81_FR_72722 81 FR 72519 - Direct Investment Surveys: BE-13, Survey of New Foreign Direct Investment in the United States, and Changes to Private Fund Reporting on Direct Investment Surveys

81 FR 72519 - Direct Investment Surveys: BE-13, Survey of New Foreign Direct Investment in the United States, and Changes to Private Fund Reporting on Direct Investment Surveys

DEPARTMENT OF COMMERCE
Bureau of Economic Analysis

Federal Register Volume 81, Issue 203 (October 20, 2016)

Page Range72519-72522
FR Document2016-25208

The final rule amends regulations of the Department of Commerce's Bureau of Economic Analysis (BEA) to set forth the reporting requirements for the BE-13, Survey of New Foreign Direct Investment in the United States. This rule also amends the reporting requirements for certain private funds on BEA's surveys of foreign direct investment in the United States, including the BE-605, Quarterly Survey of Foreign Direct Investment in the United States; the BE-15, Annual Survey of Foreign Direct Investment in the United States; and the BE-13, Survey of New Foreign Direct Investment in the United States. The BE-13 survey collects information on the acquisition or establishment of U.S. business enterprises by foreign investors, and information on expansions by existing U.S. affiliates of foreign companies. The data collected through the survey are used to measure the amount of new foreign direct investment in the United States and ensure complete coverage of BEA's other foreign direct investment statistics. BEA will make several changes to the survey that will simplify reporting and provide more complete information for use in BEA's direct investment statistics. BEA will also change the survey form design and accompanying instructions to improve the quality of the data collected and reduce respondent burden. This mandatory BE-13 survey is required from persons subject to the reporting requirements, whether or not they are contacted by BEA.

Federal Register, Volume 81 Issue 203 (Thursday, October 20, 2016) 
[Federal Register Volume 81, Number 203 (Thursday, October 20, 2016)]
[Rules and Regulations]
[Pages 72519-72522]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-25208]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 160531475-6465-01]
RIN 0691-0691-AA85


Direct Investment Surveys: BE-13, Survey of New Foreign Direct 
Investment in the United States, and Changes to Private Fund Reporting 
on Direct Investment Surveys

AGENCY: Bureau of Economic Analysis, Commerce.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The final rule amends regulations of the Department of 
Commerce's Bureau of Economic Analysis (BEA) to set forth the reporting 
requirements for the BE-13, Survey of New Foreign Direct Investment in 
the United States. This rule also amends the reporting requirements for 
certain private funds on BEA's surveys of foreign direct investment in 
the United States, including the BE-605, Quarterly Survey of Foreign 
Direct Investment in the United States; the BE-15, Annual Survey of 
Foreign Direct Investment in the United States; and the BE-13, Survey 
of New Foreign Direct Investment in the United States.
    The BE-13 survey collects information on the acquisition or 
establishment of U.S. business enterprises by foreign investors, and 
information on expansions by existing U.S. affiliates of foreign 
companies. The data collected through the survey are used to measure 
the amount of new foreign direct investment in the United States and 
ensure complete coverage of BEA's other foreign direct investment 
statistics. BEA will make several changes to the survey that will 
simplify reporting and provide more complete information for use in 
BEA's direct investment statistics. BEA will also change the survey 
form design and accompanying instructions to improve the quality of the 
data collected and reduce respondent burden. This mandatory BE-13 
survey is required from persons subject to the reporting requirements, 
whether or not they are contacted by BEA.

DATES: This final rule will be effective November 21, 2016.

FOR FURTHER INFORMATION CONTACT: Patricia Abaroa, Chief, Direct 
Investment Division (BE-49), Bureau of Economic Analysis, U.S. 
Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; 
phone (301) 278-9591; or via email at [email protected].

SUPPLEMENTARY INFORMATION: On July 1, 2016, 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 (81 
FR 43126-43130). One comment on the proposed rule was received.
    The comment was written by a group representing U.S. asset 
management firms whose combined assets under management exceed $30 
trillion. The letter was generally supportive of the changes to the 
reporting requirements for private funds, but it did raise two points, 
one of which lead to a clarification in the reporting requirements for 
private funds which is outlined below.
    One point raised in the letter led to an adjustment to the language 
of the reporting requirements for private funds used in the proposed 
rule. As stated in the proposed rule, a foreign-owned U.S. private fund 
would be required to report on BEA's direct investment surveys if it 
owns at least 10 percent of an operating company. The letter pointed 
out that under this standard a private fund may be required to report 
on direct investment surveys even though in certain cases its foreign 
parent may own less than 10 percent of an operating company. For 
example, if a foreign parent owns 10 percent voting interest in a U.S. 
private fund, and that private fund owns 10 percent of an operating 
company, under the proposed rule the U.S. private fund would be 
required to report even though the foreign parent's indirect ownership 
interest in the operating company is just 1 percent. It was not BEA's 
intention to include investments of less than 10 percent foreign 
ownership in the direct investment statistics. In this final rule, BEA 
has clarified language regarding the private fund reporting 
requirements to indicate that if the foreign parent of a U.S. private 
fund does not own through the private fund 10 percent or more of an 
operating company, the private fund is not required to file.
    The letter also indicated that the burden estimate provided on the 
BE-13 form is understated. BEA's burden estimate is an average across 
the various BE-13 survey forms and across survey respondents with 
different levels of complexity and different activities or transactions 
that may be reported on the survey. BEA has noted the input from the 
private fund industry on burden estimates.
    This final rule amends 15 CFR part 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).
    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 a new 
facility where business is conducted. 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. Notifications will be mailed to respondents as BEA 
becomes aware of a potentially reportable investment or when annual 
cost updates are needed. A response is required whether or not the 
respondent is contacted by BEA. The forms are due no later than 45 days 
after the acquisition is completed, the new U.S. business enterprise is 
established, the expansion is begun, the cost update is requested, or a 
notification letter is received from BEA by a U.S. business enterprise 
that does not meet the filing requirements for the survey.

