ing any amendments to the guaranteed specifications which have been inserted in the record. Similarly, the guaranteed specifications for the most closely comparable domestic instrument will be considered, including any amendments to the guaranteed specifications which have been inserted in the record. In the comparison, the Deputy Assistant Secretary may consider any reasonable combination of domestic instruments and accessories as being comparable to a foreign instrument that combines two or more functions in an integrated unit, if the combination of domestic instruments and accessories is capable of accomplishing the purposes for which the foreign instrument is intended to be used. If the Deputy Assistant Secretary finds that at least one domestic instrument or reasonable combination of domestic instruments does possess all the pertinent specifications of the foreign article, he shall find that there is being manufactured in the United States an instrument of equivalent scientific value to the foreign instrument for such purposes as described in the response to question 7 of the application form. Otherwise, he shall find to the contrary.

in the United

(b) Manufactured States. An instrument, apparatus, or accessory shall be considered as being manufactured in the United States if it is customarily produced for stock, produced on order, or custom-made within the United States. In determining whether a U.S. manufacturer is able and willing to produce a produced on order, or custom-made instrument, apparatus, or accessory and have it available without unreasonable delay to the applicant the Deputy Assistant Secretary shall take into account the normal commercial practices applicable to the production and delivery of instruments, apparatus, or accessories of the same general category. For example, in determining whether a domestic manufacturer is able to produce a custom-made instrument, apparatus, or accessory the Deputy Assistant Secretary may take into account the production experiences of the domestic manufacturer with respect to the types and complexity of products, the extent of the technological gap between the instrument, apparatus, or accessory to which the application relates and the manufacturer's customary products, and the availability of the professional and technical skills, as well as manu

facturing experience, essential to bridging the gap and the time required by the domestic manufacturer to produce an instrument, apparatus, or accessory to purchaser's specifications.

(c) Excessive delivery time. Dutyfree entry of the article shall be considered justified without regard to whether there is being manufactured in the United States an instrument, apparatus, or accessory of equivalent scientific value for the purposes described in response to question 7 of the application form, if the delay in obtaining such domestic instrument, apparatus, or accessory (as indicated by the difference between the delivery times quoted by domestic manufacturer and foreign manufacturer) will seriously impair the accomplishment of the purposes. In determining whether the difference in delivery times is excessive, the Deputy Assistant Secretary shall take into account the relevancy of the applicant's program to other research programs with respect to timing, the applicant's need to have such instrument, apparatus, or accessory available at the scheduled time for the course(s) in which the article is intended to be used, and other relevant circumstances.

(d) Decision on the application. The Deputy Assistant Secretary shall prepare a written decision granting or denying the application in whole or in part. The decision shall be in the form of one or more findings stating whether an instrument or apparatus of equivalent scientific value to the article for which duty-free entry is sought, for the purposes for which it is intended to be used, is or is not being manufactured in the United States, and it shall include a statement of his reasons for the finding(s). He shall transmit the decision to the FEDERAL REGISTER for publication, to the Commissioner of Customs, and to the applicant. At the same time, he shall make a copy of the record available for public review. (Copies of materials received pursuant to paragraphs (a) and (c) of 8701.10 which were not entered in the record pursuant to § 701.10 shall also be made available for public review. The Deputy Assistant Secretary may dispose of such materials at any time after final disposition of the application.) Pursuant to 19 CFR 10.117, the Deputy Assistant Secretary shall notify the district director of customs for the district in which entry of the merchandise in question was made, or the Com

missioner of Customs if the district of entry is not known to the Deputy Assistant Secretary, of the final disposition of each application. If the Deputy Assistant Secretary thereafter receives notice from the applicant in accordance with 19 CFR 10.116(c), he shall then notify said district director of the final disposition of the application. For purposes of this paragraph, disposition of an application shall be deemed final (1) when 20 days have elapsed after publication of the decision in the FEDERAL REGISTER and no appeal has been taken pursuant to 701.12, or (2) if such appeal has been taken, when final judgment is made and entered by the U.S. Court of Customs and Patent Appeals.

(e) Consolidated decision. The Deputy Assistant Secretary may on his own initiative, consolidate two or more applications under a single notice of consolidated decision whenever he deems such consolidation to be appropriate. An appeal from any decision published in such notice of consolidated decision which is

An appeal from any decision made pursuant to § 701.11 may be taken, in accordance with headnote 6(e) to part 4 of Schedule 8, only to the U.S. Court of Customs and Patent Appeals and only on a question or questions of law, within 20 days after publication of the decision in the FEDERAL REGISTER. If at any time while its application is under consideration by the Deputy Assistant Secretary or by the Court of Customs and Patent Appeals on an appeal from a finding by him, an institution cancels an order for the instrument or apparatus to which the application relates or ceases to have a firm intention to order such instrument or apparatus, the institution shall promptly notify the Deputy Assistant Secretary or such court, as the case may be.

Part 802

803

(2) The Department of Commerce may in lieu of individual reports required under this part, accept consolidated reports from foreign governments covering the operations of their national shipping concerns when, in its discretion, such consolidated reports would provide the information required by this part. Where such reports are accepted, the individual reports from operators or their agents will not be required.

(b) The foreign operator, for purposes of this part, means the owner, managing or operating owner, chartered owner, or subchartered owner who enters into and carries out any form of transportation contract with the shippers of merchandise or with passengers.

(c) If foreign-owned vessels or aircraft are chartered to other foreign operators, the owner should report his expenses in the United States, if any, and the operator should report the freight or charter revenue earned from the shippers of merchandise and his expenses in the United States.

(d) If foreign-owned vessels or aircraft are chartered to a United States operator, the owner should report his expenses in the United States, if any.

(e) Reports submitted by agents should include all disbursements accounted for directly by them to the foreign company at its foreign office; if subagents report through a principal agent in the same or another location, the

principal agent should file a consolidated report on behalf of the foreign company. § 802.2 Forms to be used.

Vessel operators shall report on Form BE-29,1 Aircraft operators shall report on Form BE-36.1

§ 802.3

Information to be furnished.

The information required for balanceof-payments purposes consists of the earnings of foreign operators from the carriage of imports into the United States and their total expenses incurred in the United States on both passenger and freight operations, including overhead. Voluntary replies to questions 5, 6, 7 and 8 on Form BE-29 (vessel operators) regarding earnings on exports and movements in accounts due to or payable from home offices of foreign branches in the United States are requested but are not required by law.

§ 802.4 Time and place of filing reports.

Reports shall be filed annually on or before March 31 of each year to cover operations of the preceding calendar year, except that a report covering operations for 1951 shall be filed on or before June 30, 1952. Reports shall be filed with the Department of Commerce, Office of Business Economics, Balance of Payments Division, Washington, D.C. 20230.

AUTHORITY: The provisions of this Part 803 issued under R.S. 161; 5 U.S.C. 301. Interpret or apply sec. 8, 59 Stat. 515; 22 U.S.C. 2861, E.O. 10033, 14 F.R. 561, 3 CFR, 1949 Supp.

SOURCE: The provisions of this Part 803 appear at 27 F.R. 3846, Apr. 21, 1962, unless otherwise noted.

§ 803.1 Who must report.

(a) United States business investments abroad (1) Basic requirement. A report is required from every corporation, partnership, individual, or any other person or closely related group of persons subject to the jurisdiction of the United States and ordinarily residing within the United States having:

(i) Ownership of 25 percent or more of the voting stock of foreign corporations, either directly or together with domestic or foreign affiliates (Forms BE-577 and BE-577S). See § 803.2(a) (1) for further detail.

(ii) Ownership of at least 10 percent, but less than 25 percent, of the voting stock of foreign corporations, or the equivalent interest in an unincorporated foreign enterprise, held either directly or together with domestic affiliates (Form BE-577A). See § 803.2(a) (1)

for further detail.

(iii) Unincorporated foreign branches, or other direct foreign operations conducted by a United States incorporated interprise or other business organization in its own name in a foreign country. This includes mining claims, oil concessions, exploration and development activities or other property held by United States persons directly or jointly with others (Form BE-578). See § 803.2(a) (1) for further detail.

