Authorization (webinars updated), Regulations (articles), FY2021 Q2 Processing Data

With a record level of uncertainty in EB-5, it’s hard to know what to say. But I shall provide resources and processing updates, at least.

Regional Center Program Authorization Legislation Updates

• USCIS has not yet published guidance for the now-inevitable regional center program expiration/lapse as of July 1. 6/30 UPDATE: Now USCIS has published an alert on the website page for Approved EB-5 Immigrant Investor Regional Centers.
• Attorney Carolyn Lee hosted an EB-5 Program Sunset Pop-Up Event, on 6/30 at 2:00 PM ET. I will link to a recording here when available
• AIIA is hosting a Town Hall on July 1 at 6 pm ET to provide EB-5-investor-focused updates on what’s happening and solicit investor input for EB-5 reform negotiations. UPDATE: Recording available on YouTube.
• IIUSA is hosting a webinar on June 7 at 12 pm ET to discuss reauthorization efforts and the IIUSA advocacy plan. UPDATE: Recording available on YouTube.
• EB5IC and the China-focused EB-5 investor advocacy organizations are not offering any public engagement so far as I know, but I’ll update this list if I hear anything new. (UPDATE: EB5IC is doing some Sarah-Kendall-style public engagement, and emailed video on July 1.)

Regulations Update

The government has not yet reacted publicly (that I can find) to the court decision on June 22 vacating the EB-5 Modernization Regulation. The Code of Federal Regulations 8 CFR 204.6 at ecfr.gov (updated as of June 25), the USCIS Policy Manual Vol. 6 Part G, and the EB-5 page at USCIS.gov still say that the minimum EB-5 investment amount is $1.8 million, or $900,000 in a TEA designed by USCIS. EB-5 lawyers agree that the June 22 court win did indeed return the EB-5 investment amounts to $500,000 or $1 million in a State-designated TEA, and that I-526 can be filed at this level so long as the June 22 change still applies. The expert lawyers do not agree on the probability that USCIS will go on to approve I-526 filed at the lower investment level, or how and how soon and for whom the rules may change back again. I’ve started a table lining up the variety of opinions I’m seeing/hearing on regulations-related questions, and may publish it later once I have more feedback. A few expert reference articles available so far:

• “A swirl of EB-5 Developments” (June 25, 2021) by Robert Divine
• “EB-5 Investor Visa Update” (June 28, 2021)  by Jackson Lewis P.C. in the National Law Review
• “The $500,000 EB-5 Ruling: Two Top Immigration Lawyers Answer Questions, Explain Investor Impact” EB5 Marketplace (June 23, 2021)
• “Political Consequences of Behring Decision” (June 23, 2021) ILW
• Investment Migration Report interview with Aaron Grau on June 23

EB-5 Form Processing Update and FY2021 Q2 Processing Data

On the positive side, USCIS says they welcome the extensive public feedback on “Identifying Barriers Across USCIS Benefits and Services.” A USCIS Public Engagement email last week said that: “We greatly appreciate all the feedback submitted and are actively reviewing the comments we received. We will use this feedback to inform future policy changes and operational improvements. We remain dedicated to providing all stakeholders with opportunities to share meaningful feedback and to engage with the agency.”

A second piece of good news:   On June 24, the Senate Judiciary Committee advanced Ms. Ur Jaddou’s nomination for USCIS director, bringing her bringing the nomination closer to a full Senate vote.

And now for the rest of the news. The Investor Program Office and EB-5 processing have not shown improvements yet. Last week, the USCIS Citizenship & Immigration Data page was updated with data reports for FY2021 Q2 (January to March 2021). Processing volume in this quarter remained low – even worse than in the last quarter under the Trump administration. This is not the trend I wanted to see. I-526 receipts also remained low, though a bit higher than we had thought: total 189 for October 2020 to March 2021. I was glad to see that I-829 receipts caught up in January to March, compensating for an artificially low previous quarter.

I-526	Receipts	Approvals	Denials	Total Processed	Pending
Jan 2021 to Mar 2021	98	752	130	882	13,044
Fiscal Year to Date	189	1,756	249	2,005
I-829
Jan 2021 to Mar 2021	1,053	566	37	603	10,356
Fiscal Year to Date	1,258	1,207	78	1,235

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USCIS reported 13,044 pending I-526 as of March 31, 2021. Considering historical trends, we can assume that over 90% of those are regional center I-526 that cannot be processed once the regional center program lapses starting on July 1.  A Bloomberg Law article from June 25 “Backlog of Investor Visa Applications in Limbo as Program Dies” included this quote: “The Homeland Security Department subagency can’t yet say what the fate of those EB-5 applications are, USCIS spokesman Joe Sowers said Friday.” That’s over 10,000 regional center investors and their families and over 5 billion dollars in limbo associated with pending I-526 alone, not to mention over 70,000 regional center applicants at the visa stage. As industry negotiators keep up their “my way or nothing” positions, they must think about the implications associated with that amount of money in the economy, if not that number of tender individual human beings dependent on regional center program authorization.

Mandamus litigation has offered hope to combat the EB-5 processing slowdown since 2018. But the hope is limited. The above-linked Bloomberg Law article reports (though without citing sources) a high rate of denial and dismissal for mandamus lawsuits. The article indicates that federal courts threw out two of four EB-5 mandamus actions in 2020 and two out of three suits in January and February. One suit in May had a partial victory for the plaintiffs, while three were denied in June. “In many of these cases, judges cite a set of factors in a 1984 case—Telecommunications Research and Action Center v. FCC—that set standards for when courts ought to compel agencies to take action in the event of an unreasonable delay. The opinions often cited the concern that siding with the plaintiffs would send a signal that litigious applicants for the program can jump to the front of the line.” Ideally someone will soon address the across-the-board slowdowns and productivity loss at the Investor Program Office, as illustrated in the above charts, so that individual petitioners do not have to fight individually for treatment that everyone deserves.

What will happen to EB-5 processing during the regional center program expiration/lapse? If we assume that about 1,300 pending I-526 are direct petitions, that IPO continues processing I-526 at a rate of 900 petitions per quarter, and that the RC program stays expired for months to come, then the direct I-526 inventory could all be adjudicated this year. Or maybe IPO will eventually respond to changes by moving staff over to I-829 adjudications, in which case I-829 rather than direct EB-5 may benefit from the RC program lapse/expiration. With so many moving parts, prediction is difficult.