[Code of Federal Regulations]

[Title 15, Volume 3]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 15CFR806.11]



[Page 21-22]

 

                  TITLE 15--COMMERCE AND FOREIGN TRADE

 

    CHAPTER VIII--BUREAU OF ECONOMIC ANALYSIS, DEPARTMENT OF COMMERCE

 

PART 806_DIRECT INVESTMENT SURVEYS--Table of Contents

 

Sec. 806.11  Estates, trusts, and intermediaries.



    (a) An estate, either U.S. or foreign, is a person and therefore may 

have direct investment, and the estate, not the beneficiary, is 

considered to be the owner.

    (b) A trust, either U.S. or foreign, is a person, but is not a 

business enterprise. The trust shall be considered the same as an 

intermediary and reporting should be as outlined in paragraph (c) of 

this section. For reporting purposes, the beneficiary(ies) of the trust, 

or the creator(s) of the trust in the situation detailed below or if 

there is, or may be, a reversionary interest, shall be considered to be 

the owner(s) of the investments of the trust for determining the 

existence of direct investment. Where a corporation or other 

organization creates a trust designating its shareholders or members as 

beneficiaries, the creating corporation or organization shall be deemed 

to be the owner of the investments of the trust, or succeeding trusts 

where the presently existing trust has evolved out of a prior trust, for 

the purposes of determining the existence and reporting of direct 

investment.



This procedure is adopted in order to fulfill the statistical purposes 

of this part and does not imply that control over an enterprise owned or 

controlled by a trust is, or can be, exercised by the beneficiary(ies) 

or creator(s).

    (c) Intermediary. (1) If a particular U.S. direct investment abroad 

is held, administered, or managed by a U.S. intermediary, such 

intermediary shall be responsible for reporting the required information 

for, and in the name of, its principal or shall instruct the principal 

to submit the required information. Upon instructing the principal, the 

intermediary shall be released from further liability to report provided 

it has informed this bureau of the date such instructions were given and 

the name and address of the principal, and has supplied the principal 

with any information in the possession of, or which can be secured by, 

the intermediary, that is necessary to permit the principal to complete 

the required reports. When acting in the capacity of an intermediary, 

the accounts or transactions of the U.S. intermediary with the foreign 

affiliate shall be considered as accounts or transactions of the U.S. 

principal with the foreign affiliate. To the extent such transactions or 

accounts are unavailable to the principal, they may be required to be 

reported by the intermediary.

    (2) If a U.S. person holds a foreign affiliate through a foreign 

intermediary, the U.S. person will be considered to own the foreign 

affiliate directly and all accounts or transactions of the U.S. person 

with the intermediary will be considered to be with the foreign 

affiliate.

    (3) If a particular foreign direct investment in the United States 

is held, exercised, administered, or managed by a U.S. intermediary for 

the foreign beneficial owner, such intermediary shall be responsible for 

reporting the required information for, and in the name of, the U.S. 

affiliate, and shall report on behalf of the U.S. affiliate or shall 

instruct the U.S. affiliate to submit the required information. Upon so 

instructing the U.S. affiliate, the intermediary shall be released from 

further liability to report provided it has informed this Bureau of the 

date such instructions were given and the name and address of the U.S. 

affiliate, and has supplied the U.S. affiliate with any information in 

the possession of, or which can be secured by, the intermediary that is 

necessary to permit the U.S. affiliate to complete the required reports. 

When acting in the capacity of an intermediary, the accounts or 

transactions of the U.S. intermediary with a foreign beneficial owner 

shall be considered as accounts or transactions of the U.S. affiliate 

with the foreign beneficial owner. To the extent such transactions or 

accounts are unavailable to the U.S. affiliiate, they may be required to 

be reported by the intermediary.

    (4) If a foreign beneficial owner holds a U.S. affiliate through a 

foreign intermediary, the U.S. affiliate may report the intermediary as 

its foreign parent but, when requested, must also identify and furnish 

information concerning the foreign beneficial owner, if known, or if



[[Page 22]]



such information can be secured. Accounts or transactions of the U.S. 

affiliate with the foreign intermediary shall be considered as accounts 

or transactions of the U.S. affiliate with the foreign beneficial owner.



[42 FR 64315, Dec. 22, 1977, as amended at 43 FR 54624, Nov. 22, 1978]