December/January Updates (Regional Center status, visa availability, I-526 and I-829 Processing in Q4, Fee Rule, Form I-526 and I-956 revisions and comments)

A quick roundup of significant EB-5 developments since last report – rather delayed, while I held out for good news. I did not expect to start my 14th year in EB-5 grappling with basic questions like “How and why do regional centers exist?” and “Is EB-5 an immigration opportunity?” I hope that 2023 will bring policy clarifications and processing improvements to help resolve such questions, which should not be open.

Regional Center Status

On December 23, USCIS slipped a new sentence onto the USCIS website: “Dec. 29, 2022, is no longer the deadline to file Form I-956, Application for Regional Center Designation, amendments, as required by the Behring Settlement, and Form I-956G, Regional Center Annual Statement. USCIS is extending this deadline until we publish guidance that clarifies the requirements of these forms.”

I saw this update on Christmas Eve and thought about leaving the nieces and nephews to report on it, but why? EB-5 stakeholders needed this notice months ago. By three business days before the deadline, everyone had already had to make their guesses and gambles and done what they were going to do with I-956 and I-956G (if they even realized that a December 29 deadline existed, since USCIS did not offer I-956 guidance to the general public, but only in litigation settlement and a private meeting with a few litigation plaintiffs). USCIS and industry are not sure how to handle the regional center application, amendment, and reporting forms because we lack clarity or agreement on basic questions about regional center identity and responsibilities. The effect of the Integrity Act on previously-approved regional centers and their investors remains unclear. Nine months after the Integrity Act passed, the USCIS Policy Manual section on regional center designation and termination remains vacant.  Meanwhile, billions of dollars are flowing in real time under sponsorship of entities and from investors who aren’t sure what eligibility requirements do or will apply to them. On the bright side, I’m glad that USCIS acknowledged a need to “clarify the requirements,” and did not stick to an unreasonable deadline. And stakeholders now have more time to provide input.

Form I-956, I-956F, I-956G, and I-956K

The Federal Register has re-opened opportunity to comment on the new regional center forms I-956, I-956F, I-956G, and I-956K. Feedback will be accepted until January 26, 2023. (Click on the “View More Documents” button to see what you’re commenting on.) This is a great chance to submit your view on the application/implementation of regional center requirements, because a responsible person at DHS is compelled to actually read and respond to each comment made through the regulatory process. It’s not like stakeholder meeting comments, which can disappear into the void. I was interested to read USCIS’s digest and responses to the previous round of comments. Many stakeholder questions about ambiguities were met with the response “USCIS may consider rulemaking to address these issues.”

I-526 and I-829 Receipt and Processing Data

USCIS published form receipt and processing data for FY2022 Q4 (July to September 2022), and I also received data unofficially for EB-5 adjudications in October to December 2022. See my Processing Data page with updated charts and detail for I-526, I-829, and I-485 processing through the end of the year.

Short report: fantastic performance for I-485 at the California Service Center in Q4 (thanks to USCIS leadership for prioritizing EB visa issuance and to Congress for applying political pressure that proved effective!), and on-going terrible performance by the Investor Program Office. IPO is still on track to deliver over-six-year processing times for I-526 and I-829, still chaotic in the date range of petitions being processed, and still denying a large percentage of I-526. In July to September 2022, over half of I-526 adjudications were denials. Fiscal Year 2022 ended with a total of 590 I-526 approvals and 825 denials/withdrawals; in other words, $295+ million in EB-5 investment yielded a chance to pursue a visa while $423.5+ million was invested without resulting in any chance to immigrate. These dreadful numbers can trace back to factors including economic pressures on EB-5 projects, heightened risk from long processing delays, the legacy of “extreme vetting” philosophy, and rogue IPO staff alone in their home offices and apparently free to make up and apply idiosyncratic standards of proof for source of funds. I expect the I-526 success rate to improve if and when IPO standardizes and publicly articulates its policy and adjudication guidelines, shortens processing times, and increases staff supervision and quality control.

I-956 and I-956F filings commenced in Q4, but the USCIS data report for Q4 does not report them. The USCIS Office of Performance and Quality may not even realize that the I-956 forms exist, and still has line items for I-924. OPQ did add I-526E to its Q4 data reporting, lumped in one line item together with I-526. Just 188 I-526/I-526E were filed in July to September 2022.

USCIS Fee Rule

The Federal Register has published a Notice of Proposed Rulemaking for the future USCIS fee schedule, with a public comment period open until March 6, 2023. USCIS invites the public to a listening session for the Proposed Rule on January 11 at 2 pm ET.

The fee rule process is critical, because it determines over 90 percent of USCIS funding and whether or not USCIS has “the resources it needs to provide adequate service.” The fee rule process is a major reason why USCIS never has ended up with needed resources or adequate service. If you want a good cry and to lose some hair, read the 132,341 words that explain the budgeting methodology and assumptions. I am working on an in-depth article discussing the rule’s EB-5-related content. The obvious headline is the huge proposed increase to EB-5 form filing fees. But I’m more concerned by the assumptions and plans disclosed in discussion of how USCIS arrived at the proposed fees, and the question of how to respond strategically so that the Investor Program Office ends up with resources.

UPDATE: The IIUSA blog has published my detailed analysis of the formula and inputs behind the fee rule, with thoughts on how to respond.

Visa Availability

Congress did not, after all, pass the EAGLE Act or repeal country caps as part of FY2023 appropriations, which means that (for now) EB-5 visa availability remains constrained/protected by caps that limit any one country to 7% of visas in oversubscribed categories. In the near term, that on-going status quo is good news for anyone in EB-5 who isn’t an in-process EB-5 applicant born in China, India, or Vietnam.

The new EB-5 set-aside categories remain enticingly “Current” in the Visa Bulletin, which means nothing for planning because the Visa Bulletin cannot see and does not flag crowds, if any, when they start at the I-526 stage. The Visa Bulletin only monitors and controls the later visa stage, not the queue on its way to the visa stage. USCIS knows how many people are getting in line by filing I-526/I-526E, but USCIS has persistently refused to publicly report on I-526 filings/inventory by category or country. This leaves stakeholders blind to visa backlogs until the backlogs have already built up and too late to avoid.

If only USCIS would report timely and category/country-specific I-526 filing data, then we could project and compare in-process visa demand with available visa supply to calculate availability/timing for each EB-5 category.  USCIS should want to empower prospective EB-5 users to judge upfront whether and when EB-5 could offer an opportunity to immigrate. The U.S. government engages in fraud when offers an investor visa incentive while making it impossible to assess, at the time of investment, the availability of that incentive. (So far, I’ve only succeeded in getting USCIS to answer in November 2022 a Freedom of Information Act request that I submitted in February 2020 for I-526 inventory by country, having previously fruitlessly tried to get country-specific I-526 data via IPO customer service requests. The two-year-old data was useless by the time it was finally delivered to me. Others have encountered similar delays and obstruction from USCIS. As of today, the best I-526 data we have is mostly thanks to IIUSA communicating with the now-retired Charles Oppenheim at Department of State, and goes through 2021. I hope for more transparency from USCIS in 2023!)

