Wide Range of U.S. Service Providers and IP Rights Holders Required to Respond to New Mandatory U.S. Government Survey
As previously reported, the U.S. Bureau of Economic Analysis (BEA) is conducting a mandatory survey of transactions between U.S.-based persons and non-U.S. persons involving a very broad range of intellectual property (IP) and services transactions. Companies in virtually every industry that engaged in covered transactions during the 2017 fiscal year will be required to respond by June 29, 2018, or could face civil and criminal penalties. Responses are required whether or not a company is contacted by BEA.
BEA has now issued the survey (Form BE-120), which can be found here, along with related FAQs and guidance documents. Companies are encouraged to begin the survey response early, as it may take considerable time and effort to compile, verify and report the requested information.
BEA, the statistical division of the U.S. Department of Commerce (DOC), is tasked with collecting a wide range of economic and industry data, preparing economic statistics from such data, and providing publicly available macroeconomic analyses. Like other benchmark surveys that it conducts, the BEA generally issues the BE-120 survey every five years.
The BE-120 survey requires U.S. companies and individuals that had sales to foreign persons or purchases from foreign persons in the services and IP categories covered by the survey during the U.S. person’s 2017 fiscal year to submit either a full or abbreviated response. U.S. persons with combined sales to foreign persons of covered IP or services that exceed $2 million during 2017, and those U.S. persons whose combined purchases of covered IP or services from foreign persons exceeded $1 million during the same period, must provide full survey responses, including data on their total sales or purchases by foreign country. U.S. persons that had combined sales and purchases less than the applicable dollar thresholds are required to submit abbreviated responses.
Examples of the types of IP transactions covered by the survey include sales and purchases of IP rights related to industrial processes and products as well as sales and purchases of trademarks, digital recordings, and computer software (including end-user licenses and customization services). Examples of covered services include cloud computing, advertising, engineering services, accounting and auditing services, legal services, computer and data processing services, research and development services, telecommunications services, agricultural services, construction services, engineering services, and mining services. For a complete list of covered transactions, please refer to the BE-120 survey form and instructions.
Penalties for Noncompliance
Individuals or companies that fail to submit timely responses to the BE-120 benchmark survey may be subject to a fine of between $2,500 and $25,000. In cases where non-compliance is willful, criminal penalties of up to $10,000 and one year’s imprisonment may be imposed.