Description of Changes

    BEA amends the reporting requirements for certain private funds 
that file BEA's surveys of foreign direct investment in the United 
States: the BE-605, Quarterly Survey of Foreign Direct Investment in 
the United States; BE-15, Annual Survey of Foreign Direct Investment in 
the United States; and the BE-13, Survey of New Foreign Direct 
Investment in the United States. The BE-12, Benchmark Survey of Foreign 
Direct Investment in the United States, will also be affected by this 
change but

[[Page 72520]]

will be addressed in a proposed rule in 2017.
    BEA, in cooperation with the U.S. Treasury Department, will 
instruct reporters of investments in private funds that meet the 
definition of direct investment (that is, ownership by one person of 10 
percent or more of the voting interest of a business enterprise) but 
display characteristics of portfolio investment (specifically, 
investors who do not intend to control or influence the management of 
an operating company) to report through the Treasury International 
Capital (TIC) reporting system, where other related portfolio 
investments are already being reported, and not to report on BEA's 
direct investment surveys. Direct investment in operating companies, 
including investment by and through private funds, will continue to be 
reported to BEA. This change aligns the U.S. direct investment and 
portfolio investment data more closely with the intent of the 
investment with respect to management control. In addition, it reduces 
burden for respondents, many of whom now report both to the TIC 
reporting system and to BEA's direct investment reporting system. Under 
the revised regulations, U.S. affiliates that are private funds but 
whose foreign parents do not own through the private fund 10 percent or 
more of the voting interest of another business enterprise that is not 
a private fund or holding company, will no longer be required to report 
on BEA surveys of foreign direct investment in the United States.
    The changes also amend the regulations and the survey forms for the 
BE-13 survey. These amendments include changes in reporting 
requirements and questionnaire design and instructions as well as data 
items collected. The following changes are specific to the BE-13.
    BEA will combine Forms BE-13A, Report for Acquisition of a U.S. 
Business Enterprise That Remains a Separate Entity, and BE-13C, Report 
for Acquisition of a U.S. Business Enterprise That is Merged With an 
Existing U.S. Affiliate, into one form and discontinue the use of Form 
BE-13C. These acquisitions should be filed on Form BE-13A along with 
acquired U.S. business enterprises that will operate as a separate 
legal entity after the acquisition. The revised Form BE-13A will be a 
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 U.S. business enterprise (including segments, 
operating units, or real estate) and (1) the total cost of the 
acquisition is greater than $3 million; and (2) by this acquisition, 
the foreign entity now owns at least 10 percent of the voting interest 
(directly, or indirectly through an existing U.S. affiliate) in the 
acquired U.S. business enterprise.
    BEA will add an instruction to eliminate the requirement to file 
two forms--Form BE-13B (establishment) and Form BE-13A (acquisition)--
when a new U.S. business enterprise is established to facilitate a 
single U.S. acquisition that takes place within 30 days. The U.S. 
business enterprise will be asked to consolidate the new U.S. business 
enterprise with the acquired U.S. business enterprise and submit a 
single Form BE-13A. A question will be added to Form BE-13A to capture 
the names of both the established and acquired entities in this 
scenario.
    BEA will clarify the reporting requirements for Form BE-13E, Cost 
Update for Projects Originally Reported on Forms BE-13B or BE-13D, by 
removing the reference to the established or expanded business 
enterprise still being under construction. At least one Form BE-13E 
must be filed for each reported BE-13B or BE-13D form to obtain actual 
costs since the cost data provided on these forms may not be final when 
filed.
    BEA will not change the reporting requirements for Form BE-13D, 
Report for the Expansion of an Existing U.S. Affiliate, or Form BE-13 
Claim for Exemption.
    BEA will modify the questions on existing U.S. affiliates in the 
ownership chain between the acquired or established U.S. business 
enterprise and the foreign parent to narrow the focus to the specific 
affiliates needed for analysis and to improve the sample frames of the 
other BEA surveys.
    BEA will restructure and rephrase the cost questions to more 
accurately capture any funding from the affiliated foreign group to 
facilitate the new foreign direct investment and to determine whether 
the funding was in the form of a loan or capital contribution.
    BEA will add an instruction on Forms BE-13B and BE-13D to direct 
U.S. businesses to report total expected costs by year based on their 
fiscal year end.
    BEA will add an instruction on Form BE-13 Claim for Exemption to 
direct U.S. businesses that are reporting expansions to skip the 
questions asking for U.S. affiliates' total assets, total liabilities, 
and net income (loss). These questions are not asked on Form BE-13D, 
Report for the Expansion of an Existing U.S. Affiliate, where expected 
costs are greater than $3 million, so they are not required for 
expansions with expected costs of $3 million or less.
    BEA will eliminate ``lease'' and ``construction'' from the list of 
expected costs on Forms BE-13B and BE-13D. BEA will continue to collect 
data on land; property, plant, and equipment (PP&E); intellectual 
property rights; fees, taxes, permits, and licenses; and other costs.
    BEA will add a question to Form BE-13D to collect the name of the 
expanding U.S. affiliate and to Form BE-13 Claim for Exemption to 
collect the name of the acquired, established, or expanding U.S. 
business enterprise.
    BEA will add a question to Form BE-13 Claim for Exemption to 
collect the state where the new investment is located in cases when 
this form is being filed to report a new investment that met all the 
requirements for filing on Forms BE-13A, BE-13B, or BE-13D except the 
$3 million reporting threshold.

