August Updates (IPO Processing, Terminations, Marketing, Regs & Legislation, Visa Bulletin)

USCIS Investor Program Office Updates: There’s evidence of increased activity at IPO.

  • Processing Times: The report on the USCIS Processing Time page improved this week for all EB-5 forms, with the “Case Inquiry Date” formula moving forward 76 days for I-526, 62 days for I-829, and 1,097 days for I-924. The months in the “Estimated Time Range” also dropped somewhat, and reduced their spread. I make regular spot checks of the daily report and enter them in this log. Making charts from this log, I note a possible rationale behind the recent fluctuations and slowdowns. Could the USCIS objective be to get all adjudications focused on the same date? Message to USCIS: what we need most of all is predictability within each form type (with productivity maintaining a reliable baseline or trending up). No one would cheer at the odd goal of making I-526, I-829, and I-924 equally slow. We are happy to see processing times finally trending down rather than up, though still with far to go.
  • Regional Center Terminations: In the email to USCIS copied in my last post, I noted that just 11 regional centers had been terminated so far in 2019. But USCIS proceeded to terminate a whopping 62 more regional centers in one week of August. Apparently, the regional center compliance team is back to work with a vengeance, though I-924 volumes remain low.

Other Updates

Regional Center Program Authorization: Regional center program authorization is currently attached to 2018 appropriations that expire on September 30, 2019. It appears likely that Congress will, per usual, fail to finalize 2019 appropriations in advance of the September 30 deadline, and instead defer the deadline with one or more Continuing Resolutions (CR). In the IIUSA Midyear Association Update Webinar, the government affairs panelist said he’d been assured that regional center program authorization will be included in the CR, if there is a CR.

EB-5 Reform/Change Regulations or Legislation: The IIUSA Midyear Association Update Webinar indicated that draft EB-5 legislation continues to circulate among select industry leaders, and to be discussed with Congressional offices. The webinar did not offer any timeframe estimate for such legislation to be advanced toward a vote. IIUSA did state that EB-5 has “Champions in Congress,” though the champions are not yet ready to be named and go public with EB-5 support. EB5 Investors Magazine reports that Senator Rand Paul is trying for a joint resolution that would withdraw the EB-5 regulation – but Senator Paul has not promoted this (or his backlog elimination bill) on hiswebsite. It looks unlikely that there will be any EB-5 program changes before the end of the year, beyond the changes that will result from the EB-5 Modernization Regulation taking effect on November 21, 2019. If only politicians and industry would allow for healthy enhancements and effective reforms for EB-5!

EB-5 Future: How much future does EB-5 have after November 21, 2019, when investment amounts will have increased and when – perhaps more to the point — and there’s no more deadline threat to hustle investment decisions and obscure visa availability and other issues? The industry is divided between people who are making a last mad rush and expecting to abandon the field after November, and people seeking a sustainable path into the future.

EB-5 Marketing and Oversubscription: I hear from multiple sources of significantly increased investment activity from Brazil, South Korea, and Taiwan in recent months, threatening backlogs for those countries. Unfortunately USCIS has not shared any per-country I-526 data since October 2018, so we can only guess at the likelihood that those countries are becoming oversubscribed in 2019. Prospective investors, you’ll want to monitor your markets while keeping in mind this rough metric: an additional year of visa wait for every additional 230 or so EB-5 investors from your country (assuming 700 annual visa cap and a 3:1 ratio of visas demanded to filed I-526). (If you want a more fine-tuned analysis that looks at country-specific historical trends and existing backlog, and explains how to model future waits from current assumptions, my timing estimate service is available.) The visa wait for any given investor is determined by the size of the backlog on the day she invests, so we try our best to estimate current volumes.

Visa Bulletin for India: Section D of the September 2019 Visa Bulletin includes this statement: “There has been a combination of a dramatic change in the USCIS demand pattern for adjustment of status applicants during July, and a larger than anticipated return of unused numbers which had been provided to consular offices for July use.  As a result, it has been possible to advance the Employment First and Second preference September final action dates for most countries, as well as the India Employment Fifth preference. ” The India Final Action Date for EB-5, which hadn’t been expected to move this month, advanced to September 1, 2017.

