§ 801.11 Rules and regulations for the BE-120 Benchmark Survey of Transactions in Selected Services and Intellectual Property with Foreign Persons. The BE-120 Benchmark Survey of Transactions in Selected Services and Intellectual Property with Foreign Persons will be conducted once every five years and covers years ending in 2 and 7. BEA will describe the proposed information collection in a public notice and will solicit comments according to the requirements of the Paperwork Reduction Act (44 U.S.C. 3501-3520). All legal authorities, provisions, definitions, and requirements contained in §§ 801.1 through 801.2 and 801.4 through 801.6 are applicable to this survey. Specific additional rules and regulations for the BE-120 survey are given in this section. More detailed instructions are given on the report form and in instructions accompanying the report form. ( a ) *Response required.* A response is required, every fifth year, from persons subject to the reporting requirements of the BE-120 Benchmark Survey of Transactions in Selected Services and Intellectual Property with Foreign Persons, contained in this section, whether or not they are contacted by BEA. Also, a person, or its agent, that is contacted by BEA about reporting on this survey, either by sending a report form or by written inquiry, must respond in writing pursuant to this section. This may be accomplished by: ( 1 ) Completing and returning the BE-120 by the due date of the survey; or
( 2 ) If exempt, by completing the determination of reporting status section of the BE-120 survey and returning it to BEA by the due date of the survey.
( b ) *Who must report.* A BE-120 report is required of each U.S. person that had transactions with foreign persons in the categories covered by the survey during the fiscal year covered by the survey.
( c ) *What must be reported.* ( 1 ) A U.S. person that had combined sales to foreign persons that exceeded $2 million, and/or combined purchases from foreign persons that exceeded $1 million in the services and intellectual property categories covered by the survey during its fiscal year, on an accrual basis, is required to provide data on total sales and/or purchases of each of the covered types of transactions and must disaggregate the totals by country and by relationship to the foreign transactor (foreign affiliate, foreign parent group, or unaffiliated). The $2 million threshold for sales and the $1 million threshold for purchases should be applied to the covered transactions categories with foreign persons by all parts of the consolidated domestic U.S. Reporter. Because the $2 million and $1 million thresholds apply separately to sales and purchases, the mandatory reporting requirement may apply to sales only, to purchases only, or to both. The determination of whether a U.S. services provider is subject to this reporting requirement can be based on the judgment of knowledgeable persons in a company who can identify reportable transactions on a recall basis, with a reasonable degree of certainty, without conducting a detailed manual records search.
( 2 ) A U.S. person that had combined sales to foreign persons that were $2 million or less, and combined purchases from foreign persons that were $1 million or less in the transaction categories covered by the survey during its fiscal year, on an accrual basis, is required to provide the total sales and/or purchases for each type of transaction in which they engaged. The $2 million threshold for sales and the $1 million threshold for purchases should be applied to the covered transactions categories with foreign persons by all parts of the consolidated domestic U.S. Reporter. Because the $2 million and $1 million thresholds apply separately to sales and purchases, the mandatory reporting requirement may apply to sales only, to purchases only, or to both. ( i ) *Voluntary reporting of transactions.* If, during the reporter's fiscal year, combined sales were $2 million or less, and combined purchases were $1 million or less, on an accrual basis, the U.S. person may, in addition to providing the required total for each type of transaction, report sales at a country and affiliation level of detail on the applicable mandatory schedule(s). The estimates can be judgmental, that is, based on recall, without conducting a detailed records search.
( ii ) [Reserved]
( 3 ) Exemption claims: Any U.S. person that receives the BE-120 survey form from BEA, but is not subject to the reporting requirements, must file an exemption claim by completing the determination of reporting status section of the BE-120 survey and returning it to BEA by the due date of the survey. This requirement is necessary to ensure compliance with reporting requirements and efficient administration of the Act by eliminating unnecessary follow-up contact.
( d ) *Covered types of services and intellectual property.* Services transactions covered by this survey consist of: Advertising and related services; Architectural, engineering, scientific, and other technical services; Computer services; Construction; Financial services (for reporters who are not a financial services providers); Franchises and trademarks licensing fees; Information services; Legal, accounting, management consulting, and public relations services; Licenses for the use of outcomes of research and development; Licenses to reproduce and/or distribute computer software; Licenses to reproduce and/or distribute audiovisual products; Maintenance and repair services; Manufacturing services; Operating leasing services; Other business services; Personal, cultural, and recreational services; Research and development services; Primary insurance premiums and losses (for reporters who are not a U.S. insurance company); Space transport services; Telecommunications services; Trade-related services; Waste treatment and de-pollution, agricultural, and mining services.
( e ) *Types of transactions excluded from the scope of this survey.* ( 1 ) Financial services transactions conducted by a U.S. financial services provider, all insurance services conducted by a U.S. insurance company, and all travel and transport activities that are not space transport services.
( 2 ) Sales and purchases of goods. Trade in goods involves products that have a physical form, and includes payments or receipts for electricity.
( 3 ) Sales and purchases of financial instruments, including stocks, bonds, financial derivatives, loans, mutual fund shares, and negotiable CDs. (However, securities brokerage is a service).
( 4 ) Income on financial instruments (interest, dividends, capital gain distributions, etc.).
( 5 ) Compensation paid to, or received by, employees.
( 6 ) Penalties and fines and gifts or grants in the form of goods and cash (sometimes called “transfers”).
( f ) *Due date.* A fully completed and certified BE-120 report, or qualifying exemption claim with the determination of reporting status section completed, is due to be filed with BEA by July 31 of the year after the year covered by the survey.
[87 FR 54887, Sept. 8, 2022]