Form I-526 and I-526E

We get another chance to provide feedback to USCIS on the revised Form I-526 and I-526E, with comments due by January 23, 2023. The last round of comments successfully convinced USCIS that it’s unreasonable to demand that petitioners detail 40 years of employment history (the current proposed version asks for 20 years of employment history). Perhaps this time we can get through to USCIS what “substantive authority” means, such that USCIS doesn’t misidentify “persons involved.” Also, let’s all remind USCIS that the public list of questions and required evidence on the Form I-526 should match the private list of questions and required evidence given to USCIS adjudicators. (For example, if USCIS truly holds the untenable standard that that each investor’s eligibility is contingent on the lawful source of funds for each other investor in the NCE, then the Form I-526 should reflect that standard, and request lawful source of funds documentation for NCE investors other than the petitioner. Currently, the Form I-526 does not request any non-petitioner source of funds evidence. But USCIS has directed adjudicators to request it at the RFE stage, and to deny direct I-526 for lack of source-of-funds documentation for non-EB-5 investors.)

Form I-956K Promoter Registration

USCIS has published Form I-956K, Registration for Direct and Third-Party Promoters. The purpose of the form is “to register with USCIS as a direct or third-party promoter” and to “allow DHS to perform standard background checks with law enforcement agencies.” The form is exciting due to its ambiguities (with vague terms pointed out in the draft I-956K still undefined), and the dramatic consequences of getting it wrong. The I-956K instructions warn that if USCIS finds problems with I-956K, penalties can include criminal prosecution for the aspiring promoter plus denial of applications and petitions associated with the regional center, NCE, or JCE associated with that promoter. The I-956K instructions request that “a promoter should submit Form I-956K before operating on behalf of any of the specified entities or promoting any offering under the EB-5 Regional Center Program.” (See also the article “Who are ‘Promoters’ and What Requirements Apply to Them Under the EB-5 Reform and Integrity Act?” in the October 2022 Regional Center Business Journal, and the above-linked Federal Register invitation to submit I-956 comments to USCIS.)

EB-5 roller coaster continues (RC status after December 29, processing, FY2023 visas, EAGLE Act and country caps)

While my plate is full of everyday work plus hard articles that could be written, I’d like to briefly flag a few matters of critical importance for the EB-5 community. There are questions about the status of previously-approved regional centers and their investors, ongoing processing issues, and the prospect of new legislation to change everyone’s visa wait times. Before launching into details, a reminder that industry associations like IIUSA (for regional centers) and AIIA (for investors) are working on these issues, and you can join an association to help magnify your voice and interests in these volatile times.

Regional Center Status after December 29

USCIS finally published minutes from the October 14, 2022 meeting between USCIS and the plaintiffs in the Behring litigation. These minutes reveal that at least as of October, USCIS had yet to make up its mind about a few very consequential questions, and invited stakeholder feedback.

  • USCIS has not yet decided whether it will take the position that RIA requirements, such as fund administrators and audits, apply to pre-RIA projects. USCIS will consider stakeholders’ written position paper on this issue in accordance with existing channels of communication and in compliance with Section 107 of the RIA.
  • USCIS will accept input on the issue of whether the I-956G filing requirement should be deferred to December 2023 based on input from Stakeholders that much of the information is duplicative with the I-956 being filed in December 2022. Input will be provided in accordance with existing channels of communication and in compliance with Section 107 of the RIA.
  • USCIS has not determined what will happen to regional centers that choose not to file Form I-956. Specifically, it has not decided whether such regional centers will be terminated, whether they will have to file I-956H, whether they will have to file annual statements, or whether any of the RIA requirements apply to them. They will accept our written position paper on these issues in accordance with existing channels of communication and in compliance with Section 107 of the RIA.

That last bullet point is especially urgent and significant. The Form I-956 content is focused on compliance for capital raising activities, and as such not technically relevant for previously-approved regional centers that do not plan to raise new EB-5 capital going forward. But what if USCIS decides to terminate all regional centers who do not choose to raise new EB-5 funds? If USCIS starts terminating regional centers for not filing I-956 by December 29, 2022, instead of offering another status for RCs still responsibly shepherding previous EB-5 investment, then past investors in those RCs will find their immigration status in jeopardy. Under the new law, regional center termination means that good faith investors in the terminated regional center lose eligibility in 180 days unless (1) the investor’s NCE manages to switch sponsors and secure affiliation from a different still-authorized regional center (practically a fraught and expensive undertaking) or (2) the investor makes a new investment (yikes). Under the new law, regional center termination has consequences for investors at all stages in the process, including during conditional permanent residence.  The grandfathering language in the new law protects past applicants from denials based on the expiration of regional center program authorization, but not explicitly from denials based on changes resulting from new legislation. So USCIS faces judgement calls when it comes to how to treat previously-approved regional centers and their investors, and should hear our input for those judgement calls. (To review the new law provisions, see INA 203(b)(5) sections (M) and (S). And here’s the Settlement Agreement.)

The plaintiffs in the Behring litigation are coordinating response to USCIS. Their feedback will naturally reflect their interests and perspective as regional centers who do choose to file I-956 to raise new capital going forward. If you’re with an RC that does not plan to raise new capital after RIA, and concerned about protecting past investors, you should also let USCIS hear your voice and reasoning, as soon as possible. The stakes are very high. See the base of this page for links to accepted channels of communication for submitting feedback. (UPDATE: Klasko Law, counsel for several of the Behring litigation plaintiffs, has just published a detailed article on this topic.)

RIA Compliance Resources

Note that the October 2022 Regional Center Business Journal is packed with substantive and helpful articles for regional centers working with compliance under the new law, including:

  • “Checklist of Contents for Regional Center Compliance Policies and Procedures Manual Under the EB-5 Reform & Integrity Act” by the EB-5 Securities Roundtable
  • “New Job Creation and TEA Rules in the EB-5 Reform and Integrity Act of 2022 Revised and Explained” by Scott Barnhart and Adam Greene
  • “Understanding Audits & Fund Administration Under the Reform & Integrity Act” by Coleen Danaher, Bidhya Dhungel, and Mike Xenick (also a blog post)
  • “Regional Center Transactions Post-RIA: Considerations for Purchase, Sale, and/or Rentals” by Rohit Kapuria and Ronald Fieldstone
  • “EB-5 Concurrent Filing” by Simone Williams and Charles Kaufman
  • ”Who are ‘Promoters’ and What Requirements Apply to Them Under the EB-5 Reform and Integrity Act” by Catherine DeBono Holmes (also a blog post)
  • “Reserved Visa Rules, Possible Future Visa Allocation, and Recommendations” by Barnett, Oppenheim, and Lee (also a blog post)

I’m thankful for the hard work by industry. I’ve noted no significant new content on the USCIS website EB-5 pages. The EB-5 Policy Manual EB-5 Chapters 3, 4, 5, and 6 have not been updated yet based on the new law.