What does this mean for India EB-5 applicants in line? The Visa Bulletin just tells us that there were fewer-than-expected visas issued through consular processing in July, and different-than-expected demand in July for visas through I-485. I assume that must mean (1) a processing hold-up that resulted in fewer-than-expected people with old priority dates reaching the finish line in time to be able to claim a visa in July, or (2) more denials/withdrawals than expected. If (1), then the future visa claimants are still there, just held up by USCIS/consulate delays, and thus the total backlog picture/timing picture for India doesn’t change much. In that case, the September visa bulletin jump is an anomaly reflecting a temporary phenomenon, not a signal for the future.  If (2), then the total India backlog has actually become smaller, which means that people still in line advance more quickly than expected, with visa bulletin dates moving ahead accordingly.  On a down side, such attrition would signal problems with I-485, visa interviews, or sentiment among past investors.

I’m happy to see that Charles Oppenheim of Department of State Office of Visa Control has consented to speak at the IIUSA EB-5 Industry Forum in Seattle in October.  Let’s try to ask him the right questions.

Regional Center List Updates

Changes to the USCIS Regional Center List, 05/28/19 to 08/27/19.

New Regional Center Approvals


Name Changes

  • Smith Atlantic Regional Center LLC (former name Atlantic Coast Regional Center, LLC) (Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia)
  • Smith Central Regional Center LLC (former name Central Western Regional Center LLC) (former name USA Midwest Regional Center LLC) (Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Pennsylvania, Wisconsin)
  • Smith South Atlantic Regional Center (Florida, Georgia, North Carolina, South Carolina) former name: South Atlantic Coast Regional Center LLC

New Terminations in August 2019
(Too many to list here. Visit the USCIS Regional Center Terminations page and sort by date, or see my Excel file for terminations.)

Questions for USCIS Engagement

9/9 Update: USCIS did not answer even one of my questions in the engagement. (There was one piece of information — that IPO currently has 212 dedicated staff — but the call did not state whether these staff are currently assigned to EB-5 work, or among those temporary assigned to other agency priorities.)

From: suzanne@lucidtext.com
Sent: August 11, 2019 6:03 PM
To: ‘public.engagement@uscis.dhs.gov’
Subject: EB-5 Engagement

The following are my questions for the EB-5 Immigrant Investor Program: Listening Session, Monday, September 9, 2019.

    1. Processing Volume Questions

In the October 5, 2018 meeting with IIUSA, IPO Chief Sarah Kendall reported significant productivity improvements, which “represents that it was a good decision for the leadership here to invest additional resources in the program.” The changes to processing volume (completed adjudications) between FY2017 vs FY2018 YTD were +21.9% for I-526, +.2.6% for I-829, and +72.5% for I-924. However, productivity has fallen since then. Comparing FY2018 and FY2019 YTD (Q1 and Q2), the number of EB-5 forms processed decreased by half or more: -47% for I-526, -50% for I-829, and -76% for I-924.

Does IPO’s dramatic drop in productivity in FY2019 represent loss of resources, or a different approach to adjudications? If loss of resources, what caused this loss, and can it be remedied? (Has the large drop in EB-5 receipts resulted in reduced investment in EB-5 adjudications?) If reduced productivity is due to changes to the adjudications process or standards, what are these changes? (Has there been a change in workflow? In deference policy? In RFE standards?) Does IPO see any prospect of returning to the processing volume achieved in FY2018? If yes, when? If not, why not?

    1. Staffing Questions

In the October 5, 2018 meeting with IIUSA, IPO Chief Sarah Kendall reported that “we are fully staffed now,” with “close to 200-plus personnel at this time” including FDNS, Adjudications Management, and  a support team. What is the current staffing situation – total, and by department? How many personnel are dedicated to each type of adjudications: I-526, I-829, and I-924? Does IPO anticipate any additional hiring this year, or any reallocation of staff?

