[Code of Federal Regulations] [Title 15, Volume 3] [Revised as of January 1, 2004] From the U.S. Government Printing Office via GPO Access [CITE: 15CFR806.14] [Page 23-26] TITLE 15--COMMERCE AND FOREIGN TRADE CHAPTER VIII--BUREAU OF ECONOMIC ANALYSIS, DEPARTMENT OF COMMERCE PART 806_DIRECT INVESTMENT SURVEYS--Table of Contents Sec. 806.14 U.S. direct investment abroad. (a) Specific definitions--(1) U.S. direct investment abroad means the ownership or control, directly or indirectly, by one U.S. person of 10 per centum or more of the voting securities of an incorporated foreign business enterprise or an equivalent interest in an unincorporated foreign business enterprise, including a branch. (2) U.S. Reporter means the U.S. person which has direct investment in a foreign business enterprise, including a branch. If the U.S. person is an incorporated business enterprise, the U.S. Reporter is the fully consolidated U.S. domestic enterprise consisting of (i) the U.S. corporation whose voting securities are not owned more than 50 percent by another U.S. corporation, [[Page 24]] and (ii) proceeding down each ownership chain from that U.S. corporation, any U.S. corporation (including Domestic International Sales Corporations) whose voting securities are more than 50 percent owned by the U.S. corporation above it. (3) Foreign affiliate means an affiliate located outside the United States in which a U.S. person has direct investment. (4) Majority-owned foreign affiliate means a foreign affiliate in which the combined ``direct investment interest'' of all U.S. Reporters of the affiliate exceeds 50 per centum. (b) Foreign affiliate consolidation. In cases where the recordkeeping system of foreign affiliates makes it impossible or extremely difficult to file a separate report for each foreign affiliate, a U.S. Reporter may consolidate affiliates in the same country when the following conditions apply: (1) The affiliates are in the same BEA 3-digit industry as defined in the industry Classifications and Export and Import Trade Classifications Booklet; or (2) The affiliates are integral parts of the same business operation. For example, if German affiliate A manufactures tires and a majority of its sales are to German affiliate B which produces autos, then affiliates A and B may be consolidated. Any affiliates consolidated shall thereafter be considered to be one affiliate and should be consolidated in the same manner for all reports required to be filed pursuant to this section. (c) Reports required. The place and time for filing, and specific instructions and definitions relating to, a given report form are given on the form. Reports are required even though a foreign affiliate may have been established, acquired, seized, liquidated, sold, expropriated, or inactivated during the reporting period. (d) Exemption levels. Exemption levels for individual report forms will normally be stated in terms of total assets, net sales or gross operating revenues excluding sales taxes, and net income after income taxes, whether positive or negative, although different or special criteria may be specified for a given report form. If any one of the three items exceeds the exemption level and if the statistical data requested in the report are applicable to the entity being reported, then a report must be filed. Since these items may not have to be reported on a given form, a U.S. Reporter claiming exemption from filing a given form must furnish a certification as to the levels of the items on which the exemption is based or must certify that the data requested are not applicable. The exemption-level tests shall be applied as outlined below. (1) For quarterly report forms, as to the assets test reports are required beginning with the quarter in which total assets exceed the exemption level; as to the test for sales (revenues) and net income after income taxes, reports are required for each quarter of a year in which the annual amount of these items exceeds or can be expected to exceed, the exemption level. Quarterly reports for a year may be required retroactively when it is determined that the exemption level has been exceeded. (2) For report forms requesting annual data after the close of the year in question, the test shall be whether any one of the three items exceeded the exemption level