15 CFR § 801.11 - Rules and regulations for the BE-120 Benchmark Survey of Transactions in Selected Services and Intellectual Property with Foreign Persons - 2017.

§ 801.11 Rules and regulations for the BE-120 Benchmark Survey of Transactions in Selected Services and Intellectual Property with Foreign Persons - 2017.

The BE-120 Benchmark Survey of Transactions in Selected Services and Intellectual Property with Foreign Persons will be conducted covering fiscal year 2017. All legal authorities, provisions, definitions, and requirements contained in §§ 801.1 and 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 paragraphs (a) through (e) of 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 from persons subject to the reporting requirements of the BE-120 Benchmark Survey of Transactions in Selected Services and Intellectual Property with Foreign Persons - 2017, 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 them 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 sales to foreign persons or purchases from foreign persons in the services and intellectual property categories covered by the survey during its 2017 fiscal year.

(c) What must be reported.

(1) A U.S. person that had combined sales to foreign persons that exceeded $2 million or combined purchases from foreign persons that exceeded $1 million in the services and intellectual property categories covered by the survey during its 2017 fiscal year, on an accrual basis, is required to provide data on total sales and/or purchases of each of the covered types of services and intellectual property 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 services and intellectual property transactions with foreign persons by all parts of the consolidated domestic U.S. Reporter. Because the $2 million threshold for sales and $1 million threshold for purchases apply separately to sales and purchases, the mandatory reporting requirement may apply only to sales, only to purchases, or to both. The determination of whether a U.S. company is subject to this reporting requirement may 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 or combined purchases from foreign persons that were $1 million or less in the intellectual property or services categories covered by the survey during its 2017 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 services and intellectual property transactions with foreign persons by all parts of the consolidated domestic U.S. Reporter. Because the $2 million threshold for sales and $1 million threshold for purchases apply separately to sales and purchases, the mandatory reporting requirement may apply only to sales, only to purchases, or to both.

(i) Voluntary reporting: If, during fiscal year 2017, combined sales were $2 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). Provision of this additional detail is voluntary. The estimates may be judgmental, that is, based on recall, without conducting a detailed records search.

(ii) If, during fiscal year 2017, 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 purchases at a country and affiliation level of detail on the applicable mandatory schedule(s). Provision of this additional detail is voluntary. The estimates may be judgmental, that is, based on recall, without conducting a detailed records search.

(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. Services transactions covered by this survey consist of sales and purchases related to certain intellectual property rights (see paragraphs (d)(1) through (18) of this section for a list of intellectual property-related transactions covered by this survey) and sales and purchases of selected services (see paragraphs (d)(19) through (59) of this section for a list of services covered by this survey). The transactions (sales or purchases) between U.S. companies and foreign persons covered by the BE-120 survey are:

(1) Rights related to the use of a patent, process, or trade secret to produce and/or distribute a product or service;

(2) Outright sales of proprietary rights related to patents, processes, and trade secrets;

(3) Rights to use books, music, etc., including end-user rights related to digital content;

(4) Rights to reproduce and/or distribute books, music, etc.;

(5) Outright sales of proprietary rights related to books, music, etc.;

(6) Rights to use trademarks;

(7) Outright sales of proprietary rights related to trademarks;

(8) Rights to use recorded performances and events, including end-user rights related to digital content;

(9) Rights to reproduce and/or distribute recorded performances and events;

(10) Outright sales of proprietary rights related to recorded performances and events;

(11) Rights to broadcast and record live performances and events;

(12) Rights to reproduce and/or distribute general use computer software;

(13) Outright sales of proprietary rights related to general use computer software;

(14) Fees associated with business format franchising;

(15) Outright sales of proprietary rights related to business format franchising;

(16) Rights to use other intellectual property;

(17) Rights to reproduce and/or distribute other intellectual property;

(18) Outright sales of proprietary rights related to other intellectual property;

(19) Accounting, auditing, and bookkeeping services;

(20) Advertising services;

(21) Auxiliary insurance services;

(22) Computer software, including end-user licenses and customization services;

(23) Cloud computing and data storage services;

(24) Other computer services;

(25) Construction services;

(26) News agency services (excludes production costs related to news broadcasters);

(27) Other information services;

(28) Education services;

(29) Architectural services;

(30) Engineering services;

(31) Surveying, cartography, certification, testing and technical inspection services;

(32) Financial services;

(33) Maintenance services;

(34) Installation, alteration, and training services;

(35) Legal services;

(36) Market research services;

(37) Public opinion polling services;

(38) Other management, consulting, and public relations services;

(39) Merchanting services (net receipts);

(40) Mining services;

(41) Operational leasing;

(42) Trade-related services, other than merchanting services;

(43) Artistic-related services;

(44) Premiums paid on primary insurance;

(45) Losses recovered on primary insurance;

(46) Provision of customized and non-customized research and development services;

(47) Other research and development services;

(48) Telecommunications services;

(49) Health services;

(50) Heritage and recreational services;

(51) Audiovisual and production services;

(52) Contract manufacturing services;

(53) Disbursements for sales promotion and representation;

(54) Photographic services (including satellite photography services);

(55) Space transport services;

(56) Trade exhibition and sales convention services;

(57) Agricultural services;

(58) Waste treatment and depollution services; and

(59) Other selected services n.i.e. (not included elsewhere).

(e) Types of transactions excluded from the scope of this survey.

(1) Sales and purchases of goods. Trade in goods involves products that have a physical form, and includes payments or receipts for electricity.

(2) Sales and purchases of financial instruments, including stocks, bonds, financial derivatives, loans, mutual fund shares, and negotiable CDs. (However, securities brokerage is a service).

(3) Income on financial instruments (interest, dividends, capital gain distributions, etc).

(4) Compensation paid to, or received by, employees.

(5) 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 not later than June 29, 2018 (or by July 30, 2018 for respondents that use BEA's eFile system).

[83 FR 4836, Feb. 2, 2018]