(2) Estates and trusts. Direct foreign investments held by a domestic estate or trust, i.e., an estate or trust created under the laws of the United States or any subdivision thereof, shall be reported by the fiduciary and not by a beneficiary. Such property must be reported whether or not any beneficiary is subject to the laws of the United States or any subdivision thereof.

(3) Persons beneficially interested in property. If direct foreign investments beneficially owned by a person subject to the jurisdiction of the United States were held by or in the name of another, only the person having the beneficial interest shall report, except as specifically provided above regarding domestic estates and trusts.

(4) More than one person owning an interest in the same foreign organization. Each owner is required to report if the aggregate ownership of the affiliated persons in the foreign organization totals 25 percent or more of the voting securities. However, combined reports may be filed to cover the transactions of more than one owner. Where combined reports are filed, all owners other than the reporter(s) filing the full report remain liable for the report.

(5) Insurance companies. Reports for foreign branches or subsidiaries are required on Form BE-5781.

(6) Motion picture companies. United States producers or distributors of motion pictures operating in foreign countries through subsidiaries, affiliates or branches, may file quarterly reports on Form BE-35 in lieu of Forms BE-577 and BE-578; however, Forms BE-577S and BE-577A must be filed annually, if applicable.

(b) Foreign business investment in the United States-(1) Basic requirement. A report is required to be filed with respect to every business enterprise subject to the jurisdiction of the United States in which foreign persons, either as individuals or as affiliates hold a controlling interest, or which is controlled in the manner indicated in subparagraph (2) of this paragraph directly or indirectly by a foreign person or persons. Such business enterprises shall include, but not be limited to, corporations, partnerships, investments in real property, leaseholds, estates, trusts, and sole proprietorships or other forms of outright individual ownership.

(2) Foreign beneficial interest. If the foreign controlling interest in a United States business enterprise, including commercial real property, is held, exercised or administered by a United States estate, trust (including irrevocable trusts), nominee, agent, representative, custodian, or other intermediary of the foreign beneficial owners, such intermediary shall be responsible for reporting for the business enterprise the required information on Form BE-605, BE-606, BE-606B or BE-6061, or shall instruct the United States business enterprise in question to submit the required information. This does not relieve the United States business enterprise of responsibility for reporting if such business enterprise has knowledge of the direct or indirect foreign controlling interest, but

only one report should be filed for each such enterprise. For the purposes of this report, accounts or transactions of a United States business enterprise with a United States estate, trust, nominee or other intermediary of foreign beneficial owners shall be considered as accounts or transactions with such beneficial owners.

(3) Insurance companies. Reports for U.S branches or subsidiaries of foreign insurance companies are required on Form BE-6061.

(4) Consolidated reports. If a reporter held a controlling interest in other United States enterprises engaged in the same type of business and is required to report, the information requested in the reporting forms may be consolidated for such reporter and enterprises, provided all accounts are fully consolidated. list of the enterprises included in the consolidations must be provided.

A

(c) International receipts and payments of royalties, license fees, rentals, etc. United States individuals and firms who have entered into agreements with residents or governments of foreign countries to sell or buy outright or provide or be provided with the use of intangible assets or rights such as patents, techniques, processes, formulae, designs, trademarks, copyrights, franchises, manufacturing rights, and other similar intangible property or rights shall report on Form BE-93.

NOTE: Film royalties, oil royalties, and other natural resources (mining) royalties are not reportable on this form.

Companies leasing or renting machinery, equipment, etc., should also respond on this form.

§ 803.2 Forms to be used and frequency of reports.

(a) Each reporter is required to submit reports on the following forms, as applicable. (1) United States direct investments abroad:

Form BE-577. One Form BE-577 is to be filled quarterly for each foreign corporation directly owned by the reporter and/or its domestic and foreign affiliates to the extent of at least 25 percent of total outstanding voting stock. Where more than one domestic affiliate has transactions with, or interests in, the same foreign corporation, consolidated reports should be filled; consolidated reports may also be filed where several foreign subsidiaries operate in the same country and industry. Reports are also re