Processing and Timing Questions

I continue to update my Processing Data page with intel as I receive it on I-526 and I-829 processing. Pay attention to volume trends, and to the distribution of filing dates being adjudicated.  Since May 2022, the Investor Program Office has stabilized into a new stride of 100-140 decisions per month each for I-526 and I-829, with decisions spanning a wide range of filing dates. At that volume, it will take IPO about eight years to process the already-pending inventory of over 12,000 I-526 and over 11,000 I-829. My best guess for your personal adjudication wait is “probably less than eight additional years,” with the “how much less” depending on your filing date, whether you happen to benefit or suffer from USCIS’s major deviations from FIFO processing, how soon the new adjudicators hired this year/next year can get up to speed, and whether/when IPO gets approval to significantly increase its authorized staffing level.  No one thinks that eight years is an acceptable processing target. But regardless of goals, actual performance is constrained by staffing (which doesn’t change quickly) and by decisions about processing order (which can only improve appearances by manipulating the median, and provide faster times for some at the cost of slower times for others). IPO’s demonstrated incapacity to handle the EB-5 inventory is my top EB-5 concern.

The process for I-526 approvals getting transferred to NVC continues to be problematic. See question 16 (p. 7) of this June 2022 AILA/DOS Q&A for a process to follow if NVC has not received your approval notice and sent you a welcome letter after 60 days.

Visa operations generally are improving, though not back to normal. See the DOS October 21 Update on Worldwide Visa Operations.

FY2023 Visa Availability

Department of State has published Annual Numerical Limits for Fiscal Year 2023. Despite what the EB-5 Reform and Integrity Act said, the published FY2023 annual limit for EB-5 visas is exactly and only 7.1% of the EB limit. The report mentions no carryover of the 6,396 reserve EB-5 visas that went unused in FY2022.  I had wondered what DOS would do with a new EB-5 carryover law that contradicted another part of the INA. It appears that the conflict has not been resolved in EB-5’s favor. It’s a pity, because EB-5 will lose over 10,000 visas by FY2024 if the newly-reserved EB-5 visas both can’t be issued (because strictly restricted to post-RIA applicants who can’t reach the visa stage yet) and also can’t be carried over to the next year (as RIA had contemplated). I’ve encouraged advocates to look into this.

EAGLE Act and Country Caps

Under current law, there’s a country cap of 7% applied to each category of Employment-Based visas. The cap limits any one country to 7% of visas within that category until other countries’ demand under the 7% limit has been satisfied. (I used to assume that the 7% applied to categories as a whole, not subcategories, but Charles Oppenheim recently set me straight. In EB-5, the 7% cap applies independently within each reserve and unreserve visa class, not just to the EB-5 limit as a whole.)

Without country caps, visas within each EB category would simply get issued by priority date, oldest to youngest.

Who benefits from the country cap law, and who would benefit from changing the law to eliminate country caps and let EB visa applicants flow in FIFO order? Country caps protect visa availability for applicants from low-demand countries, while constraining applicants from high-demand countries into enormous backlogs. Big tech companies reliant on EB-2 and EB-3 don’t like country caps, which is why legislation to eliminate country caps has been proposed in Congress continuously since at least 2011. In EB-5, Chinese investors who filed I-526 before 2018 and Indian investors who filed I-526 in 2019-2021 suffer from country caps, while others largely benefit. I’ve written about country cap bills several times over the years and they never passed, but the current version (the EAGLE Act H.R.3648/S.4567) is reportedly actively in play, with a chance to get attached to FY2023 appropriations. And so I’m back with a few comments on the EB-5 effects, in case the legislation does pass.

To understand what a merely-FIFO queue for EB-5 visas would look like, it’s necessary to think about the distribution of the 80,000+ people currently queued up for an EB-5 visa (either already at the visa stage, or on the way at USCIS). The government doesn’t report this valuable intel directly, but I can guess by looking at data for I-526 filings by country and by year, and thinking about where those petitioners must be today based on what I know about petition processing, visa issuance, and the visa bulletin to date. Having estimated the distribution of applicants in today’s queue, I can further project the FY2025 distribution based on what I expect of I-526 processing and visa issuance in 2023 and 2024. I don’t have time to spell out all my thinking on this, but here’s my Excel file of data and calculations.  You’re welcome to download and play with this and apply your own assumptions. (One significant variable is attrition from denials/withdrawals/age-outs, which could reasonably turn out much higher than the value entered in my model.) My best guess is that if Congress acts soon to eliminate country caps, and if the country cap elimination takes effect in FY2025 as proposed, then it will have the following EB-5 effects.

  1. Without country caps, the wait times for China-born EB-5 applicants with pre-2022 priority dates will at least have a predictable ceiling, instead of being potentially nearly infinite as is the sad case under country caps plus reserve visas. I estimate that a majority of the Chinese backlog (at least 2016/2017 priority dates) would get visas at least by 2032.
  2. Without country caps, applicants from all countries except China with pre-2022 priority dates who don’t already have a visa by FY2025 could wait until 2032 before they can start getting visas. That estimate considers the number of Chinese applicants with pre-2018 priority dates whom I calculate will still be pre-green-card by 2025 (further considering newly-restricted unreserved visa availability and pending rest-of-world demand).  Based on processing trends and factors observable so far, I expect that a significant number of non-Chinese who filed I-526 in 2019-2022 will not have received a visa yet by October 2024 due to slow processing, and thus impacted by country cap removal.
  3. Without country cap limits/projections, people filing I-526 or I-526E after 2022 would be advised to invest exclusively in one of the new reserve visa categories (since the unreserved category will be entirely absorbed by the oldest Chinese applicants if unconstrained by country caps). With country caps, on the other hand, new petitioners from some countries other than China and India might be advised to invest outside a TEA to qualify for an unreserved visa, since 7% of 68% is a lot more visas available than 7% of 20%, 7% of 10%, or 7% of 2%.
  4. Without country caps to hold back and distribute demand, EB-5 categories will quickly become not-current across the board in the visa bulletin.

People are often surprised that applicants who started the EB-5 process years ago remain vulnerable to changing rules and conditions for visa availability. This is true because of when visas get allocated. Filing I-526 does not lock in access to a visa. Petition approval does not lock in access to a visa. The law and conditions that determine the EB-5 visa allocated are those that pertain at the time the visa is allocated — a time years after investment under current processing conditions. For EB-5 to become a stable program, that needs to change. We need more predictability at the time of investment/I-526 filing about the availability and even existence of the visa that incentivized the investment. The U.S. government should want to avoid bait-and-switch.

Country cap removal keeps being pushed in Congress because Employment-Based visas have a live issue — painful backlogs. So long as country cap victims are suffering in decade and multi-decade long queues, country cap beneficiaries cannot expect to rest easy in an unchallenged status quo. Until backlog problems resolve, we can expect to see civil wars over the insufficient few visas available. I would love to see the U.S. government supply EB-5 visa numbers sufficient to reward the investment-fueled U.S. job creation that already occurred based on the promise of such visas. That would be only fair. As things stand, the United States has raised and benefited from about 15 billion dollars in EB-5 investment over and above what it can justify based on current EB-5 visa number limits.