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 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 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 2,550 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 1.1 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 2,860 hours, compared to 2,160 hours for 
the

[[Page 72521]]

previous BE-13 survey estimate. The increase in burden hours is due to 
the increase in the number of respondents expected to file. The 
previous estimate of the number of respondents was made before the 
survey was launched; the revised estimate is based on two years of data 
collection.
    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 
[email protected], and to OMB, O.I.R.A., Paperwork Reduction 
Project 0608-0035, Attention PRA Desk Officer for BEA, via email at 
[email protected].

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 aside from the comment regarding the burden estimate. 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 recordkeeping 
requirements.

    Dated: October 6, 2016.
Brent Moulton,
Acting Director, Bureau of Economic Analysis.

    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


0
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).

0
 2. Revise Sec.  801.7 to read as follows:


Sec.  801.7  Rules and regulations for the BE-13, Survey of New Foreign 
Direct Investment in the United States.

    The BE-13, Survey of New Foreign Direct Investment in the United 
States, is conducted to collect 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 facilities where business is conducted. Foreign direct investment 
is defined as the ownership or control 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. All legal 
authorities, provisions, definitions, and requirements contained in 
Sec. Sec.  801.1 through 801.2 and Sec. Sec.  801.4 through 801.6 are 
applicable to this survey. Specific additional rules and regulations 
for the BE-13 survey are given in paragraphs (a) through (d) of this 
section. More detailed instructions are given on the report forms and 
instructions.
    (a) Response required. A response is required from persons subject 
to the reporting requirements of the BE-13, Survey of New Foreign 
Direct Investment in the United States, contained herein, whether or 
not they are contacted by BEA. Also, persons, or their agents, that are 
contacted by BEA about reporting in this survey, either by sending them 
a report form or by written inquiry, must respond in writing pursuant 
to this section. This may be accomplished by filing the properly 
completed BE-13 report (BE-13A, BE-13B, BE-13D, BE-13E, or BE-13 Claim 
for Exemption).
    (b) Who must report. A BE-13 report is required of any U.S. 
business enterprise, except certain private funds, see exception in 
paragraph (b)(4) of this section, in which:
    (1) A foreign direct investment in the United States relationship 
is created;
    (2) An existing U.S. affiliate of a foreign parent establishes a 
new U.S. business enterprise, expands its U.S. operations, or acquires 
a U.S. business enterprise, or;
    (3) BEA requests a cost update (Form BE-13E) for a U.S. business 
enterprise that previously filed Form BE-13B or BE-13D.
    (4) Certain private funds are exempt from reporting on the BE-13 
survey. If a U.S. business enterprise is a private fund and its foreign 
parent does not own through the private fund 10 percent or more of the 
voting interest of a business enterprise that is not also a private 
fund or a holding company, the private fund is not required to file any 
BE-13 report except to indicate exemption from the survey if contacted 
by BEA.
    (c) Forms to be filed. Depending on the type of investment 
transaction, U.S. affiliates shall report their information on one of 
five forms--BE-13A, BE-13B, BE-13D, BE-13E, or BE-13 Claim for 
Exemption.
    (1) 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 U.S. business enterprise 
including segments, operating units, or real estate; and
    (i) The total cost of the acquisition is greater than $3 million; 
and
    (ii) By this acquisition, the foreign entity now owns at least 10 
percent of the voting interest (directly, or indirectly through an 
existing U.S. affiliate) in the acquired U.S. business enterprise.
    (2) Form BE-13B--Report for a U.S. business enterprise when it is 
established by a foreign entity or by an existing U.S. affiliate of a 
foreign parent; and
    (i) The expected total cost to establish the new U.S. business 
enterprise is greater than $3 million; and
    (ii) The foreign entity owns at least 10 percent of the voting 
interest (directly, or indirectly through an existing U.S. affiliate) 
in the new U.S. business enterprise.
    (3) 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 expected total cost of the expansion is 
greater than $3 million.
    (4) Form BE-13E--Report for a U.S. business enterprise that 
previously filed Form BE-13B or BE-13D. Form BE-13E collects updated 
cost information and will be collected annually until the establishment 
or expansion of the U.S. business enterprise is complete.
    (5) 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, or BE-13D; or
    (ii) Whether or not contacted by BEA, met all requirements for 
filing Forms BE-13A, BE-13B, or BE-13D except the $3 million reporting 
threshold.
    (d) Due date. The BE-13 forms are due no later than 45 calendar 
days after the acquisition is completed, the new U.S. business 
enterprise is established, the expansion is begun, the cost update is 
requested, or a notification letter is received from BEA by a U.S. 
business

[[Page 72522]]

enterprise that does not meet the filing requirements for the survey.
[FR Doc. 2016-25208 Filed 10-19-16; 8:45 am]
 BILLING CODE 3510-06-P

Federal Register / Vol. 81, No. 203 / Thursday, October 20, 2016 / Rules and Regulations 72519 Issued in Renton, Washington, on DATES: This final rule will be effective respondents with different levels of September 28, 2016. November 21, 2016. complexity and different activities or Dionne Palermo, FOR FURTHER INFORMATION CONTACT: transactions that may be reported on the Acting Manager, Transport Airplane Patricia Abaroa, Chief, Direct survey. BEA has noted the input from Directorate, Aircraft Certification Service. Investment Division (BE–49), Bureau of the private fund industry on burden [FR Doc. 2016–24191 Filed 10–19–16; 8:45 am] Economic Analysis, U.S. Department of estimates. BILLING CODE 4910–13–P Commerce, 4600 Silver Hill Road, This final rule amends 15 CFR part Washington, DC 20233; phone (301) 801.7 to set forth the reporting 278–9591; or via email at requirements for the BE–13, Survey of DEPARTMENT OF COMMERCE Patricia.Abaroa@bea.gov. New Foreign Direct Investment in the United States. SUPPLEMENTARY INFORMATION: On July 1, Bureau of Economic Analysis BEA conducts the BE–13 survey 2016, BEA published a notice of under the authority of the International proposed rulemaking that set forth Investment and Trade in Services 15 CFR Part 801 revised reporting criteria for the BE–13, Survey Act (22 U.S.C. 3101–3108). [Docket No. 160531475–6465–01] Survey of New Foreign Direct The BE–13 survey collects data on the Investment in the United States (81 FR acquisition or establishment of U.S. RIN 0691–0691–AA85 43126–43130). One comment on the business enterprises by foreign investors Direct Investment Surveys: BE–13, proposed rule was received. and the expansion of existing U.S. Survey of New Foreign Direct The comment was written by a group affiliates of foreign companies to Investment in the United States, and representing U.S. asset management establish a new facility where business Changes to Private Fund Reporting on firms whose combined assets under is conducted. The data collected on the Direct Investment Surveys management exceed $30 trillion. The survey are used to measure the amount letter was generally supportive of the of new foreign direct investment in the AGENCY: Bureau of Economic Analysis, changes to the reporting requirements United States, assess the impact on the Commerce. for private funds, but it did raise two U.S. economy, and based on this ACTION: Final rule. points, one of which lead to a assessment, make informed policy clarification in the reporting decisions regarding foreign direct SUMMARY: The final rule amends requirements for private funds which is investment in the United States. Foreign regulations of the Department of outlined below. direct investment in the United States is Commerce’s Bureau of Economic One point raised in the letter led to an defined as the ownership or control, Analysis (BEA) to set forth the reporting adjustment to the language of the directly or indirectly, by one foreign requirements for the BE–13, Survey of reporting requirements for private funds person (foreign parent) of 10 percent or New Foreign Direct Investment in the used in the proposed rule. As stated in more of the voting securities of an United States. This rule also amends the the proposed rule, a foreign-owned U.S. incorporated U.S. business enterprise, reporting requirements for certain private fund would be required to report or an equivalent interest of an private funds on BEA’s surveys of on BEA’s direct investment surveys if it unincorporated U.S. business foreign direct investment in the United owns at least 10 percent of an operating enterprise, including a branch. States, including the BE–605, Quarterly company. The letter pointed out that BEA will make the survey available Survey of Foreign Direct Investment in under this standard a private fund may via eFile, BEA’s electronic filing system. the United States; the BE–15, Annual be required to report on direct Notifications will be mailed to Survey of Foreign Direct Investment in investment surveys even though in respondents as BEA becomes aware of a the United States; and the BE–13, certain cases its foreign parent may own potentially reportable investment or Survey of New Foreign Direct less than 10 percent of an operating when annual cost updates are needed. A Investment in the United States. company. For example, if a foreign response is required whether or not the The BE–13 survey collects parent owns 10 percent voting interest respondent is contacted by BEA. The information on the acquisition or in a U.S. private fund, and that private forms are due no later than 45 days after establishment of U.S. business fund owns 10 percent of an operating the acquisition is completed, the new enterprises by foreign investors, and company, under the proposed rule the U.S. business enterprise is established, information on expansions by existing U.S. private fund would be required to the expansion is begun, the cost update U.S. affiliates of foreign companies. The report even though the foreign parent’s is requested, or a notification letter is data collected through the survey are indirect ownership interest in the received from BEA by a U.S. business used to measure the amount of new operating company is just 1 percent. It enterprise that does not meet the filing foreign direct investment in the United was not BEA’s intention to include requirements for the survey. States and ensure complete coverage of investments of less than 10 percent BEA’s other foreign direct investment foreign ownership in the direct Description of Changes statistics. BEA will make several investment statistics. In this final rule, BEA amends the reporting changes to the survey that will simplify BEA has clarified language regarding the requirements for certain private funds reporting and provide more complete private fund reporting requirements to that file BEA’s surveys of foreign direct information for use in BEA’s direct indicate that if the foreign parent of a investment in the United States: the BE– investment statistics. BEA will also U.S. private fund does not own through 605, Quarterly Survey of Foreign Direct asabaliauskas on DSK3SPTVN1PROD with RULES change the survey form design and the private fund 10 percent or more of Investment in the United States; BE–15, accompanying instructions to improve an operating company, the private fund Annual Survey of Foreign Direct the quality of the data collected and is not required to file. Investment in the United States; and the reduce respondent burden. This The letter also indicated that the BE–13, Survey of New Foreign Direct mandatory BE–13 survey is required burden estimate provided on the BE–13 Investment in the United States. The from persons subject to the reporting form is understated. BEA’s burden BE–12, Benchmark Survey of Foreign requirements, whether or not they are estimate is an average across the various Direct Investment in the United States, contacted by BEA. BE–13 survey forms and across survey will also be affected by this change but VerDate Sep<11>2014 15:55 Oct 19, 2016 Jkt 241001 PO 00000 Frm 00039 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1

72520 Federal Register / Vol. 81, No. 203 / Thursday, October 20, 2016 / Rules and Regulations will be addressed in a proposed rule in and (2) by this acquisition, the foreign are not required for expansions with 2017. entity now owns at least 10 percent of expected costs of $3 million or less. BEA, in cooperation with the U.S. the voting interest (directly, or BEA will eliminate ‘‘lease’’ and Treasury Department, will instruct indirectly through an existing U.S. ‘‘construction’’ from the list of expected reporters of investments in private affiliate) in the acquired U.S. business costs on Forms BE–13B and BE–13D. funds that meet the definition of direct enterprise. BEA will continue to collect data on investment (that is, ownership by one BEA will add an instruction to land; property, plant, and equipment person of 10 percent or more of the eliminate the requirement to file two (PP&E); intellectual property rights; fees, voting interest of a business enterprise) forms—Form BE–13B (establishment) taxes, permits, and licenses; and other but display characteristics of portfolio and Form BE–13A (acquisition)—when costs. investment (specifically, investors who a new U.S. business enterprise is BEA will add a question to Form BE– do not intend to control or influence the established to facilitate a single U.S. 13D to collect the name of the management of an operating company) acquisition that takes place within 30 expanding U.S. affiliate and to Form to report through the Treasury days. The U.S. business enterprise will BE–13 Claim for Exemption to collect International Capital (TIC) reporting be asked to consolidate the new U.S. the name of the acquired, established, or system, where other related portfolio business enterprise with the acquired expanding U.S. business enterprise. investments are already being reported, U.S. business enterprise and submit a BEA will add a question to Form BE– and not to report on BEA’s direct single Form BE–13A. A question will be 13 Claim for Exemption to collect the investment surveys. Direct investment added to Form BE–13A to capture the state where the new investment is in operating companies, including names of both the established and located in cases when this form is being investment by and through private acquired entities in this scenario. filed to report a new investment that funds, will continue to be reported to BEA will clarify the reporting met all the requirements for filing on BEA. This change aligns the U.S. direct requirements for Form BE–13E, Cost Forms BE–13A, BE–13B, or BE–13D investment and portfolio investment Update for Projects Originally Reported except the $3 million reporting data more closely with the intent of the on Forms BE–13B or BE–13D, by threshold. investment with respect to management removing the reference to the control. In addition, it reduces burden Executive Order 12866 established or expanded business for respondents, many of whom now enterprise still being under This final rule has been determined to report both to the TIC reporting system construction. At least one Form BE–13E be not significant for purposes of E.O. and to BEA’s direct investment must be filed for each reported BE–13B 12866. reporting system. Under the revised or BE–13D form to obtain actual costs Executive Order 13132 regulations, U.S. affiliates that are since the cost data provided on these private funds but whose foreign parents This final rule does not contain forms may not be final when filed. policies with Federalism implications do not own through the private fund 10 BEA will not change the reporting sufficient to warrant preparation of a percent or more of the voting interest of requirements for Form BE–13D, Report Federalism assessment under E.O. another business enterprise that is not a for the Expansion of an Existing U.S. 13132. private fund or holding company, will Affiliate, or Form BE–13 Claim for no longer be required to report on BEA Paperwork Reduction Act Exemption. surveys of foreign direct investment in the United States. BEA will modify the questions on The collection-of-information in this The changes also amend the existing U.S. affiliates in the ownership final rule was submitted to the Office of regulations and the survey forms for the chain between the acquired or Management and Budget (OMB) BE–13 survey. These amendments established U.S. business enterprise and pursuant to the requirements of the include changes in reporting the foreign parent to narrow the focus to Paperwork Reduction Act (PRA). OMB requirements and questionnaire design the specific affiliates needed for analysis approved the information collection and instructions as well as data items and to improve the sample frames of the under OMB control number 0608–0035. collected. The following changes are other BEA surveys. Notwithstanding any other provisions specific to the BE–13. BEA will restructure and rephrase the of the law, no person is required to BEA will combine Forms BE–13A, cost questions to more accurately respond to, nor shall any person be Report for Acquisition of a U.S. capture any funding from the affiliated subject to a penalty for failure to comply Business Enterprise That Remains a foreign group to facilitate the new with, a collection of information subject Separate Entity, and BE–13C, Report for foreign direct investment and to to the requirements of the PRA unless Acquisition of a U.S. Business determine whether the funding was in that collection displays a currently valid Enterprise That is Merged With an the form of a loan or capital OMB control number. Existing U.S. Affiliate, into one form contribution. The BE–13 survey is expected to and discontinue the use of Form BE– BEA will add an instruction on Forms result in the filing of reports from 13C. These acquisitions should be filed BE–13B and BE–13D to direct U.S. approximately 2,550 U.S. affiliates each on Form BE–13A along with acquired businesses to report total expected costs year. The respondent burden for this U.S. business enterprises that will by year based on their fiscal year end. collection of information will vary from operate as a separate legal entity after BEA will add an instruction on Form one company to another, but is the acquisition. The revised Form BE– BE–13 Claim for Exemption to direct estimated to average 1.1 hours per asabaliauskas on DSK3SPTVN1PROD with RULES 13A will be a report for a U.S. business U.S. businesses that are reporting response, including time for reviewing enterprise when a foreign entity expansions to skip the questions asking instructions, searching existing data acquires a voting interest (directly, or for U.S. affiliates’ total assets, total sources, gathering and maintaining the indirectly through an existing U.S. liabilities, and net income (loss). These data needed, and completing and affiliate) in that U.S. business enterprise questions are not asked on Form BE– reviewing the collection of information. (including segments, operating units, or 13D, Report for the Expansion of an Thus the total respondent burden for real estate) and (1) the total cost of the Existing U.S. Affiliate, where expected this survey is estimated at 2,860 hours, acquisition is greater than $3 million; costs are greater than $3 million, so they compared to 2,160 hours for the VerDate Sep<11>2014 15:55 Oct 19, 2016 Jkt 241001 PO 00000 Frm 00040 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1

Federal Register / Vol. 81, No. 203 / Thursday, October 20, 2016 / Rules and Regulations 72521 previous BE–13 survey estimate. The § 801.7 Rules and regulations for the BE– private fund is not required to file any increase in burden hours is due to the 13, Survey of New Foreign Direct BE–13 report except to indicate increase in the number of respondents Investment in the United States. exemption from the survey if contacted expected to file. The previous estimate The BE–13, Survey of New Foreign by BEA. of the number of respondents was made Direct Investment in the United States, (c) Forms to be filed. Depending on before the survey was launched; the is conducted to collect data on the the type of investment transaction, U.S. revised estimate is based on two years acquisition or establishment of U.S. affiliates shall report their information of data collection. business enterprises by foreign investors on one of five forms—BE–13A, BE–13B, Written comments regarding the and the expansion of existing U.S. BE–13D, BE–13E, or BE–13 Claim for burden-hour estimates or other aspects affiliates of foreign companies to Exemption. of the collection-of-information establish new facilities where business (1) Form BE–13A—Report for a U.S. requirements contained in the final rule is conducted. Foreign direct investment business enterprise when a foreign should be sent to both BEA via email at is defined as the ownership or control entity acquires a voting interest Patricia.Abaroa@bea.gov, and to OMB, by one foreign person (foreign parent) of (directly, or indirectly through an O.I.R.A., Paperwork Reduction Project 10 percent or more of the voting existing U.S. affiliate) in that U.S. 0608–0035, Attention PRA Desk Officer securities of an incorporated U.S. business enterprise including segments, for BEA, via email at pbugg@ business enterprise, or an equivalent operating units, or real estate; and omb.eop.gov. interest of an unincorporated U.S. (i) The total cost of the acquisition is business enterprise, including a branch. greater than $3 million; and Regulatory Flexibility Act All legal authorities, provisions, (ii) By this acquisition, the foreign The Chief Counsel for Regulation, definitions, and requirements contained entity now owns at least 10 percent of Department of Commerce, certified at in §§ 801.1 through 801.2 and §§ 801.4 the voting interest (directly, or the proposed rule stage to the Chief through 801.6 are applicable to this indirectly through an existing U.S. Counsel for Advocacy, Small Business survey. Specific additional rules and affiliate) in the acquired U.S. business Administration, under the provisions of regulations for the BE–13 survey are enterprise. the Regulatory Flexibility Act (RFA), 5 given in paragraphs (a) through (d) of (2) Form BE–13B—Report for a U.S. U.S.C. 605(b), that this final rule will this section. More detailed instructions business enterprise when it is not have a significant economic impact are given on the report forms and established by a foreign entity or by an on a substantial number of small instructions. existing U.S. affiliate of a foreign parent; entities. The factual basis for the (a) Response required. A response is and certification was published in the required from persons subject to the (i) The expected total cost to establish proposed rule and is not repeated here. reporting requirements of the BE–13, the new U.S. business enterprise is No comments were received regarding Survey of New Foreign Direct greater than $3 million; and the certification or the economic impact Investment in the United States, (ii) The foreign entity owns at least 10 of the rule more generally aside from the contained herein, whether or not they percent of the voting interest (directly, comment regarding the burden estimate. are contacted by BEA. Also, persons, or or indirectly through an existing U.S. No final regulatory flexibility analysis their agents, that are contacted by BEA affiliate) in the new U.S. business was prepared. about reporting in this survey, either by enterprise. sending them a report form or by List of Subjects in 15 CFR Part 801 (3) Form BE–13D—Report for an written inquiry, must respond in writing existing U.S. affiliate of a foreign parent Economic statistics, Foreign pursuant to this section. This may be when it expands its operations to investment in the United States, accomplished by filing the properly include a new facility where business is International transactions, Penalties, completed BE–13 report (BE–13A, BE– conducted and the expected total cost of Reporting and recordkeeping 13B, BE–13D, BE–13E, or BE–13 Claim the expansion is greater than $3 million. requirements. for Exemption). (b) Who must report. A BE–13 report (4) Form BE–13E—Report for a U.S. Dated: October 6, 2016. is required of any U.S. business business enterprise that previously filed Brent Moulton, enterprise, except certain private funds, Form BE–13B or BE–13D. Form BE–13E Acting Director, Bureau of Economic see exception in paragraph (b)(4) of this collects updated cost information and Analysis. section, in which: will be collected annually until the (1) A foreign direct investment in the establishment or expansion of the U.S. For reasons set forth in the preamble, business enterprise is complete. United States relationship is created; BEA amends 15 CFR part 801 as (2) An existing U.S. affiliate of a (5) Form BE–13 Claim for follows: foreign parent establishes a new U.S. Exemption—Report for a U.S. business business enterprise, expands its U.S. enterprise that: PART 801—SURVEY OF (i) Was contacted by BEA but does not INTERNATIONAL TRADE IN SERVICES operations, or acquires a U.S. business enterprise, or; meet the requirements for filing Forms BETWEEN U.S. AND FOREIGN BE–13A, BE–13B, or BE–13D; or (3) BEA requests a cost update (Form PERSONS AND SURVEYS OF DIRECT (ii) Whether or not contacted by BEA, BE–13E) for a U.S. business enterprise INVESTMENT met all requirements for filing Forms that previously filed Form BE–13B or BE–13D. BE–13A, BE–13B, or BE–13D except the asabaliauskas on DSK3SPTVN1PROD with RULES ■ 1. The authority citation for 15 CFR (4) Certain private funds are exempt $3 million reporting threshold. part 801 continues to read as follows: from reporting on the BE–13 survey. If (d) Due date. The BE–13 forms are Authority: 5 U.S.C. 301; 15 U.S.C. 4908; a U.S. business enterprise is a private due no later than 45 calendar days after 22 U.S.C. 3101–3108; E.O. 11961 (3 CFR, fund and its foreign parent does not the acquisition is completed, the new 1977 Comp., p. 86), as amended by E.O. own through the private fund 10 percent U.S. business enterprise is established, 12318 (3 CFR, 1981 Comp. p. 173); and E.O. or more of the voting interest of a the expansion is begun, the cost update 12518 (3 CFR, 1985 Comp. p. 348). business enterprise that is not also a is requested, or a notification letter is ■ 2. Revise § 801.7 to read as follows: private fund or a holding company, the received from BEA by a U.S. business VerDate Sep<11>2014 15:55 Oct 19, 2016 Jkt 241001 PO 00000 Frm 00041 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1

