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FEDERAL RESERVE BANK
OF NEW YORK

I"Circular No. 001)0"1
L January 4, 1968 -J

U. S. Department of Commerce Foreign Direct Investment Program
To All Banks and Other Financial Institutions
in the Second Federal Reserve District:

Printed on the following pages are the texts of the following documents:
(1) Message to the Nation 011 the Balance of Payments, issued January 1, 1968, by President
Johnson;
(2) Executive Order No. 11387, dated January 1, 1968, Governing Certain Capital Transfers
Abroad, which, among other things, authorizes the Secretary of Commerce to issue regulations
governing such transfers;
(3) Regulations of the Secretary of Commerce, dated January 1, 1968, relating to Foreign
Direct Investment by Persons in the United States, which implement Executive Order No. 11387;
(4) U. S. Department of Commerce Order 184-A, dated January 1, 1968, which establishes
the Office of Foreign Direct Investments to carry out the provisions of the Executive Order; and
(5) Instructions for Specific Authorizations or Exemptions Pursuant to Section 1000.801
of Foreign Direct Investment Regulations, issued by said Office of Foreign Direct Investments.

Documents 2, 3, and 4 above have been extracted from the Federal Register, dated
January 3,1968.
Additional copies of this circular will be furnished upon request.

lfred

ayes,

President.

M ESSA G E TO TH E N AT IO N
ON T H E B A LA N C E OF P A Y M E N T S

Where We Stand Today

I want to discuss with the American people a subject of vital concern to the economic health and
well-being of this Nation and the Free World.
It is our international balance of payments position.
The strength of our dollar depends 011 the strength of that position.
The soundness of the Free W orld monetary system, which rests largely 011 the dollar, also depends on
the strength of that position.
To the average citizen, the balance of payments, and the strength of the dollar and of the international
monetary system, are meaningless phrases. They seem to have little relevance to our daily lives. Yet their
consequences touch us all — consumer and captain of industry, worker, farmer, and financier.
More than ever before, the economy of each nation is today deeply intertwined with that of every
other. A vast network of world trade and financial transactions ties us all together. The prosperity o f
every economy rests on that of every other.
More than ever before, this is one world — in economic affairs as in every other way.
Your job, the prosperity of your farm or business, depends directly or indirectly on what happens in
Europe, Asia, Latin America, or Africa.
The health of the international economic system rests on a sound international money in the same way
as the health of our domestic economy rests on a sound domestic money. Today, our domestic money — the
U. S. dollar — is also the money most used in international transactions. That money can be sound at
home — as it surely is — yet can be in trouble abroad — as it now threatens to become.
In the final analysis its strength abroad depends on our earning abroad about as many dollars as we
send abroad.
U. S. dollars flow from these shores for many reasons — to pay for imports and travel, to finance
loans and investments and to maintain our lines of defense around the world.
When that outflow is greater than our earnings and credits from foreign nations, a deficit results in
our international accounts.
For 17 of the last 18 years we have had such deficits. For a time those deficits were needed to help
the world recover from the ravages of W orld War II. They could be tolerated by the United States and
welcomed by the rest of the world. They distributed more equitably the world’s monetary gold reserves
and supplemented them with dollars.
Once recovery was assured, however, large deficits were no longer needed and indeed began to threaten
the strength of the dollar. Since 1961 your government has worked to reduce that deficit.
By the middle of the decade, we could see signs of success. Our annual deficit had been reduced
two-thirds — from $3.9 billion in 1960 to $1.3 billion in 1965.
In 1966, because of our increased responsibility to arm and supply our men in Southeast Asia, progress
was interrupted, with the deficit remaining at the same level as 1965 — about $1.3 billion.

In 1967, progress was reversed for a number of reasons :
— Our costs for Vietnam increased further.
— Private loans and investments abroad increased.
— Our trade surplus, although larger than 1966, did not rise as much as we had expected.
— Americans spent more on travel abroad.
Added to these factors was the uncertainty and unrest surrounding the devaluation of the British
pound. This event strained the international monetary system. It sharply increased our balance of pay
ments deficit and our gold sales in the last quarter of 1967.
The Problem

Preliminary reports indicate that these conditions may result in a 1967 balance of payments deficit
in the area of $3.5 to $4 billion — the highest since 1960. Although some factors affecting our deficit will be
more favorable in 1968, my advisors and I are convinced that we must act to bring about a decisive
improvement.
We cannot tolerate a deficit that could threaten the stability of the international monetary system — of
which the U. S. dollar is the bulwark.
We cannot tolerate a deficit that could endanger the strength of the entire Free W orld economy, and
thereby threaten our unprecedented prosperity at home.
A Time for Action

The time has now come for decisive action designed to bring our balance of payments to — or close
to — equilibrium in the year ahead.
The need for action is a national and international responsibility of the highest priority.
I am proposing a program which will meet this critical need, and at the same time satisfy four
essential conditions:
— Sustain the growth, strength and prosperity of our own economy.
— Allow us to continue to meet our international responsibilities in defense of freedom, in pro
moting world trade, and in encouraging economic growth in the developing countries.
— Engage the cooperation of other free nations, whose stake in a sound international monetary
system is no less compelling than our own.
— Recognize the special obligation of those nations with balance of payments surpluses, to bring
their payments into equilibrium.
The First Order of Business

The first line of defense of the dollar is the strength of the American economy.
No business before the returning Congress will be more urgent than this: To enact the anti-inflation
tax which I have sought for almost a year. Coupled with our expenditure controls and appropriate
monetary policy, this will help to stem the inflationary pressures which now threaten our economic
prosperity and our trade surplus.
No challenge before business and labor is more urgent than this: To exercise the utmost responsibility
in their wage-price decisions, which affect so directly our competitive position at home and in world markets.

I have directed the Secretaries of Commerce and Labor, and the Chairman of the Council of Economic
Advisers to work with leaders of business and labor to make more effective our voluntary program of wageprice restraint.
I have also instructed the Secretaries of Commerce and Labor to work with unions and companies
to prevent our exports from being reduced or our imports increased by crippling work stoppages in the
year ahead.
A sure way to instill confidence in our dollar — both here and abroad — is through these actions.
The New Program

But we must go beyond this and take action to deal directly with the balance of payments deficit.
Some of the elements in the program I propose will have a temporary but immediate effect. Others
will be of longer range.
All are necessary to assure confidence in the American dollar.
1. Direct Investment
Over the past three years, American business has cooperated with the government in a voluntary pro
gram to moderate the flow of U. S. dollars into foreign investments. Business leaders who have participated
so wholeheartedly deserve the appreciation of their country.
But the savings now required in foreign investment outlays are clearly beyond the reach of any volun
tary program. This is the unanimous view of all my economic and financial advisers and the Chairman of
the Federal Reserve Board.
To reduce our balance of payments deficit by at least $1 billion in 1968 from the estimated 1967 level,
I am invoking my authority under the Banking Laws to establish a mandatory program that will restrain
direct investment abroad.
This program will be effective immediately. It will insure success and guarantee fairness among
American business firms with overseas investments.
The program will be administered by the Department of Commerce, and will operate as follows:
— As in the voluntary program, over-all and individual company targets will be set. Authorizations
to exceed these targets will be issued only in exceptional circumstances.
— New direct investment outflows to countries in continental western Europe and other developed
nations not heavily dependent on our capital will be stopped in 1968. Problems arising from
work already in process or commitments under binding contracts will receive special
consideration.
— New net investments in other developed countries will be limited to 65% of the 1965-66 average.
— New net investments in the developing countries will be limited to 110% of the 1965-66 average.
This program also requires businesses to continue to bring back foreign earnings to the United States
in line with their own 1964-66 practices.
In addition, I have directed the Secretary of the Treasury to explore with the Chairmen of the House
Ways and Means Committee and Senate Finance Committee legislative proposals to induce or encourage
the repatriation of accumulated earnings by U. S.-owned foreign businesses.

