2012 BE-605 Collection of Information Part A

SUPPORTING STATEMENT
BE-605, Quarterly Survey of Foreign Direct Investment in the United States:
Transactions of U.S. Affiliate with Foreign Parent
OMB Control Number 0608-0009
A. Justification
1. Explain the circumstances that make the collection of information necessary.
Data collected on the BE-605 quarterly survey of foreign direct investment in the United States
are needed to measure the size and economic significance of foreign direct investment in the
United States, measure changes in such investment, and assess its impact on the U.S. economy.
The survey is mandatory and is conducted under the International Investment and Trade in
Services Survey Act (P.L. 94-472, 22 U.S.C. 3101-3108, as amended by P.L. 98-573 and P.L.
101-533), hereinafter “the Act.”
Section 4(a) of the Act requires that the President shall, to the extent he deems necessary and
feasible, conduct a regular data collection program to secure current information on international
capital flows and other information related to international investment and trade in services,
including (but not limited to) such information as may be necessary for computing and analyzing
the United States balance of payments, the employment and taxes of United States parents and
affiliates, and the international investment and trade in services position of the United States.
In Section 3 of Executive Order 11961, the President delegated the responsibility for performing
functions under the Act concerning direct investment to the Secretary of Commerce, who has
redelegated it to the Bureau of Economic Analysis (BEA). The implementing regulations for the
direct investment surveys conducted under the Act may be found in 15 CFR Part 806.
The Bureau of Economic Analysis (BEA) proposes the following changes to the survey: (1) the
deletion of a check-box question that asks respondents whether they plan to expand their
operation with a new facility (this information is no longer needed); and (2) design
improvements to the survey form.
2. Explain how, by whom, how frequently, and for what purpose the information will be
used. If the information collected will be disseminated to the public or used to support
information that will be disseminated to the public, then explain how the collection
complies with all applicable Information Quality Guidelines.
The quarterly survey of foreign direct investment in the United States is a sample survey that
collects data on transactions and positions between foreign-owned U.S. business enterprises
(U.S. affiliates) and their “affiliated foreign groups” (i.e., their foreign parents and foreign
affiliates of their foreign parents). The sample data are used to derive universe estimates in
nonbenchmark years from similar data reported in the BE-12, Benchmark Survey of Foreign
Direct Investment in the United States, which is conducted every five years. The data from the
BE-605 survey complement data from BEA's BE-15 Annual Survey of Foreign Direct
Investment in the United States, which provides data on the overall operations of U.S. affiliates.
A full understanding of foreign direct investment in the United States requires an understanding
of both the transactions and positions between U.S. affiliates and their affiliated foreign groups

(covered in the BE-605) and the overall operations of U.S. affiliates (covered in the BE-15).
Some specific uses of the data to be collected are discussed in greater detail below.
(a) Compile and improve the U.S. economic accounts:
Data from the BE-605 survey are needed to compile U.S. international transactions, national
income and product, and input-output accounts and the net international investment position of
the United States.
b) Support U.S. Government policy on direct investment:
The data are used by several U.S. Government agencies, including the Office of the U.S. Trade
Representative, the International Trade Administration of the Commerce Department, the
Departments of Treasury and State, the Council of Economic Advisers, and the Federal Reserve
Board to support U.S. international economic policy. The quarterly survey provides detailed
information, by country and industry, on direct investment financial and income flows that the
U.S. Government requires to evaluate these policies and to assess their effects on U.S. and
foreign economies.
Bilateral investment treaties (BIT's) are negotiated with interested countries to facilitate and
protect U.S. investment interests. During BIT negotiations, data from this and related surveys
provide important information on the level and impact of direct investment on the U.S. economy.
The United States is a signatory to regional and multilateral commercial agreements that cover
direct investment as well as cross border trade, and the data from this and related surveys provide
information that can be used both during the negotiations and as an aid in monitoring the
resulting agreements. For example, investment issues are covered both by the General
Agreement on Trade in Services, which is the principal World Trade Organization agreement on
trade in services, and by the North American Free Trade Agreement among the United States,
Canada, and Mexico.
c) Non-Government uses:
International organizations and private researchers use data from the BE-605 quarterly survey in
assessing the impact of foreign direct investment on the U.S. economy. International
organizations that regularly make use of BEA data on foreign direct investment include the
United Nations, International Monetary Fund, Organisation for Economic Co-operation and
Development, and World Bank. Numerous private researchers also use the data.
The Section 515 Information Quality Guidelines apply to this information. The information is
collected according to documented procedures in a manner that reflects standard practices
accepted by the relevant economic/statistical communities. BEA conducts a thorough review of
the survey input data using sound statistical techniques to ensure the data quality before the final
estimates are released. The data are collected and reviewed according to documented procedures
including the use of check lists, procedures manuals and on-going review by the appropriate
supervisor or team leader. The quality of the data are validated using a battery of computerized

