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.

SUMMARY:

This final rule amends 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 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.

This final rule changes 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:

This final rule will become effective December 30, 2004.

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 or e-mail (obie.whichard@bea.gov).

SUPPLEMENTARY INFORMATION:

In the August 27, 2004 Federal Register, 69 FR 52613-52615, 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 rule were received. Thus, the proposed rule is adopted without change.

This final rule amends 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.

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 1988 (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 will enact the following changes to the Code of Federal Regulations: (1) Split 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 will be amended to reflect these 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 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 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 his authority 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 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 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 as that term is defined in E.O. 13132.

Paperwork Reduction Act

The collection-of-information required in this final rule has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA).

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 OMB number for the BE-80 is 0608-0062; the collection will display this control number.

The survey 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 4 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 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 (fax: 202-606-5311); 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 final rule 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 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 in covered receipts or 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.

BEA received no comments on the economic impact of this rule. As a result, no regulatory flexibility analysis was prepared.

List of Subjects in 15 CFR Part 801

• Economic statistics
• Foreign trade
• Penalties
• Reporting and recordkeeping requirements

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 15 CFR part 801 is revised 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. Section 801.11(b) and (c) are revised to read as follows: