Approaching December 21

— UPDATE —

12/7: H.J.Res.143 – Making further continuing appropriations for fiscal year 2019, and for other purposes is a continuing resolution that replaces the previous 12/7 deadline for remaining government funding and authorizations with a new deadline: 12/21. IIUSA continues to press for longer-term regional center program authorization.

— ORIGINAL POST 11/26–

Washington has a deadline of December 7, 2018 to fully fund the government for FY2019, and to reauthorize programs (including the EB-5 regional center program) previously authorized by appropriations acts.

Those of us concerned with EB-5 wait with bated breath for language such as this, which may or may not get into legislation passed in the next few weeks:

  1. Section 610(b) of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note) shall be applied by substituting ‘[future date]’ for ‘September 30, 2015.’
  2. Such amounts as may be necessary, at a rate for operations as provided in the applicable appropriations Acts for fiscal year 2018 and under the authority and conditions provided for in such Acts, for continuing projects or activities (including the costs of direct loans and loan guarantees) that are not otherwise specifically provided for in this Act, that were conducted in fiscal year 2018, and for which appropriations, funds, or other authority were made available in the following appropriations Acts: … title II of division M of Public Law 115-141
  3. Section 202(a)(2) of the Immigration and Nationality Act (8 U.S.C. 1152(a)(2)) is amended – (1) In the paragraph heading, by striking “AND EMPLOYMENT-BASED”; (2) By striking “(3), (4), and (5),” and inserting “(3) and (4),”’ (3) By striking “subsections (a) and (b) of section 203” and inserting “section 203(a)”;

To translate each statement into common English:

  1. The EB-5 regional center program is reauthorized to a future date past the current sunset date
  2. The FY2018 authorization of the EB-5 regional center program is extended into FY2019
  3. The EB-5 category will no longer have a per-country cap on visas (among other changes)

None of these statements are true yet; they may or may not be in forthcoming legislation. In order to reauthorize the regional center program past its current sunset date of December 7, 2018, either Statement #1 will need to appear in a funding bill for FY2019, or Statement #2 will need to appear in another continuing resolution extending part of FY2018 funding into FY2019.  In order to change the per-country visa cap, Congress would have to agree about Statement #3 (which was in the House version but not the Senate version of FY2019 DHS funding bills voted out of committee in June/July, as discussed here). Congress could potentially attach other EB-5 changes to the FY2019 spending bills, but I’ve heard zero chatter about any substantial EB-5 legislation in progress.

So what will happen? I guess that the next few weeks will be full of wall-funding arguments and shutdown threats, followed by another continuing resolution for DHS funding into January/February 2019, and finally a FY2019 appropriations act that will extend regional center program authorization to September 30, 2019, and will not change visa allocation. I guess this outcome because it’s most consistent with the assumption that Congress has no time right now for EB-5 or EB immigration generally, for good or ill. EB-5 is the least pressing of all immigration issues. I guess that few of our representatives can even parse Statement #1 or Statement #2, much less have motivation to block such statements from being included again, as per long-standing practice, in the next round of funding bills. Apparently, few people can interpret Statement #3 either, since even the House Appropriations Committee has it wrong on its website.  Statement #3 appeared in a controversial early version of the DHS funding bill that’s already in conflict with the Senate and won’t be loved overall by the incoming Democrat-controlled House either. I just can’t imagine partisans charged up to deal with border security and asylum and childhood arrivals having any interest in agreeing now, by the way, on a tweak to EB visa allocations.

I expect to hear no news about EB-5 concerns in connection with spending bills, but will update my Washington Updates page on the off chance of any reports, and when I see legislation. Note that the bottom of my Washington Updates page includes “what if” discussions for several scenarios, including what would happen in case of RC program sunset or government shutdown.

Meanwhile, I regularly check the OMB List of Regulatory Actions Currently Under Review, and have yet to see the EB-5 Modernization Regulation RIN 1615-AC07 progress to the OMB review stage. This makes me doubt the OMB Fall 2018 estimate that we’ll see a Final Rule by 11/00/2018.

About Suzanne (www.lucidtext.com)
Suzanne Lazicki is a business plan writer, EB-5 expert, and founder of Lucid Professional Writing.

39 Responses to Approaching December 21

  1. Kishore says:

    Suzanne: What does this mean “The EB-5 category will no longer have a per-country cap on visas” Bullet 3 in your post ? No country cap ???

    • That statement translates a proposal in the House version of the FY2019 DHS funding bill, as discussed here: https://blog.lucidtext.com/2018/07/28/per-country-limits-in-question/

      • Kishore says:

        Got it !