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edit checks to detect potential errors and to otherwise ensure that the data are accurate, reliable,
and relevant for the estimates being made. Data are routinely revised as more complete source
data become available. The collection and use of this information complies with all applicable
information quality guidelines, i.e., those of the Department of Commerce, OMB, and the
Bureau of Economic Analysis.
3. Describe whether, and to what extent, the collection of information involves the use of
automated, electronic, mechanical, or other technological techniques or other forms of
information technology.
BEA will offer an electronic filing option that makes use of fillable PDF forms, its eFile system,
for use in reporting on the BE-605 quarterly survey forms, as an alternative to paper forms. The
eFile system enables respondents to download the survey forms in PDF format, enter the
required data, and submit the forms securely to BEA. BEA has offered electronic filing to
respondents when conducting recent quarterly surveys; approximately 50 percent of the
respondents take advantage of electronic filing.
In addition, BEA places all its survey forms and reporting instructions on its web site
(www.bea.gov), which provides an alternative and, for some, more convenient, way to access
information about BEA’s surveys.
The data from the annual surveys are published and analyzed in BEA’s monthly journal, the
Survey of Current Business. All of the data tabulated from the BE-605 survey that are released
to the public and analyses of the data, published in the Survey, are placed on the BEA web site.
4. Describe efforts to identify duplication.
The BE-605 survey, as proposed, collects data on transactions and positions between U.S.
affiliates and their affiliated foreign groups. U.S. business enterprises that qualify for reporting
on this report form are not required to file the same information with other agencies. Similar
data are not collected by other agencies and identified as being for foreign-owned U.S. business
enterprises.
To avoid duplication between Form BE-605 and the Treasury International Capital (TIC)
System, the BE-605 instructions direct respondents to exclude (a) positions and transactions in
financial derivatives contracts that are reported on or derived from TIC Form D, Report of
Holdings of and Transactions in, Financial Derivatives Contracts with Foreign Residents, and (b)
intercompany debt positions and interest of U.S. affiliates that are reported on TIC Forms B,
Reports by Depository Institutions, by Bank Holding Companies/Financial Holding Companies,
and by Securities Brokers and Dealers of Liabilities to, and Claims on, Foreign Residents by
U.S. Residents.
Some minor duplication may occur between the few annual data items reported once a year in
Part VII of the quarterly Form BE-605 and the data reported in BEA’s BE-15, Annual Survey of
Foreign Direct Investment in the United States. Data collected in the BE-15 survey reflect the
interest of all owners of the affiliate, whereas data collected in the BE-605 cover only the foreign
parent’s share of the given item. The only case in which duplication of the annual data reported
in the BE-15 and BE-605 may occur is when the affiliate is owned 100 percent by a single

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foreign parent. However, such duplication is minor, and it could not be eliminated without
compromising the integrated structure of the form.
5. If the collection of information involves small businesses or other small entities, describe
the methods used to minimize burden.
Few small U.S. businesses are subject to the reporting requirements of this survey. Foreignowned U.S. businesses are required to report on the BE-605 survey only if they have total assets,
sales or gross operating revenues, or net income that exceed $60 million. These reporting
thresholds will exempt most small businesses from the survey. If such entities receive a form,
they need only file a BE-605 Claim for Exemption to indicate that they do not meet the
requirements for filing Form BE-605.
6. Describe the consequences to the Federal program or policy activities if the collection is
not conducted or is conducted less frequently.
The U.S. international transactions and national income and product accounts are published
quarterly. The data collected in this survey are important components of these accounts. BEA
would be unable to provide the data needed in preparing these accounts if the information were
collected less frequently. Also, the objectives stated in A.2. (above) could not be accomplished
if the survey were not conducted or were conducted less frequently than each calendar quarter.
7. Explain any special circumstances that require the collection to be conducted in a
manner inconsistent with OMB guidelines.
No aspects of the proposed BE-605 data collection require a special justification.
8. Provide a copy of the PRA Federal Register notice that solicited public comments on the
information collection prior to this submission. Summarize the public comments received
in response to that notice and describe the actions taken by the agency in response to those
comments. Describe the efforts to consult with persons outside the agency to obtain their
views on the availability of data, frequency of collection, the clarity of instructions and
recordkeeping, disclosure, or reporting format (if any), and on the data elements to be
recorded, disclosed, or reported.
The public notice soliciting comments on the information collection prior to its submission to
OMB appeared on page 71937 (Vol. 76, No. 224) of the November 21, 2011 issue of the Federal
Register. BEA received no comments.
BEA maintains a continuing dialogue with survey respondents and data users, including its own
internal users through the Bureau’s Source Data Improvement and Evaluation Program, to ensure
that, as much 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.
When designing the related 2012 BE-12, Benchmark Survey of Foreign Direct Investment in the
United States, BEA solicited comments from a broad group of Government and non-Government
data users and potential respondent companies. Additional consultations outside the agency,
beyond those held in conjunction with the benchmark survey design, were not conducted.
In reaching decisions on what questions to include in the survey, BEA considered the
Government's need for the data and resources for processing the data, the burden imposed on