2. Lending by Financial Institutions
To reduce the balance of payments deficit by at least another $500 million, I have requested and authorized the Federal Reserve Board to tighten its program restraining foreign lending by banks and other
financial institutions.
Chairman Martin has assured me that this reduction can be achieved:
— without harming the financing of our exports;
— primarily out of credits to developed countries without jeopardizing the availability of funds
to the rest of the world.
Chairman Martin believes that this objective can be met through continued cooperation by the financial
community. At the request of the Chairman, however, I have given the Federal Reserve Board standby
authority to invoke mandatory controls, should such controls become desirable or necessary.
3. Travel Abroad
Our travel deficit this year will exceed $2 billion. To reduce this deficit by $500 million:
— I am asking the American people to defer for the next two years all nonessential travel outside
the Western Hemisphere.
— I am asking the Secretary of the Treasury to explore with the appropriate Congressional com
mittees legislation to help achieve this objective.
4. Government Expenditures Overseas
We cannot forego our essential commitments abroad, on which America’s security and survival depend.
Nevertheless, we must take every step to reduce their impact on our balance of payments without
endangering our security.
Recently, we have reached important agreements with some of our NATO partners to lessen the
balance of payments cost of deploying American forces on the Continent — troops necessarily stationed
there for the common defense of all.
Over the past three years, a stringent program has saved billions of dollars in foreign exchange.
I am convinced that much more can be done. I believe we should set as our target avoiding a drain
of another $500 million on our balance of payments.
To this end, I am taking three steps.
First, I have directed the Secretary of State to initiate prompt negotiations with our NATO allies
to minimize the foreign exchange costs of keeping our troops in Europe. Our allies can help in a number
o f ways, including:
— The purchase in the U. S. of more of their defense needs.
— Investments in long-term United States securities.
I have also directed the Secretaries of State, Treasury and Defense to find similar ways of dealing
with this problem in other parts of the world.
Second, I have instructed the Director of the Budget to find ways of reducing the numbers of American
civilians working overseas.
Third, I have instructed the Secretary of Defense to find ways to reduce further the foreign exchange
impact of personal spending by U. S. forces and their dependents in Europe.

Long-Term Measures
5. E xport Increases
American exports provide an important source of earnings for our businessmen and jobs for our
workers.
They are the cornerstone of our balance of payments position.
Last year we sold abroad $30 billion worth of American goods.
What we now need is a long-range systematic program to stimulate the flow of the products of our
factories and farms into overseas markets.
W e must begin now.
Some of the steps require legislation:
1 shall ask the Congress to support an intensified five year, $200 million Commerce Department program
to promote the sale of American goods overseas.
I shall also ask the Co'ngress to earmark $500 million of the Export-Im port Bank authorization to:
— Provide better export insurance.
— Expand guarantees for export financing.
— Broaden the scope of Government financing of our exports.
Other measures require no legislation.
I have today directed the Secretary of Commerce to begin a Joint Export Association program.
Through these Associations, we will provide direct financial support to American corporations joining
together to sell abroad.
And finally, the Export-Import Bank — through a more liberal rediscount system — will encourage
banks across the Nation to help firms increase their exports.
6. Nontariff Barriers
In the Kennedy Round, we climaxed three decades of intensive effort to achieve the greatest reduction
in tariff barriers in all the history of trade negotiations. Trade liberalization remains the basic policy of
the United States.
We must now look beyond the great success of the Kennedy Round to the problems of nontariff
barriers that pose a continued threat to the growth of world trade and to our competitive position.
American commerce is at a disadvantage because of the tax systems of some of our trading partners.
Some nations give across-the-board tax rebates on exports which leave their ports and impose special
border tax charges on our goods entering their country.
International rules govern these special taxes under the General Agreement on Tariffs and Trade.
These rules must be adjusted to expand international trade further.
In keeping with the principles of cooperation and consultation on common problems, I have initiated
discussions at a high level with our friends abroad on these critical matters — particularly those nations
with balance of payments surpluses.
These discussions will examine proposals for prompt cooperative action among all parties to minimize
the disadvantages to our trade which arise from differences among national tax systems.
W e are also preparing legislative measures in this area whose scope and nature will depend upon the
outcome o f these consultations.

V
6

Through these means we are determined to achieve a substantial improvement in our trade surplus
over the coming years. In the year immediately ahead, we expect to realize an improvement of $500
million.
7. Foreign Investment and Travel in U. S.
We can encourage the flow of foreign funds to our shores in two other ways:
— First, by an intensified program to attract greater foreign investment in U. S. Corporate
securities, carrying out the principles of the Foreign Investors Tax Act of 1966.
— Second, by a program to attract more visitors to this land. A Special Task Force headed by
Robert McKinney of Santa Fe, New Mexico, is already at work on measures to accomplish this.
I have directed the Task Force to report within 45 days on the immediate measures that can
be taken, and to make its long-term recommendations within 90 days.
Meeting the World’s Reserve Needs

Our movement toward balance will curb the flow of dollars into international reserves. It will there
fore be vital to speed up plans for the creation of new reserves — the Special Drawing Rights — in the
International Monetary Fund. These new reserves will be a welcome companion to gold and dollars, and
will strengthen the gold exchange standard. The dollar will remain convertible into gold at $35 an ounce,
and our full gold stock will back that commitment.
A Time for Responsibility

The program I have outlined is a program of action.
It is a program which will preserve confidence in the dollar, both at home and abroad.
The U. S. dollar has wrought the greatest economic miracles of modern times.
It stimulated the resurgence of a war-ruined Europe.
It has helped to bring new strength and life to the developing world.
It has underwritten unprecedented prosperity for the American people, who are now in the 83d
month of sustained economic growth.
A strong dollar protects and preserves the prosperity of businessman and banker, worker and farmer
— here and overseas.
The action program I have outlined in this message will keep the dollar strong. It will fulfill our
responsibilities to the American people and to the Free World.
I appeal to all of our citizens to join me in this very necessary and laudable effort to preserve our
country’s financial strength.