      • Sameer Deshpande says:

        As Suzanne has pointed out earlier, IF they scrap the per country limit, all hell breaks loose, which is one of the reasons I’m waiting to see exactly what’s going to come down the pike.

        Per Suzanne, this is most likely what would happen to EB-5 visa availability if the per-country cap were removed as part of the FY2019 funding bill in September:

        The October 2018 Visa Bulletin would have a 2014 cut-off date for the EB-5 category for all countries.
        From 2019 to 2027, Department of State would be issuing EB-5 visas to people already in the backlog as of 2018, with no visas left for contemporary demand. Here are my estimates for when visas would be available to investors from various dates, based on data about I-526 filings from 2014 to 2018 and assumptions about denials/dropouts, family size, and visas already issued. Investors from all countries would be in the same line in order by priority date, without regard to nationality.
        2014 priority date: visa issued in 2019 (5-year wait)
        2015 priority date: visa issued in 2020/2021 (6-year wait)
        2016 priority date: visa issued in 2022/2023 (7-year wait)
        2017 priority date: visa issued in 2024/2025 (8-year wait)
        2018 priority date: visa issued in 2026/2027 (9-year wait)
        2019 priority date: visa issued in 2027/2028
        China-born applicants would dominate the front of the line for EB-5 visas, having the oldest priority dates. They would get 99% of EB-5 visas in 2019, and gradually reduce to about 80% of visas by 2027.

        See https://blog.lucidtext.com/2018/07/28/per-country-limits-in-question/ for details.

        • A per-country limit change would entirely change the EB-5 landscape, if approved. But I’m not sure about a “wait and see” policy in response, because this proposal could remain a low-probability possibility forever. Representative Yoder already tried it in a stand-alone bill that hasn’t gone anywhere, and now in an amendment that probably won’t go anywhere, and could keep trying to introduce the idea in different contexts, despite low probability of success, so long as he’s in Congress. And when he goes, the lobby that likes this suggestion would find someone else to keep trying it.

  2. Julie Goldsworth says:

    I just want to say your blog is AWESOME and I thank you for making dismal governmentspeak understandable. 🙂

  3. Chinese Investor says:

    By the end of FY2019, It’s likely to see more than 10,000 Indian nationals on the waitlist, which bumps the potential waitlist to 13+ years. When the Chinese market diminishes due to visa backlog, industrial stakeholders did nothing to advocate for these investors, but rather move on to India and Vietnam. So what happens when India and Vietnam are both on the same boat with China (which will happen in 1-2 years for sure)? Move on to other countries?

    One of my friends who works as an independent congressional lobbyist told me that during a visit in summer 2018, “many offices are still surprised about 15+ years backlog. They have no idea about this at all”…. That implies that even though visa backlog has been a severe issue in the past 4 years, industrial players did little to inform congress about this. They may say they have done a lot, but they did not.

  4. Vietnam Investor says:

    Now industrial stakeholders move to Korea, Taiwan, Brazil and South Africa.

  5. Chinese Investor says:

    In addition, the House bill removes country cap for ALL EB categories, not just EB-5. This amendment is designed to help EB-2 and EB-3, NOT EB-5 at all. In other words, EB-5 just happened to be on the same boat with EB-2/3.

    You are right that congress has no time to specifically discuss EB-5 at the moment, which means the fate of EB-5 country cap is directly related to the fate of EB-1, EB-2, EB-3, EB-4. In other words, if EB1-4 no longer have country caps, EB-5 will not have country caps. If EB-1-4 keeps their country caps, EB-5 will keep its country cap. Congress will have no time to specifically change visa allocations for EB-5 …… and if congress suddenly get bold to change visa allocations for all EB categories altogether, they won’t have time to even have a discussion about EB-5 either. It’s “all or nothing” business. They either remove country caps for all, or they will do nothing.

    • Sameer Deshpande says:

      If they removed country caps for all, then the tsunami of pending EB 2/3 will basically drown out the pending EB5 visa petitions, right?

  6. tpk129 says:

    Isn’t any discussion of country caps a waste of time…or am I missing something? Wouldn’t plenty of room open up across the board and wait times diminish greatly once the proposed regulations are adopted? I don’t see many takers at a minimum of $1+ million investment participating in the EB-5 program which would free up a large number of slots that could be used to absorb the backlog.

    It would seem the EB-5 industry would shrink dramatically once the investment requirements are increased. Smart investors with substantial financial resources aren’t going to turn their money over to a Regional Center for zero return just to get a green card.

