May 29th Filing Requirement for U.S. Companies with Foreign Affiliates
Kelley Drye Client Advisory
U.S. Companies with foreign subsidiaries and other affiliates are required to report to the U.S. Department of Commerce Bureau of Economic Analysis (BEA) by May 29 or June 30, 2015, depending on the number of foreign affiliates of the U.S. company. In an effort to secure economic data on foreign affiliates, the BEA has mandated Form BE-10 filings once every five years. These reports were previously only required if a U.S. company was contacted directly by the BEA. This year, any U.S. company, public or privately held, with a foreign affiliate during its fiscal year ending in 2014 must file a BE-10 report.
The new rules apply to U.S. companies and any U.S. “person” that owns, directly or indirectly, 10% or more of a foreign business enterprise (including a partnership or other unincorporated enterprise). A U.S. person is defined as individuals, trusts, estates, partnerships, corporations, or other organizations (including private funds) that are resident in or subject to U.S. jurisdiction.
Failure to file a Form BE-10 can result in civil penalties of $2,500 to $25,000. In addition, willful failure to file can result in a penalty of $10,000 and possible imprisonment for any officer, director, employee or agent who knowingly participates in the violation.