THE PRESIDENT

Executive Order 11387
G O V E R N IN G CER T AIN CAPITAL TRANSFERS A B R O A D

B y virtue o f the authority vested in the President by section 5 (b) of
the act o f October 6,1917, as amended (12 U.S.C. 95a), and in view of
the continued existence of the national emergency declared by Procla
mation No. 2914 o f December 16,1950, and the importance of strength
ening the balance o f payments position of the United States during
this national emergency, it is hereby ordered:
1. (a) A ny person subject to the jurisdiction of the United States
who, alone or together with one or more affiliated persons, owns or
acquires as much as a 10% interest in the voting securities, capital or
earnings o f a foreign business venture is prohibited on or after the
effective date o f this Order, except as expressly authorized by the
Secretary o f Commerce, from engaging in any transaction involving
a direct or indirect transfer of capital to or within any foreign coun
try or to any national thereof outside the United States.
(b) The Secretary o f Commerce is authorized to require, as he
determines to be necessary or appropriate to strengthen the balance
o f payments position o f the United States, that any person subject to
the jurisdiction o f the United States who, alone or together with one
or more affiliated persons, owns or acquires as much as a 10% interest
in the voting securities, capital or earnings o f one or more foreign
business ventures shall cause to be repatriated to the United States
such part as the Secretary of Commerce may specify o f (1) the earn
ings o f such foreign business ventures which are attributable to such
person’s investments therein and (2) bank deposits and other short
term financial assets which are held in foreign countries by or for the
account o f such person. Any person subject to the jurisdiction of the
United States is required on or after the effective date o f this Order, to
comply with any such requirement of the Secretary o f Commerce.
(c) The Secretary o f Commerce shall exempt from the provisions
o f this section 1, to the extent delineated by the Board o f Governors
o f the Federal Reserve System (hereinafter referred to as the Board),
banks or financial institutions certified by the Board as being subject to
the Federal Reserve Foreign Credit Restraint Programs, or to any pro
gram instituted by the Board under section 2 o f this Order.
2. The Board is authorized in the event that it determines such ac
tion to be necessary or desirable to strengthen the balance o f payments
position o f the United States:
(a) to investigate, regulate or prohibit any transaction by any bank
or other financial institution subject to the jurisdiction o f the United
States involving a direct or indirect transfer o f capital to or within
any foreign country or to any national thereof outside the United
States; and
(b ) to require that any bank or financial institution subject to the
jurisdiction o f the United States shall cause to be repatriated to the
United States such part as the Board may specify o f the bank deposits
and other short term financial assets which are held in foreign countries
by or for the account o f such bank or financial institution. Any bank
or financial institution subject to the jurisdiction o f the United States
shall comply with any such requirement o f the Board on and after its
effective date.
3. The Secretary o f Commerce and the Board are respectively au
thorized, under authority delegated to each o f them under this Order
or otherwise available to them, to carry out the provisions o f this
Order, and to prescribe such definitions for any terms used herein, to
issue such rules and regulations, orders, rulings, licenses and instruc
tions, and to take sucli other actions, as each o f them determines to be
necessary or appropriate to carry out the purposes o f this Order and

THE PRESIDENT

their respective responsibilities hereunder. The Secretary o f Com
merce and the Board may each redelegate to any agency, instrumen
tality or official o f the United States any authority under this Order,
and may, in administering this Order, utilize the services o f any other
agencies, Federal or State, which are available and appropriate.
4. The Secretary o f State shall advise the Secretary o f Commerce
and the Board with respect to matters under this Order involving for
eign policy. The Secretary of Commerce and the Board shall consult as
necessary and appropriate with each other and with the Secretary o f
the Treasury.
5. The delegations o f authority in this Order shall not affect the
authority o f any agency or official pursuant to any other delegation o f
presidential authority, presently in effect or hereafter made, under sec
tion 5 (b ) o f the act o f October 6,1917, as amended (12 U.S.C. 95a).

h it e

ouse

10:45 a.m.,
Jan. 1,1968,
L .B J . Ranch.
[F.R. Doc. 68-112 ; Filed, Jan. 1,1968; 6 : 05 p.m.]

RULES A N D REGULATIONS

Title 15— COMMERCE AND
FOREIGN TRADE
Chapter X — Office of Foreign Direct
Investments, Departm ent of C o m
merce
PART 1000— FO R E IG N DIRECT
IN V E S T M E N T R EG U LA T IO N S
Foreign Direct Investment by
Persons in United States
The regulations set out below imple
ment Executive Order 11387, January 1,
1968, governing foreign direct invest
ments. Since a foreign affairs function
of the United States is involved, the re
quirements of 5 U.S.C. 553 are not appli
cable. In any event, because of the
urgency of the present situation relating
to the international balance of payments
and the desirability of immediate action
by the Government of the United States,
it is hereby found that notice and public
procedures prior to the promulgation of
these regulations are impracticable and
contrary to the public interest. For the
same reasons, it is found that these
regulations must be made effective imme
diately. The reporting and record-keep
ing requirements provided therein have
been approved by the Bureau of the
Budget in accordance with the Federal
Reports Act of 1942, as amended.
S u b p a rt A — R elatio n of This Part to O ther L aw s
a n d R egu la tio n s

Sec.
1000.101

Relation o f this part to other laws
and regulations.

Sec.
1000.403
1000.404

Transactions between principal
and agent.
Distribution, apportionm ent or
allocation o f earnings.

S u b p a rt E— A u th o rization s or Exem ption s

1000.501
1000.502
1000.503

Effect of subsequent authorization
or exemption.
Exclusion from authorization or
exemption.
Direct investm ent n ot exceeding
$ 100 , 0 0 0 .

1000.504
1000.505

Transfers of capital.
Transfer of capital between foreign
countries.
S u b p art F— Records a n d Reports

1000.601
1000.602

Records.
Reports.

1000.701

Penalties.

1000.801

Applications for specific authoriza
tions and exemptions.
Amendment, modification, or revo
cation.
Rules governing availability of
inform ation.
Delegations.

S u b p art G— P en a lties

S u b p a rt H— Proced ures

1000.802
1000.803
1000.804

A u t h o r i t y : The provision of this Part 1000
issued under sec. 5 of the A ct of October 6,
1917, 40 Stat. 415, as amended, 12 U.S.C. 95a;
E.O. 11387, Jan. 1, 1968, 33 F.R. 47.

Subpart A — Relation of This Part to
Other Law s and Regulations
§ 1000.101
Relation o f this part to other
laws and regulations.
(a) This part is independent of Title
31 CFR, Chapter V. The prohibitions con
tained in this part are in addition to the
prohibitions contained in said Chapter
V. No license contained in or issued pur
suant to said Chapter V shall be deemed
to authorize any transaction prohibited
by this part, nor shall any license or
authorization issued pursuant to any
other provision of law be deemed to
authorize any transaction so prohibited.
(b) No authorization or exemption
contained in or issued pursuant to this
part shall be deemed to authorize any
transaction to the extent that it is pro
hibited by reason of the provisions of any
law or statute other than 12 U.S.C. 95a,
as amended, or any proclamation, order,
or regulation other than those contained
in or issued pursuant to Executive Order
11387 or this part.
(c) No authorization or exemption
contained in or issued pursuant to this
part shall be deemed to authorize any
transaction to the extent that it is pro
hibited by reason of the provisions of
any part of Title 31 CFR.

direct investor are prohibited on or afte?
the effective date, if any such transaction
involves a direct or indirect transfer of
capital to or within any foreign country
directly or indirectly to or for the account
of or for the benefit of any affiliated
foreign national of such direct investor:
(1) Any transfer of credit;
(2) Any
payment
between,
by,
through, or to any banking institution
or banking institutions wheresoever
located;
(3) Any transaction in foreign ex
change;
(4) Any direct or indirect acquisition
of, or any holding, transfer of or dealing
in, or any exercise of any right, power
or privilege with respect to any property
located in a foreign country.
(b) All transactions prohibited by sec
tion 1 of Executive Order 11387 which
are not prohibited by this part are hereby
authorized; provided, however, that any
person failing to make timely compliance
with the reporting requirements of Sub
part F of this part is ineligible there
after to avail itself of this general au
thorization.
(c) To the extent that may be deline
ated from time to time by the Board of
Governors of the Federal Reserve Sys
tem, nothing in this part shall apply to
any bank or other financial institution
certified by the Board as being subject
to the Federal Reserve Foreign Credit
Restraint Programs, or to any program
instituted by the Board under Section 2
of Executive Order 11387.
§ 1000.202 Repatriation
vestment earnings.

direct

(a) Except as specifically authorized
by the Secretary by means of regulations,
1000.201 Transfers o f capital to affiliated
rulings, instructions, authorizations, li
foreign nationals involving for
censes, exemptions, waivers, or otherwise,
eign direct investment.
each direct investor is hereby required
1000.202 Repatriation o f direct investment
to transfer, not less often than once a
earnings.
year, from Schedule A countries, or na
1000.203 Liquid foreign balances o f direct
tionals thereof, to an account owned by
investors.
such direct investor denominated in U.S.
1000.204 Evasion.
dollars at a domestic bank, an amount
Su b p a rt C— G e n e ra l D efinitions
representing earnings from affiliated
1000.301 Foreign country.
foreign nationals in such countries which
1000.302 Foreign national.
is not less than the greater o f:
1000.303 Nationals o f more than one foreign
(1) The same percentage of total
country.
earnings during each year of affiliated
1000.304 Direct investor.
foreign nationals in all Schedule A coun
1000.305 Affiliated foreign national.
tries attributable to such direct investor’s
1000.306 Direct investment.
interest therein as the percentage of
1000.307 Person.
1000.308 Transfer.
such total earnings so attributable which
1000.309 Property; property interest.
was repatriated to the United States dur
1000.310 Interest.
ing the years 1964, 1965, and 1966, in
1000.311 Banking institution.
clusive; or
1000.312 Transfer o f capital.
(2) That portion of total earnings
1000.313 Reinvested earnings.
during each year of affiliated foreign na
1000.314 Authorization and exemption.
tionals in all Schedule A countries at
1000.315 General authorization and exemp
tion.
tributable to such direct investor’s in
Subpart B— Prohibitions
1000.316 Specific authorization and exemp
terest therein that exceeds the amount
§ 1000.201 Transfers o f capital to affil
tion.
of such earnings, reinvestment of which
iated foreign nationals involving fo r
1000.317 D omestic bank.
may occur within the limits of direct
eign direct investments.
1000.318 United States.
investment authorized in such countries
1000.319 Schedule A, B, C, countries.
(a)
Except as specifically authorizedfor that year in accordance with
1000.320 Effective date.
by the Secretary of Commerce (herein § 1000.504(a) (1).
1000.321 Year.
after referred to as the Secretary) by
(b) Except as specifically authorized
1000.322 W ithin the United States.
means of regulations, rulings, instruc by the Secretary by means of regulations,
S u b p a rt D— In terp retatio n s
tions, authorizations, licenses, waivers, or rulings, instructions, authorizations, li
exemptions or otherwise, all of the fol censes, exemptions, waivers, or otherwise,
1000.401 Reference to amended sections.
1000.402 Effect o f am endm ent of sections of lowing transactions directly or indirectly each direct investor is hereby required to
this part or o f other orders, etc. by or on behalf of or for the benefit of a transfer not less often than once a year
S u b p a rt B— Prohibition s

RULES A N D REGULATIONS
from Schedule B countries, or nationals
thereof, to an account owned by such
direct investor denominated in U.S. dol
lars at a domestic bank, an amount rep
resenting earnings from affiliated foreign
nationals in such countries which is not
less than the greater of:
(1) The same percentage of total
earnings during each year of affiliated
foreign nationals in all Schedule B coun
tries attributable to such direct investor’s
interest therein as the percentage of such
total earnings so attributable which was
repatriated to the United States during
the years 1964, 1965, and 1966, inclusive;
or
(2) That portion of total earnings
during each year of affiliated foreign
nationals in all Schedule A countries
attributable to such direct investor’s
interest therein that exceeds the amount
of such earnings, reinvestment of which
may occur within the limits of direct
investment authorized in such countries
for that year in accordance with
§ 1000.504(a) (2).
(c) Except as specifically authorized
by the Secretary by means of regulations,
rulings, instructions, authorizations, li
censes, exemptions, waivers, or otherwise,
each direct investor is hereby required to
transfer not less often than once a year
from Schedule C countries, or nationals
thereof, to an account owned by such
direct investor denominated in U.S. dol
lars at a domestic bank an amount
representing earnings from affiliated
foreign nationals in such countries which
is not less than the greater of:
(1) The same percentage of total earn
ings during each year of affiliated for
eign nationals in all Schedule C countries
attributable to such direct investor’s
interest therein as the percentage of such
total earnings so attributable which was
repatriated to the United States during
the years 1964, 1965, and 1966, inclusive;
or
(2) That portion of total earnings
during each year of affiliated foreign na
tionals in all Schedule C countries at
tributable to such direct investor’s inter
est thereiii that exceeds 35 percent of the
average of direct investment by the di
rect investor in all Schedule C countries
during the years 1965 and 1966 inclusive,
all in conformity with § 1000.504(a)(3).
(d) In making computations under
this section, earnings shall, where ap
propriate, be computed and/or prorated
and other proper adjustments made in
accordance with accounting principles
generally accepted in the United States
and consistently applied; Provided, That
the Secretary shall have the right in his
discretion to disapprove any such ac
counting principles determined by him
to be inconsistent with the purpose of
this part and to prescribe such principles
as he may deem appropriate to carry
out the purposes of this part.
(e) Repatriation of earnings under
this section is not required where the re
investment of the entire amount of such
earnings is authorized by § 1000.503.

§ 1000.203 Liquid foreign balances o f
direct investors.
(a) Except as specifically authorized
by the Secretary by means of regulations,
rulings, instructions, authorizations, li
censes, exemptions, waivers or otherwise,
each direct investor is hereby required,
on or before June 30, 1968, to reduce the
amount of all bank deposits and other
short-term financial assets held by or for
the account or for the benefit of such di
rect investor in all foreign countries
designated in each of Schedules A, B, and
C by persons other than affiliated foreign
nationals to an amount not in excess of
the average end-of-month amounts of
the same so held by or for the account
of or for the benefit of such direct inves
tor during 1965 and 1966 inclusive; to
transfer on or before such date funds
resulting from such reductions to an
account owned by such direct investor
denominated in U.S. dollars at a do
mestic bank; and, thereafter, to transfer
funds to an account owned by such direct
investor denominated in U.S. dollars at a
domestic bank in amounts sufficient to
limit the amount of such deposits and
assets at the end of any month to such
reduced amount of such bank deposits
and other short-term financial assets.
(b) For the purposes of this section the
term “short-term financial assets” in
cludes, but not by way of limitation: Ne
gotiable and readily transferable com
mercial and financial instruments, in
cluding obligations of foreign govern
ments.
§ 1000.204

Evasion.