72522 Federal Register / Vol. 81, No. 203 / Thursday, October 20, 2016 / Rules and Regulations enterprise that does not meet the filing amending 8 CFR part 215, subpart B B, will not be admitted to the United requirements for the survey. (RIN 1651–AB08), are creating the States under 8 CFR. 214.1(a)(3)(i), State [FR Doc. 2016–25208 Filed 10–19–16; 8:45 am] Electronic Visa Update System (EVUS). is amending 22 CFR 41.122 to provide BILLING CODE 3510–06–P As provided in 8 CFR part 215, subpart for automatic provisional revocation of B, EVUS is an online information the visas. Once the visa holder makes update system. Under EVUS, the required submission of biographic DEPARTMENT OF STATE nonimmigrant aliens who hold a and other information and successfully passport issued by an identified country enrolls in EVUS, the revocation of the 22 CFR Part 41 containing a U.S. nonimmigrant visa of visa will automatically be reversed, and [Public Notice: 9530] a designated category are required to the visa will be valid for travel to the enroll in EVUS by providing United States. RIN 1400–AD93 information to DHS after the receipt of To implement EVUS, State is their visa of a designated category, and amending 22 CFR 41.122 and DHS is Visas: Visa Information Update periodically thereafter. Successful contemporaneously amending 8 CFR Requirements Under the Electronic enrollment in EVUS is evidenced by the part 212, 214, 215, and 273. Visa Update System (EVUS) receipt of a notification of compliance. Identified countries and designated visa Description of Regulation Changes AGENCY: Department of State. ACTION: Final rule with request for categories are those countries and visa In 22 CFR 41.122, paragraph (b) is comments. categories that the Secretary of now subdivided. New paragraph (b)(1) Homeland Security, in consultation describes the force and effect of a SUMMARY: The Department of State is with the Secretary of State, has provisional revocation generally. The coordinating with the Department of determined will be subject to EVUS paragraph also describes how a Homeland Security on instituting a enrollment requirements. Identified provisional revocation can be reversed requirement for nonimmigrant aliens countries and designated visa categories and how the revocation authority who hold a passport issued by an will be announced in a notice published contained in INA 221(i) (8 U.S.C. identified country containing a U.S. in the Federal Register. Failure to 1201(i)) is not limited by this paragraph. nonimmigrant visa of a designated comply with EVUS after November 29, Paragraph (b)(2) contains the current category to provide required 2016, will result in an automatic language of paragraph (b) with the information to DHS after the receipt of provisional revocation of the visa and addition of a new header. New his or her visa of a designated category. will preclude travel to the United States paragraph (b)(3) describes the new DATES: This Final rule is effective on on that visa. The visa will be process of automatic provisional November 29, 2016. The Department of automatically reinstated upon revocation of U.S. visas of designated State will accept comments until compliance with the EVUS categories held by nonimmigrant aliens December 19, 2016. requirements outlined in 8 CFR 215.24, in a passport issued by an identified as established by receipt of a country who fail to comply with EVUS ADDRESSES: You may submit comments, notification of compliance. While, as after the receipt of his or her visa as identified by RIN 1400–AD93, by one of discussed in the DHS rulemaking, required by 8 CFR 215.24. the following methods: individuals may enroll in EVUS prior to Paragraph (c) is modified to make a • Electronic comments: Submit November 29, such enrollment is not notification exception to visa holders through the Federal