2017 BE-12 Supporting Statement Part A - final

Supporting Statement for the BE-12 Benchmark Survey
of Foreign Direct Investment in the United States
OMB Control Number 0608-0042
A. Justification
1. Explain the circumstances that make the collection of information necessary.
The 2017 Benchmark Survey of Foreign Direct Investment in the United States is necessary to
obtain complete and accurate data on the value of foreign direct investment in the United States
at yearend 2017, the changes in investments during the year, the return to foreign persons on
these investments, as well as data on the operations of the U.S. affiliates of foreign multinational
companies, including balance sheets, income statements, employment, trade, and technology that
are needed in assessing the impact of foreign direct investment on the U.S. economy. The
survey is mandatory and is conducted under the authority of the International Investment and
Trade in Services Survey Act (P.L. 94-472, 22 U.S.C. 3101-3108, as amended), hereinafter “the
Act.” The implementing regulations for the direct investment surveys conducted under the Act
can be found in 15 CFR Part 801.
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 information collected in the survey is used to compile economic statistics on foreign direct
investment in the United States and on the activities of foreign-owned U.S. companies by
country, industry, and, for some data items, state. The data are disseminated via BEA’s website.
Some specific uses of the data are discussed below.
(a) Compile and improve the U.S. economic accounts:
Data from the BE-12 survey will provide benchmarks for deriving current universe estimates of
direct investment from sample data collected in other BEA surveys in non-benchmark years. In
particular, they will serve as benchmarks for the direct investment estimates included in the U.S.
international transactions, U.S. international investment position, national income and product
accounts, and in the statistics on the activities of U.S. affiliates of foreign companies.
BEA uses BE-12 benchmark survey data to derive estimates of U.S. affiliates’ value added.
These estimates can be used to calculate and analyze U.S. affiliates’ share of U.S. gross domestic
product and to evaluate affiliates’ profitability and productivity. Data on employment by
affiliates are used to estimate U.S.-affiliate shares of the U.S. economy, both in the aggregate and
by industry and state.
In addition, data for the BE-12 benchmark survey provide financial statements against which
data on transactions and positions between parents and affiliates that are reported on the
quarterly BE-605 survey can be checked for consistency.
(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
International Trade Commission, the Departments of Treasury and State, the Council of
Economic Advisers, and the Federal Reserve Board to support U.S. international economic
policy. The International Trade Administration’s SelectUSA office uses the data in advising
foreign investors seeking to invest in the United States. The Treasury Department’s Committee
on Foreign Investment in the United States uses the data as background information in its reports
to Congress. Without this information, current data on the amount and financial and operating
characteristics of foreign direct investment in the United States would not be available.
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 bilateral, 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) Other Government uses:
Employer identification numbers and data on employment are used to link the enterprise-level
data on U.S. affiliates of foreign companies collected in the benchmark survey to establishmentlevel data for all U.S. companies collected by the Census Bureau and Bureau of Labor Statistics,
to obtain more detailed and precise data by industry and by state for foreign-owned enterprises.
The data are used by state governments in assessing the impact of foreign direct investment on
individual states, in advising foreign investors seeking to invest in the United States, and in
developing state programs to attract foreign direct investment.
Foreign governments also use data from the benchmark survey in monitoring and promoting
foreign direct investment in the United States.
(d) Non-government uses:
International organizations and private researchers also use data from the benchmark 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; use by
researchers affiliated with the National Bureau of Economic Research (NBER) has been among
the most extensive.

