BEA Retroactively Reinstates Mandatory FDI Reporting Requirements with a Due Date of January 12, 2015



On November 26, 2014, the United States Bureau of Economic Analysis (“BEA”) retroactively reinstated data collection requirements to measure foreign direct investment into the United States. The BE-13 survey collects data on the acquisition or establishment of U.S. business enterprises by foreign investors and the expansion of existing United States affiliates of foreign companies that establish new facilities where business is conducted. The data is used to measure the level of new foreign direct investment in the United States and to assess its impact on the United States economy.

BE-13 reports are due 45 days after an acquisition is completed, a new legal entity is established or an expansion is initiated. However, the reporting requirements have also been retroactively applied to foreign investment transactions dating back to January 1, 2014, and all reportable activity that took place from January 1, 2014 through November 26, 2014 must be reported by January 12, 2015.

Foreign persons who acquire or establish United States business enterprises or expand existing United States affiliates must file Form BE-13, whether or not they are contacted by BEA. Also, if BEA contacts a foreign person regarding a transaction or the transaction does not meet the filing thresholds, discussed below, the parties must nonetheless file a claim for exemption pursuant to BE-13 Claim for Exemption.

Failure to report on the appropriate form in a timely manner is subject to potential criminal1 and civil2 penalties.

Series of BE-13 Forms

BEA will release six versions of the Form BE-13 for different types of transactions, five of which are currently available on the BEA website,3 and Form BE-13E, which reports that an established or expanded entity is still under construction, is subject to future release by BEA.

1. Acquisition of Voting Interest (Form BE-13A) – Report for foreign entities that acquire at least ten percent of a U.S. business enterprise and the total cost of the acquisition is more than $3 million.

2. Establishment of a New U.S. Business Enterprise (Form BE-13B) – Report for foreign entities or U.S. affiliates of foreign entities that establish a new legal entity in the United States. Reporting is required if the foreign entity owns ten percent or more of the entity’s voting interest and such establishment is projected to cost more than $3 million.

3. Acquisition and Merger (Form BE-13C) – Report for existing U.S. affiliates of foreign parents that acquire a U.S. business enterprise or segment that it then merges into its operations and the total cost to acquire the business enterprise is greater than $3 million.

4. Expansion of Operations (Form BE-13D) – Report for existing U.S. affiliates of a foreign parent that expand their operations to include a new facility where business is conducted and the projected total cost of such expansion is greater than $3 million.

5. Continuing Construction (Form BE-13E) – Report for a U.S. business enterprise that previously filed a Form BE-13B or BE-13D, if the newly established or expanded entity is still under construction after one year. The Form BE-13E would provide updated construction costs, and the Form BE-13E must be filed annually until establishment or expansion of the entity is complete.

6. Claim for Exemption (Form BE-13 Claim for Exemption) – Report for a U.S. business enterprise that (i) was contacted by BEA but does not meet the requirements for filing Forms BE-13A, BE-13B, BE-13C or BE-13D or (ii) whether or not contacted by BEA, met all of the requirements for filing on Forms BE-13A, BE-13B, BE-13C or BE-13D except the $3 million reporting threshold. Note that exemptions are not self-executing and that the Claim for Exemption must be filed. In particular, a Claim for Exemption must be made in connection with the acquisition of a voting interest in an existing U.S. affiliate in which a foreign entity already has a ten percent voting interest.

Quarterly, Annual and Benchmark Surveys

In addition to the new Form BE-13 series of forms, Quarterly Surveys on Form BE-605 must be filed 30 days after the close of the first three calendar or fiscal quarters and 45 days after the final quarter; Annual Surveys on the BE-15 series of forms must be filed by persons contacted by BEA (persons not contacted individually by BEA are not required to file under BE-15); and the BE-12 Five Year Benchmark Survey must be filed by persons subject to the reporting requirement of BE-12, whether or not they are contacted by BEA.

History of the BE-13 Survey

The Form BE-13 originated in 1977 to survey the impact of foreign investment on the U.S. economy.4 In 2009, the BEA discontinued the BE-13 program indicating existing forms made Form BE-13 unnecessary. Then, in May 2014 the BEA published a proposed rule to reinstate the filing requirement5, and after receiving no comments, issued the final rule in August of 2014. However, the Office of Management and Budget originally did not approve the budget for the data collection in time for the effective date in September 2014. The rule finally was reinstated on November 26, 2014, applying retroactively to transactions closing from January 1, 2014 forward.6

1 Criminal penalties for a willful failure to report up to imprisonment of not more than one year and/or a fine of not more than $10,000 per violation.
2 Civil penalties of not less than $2,500 or more than $32,500 per violation and injunctive relief compelling compliance.
4 See (3 CFR, 1977 Comp., p. 86).
6 Copies of the various Forms BE-13 are available at the BEA website.

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