10/19 EB-5 Stakeholder Meeting (call recording, I-956 and I-956G for pre-existing RCs, termination risk, sustainment)

10/25 Update: USCIS has now published EB-5 National Stakeholder Engagement Talking Points (PDF, 238.48 KB) and National Engagement EB-5 Stakeholder PowerPoint Presentation (PDF, 315.88 KB).

Today USCIS held a substantive and friendly meeting with EB-5 stakeholders. I wouldn’t exactly call it an engagement, since USCIS did not address many questions that we submitted in advance, and responded to the majority of in-person questions with “thank you for your input” and/or “please send this question to the EB-5 Customer Service Mailbox” (a notorious black hole). However, I appreciate that USCIS put all of IPO leadership on-stage to speak to us, and the level of detail shared. Division leaders spoke for nearly an hour, and I learned something. The subsequent Q&A session was short on A, but expressed more solicitude and helpful intent than we’ve heard in a long time. I sensed a litigation subtext, with about half of the content discussing Integrity Act implementation in compliance with the Behring Settlement Agreement, and the other half explaining operations challenged by and exposed in Mandamus litigation.

Besides organizational detail, which I’ll discuss further in a separate post, the teleconference included the following new and controversial input.

Treatment of Previously-Approved Regional Centers and their Investors: USCIS for the first time addressed the question of consequences if a previously-approved regional center chooses not to raise new investment under RIA, and therefore does not file a I-956 by December 29, 2022. IPO Chief Alissa Emmel stated that this (1) will not prevent the adjudication of related Form I-526 and I-829 filed before the passage of the Integrity Act, (2) may result in termination of the RC’s designation, and (3) will not be the basis for denial of the I-526 or I-829 petitions. Ms. Emmel did not address the contradictions in her statement, considering RIA provisions that make termination a potential sole basis for denying petitions. In response to a followup question, Acting Compliance Division Chief Andrew Driscoll Black indicated that a previously-approved regional center must file both I-956 and I-956G this year or be subject to termination, but then admitted that he hadn’t thought about the scenario where a previously-approved RC simply doesn’t have immediate plans to sponsor new projects, and thus no occasion to apply right away to sponsor new projects. Mr. Black advised to submit the question to the IPO customer service mailbox, with an indication that it’s time sensitive. If only USCIS had read and prepared to answer the many advance questions submitted on this urgent topic. See minute 4 and 1:12:13 of my recording.

Annual Report: Although the USCIS website I-956G instructions say that regional centers approved after May 14, 2022 may file the I-956G annual report, the Investor Program Office gave different instructions in the call. Acting Compliance Division Chief Andrew Driscoll Black stated that all regional centers approved prior to October 1, 2022 must file the I-956G annual report for 2022. Alissa Emmel admitted that USCIS has yet to publish information about how to pay the newly-required annual fee, and that USCIS will not impose late penalties on payment of 2022 fees. See minutes 7, 32, and 1:17:00 of my recording.

Sustainment Period: Paul Egan, Acting Policy Division Chief, indicated his understanding that the Integrity Act modifies the sustainment requirement for new investors who file I-526 after the Integrity Act. When pressed about this during the Q&A, Mr. Egan had already left the call and none of the other USCIS reps wanted to confirm or clarify his statement. “We’ll make sure to get a FAQ out for the public very soon.” I’m sure that many advance questions addressed this hot topic, so USCIS should’ve been ready for it. See minute 19:08 and 1:00:00 of my recording.

I’ll comment in more detail when USCIS publishes the prepared statements, as promised. In the meantime, here is a link to my recording of the 10/19 EB-5 Stakeholder Engagement, and an index to recording content. (For future reference, I’m also adding this engagement to my Meeting Log of USCIS EB-5 engagement reports going back to 2009.)

Time StartSpeakerTopic
0:22Amanda Atkinson USCIS Office of Citizenship, Partnership, and EngagementIntroduction
3:18Alissa Emmel, IPO ChiefIntroduction
4:02Alissa Emmel, IPO ChiefRIA implementation updates (Behring Settlement content, RCs that don’t file I-956 by December 29, RC fees)
8:00Alissa Emmel, IPO ChiefStaffing update (total employment level, discussion of duties and priorities, excuses for lack of resources assigned to adjudication, general statement on hiring plans)
10:22Alissa Emmel, IPO ChiefDigitization Initiative Update (current initiative to scan I-829 files, indefinite future hopes for ELIS)
12:45Karen Karas, IPO Deputy  ChiefDiscussed IPO operations and divisional responsibilities
15:36Paul Egan, Acting Policy Division ChiefEditorialized about policy change implications of the Integrity Act (including change to the sustainment period requirement) and gave a target to finalize new EB-5 regulations at the end of CY2023.
23:00Todd Young, IPO Communications and Liaison Team ChiefDiscussed IPO communications team staffing and responsibilities.
25:48Andrew Diroll-Black, Acting Division Chief for Compliance DivisionDiscussed Regional Center compliance, I-956 forms, I-956 adjudications, RC annual report requirement. Revealed that a major I-956 RFE issue on the question of who should file a I-956H.
33:55Kevin Murk, Division Chief for Form I-526 DivisionDiscussed I-526 team staffing, inventory management, workflow management, and excuses for low completion rates.
44:45Tsa Weatherl, Division Chief for Form I-829 DivisionDiscussed I-829 team staffing, workflow, excuses for low completion rates, filing tips  
52:27Amanda Atkinson moderating the Q&A sessionQuestions: 53:44 Carolyn Lee (encouragement to engage, focus specific issues); 58:53 Mona Shah (problems with I-829 extensions, and DOS not recognizing extensions); 1:00:00 Dan Lundy (what is the sustainment period post-RIA and pre-RIA?); 1:03 Rana Jazayerli (I-956 amendment filings, does it preclude also requesting expanded geography?); 1:08 David Morris (encouragement to engage, focus specific issues, suggest ANPRM); 1:12:13 Rohit Kapuria (does previously-approved RC without immediate new projects need to file both I-956 and I-956G this year?); 1:17 Jesse Rios Lone Star Regional Center (which RCs need to file I-956G?); 1:20 Joel Yanovich (problem with incorrect rejection of concurrently-filed I-485); 1:22::40 James Wolf, Golden Pacific (deference to pre-RIA examplars?); 1:25 Michele Franchett (encouragement to engage, question about application of audit exemption to fund administration requirement)

Incomplete EB-5 policy update

On October 7, the USCIS Policy Manual was updated with revisions to some of the policy affected by the EB-5 Reform and Integrity Act. In Volume 6 Part G “Investors,” which contains EB-5 program guidance, USCIS updated Chapters 1 and 2 but not Chapters 3, 4, 5, or 6. USCIS also made changes to Volume 7 to add concurrent filing for EB-5 (now allowed since RIA) and to delete priority date protection for EB-5 (now not available since the EB-5 Modernization Regulation was rescinded). The Policy Alert does not acknowledge that Volume 6 Part G is now a confusing mix of half updated and half outdated content, but I trust that USCIS realizes the fact and is still at work to finish the job. For reference, here is my redline document comparison of the October 7, 2022 version of Volume 6 Part G with the previous version dated July 22, 2021. I will comment more when USCIS completes the revision, and look forward to industry reactions. The USCIS website EB-5 pages have also been getting edits, but still not fully updated. Reading the policy manual and the website, I guess that writers have been instructed “as much as possible just quote the law and don’t add any clarifications or further guidance, which could get us sued.”

