BE-13B—Report for a U.S. business enterprise when a foreign entity, or an existing U.S. affiliate of a foreign entity, establishes a new legal entity in the United States and (i) the projected total cost to establish the new legal entity is greater than $3 million, and (ii) the foreign entity owns 10 percent or more of the new business enterprise's voting interest (directly or indirectly).

c. Form BE-13C—Report for an existing U.S. affiliate of a foreign parent when it acquires a U.S. business enterprise or segment that it then merges into its operations and the total cost to acquire the business enterprise is greater than $3 million.

d. Form BE-13D—Report for an existing U.S. affiliate of a foreign parent when it expands its operations to include a new facility where business is conducted and the projected total cost of the expansion is greater than $3 million.

e. Form BE-13E—Report for a U.S. business enterprise that previously filed a BE-13B or BE-13D indicating that the established or expanded entity is still under construction.

f. Form BE-13 Claim for Exemption—Report for a U.S. business enterprise that (i) was contacted by BEA but does not meet the requirements for filing forms BE-13A, BE-13B, BE-13C, or BE-13D, or (ii) whether or not contacted by BEA, met all requirements for filing on Forms BE-13A, BE-13B, BE-13C, or BE-13D except the $3 million reporting threshold.

In addition to the changes in the reporting criteria and form design, BEA hereby adds and deletes some data items from the information collected on the previous BE-13 survey. The following items are added to the survey:

1. Equity and debt components of the foreign parent funding;

2. A question asking if the new U.S. operation will have research and development activities;

3. A question asking if the new operation is under construction;

4. Employment projections;

5. Actual and projected construction expenditures by type and by year.

BEA is eliminating the following items from the new BE-13 survey: Investment incentives, sales by industry (total sales and the overall industry code for the new operation is still collected), equity ownership interest (voting interest is still collected), address of the foreign parent (country is still collected), and acres of U.S. land owned.

Executive Order 12866

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

Executive Order 13132

This final rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under E.O. 13132.

Paperwork Reduction Act

The collection of information in this final rule was submitted to the Office of Management and Budget (OMB) pursuant to the requirements of the Paperwork Reduction Act (PRA). OMB approved the information collection under OMB control number 0608-0035.

Notwithstanding any other provisions of 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 PRA unless that collection displays a currently valid OMB control number.

The BE-13 survey is expected to result in the filing of reports from approximately 1,350 U.S. affiliates each year. The respondent burden for this collection of information will vary from one company to another, but is estimated to average 1.6 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 this survey is estimated at 2,160 hours, compared to 900 hours for the previous BE-13 survey. The increase in burden hours is due to the increase in the number of respondents expected to file.

Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in the final rule should be sent to both BEA via email at Barbara.Hubbard@bea.gov or by FAX at (202) 606-2894, and to OMB, O.I.R.A., Paperwork Reduction Project 0608-0035, Attention PRA Desk Officer for BEA, via email at pbugg@omb.eop.gov or by FAX at (202) 395-7245.

Regulatory Flexibility Act

The Chief Counsel for Regulation, Department of Commerce, certified at the proposed rule stage to the Chief Counsel for Advocacy, Small Business Administration, under the provisions of the Regulatory Flexibility Act (RFA), 5 U.S.C. 605(b), that this final rule will not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding the certification or the economic impact of the rule more generally. No final regulatory flexibility analysis was prepared.

List of Subjects in 15 CFR Part 801

• Economic statistics
• Foreign investment in the United States
• International transactions
• Penalties
• Reporting and record keeping requirements

For 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 AND SURVEYS OF DIRECT INVESTMENT

1. The authority citation for 15 CFR 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. 12318 (3 CFR, 1981 Comp. p. 173); and E.O. 12518 (3 CFR, 1985 Comp. p. 348).

2. Revise § 801.3 to read as follows:

3. Revise § 801.4 to read as follows:

4. Add § 801.7 to read as follows: