Reminder October 30 Filing Deadline to file 2019 Form BE-180 Electronically

19 October 2020 Foley Funds Legal Focus Blog
Authors: Stuart E. Fross Peter D. Fetzer Clyde Tinnen Stephen M. Meli Margaret Gembala Nelson

For investment advisers, managers/general partners of private funds, registered funds, private funds, and pension funds, among others, you have until October 30 to file Form BE-180, but you must do so electronically.  (Yes, it has been 5 years since the last Bureau of Economic Analysis (BEA) filing requirement and if you have not filed, it is time to do so again).

The BEA has provided a decision tool to enable you to determine if you must file Form BE-180:

  • In years past, filers were generally notified by the BEA.If you were notified, you have to file (either the form, or a claim for an exemption).

  • Any U.S. person that had transactions in covered financial services (see discussion below) directly with foreign persons that exceeded $3 million (either sales or purchases) for its 2019 fiscal year, on an accrual basis, must file.1

  • In addition, pursuant to June 2020 rulemaking by the BEA, any U.S. person that had transactions in covered financial services (see discussion below) directly with foreign persons that were $3 million or less (either sales or purchases) for its 2019 fiscal year, on an accrual basis, must file to report certain information, as discussed below.2

To access the decision tool:  https://apps.bea.gov/ssb/be180/

Covered Financial Services

As noted above, the filing requirement applies if you had sales or purchases of covered financial services directly with foreign persons during your 2019 fiscal year. Covered “financial services” include the following:

  • Brokerage services related to equity transactions

  • Other brokerage services

  • Underwriting and private placement services related to equity transactions

  • Underwriting and private placement services related to debt transactions

  • Financial management services (including fees for mutual funds, pension funds, exchange-traded funds, private equity funds, corporate portfolio, individual portfolio, hedge funds, trusts, and other financial vehicles)

  • Credit card services

  • Credit-related services

  • Financial advisory and custody services

  • Securities lending services

  • Electronic funds transfer services

  • Other financial services

What information must you provide?

If you paid in excess of $3 million in combined purchases to foreign persons for covered financial services during your 2019 fiscal year, on an accrual basis, or you were paid in excess of $3 million in combined sales from foreign persons for covered financial services during your 2019 fiscal year, on an accrual basis, you are required to provide data on total sales and/or total purchases for each type of service transaction in which you engaged and must disaggregate the totals by country and by relationship to the foreign transactor (foreign affiliate, foreign parent group, or unaffiliated).

If you paid $3 million or less in combined purchases to foreign persons for covered financial services during your 2019 fiscal year, on an accrual basis, or you were paid $3 million or less in combined sales from foreign persons for covered financial services during your 2019 fiscal year, on an accrual basis, you are required to provide data on total sales and/or total purchases for each type of service transaction in which you engaged by completing pages 1 to 7 of Form BE-180.  You are not required to disaggregate the totals by country and by relationship to the foreign transactor (foreign affiliate, foreign parent group, or unaffiliated), but you may voluntarily report this information, if you desire.

Who has to file?

Form BE-180 applies to “financial services providers,” which the Form defines by reference to those entities that fall within North American Industry Classification System, United States, 2012, Sector 52 - Finance and Insurance.  In addition, the instructions to Form BE-180 provide a lengthy list of examples of a “Financial Services Provider,” including persons engaged in the following industries, among others: financial investment activities (including portfolio management, investment advice, and all other financial investment activities), investment pools and funds (including open-end investment funds, trusts, estates, and agency accounts, real estate investment trusts and other financial vehicles), insurance carriers, pension funds and other employee benefit funds, and holding companies that own, or influence the management decisions of, firms principally engaged in the aforementioned activities. 

As noted above, the categories of “financial services” are very broad and include financial management and advisory services, brokerage services, private placement and underwriting services, credit-related services and custody services, and certain other financial services.

Can you get an extension for filing?

The deadline for filing the Form BE-180 using the BEA’s eFile system is on October 30, 2020. The BEA has advised that it is granting requests for extensions to file from November 30, 2020 through December 31, 2020. In order to request an extension, a written request should be sent via email to BE-180extension@bea.gov.

What is Form BE-180?

Form BE-180 is a mandatory survey conducted every 5 years under the International Investment and Trade Services Survey Act and Section 5408 of the Omnibus Trade and Competitiveness Act of 1988.  Failure to file can give rise to civil or criminal penalties.

Click here for the Federal Register.

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1 If you are 50% plus owned by another U.S. person, then you identify your owner on the Form BE-180, and the filing requirement moves upstream.

Based on Form BE-180’s instruction that amounts of less than $500 are rounded to $0, and a related frequently asked question, it appears that you are required to file Form BE-180 only if covered transactions equal or exceed $500.

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