Anything in this part to the contrary
notwithstanding, any transaction for the
purpose of, or which has the effect of,
evading or avoiding any of the provisions
set forth in this part may be disregarded
in whole or in part for purposes of meas
uring compliance with the provisions of
this part.

Subpart C— General Definitions
§ 1000.301

Foreign country.

The term “ foreign country” includes,
but not by way of limitation:
(a) The state and the government of
any foreign country as well as any politi
cal subdivision, agency, or instrumen
tality thereof or any territory, depen
dency, colony, protectorate, mandate,
dominion, possession or place subject to
the jurisdiction thereof.
(b) Any other government (including
any political subdivision, agency, or in
strumentality thereof) to the extent and
only to the extent that such government
exercises or claims to exercise control,
authority, jurisdiction or sovereignty
over territory which constitutes such for
eign country.
(c) Any person to the extent that such
person is, or to the extent that there is
reasonable cause to believe that such per
son is, acting or purporting to act di
rectly or indirectly for the benefit or on
behalf of any of the foregoing.
(d) Any territory which is controlled
or occupied by the military, naval or
police forces or other authority of a
foreign country.

§ 1000.302

Foreign national.

The terms “foreign national” and “na
tional” of a foreign country shall in
clude:
(a) A subject or citizen of, or any per
son domiciled or resident in, a foreign
country.
(b) Any partnership, association, cor
poration, trust, estate, or other organiza
tion outside the United States organized
under the laws of, or which has its prin
cipal place of business in, a foreign coun
try, or any partnership, association, cor
poration, trust, estate, or other organiza
tion outside the United States which is
controlled by, or a substantial part of the
stock, shares, bonds, debentures, notes,
drafts, or other securities or obligations
of which, is owned or controlled by, di
rectly or indirectly, a foreign country or
one or more foreign nationals thereof.
(c) Any subsidiary, branch, division,
or other subpart outside the United
States, regardless of the place or or
ganization, of a person within the United
States shall be considered a foreign na
tional if the same is engaged in trade
or business in a foreign country.
(d) Any person to the extent that
such person is acting or purporting to act
directly or indirectly for the benefit or on
behalf of any national of a foreign
country.
(e) Any other person which there is
reasonable cause to believe is a “ foreign
national” as defined in this section. The
Secretary retains full power to determine
that any person is or shall be deemed to
be a “ foreign national” within the mean
ing of this section, and to specify the
foreign country of which such person is
or shall be deemed to be a national.
§ 1000.303 Nationals o f m ore than one
foreign country.
(a) Any person who by virtue of any
provision in this part is a national of
more than one foreign country shall be
deemed to be a national of each of such
foreign countries.
(b) In any case in which a person is
a national of two or more foreign coun
tries, an authorization or exemption with
respect to nationals of one of such for
eign countries shall not be deemed to
apply to such person unless an authori
zation or exemption of equal or greater
scope is outstanding with respect to such
person as a national of each other for
eign country.
§ 1000.304

Direct investor.

The term “direct investor” means any
person within the United States who
directly or indirectly owns or acquires:
(a) Ten percent or more of the total
combined voting power of any foreign
national; or
(b) The right or power to receive, con
trol, or otherwise enjoy 10 percent or
more of the earnings, receipts, income or
profits of any foreign national; or
(c) The right or power to receive, con
trol or otherwise direct the disposition of
10 percent or more of the assets of any
foreign national upon the liquidation,
termination, or winding up thereof.

RULES A N D REGULATIONS
§ 1000.305

Affiliated foreign national.

The term “affiliated foreign national”
means any foreign national in which a
person within the United States is a
direct investor.

be regarded as a separate
institution” .
§ 1000.312

“banking

Transfer o f capital.

The term “ transfer of capital” shall
mean a transfer of capital, directly or
indirectly, by or on behalf of, or for the
§ 1000.306 Direct investment.
The term “ direct investment” means: benefit of, a direct investor directly or
indirectly to or on behalf of, or for the
(a)
The act of making a transfer of
benefit of an affiliated foreign national
capital or the capital so transferred; and
<b) The share of a direct investor in including but not by way of limitation:
<a) A net contribution to the capital
reinvested earnings of an affiliated for
of an affiliated foreign national;
eign national or the accrual thereof.
(b) The acquisition of an interest in,
§ 1000.307 Person.
or an increase in net interest in, an affil
The term “person” means an individ iated foreign national;
(c) The acquisition of an obligation
ual,
partnership,
association, trust,
estate, corporation, or other organiza of an affiliated foreign national, regard
tion. For purposes of § 1000.304 and less of the maturity date of the obliga
wherever appropriate in the context, a tion, to the extent the principal amount
person within the United States shall of all such obligations exceeds that of
mean and include all members of an obligations of the direct investor ac
affiliated or associated group within the quired by such foreign national;
(d) A net increase in loans or ad
United States.
vances upon open account to an affiliated
§ 1000.308 Transfer.
foreign national;
(e) Any transfer to any other person,
The term “transfer” means any ac
tual or purported act or transaction, wheresoever located, in satisfaction of
whether or not evidenced by writing, and an obligation of a direct investor in
whether or not done or performed with curred as a result of (1) a guarantee of
in the United States, the purpose, intent, an obligation of an affiliated foreign
or effect of which is to create, surrender, national or (2) the assumption of a lia
release, transfer, or alter, directly or bility of an affiliated foreign national.
indirectly, any right, remedy, power, § 1000.313 Reinvested earnings.
privilege, or interest with respect to any
The term “ reinvested earnings” shall
property and without limitation upon
the foregoing shall include the making, mean the earnings of an affiliated foreign
execution, or delivery of any assignment, national available at any time for dis
power, conveyance, check, declaration, tribution and not so distributed.
deed, deed of trust, power-of attorney,
power of appointment, bill of sale, mort
gage, receipt, agreement, contract, certif
icate, gift, sale, affidavit, or statement;
the appointment of any agent, trustee,
or other fiduciary; the creation or trans
fer of any lien; the acquisition of any
interest of any nature whatsoever by
reason of a judgment or decree of any
foreign country; the fulfillment of any
condition, or the exercise of any power
of appointment, power of attorney, or
other power.
§ 1000.309

Property; property interest.

The terms “property” and “property
interest” include any property, real, per
sonal, or mixed, tangible or intangible,
or interest or interests therein, present,
future or contingent.
§ 1000.310

Interest.

The term “interest” when used with
respect to property shall mean an inter
est of any nature whatsoever, direct or
indirect.
§ 1000.31 I

Hanking institution.