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respondents, the quality of the likely responses (e.g., whether the data are readily available on
respondents’ books), and BEA's experience in previous quarterly and related annual and
benchmark surveys.
9. Explain any decisions to provide payments or gifts to respondents, other than
remuneration of contractors or grantees.
No payments or gifts to respondents are made.
10. Describe any assurance of confidentiality provided to respondents and the basis for
assurance in statute, regulation, or agency policy.
BEA provides respondents with assurance that it will keep the reported data confidential. The
following statement is taken directly from the reporting instructions for the survey.
“Confidentiality – The Act provides that your report is CONFIDENTIAL and may be used only
for analytical or statistical purposes. Without your prior written permission, the information
filed in your report CANNOT be presented in a manner that allows it to be individually
identified. Your report CANNOT be used for purposes of taxation, investigation, or regulation.
Copies retained in your files are immune from legal process.”
Section 5(c) of the Act (22 U.S.C. 3104) provides that the information collected may be used
only for analytical and statistical purposes and access to the information shall be available only
to officials and employees (including consultants and contractors and their employees) of
agencies designated by the President to perform functions under the Act. The President may
authorize the exchange of information between agencies or officials designated to perform
functions under the Act, but only for analytical and statistical purposes. No official or employee
(including consultants and contractors and their employees) shall publish or make available any
information collected under the Act in such a manner that the person to whom the information
relates can be specifically identified. Reports and copies of reports prepared pursuant to the Act
are confidential, and their submission or disclosure shall not be compelled by any person without
the prior written permission of the person filing the report and the customer of such person,
where the information supplied is identifiable as being derived from the records of such
customer.
11. Provide additional justification for any questions of a sensitive nature, such as sexual
behavior and attitudes, religious beliefs, and other matters that are commonly considered
private.
No questions of a sensitive nature are asked.
12. Provide an estimate in hours of the burden of the collection of information.
BEA expects 4,000 responses quarterly; because reports are filed 4 times per year, BEA expects
16,000 responses annually. The respondent burden for this collection of information is estimated
to vary from one-half hour to three hours per response, with an average of one hour 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 annual respondent burden for this survey is estimated at 16,000 hours as shown in the
RISC/OIRA Consolidated Information System (ROCIS).

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The estimated annualized cost to respondents is $640,000 based on the estimated reporting
burden of 16,000 hours and an estimated hourly cost of $40.
13. Provide an estimate of the total annual cost burden to the respondents or recordkeepers resulting from the collection (excluding the value of the burden hours in #12
above).
Other than respondent cost associated with the estimated burden of 16,000 hours (see A.12
above), the total additional annual cost burden to respondents is expected to be negligible. Total
capital and start-up costs are insignificant, because new technology or capital equipment would
not be needed by respondents in order to prepare their responses to the survey. As a
consequence, the total cost of operating and maintaining the technology and capital equipment
will also be insignificant. Purchases of services to complete the information collection are also
expected to be insignificant.
14. Provide estimates of annualized cost to the Federal government.
The project cost to the Federal Government for this survey is estimated at $1,100,000, which
consists of $700,000 for salaries and related overhead, and $400,000 for equipment, supplies,
forms design, mailing, printing, and computer processing.
15. Explain the reasons for any program changes or adjustments.
This request is for an extension without change of a currently approved collection. There is no
change to the overall respondent burden of 16,000 hours currently shown in the inventory
maintained by OMB.
16. For collections whose results will be published, outline the plans for tabulation and
publication.
Each quarter BEA mails either pre-addressed survey forms to respondents filing paper forms or,
for respondents that file electronically, a notification letter that reports are due. Reports are due
30 days after the close of the calendar or fiscal quarter, except for the fourth quarter when reports
are due within 45 days.
Quarterly data are released four times a year as part of the U.S. international transactions
accounts approximately 75 days after the close of the quarter. An analysis of the quarterly data
appears in the BEA’s monthly magazine, the Survey of Current Business, about 90 days after the
end of the quarter.
Annual summations of the quarterly data are released approximately six months after the end of
the year. More detailed annual data with tabulations by industry and country are available about
eight months after the end of the year.
All of the data tabulated from the BE-605 survey that are released to the public and analyses of
the data, published in the Survey, are placed on BEA’s Web site www.bea.gov.
17. If seeking approval to not display the expiration date for OMB approval of the
information collection, explain the reasons why display would be inappropriate.

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The OMB expiration date will be displayed on the forms.
18. Explain each exception to the certification statement.
The BE-605 information collection is consistent with the certification in all aspects.

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