BE-180 Filing Requirement is Looming

The U.S. Department of Commerce can assess draconian penalties for failing to file a BE-180 survey form.  These penalties can range from fines of $2,500 to $32,500, and imprisonment of one (1) year, or both[1].  All U.S. based fund managers that advise non-U.S. entities must consider their filing requirements under the BE-180 survey.  The BE-180 survey is also a separate filing from the BE-10 and BE-13 filings. The BE-180 Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons is administered by the Bureau of Economic Analysis (the "BEA") and is conducted once every five (5) years. U.S. Financial Services Providers are U.S. Persons (defined as any person, including U.S. based fund managers advising offshore vehicles, resident in the U.S. or subject to the jurisdiction of the U.S.) that had covered transactions at any time during fiscal 2014.   A Foreign Person is "any resident outside the U.S. or subject to a jurisdiction other than the U.S." Both individuals and entities are considered "Persons" for the purposes above.

The deadline for filing BE-180 is October 1, 2015, but the following automatic extensions have been granted:

1) November 1, 2015, if the U.S. Reporter was NOT contacted by the BEA of the BE-180 survey and does NOT have a BE-180 identification number

2) November 1, 2015, if the U.S. Reporter was contacted by the BEA and has a BE-180 identification number below 140012490.

3) December 1, 2015, if the U.S. Reporter was contacted by the BEA and has a BE-180 identification number above 140012490.

"Financial Services Provider" is intended to be a very broad term that includes persons engaged in "...securities/commodities contracts, and other financial investments and related activities (including security and commodity futures brokers, dealers, exchanges, traders, underwriters, investment bankers, and providers or securities custody services);...investment advisors and managers of funds, trusts, and other financial vehicles (including mutual funds, pension funds, real estate investment trusts, investors, stock quotation services, etc.)"[2]. Information about the types of financial services covered by the BE-180 is listed in Table 1, Page 3 of the BE-180 survey form.  If both sales and purchases involving covered transactions were less than $3 million, an exemption claim must be filed. Thus, for example, an exemption filing would be required if a U.S. based fund manager collected less than $3 million from non-US fund clients.

The BE-180 survey is meant to capture the largest universe of financial service providers, as well as their covered transactions. If your business operations are captured under the broad criteria described above or you have received a BE-180 survey letter from the BEA, please contact us for additional guidance. A sample BE-180 survey form can be found at the following link:  http://bea.gov/surveys/pdf/be180.pdf

If you have questions about this Alert, please contact Daniel Viola at 212.573.8038 or dviola@sglawyers.com.

 

[1] See: "Penalties"  http://bea.gov/surveys/pdf/BE-180%20Instructions.pdf 

[2] See: I, B(1) "Definition of financial services provider" http://www.bea.gov/surveys/pdf/BE-180%20Instructions.pdf

 

Cheryl Spratt