Pursuant to 15 CFR 801.3, 801.10, the U.S. Department of Commerce’s Bureau of Economic Analysis (“BEA”) has issued a mandatory five-year benchmark survey to obtain data on foreign direct investment (“FDI”) in the United States. The information collected on the survey is confidential and will be used for statistical purposes only.
The survey, known as the BE-12 survey, is required for U.S. entities in which a foreign individual or entity holds, directly or indirectly, 10 percent or more of the U.S. entity’s voting interests at any time during 2017. This also includes direct ownership of real estate by foreign entities or individuals for non-residential purposes.
The information required by the BE-12 surveys includes identification of foreign owners, major products and/or services provided by the U.S. business, sales or gross operating revenues, balance sheet information, income and employment information, as well as financial and operating data for the U.S. business. There are four options for the survey: the BE-12A; BE-12B; BE-12C; and the BE-12 Claim for Not Filing. The specific form that a particular U.S. entity or individual must file will be determined by the size of the U.S. business and amount of foreign ownership. A U.S. business may submit a BE-12 Claim for Not Filing if: (i) the foreign ownership has fallen below 10 percent in 2017; (ii) the entity has been fully consolidated or merged into another U.S. business; or (iii) the entity has been liquidated or dissolved. There is the exemption of private funds. It would generally cover a U.S. private fund that does not own, directly or indirectly, an operating company and no U.S. operating company exists between the foreign investor and the U.S. private fund.
The completed surveys are due to the BEA on or before May 31 2018 (or June 30 2018 in the event of electronic filing) and covered entities must file regardless of whether the entity is contacted by the BEA. While the BE-12 is a five-year benchmark survey, the reporting period is just one year. For the upcoming BE-12 survey, the period is an entity’s fiscal year ending in 2017.
An entity that fails to file a required Form BE-12 may be subject to civil penalties and, if found to have willfully failed to file a required Form BE-12, may be subject to criminal penalties. An officer, director, employee, or agent of an entity who knowingly participates in a willful failure to file may also be subject to criminal penalties.
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Compliments of AEM Carnelutti , a member of the EACNY