    1. Adjudication Priority Questions

The “Check Case Processing Times” page on the USCIS website says that “we generally process cases in the order we receive them.” However, the wide spread in the “estimated time range” reported on this page indicates that some cases are being processed two or more years earlier than others. Can IPO comment on reasons for this wide range in processing times? Do any of these factors result in some petitions experiencing longer wait times than others: whether direct EB-5 or regional center investment, the number of EB-5 investors in the project, the investor’s nationality.

    1. Response Time Questions

After a petitioner has filed a response to a RFE or NOID, how long should the petitioner expect to wait for a response from USCIS? What does USCIS consider a “normal” time between RFE response receipt and decision?

Considering the recent flood of Mandamus complaints, would USCIS like to suggest any additional measures short of Mandamus for petitioners with long-delayed petitions?

    1. Regulations Questions

What is IPO doing to prepare for the November 21, 2019 effective date of the EB-5 Modernization Regulation? Will Form revisions and policy manual revisions be complete by that time? Will IPO issue additional guidance regarding TEA evidence (to address ambiguities in the regulation regarding acceptable data and methodologies), and priority date retention (to address ambiguities in the regulation regarding the conditions under which the qualifying investment in a previously-filed petition can be counted toward the qualifying investment required for a newly-filed I-526).

Meanwhile, does IPO have any update or timeframe for the Regional Center Program regulation (RIN 1615-AC11) and EB-5 Immigrant Investor Program Realignment regulation (RIN 1615-AC26)?

    1. Regional Center Compliance Questions

IPO terminated 83 regional centers in 2017, 133 regional centers in 2018, and only 11 so far in 2019. Does this drop in terminations reflect a change in standards for regional center activity or compliance?

    1. Pending I-526 Data

In October 2018, IPO posted on the USCIS website a list that itemized pending I-526 by country of investor origin and priority date. This data was extremely valuable to program integrity, helping prospective investors to make informed decisions in light of the EB-5 backlog. But this list has since been removed from USCIS.gov. Will IPO publish an updated version of the list?

  1. Public Engagement

What can the industry do to best support IPO at this time? How can we help to reduce processing times? What input would be helpful from us?

We really appreciate this opportunity to engage with USCIS. Thank you!

Suzanne Lazicki
Lucid Professional Writing
(626) 660-4030
http://lucidtext.com/

9/9 Engagement Invitation

USCIS has emailed an invitation to EB-5 Immigrant Investor Program: Listening Session: EB-5 Listening Session_Invite_09092019_PL_OCC GovDel.pdf

Business Plans and RFE Response

Do responses to Requests for Evidence need business plans? What if the RFE for an I-526 petition includes this dread sentence “Upon reviewing the business plan, USCIS finds that the evidence in the record does not establish that the business plan is Matter of Ho compliant.” Should the RFE response submit an updated/revised business plan, or take another strategy?  Which forms of evidence will be most compelling to USCIS and most effective for the petitioner, when addressing USCIS questions and concerns related to the I-526 business plan?

The question is important, because Requests for Evidence have become so common and lengthy as to constitute, effectively, an additional stage in the EB-5 process.  The official EB-5 process includes the I-526 stage, which provides a business plan to reasonably predict prospective job creation, and the I-829 stage, which provides evidence to document actual job creation. The unofficial EB-5 process introduces the I-526 RFE stage, which preemptively asks for verification of actual job creation, masked as request for evidence that business plan predictions are reasonable.

It’s necessary to read the RFE carefully, to identify the concerns behind the requests. A statement in the RFE that “the I-526 business plan is deficient” has four possible meanings, each calling for a distinct response.

