On June 19, 2015, the U.S. Commerce Department’s Bureau of Economic Analysis (BEA) reinstated reporting requirements for the BE-180, which is designed to collect data regarding certain financial services transactions between U.S. financial services providers and foreign persons. U.S. companies subject to the reporting requirements must respond to the survey, irrespective of whether they are contacted by BEA. U.S. companies that fail to comply with the BE-180 mandatory reporting requirements could be subject to civil penalties of up to US$32,500 or, in some cases, criminal penalties.
The BE-180 is a so-called benchmark survey that BEA conducts every five years. The prior survey covered fiscal year 2009, and the present survey will cover fiscal year 2014. The due date for submission of Form BE-180, or a claim for exemption, is October 1, 2015.
Who Must Report?
The BE-180 reporting requirements apply to all U.S. financial services providers or intermediaries that had transactions, either sales or purchases, directly with foreign persons in all financial services combined in excess of US$3 million during the 2014 fiscal year. U.S. companies that have subsidiaries who are financial services providers or intermediaries engaged in foreign financial services transactions also must file if they exceed the US$3 million threshold. Companies are not required to conduct a detailed records search to determine whether they must file a BE-180; rather, they may depend upon the judgment of knowledgeable employees who can recall reportable transactions with a reasonable degree of certainty. BEA also requests that firms whose aggregate transactions with foreign persons in all financial services fall at or below the US$3 million threshold voluntarily provide estimates in the BE-180 for each type of financial service they have provided to a foreign person during fiscal year 2014.
Who is a Financial Services Provider?
Financial services providers covered by the BE–180 include:
depository credit intermediation activities (including commercial banking and credit unions);
- credit intermediation activities (including credit card issuing and sales financing intermediation);
- mortgage and nonmortgage loan brokers;
- financial transactions processing, reserve, and clearinghouse activities;
- securities and commodities contracts intermediation and brokerage activities (including investment banking and securities dealing, commodity contracts brokerage);
- securities and commodities exchanges;
- insurance carriers and brokerages;
- insurance and employee benefit funds;
- investment pools; and
- holding companies that own or influence firms principally engaged in the activities identified above.
What Financial Services are Covered?
The services covered by the BE–180 include the following:
- brokerage services;
- underwriting and private placement services;
- financial management services;
- credit-related services, including credit card services;
- financial advisory and custody services;
- securities lending services; and
- electronic funds transfer services
Exemptions, Extensions, and Regulatory Burden
If a U.S. company receives a BE-180 survey form from BEA, but the company is not subject to the BE-180’s mandatory reporting requirements, the company must complete pages 1-5 of Form BE-180 and submit the form to BEA. BEA will accept extension requests through the October 1, 2015 due date. Requests for extensions of longer than 30 days must be made in writing, and respondents who file electronically through BEA’s eFile system automatically receive a 30-day extension.
BEA estimates that respondents who file mandatory or voluntary data will spend on average ten hours to complete the survey, while those filing a BE-180 claim for exemption will spend on average two hours. Some companies, including U.S. multi-nationals with a large or complex corporate structure, may find the regulatory burden is somewhat greater. BEA expects about 8,750 respondents to the 2014 survey, with approximately 1,250 respondents reporting mandatory or voluntary data.
Special thanks to Nic Sparks on his contribution to this upate.