June 30th Deadline Approaching for US Subsidiaries of Foreign Entities Mandatory Response to Commerce Department 2017 Benchmark Survey of Foreign Direct Investment in the United States

June 15, 2018

By: Allan Grauberd and Justin A. Purtle

The time has come for the 2017 Benchmark Survey of Foreign Direct Investment in the United States, which is conducted by the U.S. Department of Commerce, Bureau of Economic Analysis. This survey is conducted every five years, and is related to financial and operating data of U.S. affiliates/subsidiaries of foreign multinational entities (see https://www.bea.gov/surveys/respondent_be12_be15.htm). Response to the survey is mandatory for the U.S. affiliates/subsidiaries of non-U.S. persons or entities, if, at the end of the U.S. entity’s fiscal year that ended in calendar year 2017, the non-U.S. person or entity owned or controlled 10 percent or more of the voting interest (or equivalent interest if an unincorporated affiliate), directly or indirectly, of the U.S. entity, or if the relevant person or entity was contacted by the Bureau about reporting on the BE-12 survey. Some exemptions exist for private funds.  Please see the flowchart provided at https://bea.gov/surveys/pdf/be12/which-form-do-i-file-2017.pdf in order to determine: (a) whether compliance is mandatory, and (b) if compliance is mandatory, which form should be filed.  Each form has different requirements and instructions, and each is available on the Bureau’s website for eFiling at www.bea.gov/efile. Any entity that would normally file an annual BE-15 survey should instead file the benchmark survey for 2017. The confidentiality of data collected in the survey is protected by federal law.

For entities using the Bureau’s eFile system, the deadline to respond to the survey is June 30, 2018. There are penalties associated with failure to comply; for example, failure to file form BE-12C when required results in a civil penalty of not less than $4,527, and not more than $45,268, and/or injunctive relief compelling compliance. Willful failure to comply can result in fines of up to $10,000 and/or imprisonment for not more than one year.

Allan Grauberd is a partner in Moses & Singer’s Securities and Capital Markets Practice Group, and Justin A. Purtle an associate in Moses & Singer’s Corporate Practice Group.