RIA Implementation Update (website, forms, litigation, processing)

Today marks five months since the EB-5 Reform and Integrity Act (RIA) was enacted on March 15, 2022, and three months since the regional center program gained new authorization. Where are we now?

Amidst the flux on the USCIS website, litigation disputes, questionable new forms, and guidance that’s here today and may be gone tomorrow, this reliable foundation remains: RIA is law. Every regional center application and new investor petition filed today will certainly be approved or denied with reference to the law as updated by RIA. Every interpretation/application question that’s open today will eventually have to be resolved with reference to the law as updated by RIA.

The word “back” has become extremely popular, but the regional center program is not “back” in the sense of “back to the way it was before.” Regional centers are moving forward and finding their feet on a new footing: a law with new requirements and restrictions.  Struggling to avoid RIA compliance can only lead to failure, for industry and investors. For better or worse, RIA is the law.

Can new regional center investors file petitions? The day is coming, but it’s been a long wait. The new law says that “a regional center shall file an application with the Secretary of Homeland Security for each particular investment offering through an associated new commercial enterprise before any alien files a petition for classification under this paragraph by reason of investment in that offering.” IPO Chief Alissa Emmel declared on July 15 that “We are currently accepting immigrant petitions based on previously approved exemplars from regional centers. We are also receiving Form I-956F applications from previously designated regional centers.” So far I have heard of just two I-956F receipt notices, though many I-956F applications have been filed over the past couple months and should be acknowledged shortly. For example, USCIS finally issued a receipt notice on August 11 for an I-956F that it received from CMB on July 1. Cautious prospective regional center investors are waiting on I-956F receipt notices so that they can file I-526E according to instructions. (Personally I would not file I-526 relying on an I-924 exemplar approval without I-956F, since I-924 had half the content required for an exemplar under the new law plus different approval standards, and any material change cancels exemplar deference according to the new law.)  IPO should at least issue I-956F receipt notices expeditiously, and should also approve or deny I-956F as soon as possible. The exemplar process will only be effective if IPO can process NCE approval requests quickly enough to provide a reliable basis for approvable investor petitions. I wish that IPO will publish a list of approved and denied NCEs, to help regulate the market and stop denied NCEs from still soliciting EB-5 investment and sponsoring I-526E that can never be approved.

The litigation Behring Regional Center LLC v. Mayorkas et al. is still underway. The Preliminary Injunction on June 24 preliminary enjoined DHS from treating pre-RIA regional centers as deauthorized (finding ambiguity in RIA about RC designation). The parties are still discussing how DHS should handle pre-existing regional centers and their existing and new investors under the new rules. The plaintiff regional centers are trying to preserve as much of the pre-RIA status quo as possible, while DHS is fighting for time and leeway to ensure RIA compliance. (For a sense of the back and forth see the IIUSA Notice of Motion for Summary Judgment filed July 21 and the DHS Cross Motion for Summary Judgment filed August 18.) The most recent docket item filed August 12 by DHS discloses that “the parties are substantially engaged in settlement discussions, and an administrative resolution that may render further litigation of this case unnecessary.”

Prodded by litigation, USCIS has made limited adjustments to the EB-5 pages on the USCIS website.

  • EB-5 Home is updated as of 8/2/2022 to remove references to a repealed RC program and to add one “Alert” that USCIS will no longer accept combined fee payments for I-526/I-526E concurrently filed with status adjustment forms.
  • About the EB-5 Visa Classification was updated on 7/28/2022 with new sections reflecting the new law on Job Creation Requirements, Capital Investment Requirements, and Immigrant Visa Set-asides.
  • EB-5 Investors – This page is marked as last reviewed/updated on 8/2/2022, but the information provided on this page is outdated and inaccurate to the new law except for the “alert” in the header.
  • EB-5 Filing Tips – This page is marked as last reviewed/updated on 6/23/2022, but only one form title was changed. The page continues to give info that was accurate in December 2020 but now outdated/inaccurate.
  • EB-5 Regional Center Compliance Reviews – this page was last updated in 2020 and the info provided is now outdated/inaccurate
  • Approved EB-5 Immigrant Investor Regional Centers – this page still shows the regional center list as of October 24, 2021.
  • EB-5 Resources – This page links to the EB-5 Questions and Answers (updated April 2022) document most recently revised as of 7/11/2022. The latest Q&A deletes the previously-provided answers about regional center authorization repeal and investor petition grandfathering. The Q&A is currently silent on how USCIS treats pre-RIA regional center and their investors.
  • EB-5 Support – This page has been updated as of 7/27/2022 to link to new EB-5 forms (and now interestingly links to no regional center annual statement form – not I-924A and not I-956G – though I-956G remains available on the USCIS website.)
  • USCIS Policy Manual Volume G Part G Investors has not been updated at all as of August 15 except with an Alert noting that RIA was enacted and “USCIS is reviewing the new legislation and will provide additional guidance, including an eventual revision of Policy Manual content.”

USCIS has published six new forms that will need to be revised eventually in response to litigation and to correct errors and omissions: Form I-956 Application for Regional Center Designation, Form I-956H Bona Fides of Persons Involved with Regional Center Program, Form I-956F Application for Approval of an Investment in a New Commercial Enterprise, Form I-956G Regional Center Annual Statement, Form I-526, Immigrant Petition by Standalone Investor, and Form I-526E Immigrant Petition by Regional Center Investor. These forms can be filed despite their faults; lawyers and advisors just have to go the extra mile to think through what the law requires and what USCIS can be expected to request or should accept beyond what’s in the forms.  I particularly look forward to USCIS revising I-956G Annual Statement (which is predicated on the now discredited interpretation that RIA canceled pre-RIA regional center designations), and the new I-526E (which conflates ownership with decision rights over EB-5 investment in the definition of “persons involved”).

We’re used to living with inadequate instructions, as USCIS has a history of disconnect between form content and adjudication standards. For example among AAO I-526 denial decisions in 2021, a third cite lack of documentation for currency exchanger source of funds – a type of evidence that Form I-526 never has and still does not request. I-526 routinely get denied for not providing such evidence, because RFEs and decisions can point to justification in the law although USCIS doesn’t publicly request the evidence in their forms, instructions, filing tips, or policy manual. Or consider the issue of source of funds for enterprise owners not seeking immigration benefits. Form I-526 does not ask each petitioner to provide and depend on lawful source of funds documentation for every other investor in the NCE. But USCIS still denies I-526 for lack of such documentation. EB-5 practitioners have had to get used to looking past form instructions to figure out what EB-5 submissions need to succeed with USCIS. This challenge increases with room for interpretation in new EB-5 law. (And the new law sadly increases the stakes and risks of ambiguity, because RIA removed the possibility of judicial review for unreasonable USCIS interpretations.)