  1. “Not Up-to-Date”: The I-526 plan may be fine as a plan, but we (USCIS) are not interested in a plan anymore. Over the 2-4 years of processing delay, the business has had time to develop. Now we don’t care whether the petitioner established eligibility at the time of filing based on having a reasonable plan for the future. Rather, we want the petitioner to demonstrate eligibility as of today based on what’s already happened. Therefore we shall issue an RFE that calls the I-526 plan deficient just because it is a plan. In place of a plan and projections, we want a laundry list of evidence for past activity. For example, to quote recent RFEs: NCE tax filings to date, payroll records to date, bank records to date, and evidence for schedule milestones accomplished. This is justified by the idea that the only way to show that a business plan projection is reasonable is to prove that it already came true.
  2. “Not Complete”: The I-526 plan was deficient at the time of filing. Had we reviewed this plan promptly, while it was still up-to-date, we would still have found that it was not comprehensive and credible. The plan lacks the detail and supporting evidence that would normally be required to assess the credibility of a plan for the future.
  3. “Clarification Needed” The I-526 plan includes a few points that cause confusion — usually internal discrepancies, or discrepancies between the plan and external evidence. The RFE requests clarification on these points.
  4. Underlying Fact Problem” The I-526 plan might be beautiful as a document, but it describes a business that does not fit EB-5 requirements. Problematic elements might include prohibited debt arrangements, the wrong kind of structure, the wrong kind of job creation, unsuitable timing, failure to fit TEA requirements, or unacceptable immaturity or unpredictability.

Depending on the underlying concern, the RFE response may or may not need to include an updated business plan.

  1. Responding to the “Not Up-to-Date” RFE: In this type of RFE, USCIS does not identify problems with the original business plan as such, but requests evidence for implementation of the original plan. The petitioner could respond fully to this RFE by simply providing the specific evidence documents requested, such as tax, payroll, and permit records. This RFE does not ask for a revised business plan, because business plans treat the future and this RFE wants to know about the past. If actual performance closely followed the original business plan, and if the evidence documents speak for themselves, then an updated business plan would be needless and distracting. An updated plan can be helpful if actual performance has departed or will depart from the original plan.  In that case, a business plan is a good venue for putting new evidence in context, telling a coherent story that bridges the gap between the original plan and current conditions, and making a case for fundamental continuity despite non-material changes. Such an updated business plan must be written with great care and sensitivity to EB-5 requirements, to give the petition its best chance to demonstrate ongoing eligibility while avoiding material change problems. My RFE response service covers this type of business plan. (If actual performance has departed significantly from the original plan, then even the most expert business plan update may fail. But a slim chance of success can be maximized with a plan written by someone who is thoughtful, strategic, and intimately familiar with how USCIS has handled material change policy.) Note that one fair response to the “not-up-to-date” RFE would be “this RFE should not exist at all.” Most petitioners will want to comply instead of argue, to minimize risk and because this RFE response helps prepare the way for I-829, at least.  But arguments exist. USCIS is unreasonable to use an RFE to demand evidence that does not implicate eligibility at the time of filing (because such evidence did not exist at the time of filing), that would not have been requested had the petition been adjudicated promptly rather than delayed for many years, that belongs to the I-829 rather than I-526 stage, that appears to be fishing for material changes to provide denial pretext, and that slows adjudications to a crawl for everyone by doubling/tripling I-526 evidence. And it is impossible to write a business plan that will avoid this RFE. The mere passage of time due to USCIS delays creates  the “deficiency” of being not up-to-date, and of being a reasonable plan for the future rather than evidence of past performance.
  2. Responding to the “Not Complete” RFE: This type of RFE points out that the original business plan is deficient as a plan, suffering from content omissions. The RFE response has options: (a) provide the specifically-identified missing content as an amendment to the original plan, or (b) provide an updated business plan that includes the missing content plus takes opportunity to bring the entire original plan up-to-date. For an example, if the RFE just notes the lack of a hiring schedule, then a hiring schedule can be provided in the form of a business plan amendment. If the RFE just complains about lack of credibility due to unsupported market analysis, then a well-documented market analysis can be provided as additional evidence. A completely updated business plan may be called for if the RFE asked more wide-ranging questions, or if the positive factors in a business plan update look likely to outweigh the risk that unsolicited new information could open new questions and be labeled as material change.  Again, drafting such responses requires great care and significant EB-5 expertise. The very fact that USCIS decided to issue an RFE, instead of exercising its right to deny the petition outright for incompleteness, is a good sign for the petitioner. Value the second chance offered by the RFE, and make every effort to take advantage of it.  My RFE response service also covers these types of business plan amendments and updates.  (And note that unlike the “not up-to-date” RFE, the “not complete” RFE can be avoided. My business plan writing service and review service aim for business plans that are sufficiently comprehensive and credible to comply with Matter of Ho from the beginning.)
  3. Responding to the “Clarification Needed” RFE: This type of RFE asks for detail clarifications that often do not need a full business plan to answer. “The square footage is 32,000 on page 5 and 33,000 on page 10 of the original plan – which is correct?” A question like that can be answered in a few sentences and with the approved drawings as evidence. No need to revise the entire plan for the purpose of reconciling a few minor discrepancies and clearing up minor ambiguities. (But note to fellow business plan writers – even a tiny discrepancy can lead to months-long processing delay. Implement methods to avoid such errors in the first place.) “The original plan is for a McDonald’s but Google Maps currently shows a KFC at the project address – explain the discrepancy.” That kind of clarification may occupy a full business plan update.
  4. Responding to theUnderlying Fact ProblemRFE: This type of RFE points out underlying fact problems that would make the petitioner ineligible at the time of filing. For example, suppose the original business plan indicated that the petitioner made a loan to the NCE, while EB-5 eligibility requires equity. Pursuant to material change policy, such an eligibility problem at the time of filing I-526 cannot be fixed post-filing. Unless it’s possible to argue that the apparent problem did not really exist. Maybe the original business plan document was not written with care by Lucid Professional Writing, but by someone in a rush who made template errors and typos. Maybe the NCE’s operating agreement and tax filings clearly demonstrate that the petitioner’s funds were always in fact equity in the NCE from the beginning, and thus any reference to debt in the original business plan reflects a slip-up by the plan writer, not a problem in the reality upon which the petitioner’s eligibility depends. A business plan update or amendment in the RFE response can make such a case. But if a debt arrangement really existed at the time of filing, the most beautiful business plan revision cannot help. Again, it’s important to think strategically and realistically about what kind of RFE response is worthwhile, considering the facts.  (And for those just starting the process, be sure to get your EB-5 business plan written or at least reviewed by a careful expert.  Because once that business plan has been filed with USCIS, it’s difficult to fix document problems and almost impossible to fix reality problems.)

