We believe. compliance should be simple.

Transcription

1 We believe SM compliance should be simple.

2 PorzioCS Regulatory Compliance Program for U.S. Bureau of Economic Analysis Mandatory Reporting Obligations The U.S. Bureau of Economic Analysis ( BEA ), an agency of the U.S. Department of Commerce, monitors inbound and outbound U.S. investments as part of its regulatory mission of tracking international commerce and publishing leading economic indicators such as GDP. To fulfill this mission, the BEA imposes mandatory reporting obligations upon, and collects data from: U.S. persons and businesses holding a 10% or greater interest in a foreign business; Foreign persons and businesses holding a 10% or greater interest in a U.S. business; U.S. subsidiaries of foreign businesses; Foreign subsidiaries of U.S. businesses; and U.S. service sector businesses that transact with foreign parties, whether U.S. or foreign owned. reporting obligations is subject to both civil and criminal penalties pursuant to section 3105 of title 22 of the United States Code (22 U.S.C. 3105). The BEA now requires transactional reporting for all foreign persons making investments in the U.S., which are due within 45 days of certain acquisitions, expansions, and business formations, whether or not contacted by the BEA. BEA regulatory compliance includes quarterly, annual and 5-year reporting obligations. The BEA 5-year reports, referred to as benchmark reports, are the most comprehensive of the BEA reporting obligations and are estimated to take up to several hundred hours to complete. These benchmark reports are mandatory and must be filed when U.S. persons hold an interest in a foreign business and foreign persons hold an interest in a U.S. business. These reports are typically due within 150 days of year end. Importantly, both direct and indirect ownership interests in cross-border investments can trigger reporting obligations. Failure to comply with BEA U.S. DIRECT INVESTMENT ABROAD FOREIGN DIRECT INVESTMENT IN THE U.S. QUARTERLY ANNUAL QUINQUENNIAL (5-YEAR) QUARTERLY ANNUAL QUINQUENNIAL (5-YEAR) TRANSACTIONAL 2016 Porzio Compliance Services, LLC. All Rights Reserved. 2

3 IF YOU ARE A NON-U.S. PERSON OR BUSINESS THAT OWNS A U.S. BUSINESS, REPORTING OBLIGATIONS EXIST Transactional Survey of Foreign Direct Investment in the U.S. Quarterly Survey of Foreign Direct Investment in U.S. Acquisitions, Formations and Expansions of U.S. Businesses Foreign Persons Owning 10% or More of a U.S. Business Enterprise Must be Filed within 45 days of Transaction Must be Filed, Upon Request From the BEA, 30 Days After Each Quarter or 45 days After Year-end Exemption Filing Required Even if Transaction is Below $3 Million Threshold 3

4 IF YOU ARE A NON-U.S. PERSON OR BUSINESS THAT OWNS A U.S. BUSINESS, REPORTING OBLIGATIONS EXIST Annual Survey of Foreign Direct Investment in U.S. 5 Year Benchmark Survey of Foreign Direct Investment in U.S. Foreign Persons Owning 10% or More of a U.S. Business Enterprise Most Comprehensive Survey Required of All Parties Must be Filed, Upon Request From the BEA, 150 Days After Year-end Foreign Persons Owning 10% or More of a U.S. Business Enterprise Parties Must Typically File Within 150 Days After Year-end 4

5 IF YOU ARE A U.S. PERSON OR BUSINESS WITH AN OWNERSHIP INTEREST IN A FOREIGN BUSINESS, REPORTING OBLIGATIONS EXIST Quarterly Survey of U.S. Direct Investment Abroad Annual Survey of U.S. Direct Investment Abroad 5 Year Benchmark Survey of U.S. Direct Investment Abroad U.S. Persons Owning 10% or More of a Foreign Business Enterprise U.S. Persons Owning 10% or More of a Foreign Business Enterprise Most Comprehensive Survey Required of All Parties Must be Filed, Upon Request From the BEA, 30 Days After Each Quarter or 45 Days After Year-end Must be Filed, Upon Request From the BEA, 150 Days After Year-end U.S. Persons Owning 10% or More of a Foreign Business Enterprise Parties Must Typically File Within 150 Days After Year-end 5

6 IF YOU ARE A U.S. SERVICE SECTOR BUSINESS TRANSACTING WITH NON-U.S. PARTIES, REPORTING OBLIGATIONS EXIST REGARDLESS OF U.S. OR FOREIGN OWNERSHIP BEA Services Surveys Tracks Foreign Trade in Services by U.S. Companies Applies to U.S. Service Sector Companies, Whether or not Foreign Owned Quarterly Surveys Annual Surveys Benchmark Surveys U.S. and Foreign Airline Operators Foreign Ocean Carriers Financial Services U.S. Ocean Carriers Insurance Services Financial Services Intellectual Property Trade Insurance Services Selected Services and Intellectual Property Services Including, Among Others: Telecommunications, Advertising, and Consulting, etc. 6

7 SAMPLE ORGANIZATION STRUCTURES, PARENT/ SUBSIDIARY RELATIONSHIPS AND BUSINESS OWNERSHIP INTERESTS REQUIRING U.S. BUREAU OF ECONOMIC ANALYSIS COMPLIANCE U.S. Business ship Abroad Requiring BEA Reporting Foreign Business ship in the U.S. Requiring BEA Reporting U.S. Corp. Brazil S.A. Japan K.K. U.S. Corp. INDIRECT CROSS BORDER INVESTMENT AND BUSINESS OWNERSHIP TRIGGERS BEA REPORTING OBLIGATIONS Ireland LTD. British Virgin Islands Inc. U.S. LLC U.S. Corp. > 50% of U.S. Inc. or Indirect of German A.G. U.S. Inc. U.K. LTD. German A.G. 7

8 PorzioCS U.S. Bureau of Economic Analysis (BEA) Compliance Services Software tools that make BEA compliance simple and efficient Identify BEA reporting obligations and perform gap analysis Navigate through broad BEA data requests BEA report completion and filing Implement efficiencies and procedures for routine monitoring, collection, maintenance and reporting of data to the BEA Minimize risk of BEA compliance failures and penalties, which may include: Civil penalties of up to $32,500, injunctive relief requiring compliance, or both Criminal fines of not more than $10,000, possible imprisonment of not more than one year, or both 8

9 About PorzioCS Porzio Compliance Services ( PorzioCS ) has developed software tools that make BEA compliance simple and efficient. PorzioCS assists clients in identifying BEA reporting obligations, navigating through highly detailed data requests, report completion and filing assistance, and implementation of efficiencies and procedures for routine collection, maintenance and reporting of data to the BEA. For additional information regarding PorzioCS BEA services, please contact: Robert Schechter Chris Schultz (609) (646) rschechter@porziocs.com cschultz@porziocs.com PorzioCS 156 West 56th Street Suite 803 New York, NY TEL: (646) FAX: (212) Porzio Compliance Services, LLC is a wholly-owned subsidiary of the law firm of Porzio, Bromberg & Newman, P.C.