HIGHLIGHTS:

  • The next 5-year BE-12 Benchmark Survey on Foreign Direct Investment in the United States is due on or before May 31, 2018.
  • Failure to file as required could result in civil penalties, injunctive relief, criminal fines and imprisonment.
  • U.S. companies with a single foreign investor holding at least 10 percent of its voting shares should be aware of this and related Commerce Department survey requirements as well as any foreign ownership restrictions in their existing federal permits and licenses.

The BE-12 Benchmark Survey on Foreign Direct Investment in the United States is due to the U.S. Department of Commerce's Bureau of Economic Analysis (BEA) on or before May 31, 2018. A BE-12 survey is to be filed when one foreign person (directly or indirectly) holds 10 percent or more of the voting shares of a "U.S. affiliate." All entities subject to the reporting requirements must file, even if they are not contacted by BEA. The BEA website provides additional information. An exemption is available to certain eligible private funds.

Whoever is required but fails to report is subject to injunctive relief and a statutory civil penalty, which is adjusted for inflation. With the inflation adjustments (15 C.F.R. 6.4), the current civil penalties are not less than $4,527, and not more than $45,268. In addition, whoever willfully fails to report is subject to a criminal fine of not more than $10,000. Individuals may be imprisoned for not more than one year. Any officer, director, employee or agent of any corporation who knowingly participates in such violation, upon conviction, may be punished by a like fine, imprisonment or both (22 U.S.C. 3105). Given the "willful" standard, Holland & Knight cautions any company that receives a written request to pay careful attention as to the filing requirements.

The BE-12 Benchmark Survey should not be confused with the BE-13 Survey of New Foreign Direct Investment in the United States, which is due no later than 45 days after each relevant foreign investment event such as an acquisition, new legal entity or expansion. Finally, while BEA is prohibited from granting other federal agencies access to the data for tax, investigative or regulatory purposes, completing the BE-12 presents an opportunity for companies to assess foreign investment levels in light of foreign ownership restrictions in their existing federal contracts, permits and licenses.