Reporting on BEA’s direct investment surveys is mandatory under the International Investment and Trade in Services Survey Act.
The Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce requires all entities subject to the reporting requirements to file a mandatory BE-12 Benchmark Survey of Foreign Direct Investment in the United States. The BE-12 survey is conducted once every five years in place of the BE-15 annual survey and is the BEA's most comprehensive survey in terms of both the number of companies covered and the amount of information gathered. It is used to produce statistics on the scale and effects of foreign-owned business activities in the United States.
The deadline for submitting BE-12 surveys via e-file is June 30, 2023. Entities that are subject to the mandatory filing requirements and have not yet filed their reports should contact counsel experienced in assisting in the preparation of such reports as soon as possible given this fast-approaching deadline.
Who Is Required to File?
A survey is required for each U.S. business (including real estate held for nonpersonal use) in which a foreign person or entity owns or controls, directly or indirectly, 10 percent or more of the voting securities of an incorporated U.S. business enterprise, or an equivalent interest of an unincorporated U.S. business enterprise, at the end of the business’ fiscal year that ended in calendar year 2022. Certain private funds may be exempt from filing. A response is required from entities subject to the reporting requirements whether or not the entities have been contacted by BEA. Entities that were notified to file by BEA but do not meet the filing requirements must complete and submit a BE-12 Claim for Not Filing.
Confidentiality
Reporting on BEA’s direct investment surveys is mandatory under the International Investment and Trade in Services Survey Act (P.L. 94–472, 90 Stat. 2059, 22 U.S.C. 3101–3108, as amended). The act protects the confidentiality of the data that companies report. It further specifies that the survey data may only be used for statistical and analytical purposes. BEA is prohibited from granting another agency access to the data for tax, investigative or regulatory purposes. In addition, data reported on BEA’s surveys are not subject to Freedom of Information Act requests.
When Is the BEA E-File Submission Deadline?
While mailed submissions of complete BE-12 surveys for 2022 were due on May 31, 2023, for respondents utilizing the BEA e-file system, the due date is June 30, 2023. Reasonable requests for extension of the filing deadline will normally be granted if made before the respective deadlines.
BE-12 Survey Form Versions
The BEA has provided a flowchart to determine which form should be used, and the following is a brief description of each form and who should use it.
Form BE-12A
File to report U.S. affiliates that are majority-owned by foreign parents at the end of the fiscal year that ended in calendar year 2022 if any one of the three items including: total assets; sales or gross operating revenues excluding sales taxes; or net income (loss) after provision for federal, state and local income taxes exceeded $300 million at the end of, or for, the fiscal year that ended in calendar year 2022. A majority-owned U.S. affiliate is one in which the combined direct and indirect ownership interests of all foreign parents exceeds 50 percent.
Form BE-12B
File to report U.S. affiliates that are majority-owned by foreign parents at the end of the fiscal year that ended in calendar year 2022 if any one of the three items including; total assets; sales or gross operating revenues excluding sales taxes; or net income (loss) after provision for federal, state and local income taxes exceeded $60 million, but none of those items exceeded $300 million at the end of, or for, the fiscal year that ended in calendar year 2022. A majority-owned U.S. affiliate is defined here as above.
Also file for reporting U.S. affiliates that are minority-owned by foreign parents at the end of the fiscal year that ended in calendar year 2022 if any one of the three items including: total assets; sales or gross operating revenues excluding sales taxes; or net income (loss) after provision for federal, state and local income taxes exceeded $60 million at the end of, or for, the fiscal year that ended in calendar year 2022. A minority-owned U.S. affiliate is one in which the combined direct and indirect ownership interests of all foreign parents are at least 10 percent but do not exceed 50 percent.
Form BE-12C
File for reporting U.S. affiliates owned by foreign parents at the end of the fiscal year that ended in calendar year 2022 if none of the three items including: total assets; sales or gross operating revenues excluding sales taxes; or net income (loss) after provision for federal, state and local income taxes exceeded $60 million at the end of, or for, the fiscal year that ended in calendar year 2022. A foreign-owned U.S. affiliate is one in which the combined direct and indirect ownership interests of at least one foreign parent are at least 10 percent.
Form BE-12 Claim for Not Filing
File this form for (1) a U.S. affiliate that is consolidated into or merged with another U.S. affiliate, or (2) an entity that is not directly or indirectly foreign-owned. A U.S. affiliate that is consolidated into or merged with another U.S. affiliate is one in which more than 50 percent of the voting rights are owned by another U.S. affiliate, and different foreign persons do not hold a direct and indirect ownership interest. An entity is directly or indirectly foreign-owned if the combined direct and indirect ownership interests of at least one foreign parent are at least 10 percent. Also use this form type if the U.S. affiliate’s foreign ownership fell below 10 percent or if it was liquidated or dissolved before the end of the fiscal year.
Penalties for Failure to File
Failure to report shall be subject to a civil penalty and to injunctive relief commanding such person to comply, or both. Whoever willfully fails to report shall be fined and, if an individual, may be imprisoned for not more than one year, or both. Any officer, director, employee or agent of any corporation who knowingly participates in such violations, upon conviction, may be punished by a like fine, imprisonment or both (22 U.S.C. 3105).
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