US brings back overseas reporting requirement

Non-US GPs acquiring businesses in the US must file the BE-13 survey within 45 days of the transaction.

The US Department of Commerce’s Bureau of Economic Analysis has reinstated the BE-13 survey for foreign investment into the US. The report is used by the agency to better measure the Commerce Department's efforts through the “Build It Here, Sell It Everywhere” initiative to expand foreign business investment in the US and to ensure complete coverage of other foreign direct investment statistics.

The report, which was discontinued in 2009, applies to any transaction where a foreign direct investment in the US has taken place, an existing US affiliate of a foreign GP establishes a new US legal entity, expands its US operations, or acquires a US business.

Foreign direct investment is defined as the ownership or control by one foreign entity of 10 percent or more of the voting securities of a US business, meaning it may impact minority ownership deals as well as buyouts. Real estate purchased for other than personal use also requires filing.

Among the information required to be reported on the BE-13 is the equity and debt components of the deal’s funding, whether a new US operation will have research and development activities, whether a new operation is under construction and a US business’ employment projections.

The BE-13 survey form will be due no later than 45 days after the acquisition is completed, the new legal entity established or the expansion begun.

Failure to file the report could result in civil penalties or even criminal punishment for willful violations.