eRulemaking Portal required for travel to the United State where visas have been automatically http://www.regulations.gov and search prior to that date. provisionally revoked under new for docket number DOS–2016–0066. This rulemaking provides State the • Mail: Address all written paragraph (b)(3) of this section. mechanism for visas to be automatically Paragraph (d) is modified to make an submissions to Chief, CA/VO/L/R, U.S. provisionally revoked, and the exception to the requirement of Department of State, 600 19th St. NW., revocation to automatically be reversed physically cancelling visas for visas that 12th Floor, Washington, DC 20006. and visas reinstated upon subsequent are automatically provisionally revoked FOR FURTHER INFORMATION CONTACT: compliance with EVUS (22 CFR Kevin J. Earnest, Legislation and by paragraph (b)(3). 41.122(b)(3)). The rule also makes other Paragraph (e) remains unchanged. Regulations Division, Legal Affairs, modifications to the visa revocation Office of Visa Services, Bureau of regulations consistent with the EVUS Regulatory Findings Consular Affairs, Department of State, enrollment requirements. 600 19th St. NW., Washington, DC Administrative Procedure Act As discussed in the contemporaneous 20006, (202) 485–7588. DHS EVUS rule, DHS is exercising its This regulation involves a foreign SUPPLEMENTARY INFORMATION: The authority under INA 214(a)(1) and affairs function of the United States and, Department of State (State) regulation 215(a)(1) (8 U.S.C. 1184(a)(1) and therefore, in accordance with 5 U.S.C. on the revocation of nonimmigrant visas 1185(a)(1)) to require that nonimmigrant 553(a)(1), is not subject to the notice- is at 22 CFR 41.122. State is amending aliens who hold a passport issued by an and-comment rule making procedures 22 CFR 41.122 in support of a joint identified country containing a U.S. set forth in 5 U.S.C. 553. program with the Department of nonimmigrant visa of a designated This final rule is also exempt from Homeland Security (DHS) that requires category comply with the requirements notice and comment requirements nonimmigrant aliens who hold a in 8 CFR part 215, subpart B, and under the ‘‘good cause’’ exception set asabaliauskas on DSK3SPTVN1PROD with RULES passport issued by an identified country successfully enroll in EVUS by forth at 5 U.S.C. 553(b)(3)(B). This rule containing a U.S. nonimmigrant visa of providing certain information to DHS is critical because it improves the a designated category to periodically after the receipt of their visas of a security of granting longer-length visas provide required information to DHS designated category as a condition of while also facilitating legitimate travel. after the receipt of his or her visa of a admission to the United States. Implementation of this rule as soon as designated category. Recognizing that holders of such visas possible is necessary to protect the The revised 22 CFR 41.122(b)(3) and who have not complied with the national security of the United States the contemporaneous DHS rule requirements in 8 CFR part 215, subpart and to prevent the harm that could be VerDate Sep<11>2014 15:55 Oct 19, 2016 Jkt 241001 PO 00000 Frm 00042 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1


Document Created: 2016-10-21 09:58:50
Document Modified: 2016-10-21 09:58:50
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesThis final rule will be effective November 21, 2016.
ContactPatricia Abaroa, Chief, Direct Investment Division (BE-49), Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9591; or via email at [email protected]
FR Citation81 FR 72519 
RIN Number0691-0691
CFR AssociatedEconomic Statistics; Foreign Investment in the United States; International Transactions; Penalties and Reporting and Recordkeeping Requirements
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