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The Information Quality Guidelines of the Office of Management and Budget (OMB) apply to
this information. The information is collected according to documented procedures in a manner
that reflect 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 quality of the data is high before the final estimates are released. The data are collected and
reviewed according to documented procedures, best practice standards, and on-going review by
the appropriate supervisor. The quality of the data is validated using a battery of 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 comply with all applicable information
quality guidelines, i.e., those of the OMB, the Department of Commerce, and BEA.
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 offers electronic filing through its eFile system for use in reporting on the BE-12
benchmark survey forms. The eFile system enables respondents to download the survey forms
in PDF format for each reportable business enterprise, enter the required data, and submit the
forms securely to BEA.
In addition, BEA provides links to all of its survey forms and reporting instructions on its
website (www.bea.gov). These may be downloaded, printed, and submitted via secure email, fax,
or mail.
4. Describe efforts to identify duplication.
Similar data collected by other Government agencies and segregated as being for foreign-owned
U.S. companies are not comparable to the data collected by BEA. For example, although the
Securities and Exchange Commission (SEC) maintains information on the nationality of major
stockholders in publicly traded U.S. companies, most of the foreign-owned U.S. companies in
BEA’s reporting universe are not publicly traded. For those that are publicly traded, the data
available from the SEC are not in the form or detail required by BEA. For example, data
reported to the SEC are on a worldwide consolidated basis. In contrast, data collected in the BE12 survey are on a domestic (U.S.) consolidated basis so that they cover only U.S. affiliates’
domestic operations.
For tax purposes, the Internal Revenue Service (IRS) collects information on foreign-owned U.S.
companies, but it covers only “foreign-controlled” companies—those owned at least 50 percent
by foreigners. BEA’s data are based on a 10-percent ownership criterion—the current
international standard for defining direct investment. Consolidation rules also differ
significantly. Corporate tax returns of foreign corporations’ U.S. subsidiaries are generally filed
with the IRS at a much more deconsolidated level than reports filed by U.S. affiliates to BEA.
One result is that for items such as total assets and sales, for which intercompany transactions
and positions can be significant, there is duplication in the IRS data that is not present in the
more highly consolidated BEA data.

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BEA has examined information on foreign direct investment available from these and other
agencies and, because the information is narrower in scope and purpose than that collected by
BEA, has not identified significant duplication.
A few data items on the BE-12 survey are collected by bank regulatory agencies. For several
reasons, the regulatory data cannot be substituted for the data that BEA collects on the BE-12.
The focus of the BE-12 survey is information needed to analyze production and employment by
U.S. affiliates of foreign companies. Many key data items that are collected on the BE-12 are
outside the scope of the regulatory reports. For example, the BE-12 survey collects data on some
items needed to measure the value added in production. These items are not collected on
regulatory reports. The BE-12 also collects key aggregates from financial statements, such as
total assets, operating revenues, and net income, and information on organizational structure,
including voting rights. These items are also collected in connection with bank regulation (see
Form FR 2314, Form FFIEC 030, and Form FR Y-10). The duplicated items are limited to a few
readily available key aggregates reported by companies that file on both the BE-12 and the bank
regulatory reports and have little effect on respondent burden. It is important that BEA collects
these items directly because several items are needed to determine whether a respondent must
report on BEA’s surveys, and several are used in conjunction with non-duplicated items to make
calculations of key economic variables. Also, it is BEA’s judgment that the cost and delay that
would be associated with attempting to obtain these items from regulatory reports and join them
with other items collected through its own survey would not be practical or cost effective.
5. If the collection of information involves small businesses or other small entities, describe
the methods used to minimize burden.
Most of the U.S. business enterprises that are required to file the survey are units of multinational
enterprises. To qualify as a small business, the multinational enterprise as a whole must be
evaluated when determining if the business meets the size standards set by the Small Business
Administration (SBA). While BEA only collects information on the U.S. portion of the
multinational enterprise, the size determination takes into account the sizes of both the U.S.
businesses and their foreign parents. BEA estimates that fewer than 1 percent of the U.S.
businesses required to file the BE-12 survey are considered small businesses based on the SBA
size standards.
For the few small businesses that meet the reporting requirements of the survey, BEA has
attempted to keep burden to a minimum by asking only those questions that are considered
essential. The amount of information required to be reported by each U.S. affiliate is determined
by the size of the affiliate’s assets, sales, or net income or loss. The reporting thresholds for Form
BE-12A (the longest form) and Form BE-12B are $300 million and $60 million, respectively. All
affiliates below $60 million will file on Form BE–12C (the shortest form). The smallest
affiliates, those below $20 million, are only required to report a few items on Form BE–12C.
These data items are likely to be readily available from existing business records. Because few
small businesses are required to file the survey and because those impacted are subject to only
minimal reporting burdens, the Chief Counsel for Regulation certifies that this proposed rule will
not have a significant economic impact on a substantial number of small entities.

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6. Describe the consequences to the Federal program or policy activities if the collection is
not conducted or is conducted less frequently.
This is a benchmark survey designed to yield universe data. By law, the survey must be
conducted once every five years. The benchmark survey data are updated between benchmark
years by means of quarterly and annual sample surveys that are more limited in scope and
coverage. A period beyond the normal benchmark interval would require reliance on universe
estimates linked to an aging base. The reliability of the estimates becomes increasingly
questionable as the base ages. This problem is particularly serious during a period of rapid
change in the universe. Conducting the survey less frequently would also reduce the timeliness
of the detailed information, collected only in benchmark surveys, which is needed for
policymaking purposes.
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-12 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.
This submission supports a proposed rulemaking, which will solicit comments on this survey.
BEA maintains a continuing dialogue with respondents and with 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.
BEA developed a list of proposed changes for the 2017 survey (Attachment) in consultation with
both internal and external data users. In April 2017, BEA sent for comment the list of proposed
changes to selected respondent companies and data users. The list of proposed changes indicated
data items that BEA proposes to add, delete, or modify for the 2017 survey.
One data user responded to express support for the questions added to the survey, to offer a
suggestion regarding updating the survey instructions for reporting research and development
activity, and to inquire about BEA’s plans regarding other methods of addressing questions about
contract manufacturing. BEA will update the BE-12 instructions based on the information
provided by the data user and has provided a summary of plans for measuring contract
manufacturing to the data user.
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.

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10. Describe any assurance of confidentiality provided to respondents and the basis for
assurance in statute, regulation, or agency policy.
BEA provides respondents with the 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. Per the Cybersecurity
Enhancement Act of 2015, your data are protected from cybersecurity risks through security
monitoring of the BEA information systems.”
Sec. 5(c) of the Act (22 U.S.C. 3104) provides that the information 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 the 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.
The table below provides details on average burden, estimated number of respondents, and
estimated burden hours by form type.

Form Type 
BE‐12A 
BE‐12B 
BE‐12C 
BE‐12 Claim for Not Filing 
Total 

Average burden 
hours per response 

Estimated number of 
respondents 

Estimated burden 
hours 

99 
7.5 
1.0 
0.33 
*11.00 

                                 2,200  
                                 2,000  
                              16,000  
                                 2,500  
                              22,700  

                    217,800  
                      15,000  
                      16,000  
                           825  
                    249,625  

* Rounded from 249,625 hours/22,700 respondents.

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Respondent burden is estimated based on the estimated burden in the last BE-12 survey and
other BEA surveys, feedback from respondents, and on proposed changes to the forms. Burden
is expected to vary considerably among respondents because of differences in company size and
complexity. The estimated respondent burden currently shown in the RISC/OIRA Consolidated
Information System (ROCIS) is 194,150 hours. The increase in the estimated respondent burden
is primarily due to an increase in the number of foreign-owned companies with additional
contribution from new survey questions.
The estimated annual cost to respondents is $9,985,000, based on the estimated reporting burden
of 249,625 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 249,625 hours (see A.12.
above), the total additional annual cost 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 $3.4 million, which
consists of $2.3 million for salaries and related overhead, and $1.1 million for equipment,
supplies, forms design, mailing, printing, and computer processing.
15. Explain the reasons for any program changes or adjustments.
This request is for a reinstatement, with change, of a previously approved collection. The
estimated respondent burden for this collection is 249,625 hours; the estimated respondent
burden for the previous (2012) survey is 194,150. The increase in the estimated respondent
burden of 55,475 hours is primarily due to an increase in the number of foreign-owned
companies with additional contribution from new survey questions.
BEA proposes to eliminate the requirement to file the BE-12 survey for certain private funds.
Under the planned change, 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
the survey. These investments may be required to be reported through the Treasury International
Capital (TIC) reporting system, where other related portfolio investments are already being
reported. This change will align the U.S. direct investment and portfolio investment data more
closely with the intent of the investment and will reduce burden for respondents.
BEA proposes to add, delete, and modify some items on the benchmark survey forms (see
attachment). Most of the additions are proposed in response to suggestions from data users and
to provide more information about foreign direct investment in the United States.

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16. For collections whose results will be published, outline the plans for tabulation and
publication.
Completed benchmark survey forms are due by May 31, 2018 (or by June 30, 2018 for reporting
companies that use BEA’s eFile system). Preliminary statistics will be released on BEA’s
website and analyzed in an article in the Survey of Current Business 15 to 18 months after the
reports are due. Final statistics will be released about a year later.
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.
The OMB expiration date will be displayed on the forms.
18. Explain each exception to the certification statement.
The BE-12 information collection is consistent with the certification in all aspects.

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