EB-5 processing volumes have yet to recover from the regional center program shutdown or the new law (not to mention the 2019 Reset Training at IPO), but I keep watching and hoping. I will shortly publish a separate post and new pages with the updates I’ve been collecting on I-526 and I-829 processing, adjustment of status, consular processing, the backlog and visa availability, and processing conditions generally. At least broader processing problems and the dire consequences have started to get better recognition from the government and media, which is a good step toward change.

People are welcome to use this blog comment section as a forum for sharing experience and asking questions, but note that larger and better arranged EB-5 groups are also available, including https://goaiia.org/, https://t.me/EB5VisaGroup, https://t.me/+NWEYhY6y81AzYzIx,  and https://t.me/+N0K7TuzrPYQwMDJl Email suzanne@lucidtext.com if you know of other groups that I should mention, or if you need help joining a group.

New Form I-526E and Revised FAQ

On July 11, USCIS deleted five Q&A from the EB-5 Questions and Answers (updated April 2022) document linked to the EB-5 Resources page. This update successfully deletes all references to repealed regional centers. The update also removes all input on important questions of when investors can file I-526, how USCIS treats I-526 filed before the new law, and how regional centers maintain and amend designation.

On July 12, USCIS announced a new Form I-526 and Form I-526E. The announcement includes the important reminders that “a potential immigrant investor cannot file Form I-526E until the regional center has filed Form I-956F for the particular investment offering” and “Forms I-526 and I-526E must be submitted in compliance with new program requirements.” I will analyze the new forms as time permits. [UPDATE: USCIS has now sent a second announcement email with slightly different content and additional info about fees, copied below.]

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: July 12, 2022 2:12 PM
Subject: USCIS Releases New Forms for Immigrant Investor Program

USCIS is revising Form I-526, Immigrant Petition by Alien Entrepreneur, to accommodate the EB-5 Reform and Integrity Act of 2022, which made significant changes to both the filing and eligibility requirements for investors under the EB-5 program. The form will be split into two versions: Form I-526, Immigrant Petition by Standalone Investor, and Form I-526E, Immigrant Petition by Regional Center Investor.
Form I-526 will be used by standalone immigrant investors who are not seeking to pool their investment with additional investors seeking EB-5 classification, and will closely resemble the prior edition of Form I-526.
Form I-526E will be used by immigrant investors who are seeking to pool their investment with one or more additional investors seeking EB-5 classification under the new regional center program.

We created Form I-526E to reflect elements of the new regional center program, including the ability to incorporate evidence by reference from a regional center’s Form I-956F.

By statute, a potential immigrant investor cannot file Form I-526E until the regional center has filed Form I-956F for the particular investment offering through an associated commercial enterprise that the potential immigrant investor is investing in. Once the regional center has received a receipt notice for the Form I-956F confirming its filing, investors may then file their associated Form I-526E based on that receipt notice.

Effective July 12, 2022, Forms I-526 and I-526E must be submitted in compliance with new program requirements. The filing fee is $3,675 for each form. Visit the forms pages for additional information about the filing fees and biometric fees.

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: July 12, 2022 5:52 PM
Subject: Revision of Form I-526

 Revision of Form I-526 We have released a revised version of Form I-526, Immigrant Petition by Alien Entrepreneur, splitting it into two versions to accommodate the EB-5 Reform and Integrity Act of 2022, which made significant changes to both the filing and eligibility requirements for investors under the EB-5 program.

Background
Form I-526, Immigrant Petition by Standalone Investor
Form I-526 is filed by “standalone” immigrant investors who are not seeking to pool their investment with one or more additional investors seeking EB-5 classification.

Form I-525E, Immigrant Petition by Regional Center Investor​​ Form I-526E is filed by immigrant investors who are seeking to pool their investment with one or more additional investors seeking EB-5 classification and who must now do so under the Regional Center Program. Regional Center investors will also use Form I-526E to report any amendments necessary to establish ongoing eligibility if the regional center, new commercial enterprise, or job-creating entity in which the investor has invested is terminated or debarred from participation in the Regional Center Program.

Filing Fees
The filing fee for Form I-526 is $3,675. The filing fee for Form I-526E is $3,675 (add the $85 biometrics fee for a total of $3,760, where applicable. See exceptions below). On and after October 1, 2022, an additional $1,000 fee will be required under the EB-5 Reform and Integrity Act of 2022. Note: The biometric services fee is not required for petitioners filing the I-526E to amend a previously filed petition.

Additional Information
Forms I-526 and I-526E that are properly filed will receive two separate receipt notices. The first notice you should expect to receive will be from the USCIS Lockbox, acknowledging receipt of your I-526 or I-526E and the total fee amount received and processed. Next, we will issue a formal receipt notice that includes the assigned receipt number for the application when data entry has been completed. The priority date for the Forms I-526 and I-526E will be the date USCIS Lockbox receives your petition.

For more information on the EB-5 Immigrant Investor Program, please visit the USCIS website.

Behring injunction shifts compliance risks

Who bears the burden of waiting for USCIS to ensure regional center compliance under the EB-5 Reform and Integrity Act of 2022 (RIA)? Who takes the risk that USCIS will find some pre-RIA regional centers and their projects not compliant under all the new rules?

At first, the answer was: regional centers bore the compliance wait and the risk of denial. On April 11 and April 29, the USCIS website posted announcements to the effect that regional centers needed to wait for USCIS to approve new designation applications before sponsoring EB-5 investment. (USCIS justified the announcement with the interpretation that RIA cancelled all pre-RIA regional center designations.) This approach offered some protection for incoming investors (who would benefit from advance compliance review by USCIS), confusion and alarm for past investors (who found their previous RC sponsor status and compliance responsibilities cancelled), and pain for regional centers authorized under the old law (who wanted to resume business, not be held back by lengthy USCIS processing times for compliance review under the new law).

Naturally, previously-designated regional centers sued USCIS over the April website announcements. On June 24, a judge took preliminary action on one of the lawsuits, Behring Regional Center LLC v. Mayorkas et al, issuing an “Order Granting Plaintiff’s Motion for a Preliminary Injunction.” The order does not change RIA, or regional centers’ responsibility to comply with RIA, or USCIS’s ability to control the process (and it doesn’t decide the lawsuit). But the order finds that USCIS was likely in error to take for granted that RIA cancelled all pre-RIA regional center designations. By pulling the legal justification out from under USCIS’s website announcements, the injunction potentially opens a window for formerly-designated regional centers to raise new capital during the transition period while USCIS implements and assesses compliance under the new law. (Hopefully, the injunction also makes USCIS reconsider regional center responsibility for capital raised under the old law.)

Today, prospective investors are invited to take the compliance wait and risk. I’ve already received several marketing emails from regional centers designated under the old law, urging potential immigrants to invest with them immediately and file I-526 right away. The approvability of such new I-526 will depend on the outcome of USCIS’s assessment of regional center and project eligibility under RIA (which assessment will happen in the context of I-526 review, if not earlier). But who needs to care about the immigration risk, if EB-5 investment can be banked today and deployed regardless of future USCIS decisions?