When thinking about RFE response strategy, I keep in mind the words that USCIS uses to conclude every RFE.

USCIS has determined that the record does not establish eligibility for the benefit sought. Accordingly, USCIS has requested evidence to address the issues outlined above. Petition is not precluded, however, from submitting evidence in addition to the evidence requested by USCIS that the petitioner deems relevant to address such issues. Petitioner must prove by a preponderance of the evidence – in other words, that it is more likely than not – that Petitioner is fully qualified for the benefit sought.

If Petitioner submits updated or revised documents, please note that “[a] petitioner must establish eligibility at the time of filing; a petition cannot be approved at a future date after the petitioner becomes eligibility under a new set of facts. See Matter of Katigbak, 14 I&N Dec. 45, 49 (Comm. 1971). Therefore, a petitioner may not make material changes to a petition that has already been filed in an effort to make an apparently deficient petition conform to [USCIS] requirements.” Matter of Izummi, 22 I&N Dec. 169, 175 (Assoc. Comm’r 1998); see also 8 C.F.R 103.2(b)(1).

This conclusion makes several key points:

  • The issue in every RFE is this: to establish by the preponderance of the evidence that the petitioner is eligible for EB-5 benefits. Thus:
    • Any evidence requested by USCIS, or provided by the petitioner in response, should be relevant to that single purpose.
    • The fundamental strategy question is not so much which specific evidence items does the RFE request, but which eligibility factor does USCIS think has not been established. The petitioner should identify that factor, and think about which evidence would best support eligibility in that area. The most compelling evidence may include items not mentioned in the RFE.
    • RFEs usually request sufficient evidence to prove every claim beyond a reasonable doubt, but such a standard is not required for approval. I-526 decisions are to be made based on a preponderance of the evidence standard.
  • The RFE exists to give an opportunity to supplement the record with new information and updated and revised documents. But the opportunity comes with a warning: new facts and corrections will actually make the petition un-approvable, if they appear to make any “material” changes to the original petition. This is the rocket science of RFE response: to prepare additional evidence that supports current eligibility without undermining eligibility at the time of I-526 filing.

For additional reading: