Any U.S. entity that directly or indirectly owned or controlled at least 10 percent of the voting stock or equivalent interest in a non-U.S. entity at any time during the U.S. entity’s 2014 fiscal year is required to provide information about this investment for the 2014 Benchmark Survey of U.S. Direct Investment Abroad. This survey is conducted every five years by the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce, which, along with the Census Bureau, provides economic data for the U.S. government.
Failure to submit the required information can result in a civil penalty of as much as $25,000. Willful failure to report may result in a penalty of up to $10,000 and imprisonment for up to one year, or both. Any officer, director, employee or agent of any entity who knowingly participates in the violation is subject to a penalty.
The information is submitted by filing the applicable Forms BE-10. The filing deadline is May 29, 2015 (for any U.S. entity required to file less than 50 Forms BE-10) and June 30, 2015 for U.S. entities required to file 50 or more forms.
A U.S. entity with foreign affiliates during 2014 must file all or part of Form BE-10A. The U.S. entity must file a complete Form BE-10A if the fully consolidated U.S. domestic business enterprise (excluding foreign affiliates) had (i) total assets, (ii) sales or gross operating revenues excluding sales taxes, or (iii) net income after provision for U.S. income taxes greater than $300 million (positive or negative) for its 2014 fiscal year. If none of the three items exceeded this amount, then only parts of the Form BE-10A must be completed.
Any U.S. entity that is required to file a complete or partial Form BE-10A must also file a Form BE-10B, 10C or 10D for each of its foreign affiliates, according to the following criteria:
Form BE-10B must be filed for each foreign affiliate of a U.S. entity for which (i) total assets, (ii) sales or gross operating revenues excluding sales taxes, or (iii) net income after provision for foreign income taxes (collectively, the Financial Benchmarks) was greater than $80 million (positive or negative) at any time during its 2014 fiscal year:
Form BE-10C must be filed by (i) a majority-owned foreign affiliate if one of the Financial Benchmarks was greater than $25 million (positive or negative), but none of them was greater than $80 million, during its 2014 fiscal year; (ii) a minority-owned foreign affiliate of a U.S. entity for which any of the Financial Benchmarks was greater than $25 million (positive or negative) at any time during its 2014 fiscal year; or (iii) a foreign affiliate for which none of the Financial Benchmarks exceeded $25 million (positive or negative) at any time during its 2014 fiscal year.
Form BE-10D must be filed by a foreign affiliate with Financial Benchmarks that did not exceed $25 million (positive or negative) at any time during the affiliate’s 2014 fiscal year.
Detailed information about the U.S. company and the foreign affiliates is needed to complete the forms, likely involving input from financial, legal and compliance personnel.