If I were a prospective EB-5 immigrant willing to gamble today, I would consider trying to mitigate the risk by asking for escrow, with release of funds on I-526 approval or I-956F approval, and an exit option after a defined period in case of no action by/response from USCIS. Regional centers fought to avoid the wait and risk of USCIS’s potentially lengthy and capricious process to figure out law interpretation and compliance. Investors may also want to protect themselves from that process and risk. Meanwhile, if I were a regional center, I would still go ahead with filing the new I-956 applications. These forms have material that RIA unambiguously requires USCIS to collect and review for all regional centers, including those designated prior to RIA, and RCs should benefit from getting that submission and review done as soon as possible.

I recommend that everyone read the text of the preliminary injunction, to see what it does and – more important — does not say. The order’s content has been misrepresented in the PR I’ve seen about it so far, so caution is needed. I’m also watching the USCIS website EB-5 page, to see if/when USCIS exercises their power to choose another basis for making regional center sponsors undergo some kind of review process before new regional center petitions can be accepted. And finally, a few key quotes from the injunction.

In short, the Integrity Act does not clearly answer the question whether Congress meant to strip existing regional centers of their authorization. But the agency provided no other explanation for its decision. It stated only that because Congress “repealed Section 610, . . . regional centers previously designated under section 610 are no longer authorized.” The agency’s conclusion therefore rests on a misreading of the law: USCIS thought itself compelled by the Integrity Act to treat the existing regional centers as deauthorized, even though the Act does not require that outcome. Had the agency considered the question, balanced the competing interests at stake, and arrived at a decision on the continued status of existing regional centers, perhaps the agency could successfully defend its action.

…Accordingly, USCIS is preliminarily enjoined from treating as deauthorized the previously designated regional centers based on its almost certainly erroneous interpretation of the Integrity Act. Of course, the agency may do whatever is reasonably necessary to ensure that the existing regional centers comply with the Integrity Act, but those centers must presently be permitted to operate within the regime created by the Act. This includes processing new I‑526 petitions from immigrants investing through previously authorized regional centers like Behring, just as the agency would do for a newly approved regional center.

The preliminary injunction will remain in place until the earlier of: (1) a ruling on summary judgment by this Court; or (2) a reasoned decision by the agency about how regional centers should be treated given the Integrity Act’s ambiguity. Perhaps, after engaging in a reasoned decision‑making process and considering the competing policy factors, the agency could conclude that Behring and the other previously authorized regional centers can no longer operate until they have successfully reapplied by submitting new I-956 petitions. Perhaps the agency could conclude that the centers must reapply but can operate consistent with the requirements of the Integrity Act pending their new applications. Or perhaps the agency could conclude that the centers can operate without reapplying so long as they otherwise comply with the Act’s requirements. But what’s clear is that the agency cannot deem the existing regional centers deauthorized without engaging in reasoned decision-making consistent with the APA.

Regional Center reporting and NCE approval forms released

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: June 2, 2022 2:50 PM
Subject: USCIS Releases New Forms for Immigrant Investor Program

U.S. Citizenship and Immigration Services has released two new forms under the EB-5 Reform and Integrity Act of 2022, which revised INA 203(b)(5).

The new forms are: Form I-956F, Application for Approval of an Investment in a Commercial Enterprise, and Form I-956G, Regional Center Annual Statement.

Form I-956F is a new form that can only be filed by an approved regional center. Form I-956F is similar in some respects to an “exemplar” submission on Form I-924 under the previous program; however, Form I-956F is required by statute for regional centers to apply for approval of each particular investment offering through an associated new commercial enterprise.

Form I-956G takes the place of Form I-924A from the previous program but incorporates the increased statutory reporting requirements.

The next series of forms USCIS will be releasing are Form I-526, Immigrant Petition by Standalone Investor, and Form I-526E, Immigrant Petition by Regional Center Investor. USCIS will notify stakeholders once these forms are available on our website.

Effective June 2, Forms I-956F and I-956G must be submitted in compliance with new program requirements. The filing fee is $17,795 for Form I-956F and $3,035 for Form I-956G.

Comments on the new Form I-956 Application for Regional Center

As of this week “EB-5 2.0” has officially launched, with a new regional center program authorized since May 14, 2022. Now that 60 days have passed since enactment, the EB-5 Reform and Integrity Act of 2022 (“RIA”) has taken full effect. New regional center I-526 still cannot be filed, and none of the USCIS EB-5 pages or policies or petitions have yet been updated with the rules now in effect. But one EB-5 2.0 process is moving: entities can begin to apply for new regional center designation.

On Friday, USCIS published Form I-956 Application for Regional Center Designation and the associated Form I-956H Bona Fides of Persons Involved with Regional Center Program on the USCIS website Forms section.

Form I-956 asks open-ended questions, and provides minimal instructions. I-956 requests less evidence than the previous I-924 Application for Regional Center – whether intentionally or not, it’s hard to tell. I foresee that 100% of Form I-956 submissions will receive a Request for Evidence, given the minimal instructions. Until we start seeing RFEs from USCIS, we need to guess at how USCIS interprets new regional center designation requirements. I wonder if USCIS has drafted the Form I-956 worksheet for adjudicators, and what’s on that worksheet. If only USCIS would tell the public what’s on its adjudication checklists, then we might make submissions correct and complete the first time. The guess-question-clarification process is inefficient, and the regional center program does not have years to waste.

