Bureau of Economic Analysis Foreign Direct Investment Reports Due May 31, 2023
Foreign direct investments in U.S. businesses and real estate have become common concerns for both state and federal authorities. As a result, compliance with cross-border requirements continues to be a growing focus for U.S. companies and industries.
The Bureau of Economic Analysis (the “BEA”), a federal agency within the U.S. Commerce Department, has been authorized since the late 1970’s to collect data on foreign direct investments in U.S. businesses and real estate. For purposes of implementing its mission, the BEA has historically published a number of “BE” survey forms (including Forms BE-12, BE-13, BE-15 and BE-605), which must be filed by certain U.S. companies with foreign investors or foreign ownership.
The precise forms can depend on the monetary value of the U.S. interests owned by a foreign investor. Form deadlines vary, and may be required upon a change of control, quarterly, annually, or periodically. For example, the latest version of the Form BE-12 has a mandatory filing deadline of May 31, 2023 and applies to U.S. companies that are owned in whole or in part by foreign persons or businesses as well as certain U.S. real estate holdings of foreign persons or businesses (which can be aggregated for reporting purposes). The BEA has emphasized that the information provided by filers will be kept confidential and the data cannot be used by the U.S. government for regulatory or examination purposes, nor can be it subject to any FOIA requests.
Although the law applicable to many of these survey forms has largely remained unchanged over the years and we are not aware of any “draconian” enforcement initiatives, we are noticing a greater recognition of the existence of these forms, likely in part due to more recent U.S. policies designed to promote beneficial ownership transparency and reporting, including the coming beneficial ownership reporting regulations administered by the Financial Crimes Enforcement Network (“FinCEN”). Moreover, foreign direct investment is continuing to receive both media and political attention. By law, foreign-owned U.S. businesses and real estate holdings which fail to file a BE-12 may be subject to civil and criminal penalties.
As noted above, one of the BEA forms that has increasingly been attracting attention is the BE-12 series of forms (the “benchmark survey”), which appear every five years and was last required in 2018 (for interests held in 2017). Unlike some of the other BEA surveys, the rules relating to the BE-12 benchmark survey indicate that the form must be filed even if the U.S. party is not notified by the BEA. The due date for the 2022 BE-12 benchmark survey is currently May 31, 2023, or June 30, 2023 for companies which choose to e-file survey responses. BEA will consider extension requests submitted before the applicable deadline.
New for 2023, all versions of the BE-12 will solicit questions regarding digital economic activities and digital platform services of the applicable U.S. business. Certain types of U.S. businesses, such as private funds with indirect foreign ownership, may be exempt from this mandate if certain structural and operating requirements are met.
To better understand your U.S. foreign direct investment reporting obligations, contact Angela Gamalski, Mike Domanski, or your regular Honigman attorney.
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