The term “ banking institution” shall
include any person engaged primarily
or incidentally in the business of bank
ing, or granting or transferring credits,
or of purchasing or selling foreign ex
change or procuring purchasers and
seller thereof, as principal or agent, or
any person holding credits for others as
a direct or incidental part of his business,
or any broker; and, each principal,
agent, home office, branch, or corre
spondent of any person so engaged shall

§ 1000.314
tion.

Authorization

and

exem p

Except as otherwise specified, the terms
“ authorization” and “exemption” shall
mean, respectively, any authorization or
exemption contained in or issued pursu
ant to this part.
§ 1000.315 General
exemption.

authorization

and

The terms “general authorization” and
“ general exemption” mean those author
izations and exemptions, the terms of
which are set forth in this part.
§ 1000.316 Specific
exemption.

authorization

and

The terms “specific authorization” and
“specific exemption” mean those author
izations and exemptions issued pursuant
to this part but not set forth in this part.
§ 1000.317

Domestic hank.

The term “domestic bank” shall mean
any branch or office within the United
States of any of the following which is
not a foreign national: Any bank or trust
company incorporated under the bank
ing laws of the United States or of any
State, territory, insular possession, the
Commonwealth of Puerto Rico, or dis
trict of the United States, or any private
bank or banker subject to supervision
and examination under the banking laws
of the United States or of any State, ter
ritory, insular possession, the Common
wealth of Puerto Rico, or district of the
United States. The Secretary may also
authorize any other banking institution
to be treated as a “ domestic bank” for

the purpose of this definition or for the
purpose of any or all sections of this part.
§ 1000.318 United States.
The term “United States” means the
United States and all areas under the
jurisdiction or authority thereof.
§ 1000.319

Schedule A, B, C, countries.

(a) Schedule A countries are all foreign
countries designated as less developed
countries in the Executive order, as from
time to time in force, issued under section
4916 of the Internal Revenue Code.
<b) Schedule B countries are such
other foreign countries as the Secretary
may determine to be developed countries
in which a high level of capital inflow
is essential for the maintenance of eco
nomic growth and financial stability, and
where those requirements cannot be ade
quately met from non-U.S. sources. The
following countries are hereby deter
mined to fall in this category: Abu
Dhabi, Australia, The Bahamas, Bah
rain, Bermuda, Canada, Hong Kong,
Iran, Iraq, Ireland, Japan, Kuwait, Kuwait-Saudi Arabia Neutral Zone, Libya,
New Zealand, Qatar, Saudi Arabia, and
the United Kingdom.
(c)
Schedule C countries are all for
eign countries not included as Schedule
A or B countries.
<d) The Secretary may in his discre
tion, from time to time, transfer any
foreign country from any one of the
Schedules to another.
§ 1000.320

Effective date.

The term “effective date” means 12:00
noon eastern standard time of January
1, 1968.
§ 1000.321 Year.
Unless otherwise specified, the term
“year” or “portion of a year” means a
calendar year or a portion thereof.
§ 1000.322 Within the United States.
(a)
As applied to any person the term
“within the United States” , includes:
(1) A person, wheresoever located,
who is a resident of the United States;
(2) A person actually within the
United States; and
(3) A corporation organized under the
laws of the United States or of any State,
territory, possession. District of Colum
bia, or the Commonwealth of Puerto
Rico.
(b' A subsidiary, branch, division or
other subpart of a foreign national
which constitutes a permanent estab
lishment within the United States shall
be considered a person within the United
States for purposes of this part except
that nothing herein contained shall limit
a bona fide transfer of capital in the
ordinary and customary course of busi
ness by such subsidiary, branch, division
or other subpart to and for the benefit
of its parent organization.

Subpart D— Interpretations
§ 1000.101 Reference to amended seclions.
Reference to any section of this part
or to any regulation, ruling, order, in
struction, direction, authorization, li
cense or exemption issued pursuant to

RULES A N D REGULATIONS
this part shall be deemed to refer to the
same as currently amended unless other
wise so specified.

tion shall be binding upon all persons
receiving actual notice or constructive
notice thereof.

§ 1000.402 Effect o f amendment o f sec
tions o f this part or o f other orders,
etc.

§ 1000.503 Direct investment not ex
ceeding $100,000.

Any amendment, modification, or
revocation of any section of this part or
of any order, regulation, ruling, instruc
tion, authorization, license, or exemption
issued by or under the direction of the
Secretary pursuant to 12 U.S.C. 95a, as
amended, shall not unless otherwise
specifically provided be deemed to affect
any act done or omitted to be done, or
any suit or proceeding had or com
menced in any civil or criminal case,
prior to such amendment, modification,
or revocation, and all penalties, for
feitures, and liabilities under any such
section, order, regulation, ruling, in
struction, authorization, license, or
exemption shall continue in effect and
may be enforced as if such amendment,
modification, or revocation had not been
made.
§ 1000.403 Transactions between prin
cipal and agent.
A transaction between any person
within the United States and any princi
pal, agent, home office, branch, subsid
iary, affiliate, division, subpart, or cor
respondent outside the United States of
such person is a transaction prohibited
by § 1000.201 to the same extent as if
the parties to the transaction had no
such relationship.
§ 1000.404 Distribution, apportionment
or allocation o f earnings.
In any case of two or more organiza
tions, trades or businesses owned or con
trolled directly or indirectly by the same
interests, the Secretary may distribute,
apportion or allocate earnings or any
component of earnings, if he determines
that such distribution, apportionment,
or allocation is necessary or appropriate
clearly or properly to reflect earnings
attributable to a direct investor’s interest
in affiliated foreign nationals or other
wise to carry out the purposes of this
part.

Subpart E— Authorizations or
Exem ptions
§ 1000.501 Effect o f subsequent author
ization or exem ption.
No authorization or exemption con
tained in this part, or issued by or under
the direction of the Secretary pursuant
to this part, shall be deemed to authorize
or validate any transaction effected prior
to the issuance thereof, unless such au
thorization or other exemption specifi
cally so provides.
§ 1000.1>02 Exclusion
tion or exemption.

from

authoriza

The Secretary reserves the right to
exclude from the operation of any au
thorization or exemption or from the
privileges therein conferred, or to re
strict the applicability thereof with re
spect to particular persons, transactions
or property or classes thereof. Such ac

http://fraser.stlouisfed.org/
1Reserve Bank of St. Louis
Federal
I

During any year direct investment by
any direct investor in all foreign coun
tries, not amounting in the aggregate
to more than $100,000, are hereby
authorized.
§ 1000.504

Transfers o f capital.

