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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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The Department of Commerce Bureau of Economic Analysis (BEA) has announced that it has initiated its five-year benchmark survey of U.S. businesses whose voting shares are 10% or more owned, directly or indirectly, by a foreign person or company. U.S. businesses that have such foreign direct investment are required to respond no later than May 31, 2023.

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The BEA is a federal statistical agency that collects information and reports on aspects of the U.S. economy including the gross domestic product (GDP) and trade balance. Federal and state governments, public and private sectors, and other interested parties use the statistics for budget planning, monetary and investment policy, and a better understanding of the U.S. economy’s performance. The BEA survey data gathered can only be used for statistical and analytical purposes and may not be provided to other federal agencies for tax, investigative, or regulatory purposes. The collected information is aggregated by BEA and reported on a macro-industry/economic level so that individual U.S. company data cannot be identified.

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The BEA’s five-year benchmark survey is its most comprehensive survey on the financial and operating activities of U.S. businesses that are affiliated with foreign persons or multinational companies. The survey must be submitted using the applicable BEA Form BE-12 and is prepared based on the level of the U.S. business’s assets, sales, or income:

A U.S. business must submit one of these forms only if its voting shares/interests are 10% or more owned, directly or indirectly, by a foreign person or company. If a U.S. business does not meet the foreign ownership requirements, no action is necessary. Only under certain special circumstances are companies that do have foreign direct investment not required to file a survey response.

Qualifying U.S. businesses must file responses with the BEA no later than May 31, 2023. Depending upon the level of complexity of foreign ownership and the business’s corporate structure, completing the survey form can be time-intensive. The BEA will generally approve reasonable requests for an extension of the filing deadline if requested before May 31.

While the amount and depth of detail required varies according to the applicable BE-12 form, the BEA is generally seeking broad operational and financial data on U.S. businesses, such as industry classification, sales, income, revenue, employees, property, equipment, and the volume of trade in goods. Given the focus on foreign direct investment, the survey also seeks information on any foreign parents and ultimate beneficial owners, their country of location, and the amount of their direct or indirect ownership via voting interests.

BEA Authority and Potential Penalties for Failure to Respond

This benchmark survey is conducted pursuant to the <a>International Investment and Trade in Services Survey Act </a>(P.L. 94- 472., 22 U.S.C. §§ 3101-3108, as amended), and the filing of a response is mandatory for qualifying businesses. Failure to file can subject a party to a civil penalty and to injunctive relief commanding such person to comply, or both. Willful failure to file a response subjects a party to fines and, if an individual, to imprisonment for not more than one year, or both. Any officer, director, employee, or agent of any business who knowingly participates in such violations, may, upon conviction, be punished by a similar fine, imprisonment or both.

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

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BEA Conducts Five-Year Benchmark Survey of U.S. Foreign Direct Investment

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