    The biggest issue now is getting an application in before the new rules apply!

    • I think “Chinese investor” is correct that the country cap proposal is motivated by EB-2 and EB-3, and affects EB-5 incidentally. There isn’t really discussion about it in EB-5 except among the people who’d be most hurt — past investors who’d suddenly be pushed way back in line behind China.

  7. Sameer Deshpande says:

    Another reason for us to demand audited financial statements from any regional centre trying to sell us EB-5 visa related securities.

    https://cis.org/North/When-Truth-About-EB5-Being-Used-Support-Bad-Case

  8. rgv says:

    In that event that the RC program goes temporarily suspended while awaiting new re-authorization or a CR, is it just the visa number issuance that’s affected or will any i526 processing on pending RC petitions also stop?

      • tpk129 says:

        I’m biased as I work with “direct investment” EB-5 projects, but this is another reason why Regional Centers are a bad investment. The program isn’t permanent, investors basically pay developers for the right to give them money, and in too many cases, the promoters/developers bolt with the money. Just a bad idea and why many Senators and the SEC want EB-5 reform.

        • Kishore says:

          yet they failed to do anything. Hmmm

          • tpk129 says:

            Not a priority…we’ve have an administration that has run amok and other immigration matters are more pressing. Not sure if Congress will ever address the matter as they may leave it up to the USCIS to adopt the reforms necessary. That’s part of the reason why the USCIS have the items placed on the calendar for next year.

            The “Final Rule” item due this month should really have been legislated, but Congress simply won’t address the matter so the USCIS is going to get it accomplished on their own.

  9. Ellis says:

    Suzanne,
    As a Indian national who is a potential EB5 investor faced with wait time of six or more years to a conditional green card, I am trying to educate myself about redeployment of funds to maintain the investment “at risk”. If I am able to obtain a green card before my I-526 is approved, say by way of an approved EB1 petition and I withdraw my EB5 petition, would the RC return my funds without redeploying them even if the other investors in my project have not progressed to a stage where they can apply for removal of conditions? In other words, would I be able to opt out of redeployment after the initial loan term and project are completed if I have adjusted my status through another pathway or if I decide to give up on immigration to the US? Although this is specific to my situation, perhaps this is a question that several other investors on this blog would like answered as well. I feel for many fatigued Chinese investors who may already be in this position. Thanks!

    • USCIS requirements do not constrain all investors in a project, but only those investors seeking EB-5 benefits. If you decided to give up the EB-5 process, then EB-5 requirements no longer apply to you and it’s just a question of what the RC/issuer is willing and able under the investment agreement to do for you regarding exit strategy. Issuers are naturally unmotivated to accommodate early/at-will exit, though, so this would be something for a potential investor to examine closely and negotiate in the investment agreement.

    • Ellis says:

      I should probably rephrase my question from “if I am able to obtain a green card before my I-526 is approved” to “if I am able to obtain a green card before my EB5 priority date becomes current”.

      • In any case, USCIS only requires EB-5 requirements to be considered for people who are seeking EB-5 benefits. If you withdraw the I-526 petition, then USCIS has no further interest in what happens to your money, and whether or not it’s redeployed. But it’s the Issuer of your offering and the investment docs you sign, not USCIS, who ultimately controls what’s done with your funds and how/when you can exit.

        • Sameer Deshpande says:

          @Ellis,

          In case a regional center refuses to return your money, I believe that you can always threaten to sue them for securities fraud (for failing to honestly disclose the waiting period) and they will most likely just return your money instead of having to foot a 6-7 figure legal bill and getting shut down for fraud. I know that regional centers and their reps usually lie about waiting time, contracts, figures, etc, and just recently I spoke with someone from the Chopras as well as an Indo American lawyer, and they both claimed that we’d get our green cards in 2-3 years, and thanks to Suzanne, we know that this isn’t true. I asked both of them if they’d be willing to give it in writing with a $10,000 penalty for every month of delay, and you should have heard the pin drop silence. It was priceless. There’s also an Indian lawyer who I believe is representing a regional center that is represented by Ms. B. Parekh’s law firm in the US, and they also claimed in writing that the time for temporary green card is only 2-3 years, when that isn’t true.

          The regional center reps and marketers know that they’re lying and committing securities fraud, so if you want your money back, you may want to gather evidence by just pretending to write to them as a potential investor asking about time to get the green cards, and once you have them lying in writing, you can sue them for damages and return of your money too!