(a) Subject to the provisions of para
graphs (b) and (c) of this section, the
following provisions of this section shall
apply to aggregate direct investment in
excess of $100,000 in any year without
regard to the provisions of § 1000.503.
(1) Transfers of capital during any
year to any Schedule A country or na
tional thereof are authorized provided
that such transfers do not result in di
rect investment during that year exceed
ing 110 percent of the average of direct
investment by the direct investor in all
Schedule A countries, or nationals
thereof, during the years 1965 and 1966
inclusive.
(2) Transfers of capital during any
year to any Schedule B country or na
tional thereof are authorized provided
that such transfers do not result in direct
investment during such year exceeding
65 percent of the average of direct in
vestment by the direct investor in all
Schedule B countries, or nationals there
of, during the years 1965 and 1966
inclusive.
(3) Except as authorized in this part,
a moratorium exists on transfers of capi
tal during any year to any Schedule C
country or national thereof. Reinvest
ment during any year of a direct inves
tor’s share of earnings in Schedule C
countries is authorized provided that
the aggregate of such reinvested earnings
in Schedule C countries, in conformity
with the provisions of § 1000.202, does
not result in direct investment in that
year exceeding 35 percent of the average
of direct investment by the direct inves
tor in all Schedule C countries or na
tionals thereof during the years 1965 and
1966 inclusive.
(b) In determining whether a trans
fer of capital during any year is author
ized by this section, both the amount of
direct investment during that year and
the average amount of direct investment
during the years 1965 and 1966 inclusive,
shall be calculated by deducting such
portion of net borrowings by the direct
investor from foreign nationals other
than affiliated foreign nationals as is or
was expended in such direct investment:
Provided, however, That amounts so bor
rowed evidenced by short term instru
ments with an original maturity of less
than 12 months which are readily mar
ketable in the ordinary course of business
shall not be so deducted.
(c) The Secretary reserves the right at
any time to exclude any direct investor
from any or all of the privileges of this
section.

§ 1000.505 Transfer o f capital between
foreign countries.
Nothing contained in this part shall
prohibit a transfer of capital between
foreign nationals outside the United
States who are nationals of the same
foreign country or of two or more foreign
countries in the same Schedule contained
in § 1000.319. A transfer of capital be
tween foreign nationals outside the
United States who are nationals of coun
tries listed in different Schedules is here
by authorized except that if the trans
feror or transferee foreign national is
an affiliated foreign national acting by,
or on behalf of or for the benefit of a
direct investor:
(a) A transfer from a national of a
Schedule C or Schedule B country to a
national of a Schedule A country, or
from a national of a Schedule C country
to a national of a Schedule B country is
authorized only to the extent that the
amount of the transfer, taken together
with other authorized transfers of such
direct investor, does not exceed in any
year the limits authorized with respect to
such direct investor in § 1000.504 of this
part; and
(b) A transfer from a national of a
Schedule A or B country to a national
of a Schedule C country, or from a na
tional of a Schedule A country to a na
tional of a Schedule B country is not
authorized.

Subpart F— Records and Reports
§ 1000.601

Records.

Every person subject to the provisions
of this part shall keep in the United
States a full and accurate record of each
transaction engaged in by it which is
subject to the provisions of this part,
regardless of whether such transaction
is effected pursuant to authorization or
otherwise, and of every other transac
tion between such person and an affili
ated foreign national. Such records shall
be available for examination for at least
2 years after the date of the transactions
to which they relate.
§ 1000.602

Reports.

(a)
Every person is required to furnish
under oath, in the form of reports or
otherwise, from time to time and at any
time as may be required by the Secretary,
complete information relative to any
transaction with respect to which rec
ords are required to be kept under this
part. The Secretary may require that
such reports include the production of
any books of account, contract, letters, or
other papers, connected with any such
transaction or property, in the custody or
control of the persons required to make
such reports. Complete information with
respect to transactions may be required
either before or after such transactions
are completed. The Secretary may,
through any person or agency, investigate
any such transaction or property or any
violation of the provisions of this part,
regardless of whether any report has
been required or filed in connection
therewith.

RULES A N D REGULATIONS
(b)
The following reports are required
Subpart H— Procedures
to be filed by direct investors with the
§
1000.801
Applications for specific au
Office of Foreign Direct Investments, De
thorizations and exemptions.
partment of Commerce, Washington,
Transactions subject to the prohibi
D.C. 20230;
(1) Form CDFDI— 101, Based Period tions contained in this part which are
Report. This report is to be filed by not authorized by general authorization
March 15, 1968, or on the date its first may be effected only under specific
quarterly report is due, whichever is authorization. Persons subject to the
requirements of this part may be
earlier.
(2) Form CDFDI— 102, Quarterly Re exempted from complying with any par
port. This report must be filed within 45 ticular requirement imposed by this part
days from the close of each quarter of only through a specific exemption.
(a) General procedure. Applications
a year.
for specific authorizations to engage in
Subpart G — Penalties
any transaction prohibited, or for spe
cific exemptions to be exempted or to
§ 1000.701
Penalties.
deviate from any particular requirement
(a) Attention is directed to 12 U.S.C. imposed, by or pursuant to this part,
are to be filed in duplicate with the
95a, which provides in part:
Director, Office of Foreign Direct Invest
Whoever w illfully violates any of the pro ments, Department of Commerce, W ash
visions o f this section or of any license, order, ington, D.C. 20230. Any person affected
rule, or regulation issued thereunder, shall, by the provisions contained in this part
upon conviction, be fined n ot more than
$10,000, or, if a natural person, may be im may file such an application.
(b) Information to be supplied. Appli
prisoned for not more than 10 years, or both;
and any officer, director, or agent of any cants must supply all relevant informa
tion. Such documents as may be relevant
corporation who knowingly participates in
such violation may be punished by a like shall be attached to each application as
fine, imprisonment, or both. As used in this a part thereof, except that documents
section the term “ person” means an individ previously filed with the Director, may,
ual, partnership, association, or corporation.
where appropriate, be incorporated by
This section is applicable to violations reference. Applicants may be required to
furnish such further information as may
of any provision of this part and to vio
lations of the provisions of any license, be requested by the Director. An appli
ruling, regulation, order, direction or in cant or other party in interest may fur
struction issued by or pursuant to the nish additional information or present
direction or authorization of the Secre views concerning the application at any
tary pursuant to this part or otherwise time before a decision has been rendered.
Arrangements for oral presentation
under such section.
should be made with the Director.
(b) Attention is also directed to 18
(c) Decision. Prompt notice of action
U.S.C. 1001, which provides:
taken on an application shall be com
Whoever, in any matter within the Jurisdic municated to the applicant. Whenever an
tion o f any department or agency o f the application is denied, such notice shall
United States knowingly and w illfully falsi be accompanied by a simple statement
fies, conceals, or covers up by any trick, of the grounds therefor. The decision
scheme, or device a material fact, or makes on the application shall constitute final
any false, fictitious, or fraudulent statements
agency action.
or representations, or makes or uses any false
(d) Effect of denial. The denial of an
writing or docum ent knowing the same to
contain any false, fictitious or fraudulent application does not preclude the matter
from being reopened at the request of
statement or entry, shall be fined not more
than $10,000 or imprisoned n ot more than
the applicant, or the filing of a new
5 years, or both.
application.

(e)
Terms and conditions of specific
licenses and exemptions. Any specific
license or exemption is issued subject
to all the terms, conditions and special
requirements contained therein.
§ 1000.802 Amendment,
or revocation.

m odification,

The provisions of this part and any
rulings, licenses, exemptions, authoriza
tions, instructions, orders, or forms
issued thereunder may be amended, mod
ified, or revoked at any time. In general,
the public interest requires that such
amendments, modifications, or revoca
tions be made without prior notice.
§ 1000.803 Rules governing availability
o f inform ation.
(a) The information, records, and
other material of the Office of Foreign
Direct Investments required by 5 U.S.C.
552 to be made available to the public
shall be made available in accordance
with the provisions of Department Order
64 of the Secretary of Commerce (32 F.R.
9643 of July 4, 1967).
(b) Forms CDFDI— 101 and 102 and
any other forms used in connection with
the Foreign Direct Investment Regula
tions may be obtained in person from or
by writing to the Director, Office of For
eign Direct Investments, Department of
Commerce, Washington, D.C. 20230.
§ 1000.804

Delegations.

Any function, duty or authority under
these regulations may be performed or
exercised by the Secretary or by any
person, agency or instrumentality desig
nated by him (directly or indirectly by
one or more redelegations of authority)
and the term “ Secretary” as used in
these regulations shall include any such
designated person, agency, or instru
mentality, as applicable.
Signed at Washington, D.C., this 1st
day of January 1968.
A. B. T row brid g e ,
Secretary of Commerce.
[F.R.

Doc.

68-114; Piled,
6:44 p.m.]

Jan.

1968;

N O T IC ES
otherwise by law, and subject to such
policies, limitations and directions as the
Secretary may prescribe, the Director is
Office of the Secretary
hereby delegated the functions, authori
ties, and responsibilities given to the
[Department Order 184^A]
Secretary under said Executive order
ESTABLISH M ENT OF OFFICE OF FO R governing certain capital transfers
abroad, and under such other Executive
EIG N DIRECT IN V ESTM EN TS
orders, laws, regulations, and actions
S ection 1. Purpose. The purpose of relating thereto as the Secretary shall
this order is to establish the Office of determine are applicable.
Foreign Direct Investments, delegate au
.02 The Director may redelegate, as
thority to its Director, and describe the may be necessary in their performance,
general functions of the Office.
any functions, authorities, or responsi
Sec. 2. General— .01 The Office of bilities conferred upon him by this order
Foreign Direct Investments (hereinafter to any other agency, instrumentality, or
called the “Office”) is hereby established official of the United States, subject to
as a primary operating unit of the De such conditions and limitations as the
partment of Commerce pursuant to the Secretary may deem desirable.
authority vested in the Secretary of
Sec. 4. General functions— .01 The
Commerce by Executive Order 11387, Director shall, with respect to the func
dated January 1, 1968, and otherwise tions, authorities, and responsibilities
by law.
delegated to him by this order:
.02 The Office shall be headed by a
a. Provide advice and assistance to the
Director (hereinafter called the “Direc Secretary in such matters.
b. Carry out the provisions of Execu
tor” ) who shall report and be responsible
to the Secretary of Commerce (herein tive Order 11387, prescribe definitions for
after called the “Secretary” ) . The Direc any terms used therein, make general or
tor shall be assisted by a Deputy Director specific exemptions, exceptions, or waiv
who shall perform the functions of the ers to the prohibitions thereof, issue
Director during the latter’s absence, and such rules and regulations, orders,
by such staff as the Director may require rulings, licenses, and instructions, and
to perform the functions and authorities take such other actions, as he determines
and discharge the responsibilities set to be necessary or appropriate to carry
out the purposes of said Executive order.
forth herein.
c. Consult and collaborate as neces
S ec . 3. Delegation of authority— .01
Pursuant to the authority vested in the sary and appropriate with other officers
Secretary by Executive Order 11387 and and units of the Department, officials of

DEPARTMENT OF COMMERCE

other Federal agencies, including the
Secretaries of State and Treasury and
the Board of Governors of the Federal
Reserve System, and representatives of
foreign governments.
d. Administer the regulations issued
by the Secretary, and as they may be
amended, under Title 15, Code of Fed
eral Regulations, Chapter X , Part 1000.
e. Take such necessary actions as may
be necessary to obtain effective compli
ance with the policies, programs and
regulatory system established under this
order, to obtain .reports and other in
formation, and to conduct investigations
to carry them out.
f. Provide a basis for policy formula
tion of the Department with respect to
direct investment abroad and related
matters.
g. Utilize the facilities and services of
other units of the Department of Com
merce, of other Federal or State agencies,
and of any of the Federal Reserve Banks,
which are available and appropriate.
h. Take such other actions as may be
necessary and desirable.
Sec. 5. Effect on other orders. To the
extent that this order affects any other
orders or regulations of the Department,
they are accordingly modified.
Sec. 6. Effective date. This order shall
become effective January 2, 1968.
A. B. T r o w b rid g e ,
Secretary of Commerce.
[F.R.

Doc.

68-113; Filed,
6:43 p.m.]

Jan.

1968;

U. S. DEPARTMENT OF COMMERCE
OFFICE OF FOREIGN DIRECT INVESTMENTS
WASHINGTON, D. C. 20230

Instructions for Specific Authorizations or Exemptions
Pursuant to Section 1000.801 of Foreign Direct Investment Regulations
Section 1000.801 of the Foreign Direct Investment Regulations provides procedures whereby applica
tions may be made for specific authorizations to engage in otherwise prohibited transactions which are
not within the general authorizations set forth in the regulations. Such section also provides for applica
tions for specific exemptions from provisions of the regulations.
All requests for specific authorizations or exemptions should be made in duplicate to the Director,
Office of Foreign Direct Investments, U. S. Department of Commerce, Washington, D. C. 20230. While
the content of these applications will vary depending upon the particular specific authorization or exemp
tion sought, the application should contain information which would permit the Director to make an
informed evaluation of the need for the specific authorization or exemption and its consistency with the
overall policy and objective of the program.
With respect to their submission for specific authorizations for foreign direct investments, the following
information should be included :
— Brief description of project, program or transaction to which requested authorization relates.
— Amount of foreign direct investment which is sought to be covered by authorization.
— Source and form of the capital for which transfer is sought.
— Proposed use of the capital for which transfer is sought.
— Reasons why capital is not available from foreign sources.
— Statement and data showing why the general authorization provisions of the regulations do
not permit the proposed capital transfer to be effected.
— Relationship of specific application to your overall foreign direct investment position and
program.
— Estimated amount of, and time period in which specific proposed capital transfer will result in
cash or other returns to the United States.
— Pertinent business or economic considerations.
— Pertinent legal commitments or considerations.
— Description of related transactions involving foreign direct investment for which specific
authorization application is pending or contemplated.
— Identification of any other transaction by associated or affiliated persons involving foreign
direct investment for which specific authorization is pending or contemplated.
— Proposed time schedules for effecting the transfers for which specific authorization is sought.
With respect to applications for specific exemptions from anjr requirement of the regulation, applicants
should state why the specific exemption is appropriate. Include in such application for such exemption
any of the foregoing items of information which are relevant to a disposition of the requested exemption.
Any accounting data submitted should be consistent, as far as possible, with the accounting principles
applicable to reports required to be submitted under the regulation. Any substantial inconsistencies
should be explained.
A ny submission should be confined to essential information. I f supplemental or explanatory informa
tion is necessary, it will be requested by the Director. The application should include the name, address,
and telephone number of the person (s) to whom inquiry may be addressed by the Office of Foreign Direct
Investments.
16

Full text of Federal Reserve Bank of New York Circulars : 6090. U.S. Department of Commerce Foreign Direct Investment Program

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