during that year. (3) For the semi-annual plant and equipment expenditures survey, which requests actual data for the past year and/or annual projections for the current and following year, the test will be made for each year as to whether any one of the three items exceeded, or is expected to exceed, the exemption level; data must be reported only for the year or years in which the exemption level is, or is expected to be, exceeded. If total assets, sales or net income exceed the exemption level in a given year, it is deemed that the exemption level will also be exceeded in the following year. The number and title of each report form, its exemption level, and other reporting criteria, if any, pertaining to it, are given below. (e) Quarterly report form. BE-577--Transactions of U.S. Reporter with Foreign Affiliate: One report is required for each foreign affiliate exceeding an exemption level of $30,000,000 except that a report need not be filed by [[Page 25]] a U.S. Reporter to report direct transactions with one of its foreign affiliates in which it does not hold a direct equity interest unless an intercompany balance or fee and royalty receipts or payments for the quarter exceed $1,000,000. (f) Annual report forms. (1) BE-133B--Follow-up Schedule of Expenditures for property, Plant, and Equipment of U.S. Direct Investment Abroad: This is a schedule-type report form on which each majority-owned foreign affiliate exceeding an exemption level of $10,000,000 must be listed and the requested data given for each. (2) BE-133C--Schedule of Expenditures for Property, Plant, and Equipment of U.S. Direct Investment Abroad: This is a schedule-type report form on which each majority-owned foreign affiliate exceeding an exemption level of $10,000,000 must be listed and the requested data given for each. (3) BE-11--Annual Survey of U.S. Direct Investment Abroad: A report, consisting of Form BE-11A and Forms(s) BE-11B(LF), BE-11B(SF), and/or BE-11C, is required of each nonbank U.S. Reporter who, at the end of the Reporter's fiscal year, had a nonbank foreign affiliate reportable on Form BE-11B(LF), BE-11B(SF), or BE-11C. Forms required and the criteria for reporting on each are as follows: (i) Form BE-11A (Report for U.S. Reporter) must be filed by each nonbank U.S. person having a foreign affiliate reportable on form BE- 11B(LF), BE-11B(SF), or BE-11C. If the U.S. reporter is a corporation, Form BE-11A is required to cover the fully consolidated U.S. domestic business enterprise. (A) If for a nonbank U.S. Reporter any one of the following three items--total assets, sales or gross operating revenues excluding sales taxes, or net income after provision for U.S. income taxes--was greater than $100 million (positive or negative) at the end of, or for, the Reporter's fiscal year, the U.S. Reporter must file a complete Form BE- 11A. It must also file a Form BE-11B(LF), BE-11B(SF), or BE-11C, as applicable, for each nonexempt foreign affiliate. (B) If for a nonbank U.S. Reporter no one of the three items listed in paragraph (f)(3)(i)(A) of this section was greater than $100 million (positive or negative) at the end of, or for, the Reporter's fiscal year, the U.S. Reporter is required to file on Form BE-11A only items 1 through 27 and Part IV. It must also file a Form BE-11B(LF), BE-11B(SF), or BE-11C, as applicable, for each nonexempt foreign affiliate. (ii) (Form BE-11B(LF) or (SF) (Report for Majority-owned Foreign Affiliate). (A) A BE-11B(LF) (Long Form) is required to be filed for each majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter for which any one of the three items--total assets, sales or gross operating revenues excluding sales taxes, or net income after provision for foreign income taxes--was greater than $100 million (positive or negative) at the end of, or for, for the affiliate's fiscal year. (B) A BE-11B(SF)(Short Form) is required to be filed for each majority-owned nonbank foreign affiliate of a nonbank U.S. Reporter for which any one of the three items listed in paragraph (f)(3)(ii)(A) of this section was greater than $30 million (positive or negative), but for which no one of these items was greater than $100 million (positive or negative), at the end of, or for, the affiliate's fiscal year. (iii) Form BE-11C (Report for Minority-owned Foreign Affiliate) must be filed for each minority-owned nonbank foreign affiliate that is owned at least 20 percent, but not more than 50 percent, directly and/or indirectly, by all U.S. Reporters of the affiliate combined, and for which any one of the three items listed in paragraph(f)(3)(ii)(A) of this section was greater than $30 million (positive or negative) at the end of, or for, the affiliate's fiscal year. In addition, for the report covering fiscal year 2002 only, a Form BE-11C must be filed for each minority-owned nonbank foreign affiliate that is owned, directly or indirectly, at least 10 percent by one U.S. Reporter, but less than 20 percent by all U.S. Reporters of the affiliate combined, and for which any one of the three items listed in paragraph (f)(3)(ii)(A) of this section was greater than $100 million (positive or negative) at the end of, or for, the affiliate's fiscal year. [[Page 26]] (iv) Based on the preceding, an affiliate is exempt from being reported if it meets any one of the following criteria: (A) None of the three items listed in paragraph (f)(3)(ii)(A) of this section exceeds $30 million (positive or negative). (B) For fiscal year 2002 only, it is less than 20 percent owned, directly or indirectly, by all U.S. Reporters of the affiliate combined and none of the three items listed in paragraph (f)(3)(ii)(A) of this section exceeds $100 million (positive or negative). (C) For fiscal years other than 2002, it is less than 20 percent owned, directly or indirectly by all U.S. Reporters of the affiliate combined. (D) Its U.S. parent (U.S. Reporter) is a bank. (E) It is itself a bank. (v) Notwithstanding paragraph (f)(3)(iv) of this section, a Form BE- 11B(LF), BE-11B(SF), or BE-11C must be filed for a foreign affiliate of the U.S. Reporter than owns another nonexempt foreign affiliate of that U.S. Reporter, even if the foreign affiliate parent is otherwise exempt. That is, all affiliates upward in the chain of ownership must be reported. (g) Other report forms. (1) BE-507--Industry Classification Questionnaire: In general, U.S. Reporters and their foreign affiliates will each be assigned a BEA 3-digit industry code in the BE-10 Benchmark Surveys required by the Act to be conducted in 1982, 1989, and every fifth year thereafter. However, interim reports on Form BE-507 are required: (i) For each foreign affiliate newly established or acquired by a U.S. person on or after January 1, 1978; or (ii) For each U.S. person who becomes a U.S. Reporter on or after January 1, 1978 by virtue of establishing or acquiring a foreign affiliate; or (iii) For an existing foreign affiliate or U.S. Reporter whose industry classification changes on or after January 1, 1978 so that a previous BE-507 report or the BE-10 report required to be filed for 1977 does not accurately reflect the current industry classification of the entity. For new U.S. Reporters or foreign affiliates, the BE-507 report must be filed only if one of the other reports must be filed and shall be submitted with the initial filing of the related report. For a change in an existing U.S. Reporter or foreign affiliate which is currently filing one of the other reports, the BE-507 report must be filed whenever it is determined that change from one 3-digit industry classification to another has occurred. (2) BE-10-Benchmark Survey of U.S. Direct Investment Abroad: Section 4(b) of the Act (22 U.S.C. 3103) provides that a comprehensive benchmark survey of U.S. direct investment abroad will be conducted in 1982, 1989, and every fifth year thereafter. The survey, referred to as the ``BE- 10,'' consists of a Form BE-10A or BE-10A BANK for reporting information concerning the U.S. Reporter and Form(s) BE-10B(LF), BE-10B(SF), or BE- 10B BANK for reporting information concerning each foreign affiliate. Exemption levels, specific requirements for, and the year of coverage of, a given BE-10 survey may be found in Sec. 806.16. [42 FR 64315, Dec. 22, 1977; 43 FR 2169, Jan. 16, 1978, as amended at 46 FR 23226, Apr. 24, 1981; 47 FR 13139, Mar. 29, 1982; 48 FR 8993, Mar. 3, 1983; 49 FR 30059, July 26, 1984; 51 FR 11012, Apr. 1, 1986; 52 FR 8446, Mar. 18, 1987; 52 FR 42276, Nov. 4, 1987; 54 FR 51879, Dec. 19, 1989; 55 FR 49879, Dec. 3, 1990; 60 FR 10490, Feb. 27, 1995; 60 FR 54591, Oct. 25, 1995; 65 FR 78920, 78922, Dec. 18, 2000]