          I’ve even asked Charlie to refer any regional center that fully discloses all material facts and offers audited financial statements, and he also failed to recommend a single one, and just recently I asked another marketer (for Amrit Ocean) who promised to provide audited financials and has yet to share any documents. In India the bank won’t even give INR 3,000,000 without thoroughly examining our financials and verifying the authenticity of documents, and I intend to do the same when the total amount at stake is 12-14 times that amount. 🙂

          • tpk129 says:

            Our society has become so litigious that these threats often ring hollow and seldom work. The burden will be on you for financing the litigation.

            Green card timing is speculative at best and nobody can say with certainty how long it would take…too many factors outside the control of the private sector that influence the timing. The people you mentioned are pressed by many with “how long” questions and in many cases, they are trying their best with responses. Gather as much information as possible as to timing, add a cushion to the worst case scenario, and then decide if you want to proceed. Hopefully there will be a pleasant surprise.

            If someone does try to sell a deal based on timing of a green card within a set period, you are right to press them for it in writing. You would probably be smarter just to run away knowing they’re blowing smoke and could care less about your green card…they just want you dough. Their guarantees don’t mean anything as to collect is often futile as they go bankrupt and it is still up to you to pay your lawyers until a recovery occurs.

            All of these issues are diminished if the Regional Centers are required to prepare real prospectuses and go thru the SEC when offering these securities. How they have gotten by without meeting these rules this long is shameful.

          • rvgqmo says:

            I’ve observed that it’s industry standard to offer these private placements to accredited investors under SEC exemption of Form D. When you declare yourself to be an accredited investor, you’re taking responsibility to do the necessary due diligence for this class of offering.

            Anyway, I don’t think the EB5 industry is off SEC’s radar — a big RC had to settle with them for violation of this very rule.

  10. tpk129 says:

    …accredited investor-
    •a person must have an annual income exceeding $200,000, or $300,000 for joint income, for
    the last two years with expectation of earning the same or higher income in the current year,
    or
    •he has a net worth exceeding $1 million, either individually or jointly with his spouse.

    Did even 5% of the Chinese investors getting fleeced meet either requirement…extremely doubtful! Don’t want to hear about they only have themselves to blame…banks aren’t blamed when they get robbed…we blame the bank robber!

    The industry has brought more regulation into play because they couldn’t behave themselves and play the game fairly. Sad, but true…you need government regulations because the private sector isn’t capable of regulating itself.

    • rvgqmo says:

      I certainly hope they met the accredited investor requirement because I’m pretty sure they would have signed something to that effect!

      • tpk129 says:

        Sadly it is doubtful they understood what they were signing and common sense would say that most didn’t meet the requirements. The projects aren’t going to police potential investors about the matter with any enthusiasm.

  11. Sameer Deshpande says:

    This lawsuit shows that regional centres are fraudulently soliciting investments by deliberately concealing the actual amount of time needed to get the visas.

    https://legalnewsline.com/stories/511649515-investors-file-fraud-suit-against-adc-downey-seek-4-9-million

    • I saw that article, and felt sad for the plaintiffs because it looks like they were duped by ignorant litigators. The investors may have legitimate grievances, but the ones argued in the case are not supportable, being based on simple ignorance of fact. Whoever filed the case apparently doesn’t know that visa wait time estimates were not and are not 10 years for 2014/2015 investors, and that USCIS didn’t bring up the idea of redeployment until late 2015.

      • tpk129 says:

        Agree. Very doubtful that a plaintiff would win any suit claiming that a Regional Center project didn’t tell them about green card wait times…simply out of their control and how would they know anyway…they’re real estate developers, not immigration attorneys. If there was a guarantee in writing, which is highly unlikely, this could be a different story.

        While we feel badly about the amount time it may take, the investor took on the risks and has live with them…it is the way the system works Good news is that it is doubtful the wait time will be as long as advertised as any increase in minimum investment levels will likely clear the backlog pretty quick.

        • Also, it’s amazing how many people don’t grasp that investors who entered the EB-5 process at different periods have different wait times. Surely everyone has everyday experience of waiting in line. And yet the 2014 investors in this case assume that wait time estimates for 2017 China-born investors apply to them, though the visa bulletin shows 2014 China-born investors getting visas now.

          • x2 says:

            In 2016, Chinese investors, about 60,000 people in front of the queue, 3000 visas per year, 60,000/3000 = 20 years, this is my understanding.

  12. Dan says:

    On a different topic, it seems as if they are no longer updating the wait times at the beginning of the month anymore. Transparency appears to be really lacking of late.

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