Top Takeaways from Form I-956 Application for Regional Center

  1. What’s New: I-956 and I-956H are almost entirely language copied straight from the RIA text, without interpretation or comment. The I-956 instructions offer one item of additional guidance: “The description [of policies and procedures] may include, but is not limited to, the regional center’s policies and procedures regarding internal controls, risk management and assessment, governance, and fraud detection and/or deterrence. Documentation may include, but is not limited to, Policy Manuals and Standard Operating Procedures.” I-956 offers no comment on what USCIS considers to be the specific “applicable laws” and “program requirements” for which applicants should provide policies and procedures.
  2. Evidence Required: Form I-956 specifies little required evidence. While the old Form I-924 Application for Regional Center had a seven-point list of “evidence you must submit,” Form I-956 has mostly open-ended questions, and says ”may provide” more often than “must submit.”  An applicant following the letter of the I-956 instructions (and interpreting “should” as closer to “may” than “must”) could technically submit I-956 with the form blanks completed but no exhibits whatsoever beyond copies of the Form I-956H for persons involved. As an applicant I’d be tempted to go for a minimal initial filing, considering that I can hardly avoid an RFE in any case, given the vague and minimal instructions provided upfront.
  3. RC History: Form I-956 implies that USCIS has no interest in and attaches no relevance to the applicant’s previous history of regional center designation. I-956 asks only forward-looking questions. I-956 gives no space to provide information about any prior regional center designation, good or bad history of promoting economic growth as a previously-designed regional center, previously-approved geographic scope, in-progress EB-5 projects, or EB-5 funds currently under management.  There’s no indication in I-956 that USCIS has any plan to link designation and investors under the new law with designation and investors under the old law. The I-924 had required disclosing the applicant’s previous regional center termination and denial history, and prohibited use of names that duplicated pre-existing RC names, but the I-956 lacks even this.
  4. Geographic Area: Form I-956 is less specific than I-924 about regional center geographic area and economic impact. I-956 says generally “You should provide evidence that the regional center’s pooled investment will have a substantive economic impact on the proposed geographic area,” and asks for “reasonable predictions” supported by economic impact analysis. But it does not define “substantive impact” or request project-specific basis for predictions. By contrast, Form I-924 required the applicant to base economic impact analysis on business plan inputs, and to show “that the boundaries of the regional center are reasonable based on evidence that the proposed area is contributing significantly to the supply chain and labor pool of the proposed new commercial enterprises.” Either USCIS was careless in writing I-956, or it now has a looser/more open-ended standard than before for geographic area requests. It may be that by separating regional center designation from NCE/project approvals, USCIS has blocked itself from demanding project-specific grounding for regional center impact claims. If that’s the case, surely all applicants will submit theoretic cases for sprawling multi-state geographies.
  5. Organizational Evidence: The “who are you” questions in Form I-956 are limited to identifying the legal name of the regional center entity and the identities of persons involved with the regional center. Unlike I-924, Form I-956 does not specifically request the regional center’s formation documents, Operating Agreement, or management agreements. I-956H requests personal identity detail needed to check for law/rule violations, but not any of the business experience or professional track record detail that a banker or investor would want to know about persons involved.  This may or may not be an oversight.
  6. Business Plans: The “what will you do” questions in Form I-956 are limited to compliance policies and theoretic economic impact predictions. I-956 does not specifically ask the applicant for any kind of business plan, either for regional center operations or to support economic activity projections. (By contrast, I-924 required an Operational Plan and Plan of Promotion to describe how the regional center would operate and support its operations, and project business plans to provide reasonable real-world inputs to support impact analysis. The I-956 silence on business planning may or may not be an oversight. Surely such detail should still be relevant for designation.)
  7. Further Guidance: The I-956 instructions promise that “The approval notice will provide information about the responsibilities and obligations of your USCIS designated regional center. It will also list the evidence to submit in support of regional center-associated individual EB-5 petitions, as well as details on the reporting and oversight requirements for regional centers.” Why not disclose the approval notice template upfront, USCIS, so that applicants can shape their plans around these requirements?
  8. NCE Approval Form: The Form I-956H Instructions reveal that USCIS has chosen a name for the yet-to-be-published project approval form that needs to be filed before regional center investors can start filing I-526. The application for NCE approval will be called Form I-956F. (In the old days, applicants could file for regional center designation and exemplar project approval at the same time using the same I-924, but now the process has two separate and consecutive forms.)
  9. Timing: I foresee significant processing times for Form I-956 (given the back-and-forth that will result from the open-ended questions and minimal instructions), and for I-956H (given the number of agencies that USCIS will need to coordinate with to perform security checks). I will be pleasantly surprised if the first new regional center gets designated before 2023, and astonished if all I-956 filed in the next few weeks get adjudicated before 2025. [Update: The May 18 Declaration of Alissa Emmel in the Behring lawsuit states that: “IPO … as of this date has received approximately 8 applications. …While every application will be reviewed on a case-by-case basis, IPO aims for its processing times on Form I-956 applications to meet or exceed the statutory goal of 180 days.”] I very much hope that the first applicants to receive RFEs will be public-spirited and share the RFEs with the rest of the community. The more guidance we can extract from USCIS, the more we’ll be able to improve application quality and speed up the adjudication process for everyone.
  10.  Caution: Historically, an EB-5 document requirement will spark a cottage industry of chancers who smell profit in producing documents with the right title on a nice cover and any old filler shoved under the cover. Thus the proliferation of shoddy economic impact reports, business plans, and offering documents in EB-5.  I suggest, look closely at anyone who offers to relieve you of thousands of dollars in exchange for documents with covers that that say “Policy Manuals” and “Standard Operating Procedures.” If there isn’t an EB-5-experienced securities attorney involved in drafting and signing off on the content, consider only paying what the cover is worth. USCIS adjudicators may have little way to judge compliance policies but by the cover, and might possibly just rubber stamp whatever gets submitted. But even better for regional center applicants to invest in solid content, especially in the sensitive area of securities compliance.

4/29 USCIS Q&A and Listening Session Report

On Friday April 29, USCIS offered a first installment of guidance on implementation of the EB-5 Reform and Integrity Act of 2022.

USCIS published EB-5 Questions and Answers (updated April 2022) on the USCIS EB-5 Resources page. I’m copying images as of April 29 here for historical reference, but consult the USCIS site to read the latest version.

USCIS held the USCIS EB–5 Reform and Integrity Act of 2022 Listening Session on April 29. 5/10 UPDATE: Here is a transcript of prepared remarks from the USCIS speakers. Here is my recording of the event. Time index:

  • During the first five minutes of the listening session, USCIS Director Ur Jaddou provided opening remarks. My recording sadly does not include this intro, thanks to my apparent inability to read call-in instructions. From the portion I heard, it seems that Director Jaddou provided a “big picture” perspective of changes and improvements at USCIS, covering the points about agency-wide performance and goals that she made in her April 6 testimony to the House Committee on Appropriations (which is worth reading). She did not have significant EB-5-specific input (that I heard), but it was nice of her to be on the call. I applaud her goals and accomplishments so far at USCIS, and her seriousness about challenges.
  • My recording starts with the EB-5-specific portion of the call.
    • New Investor Program Office Chief Alissa Emmel introduced herself and talked about the new law (minute 0-5), and processing times (5-9).
    • A Policy Analyst with USCIS Office of Policy and Strategy discussed upcoming policy manual revisions and regulations. (minute 9-11)
    • An Adjudication Officer with USCIS Service Center Operations confirmed that I-485 processing for regional center petitions has resumed. He incidentally dropped the revelation that “over 4,000” regional center I-485 were already pending before July 1, 2021. (minute 11-13)
    • A Visa Policy Analyst with State Department Bureau of Consular Affairs Office of Visa Services Field Operations confirmed that RC-associated visa processing has resumed as of April 2022. (minute 13-16)
    • From minute 16 of my recording, the call consists of stakeholders making comments and asking questions, and USCIS responding with thanks for the input (but not any answers).

The headline news is that new regional center I-526 cannot be filed starting with the new regional center program authorization on May 14, 2022.  Instead, investor filings will need to wait until after USCIS designates individual regional centers under the new program; i.e. wait for new RC application forms to be not only filed but also approved. USCIS did not estimate a time for this process. (For reference, the previous RC application form, I-924, had a median processing time from 19 to 22 months between 2017 and 2021. The most I-924 approvals that USCIS ever managed in one month was about 40, back in 2018. Since 2019, the average was more like 15 per month. Based on new law requirements, the new RC application will have less offering-specific and project-specific content than I-924, but more compliance content and more security checks. The processing workload will depend on how many of the previously-designated 632 regional centers decide to apply for new designation. I guess that at least most of the 344 RC that were committed enough to file I-924A even during the RC program expiration will apply.)

A second headline, which I doubt that USCIS thought through: USCIS now claims no jurisdiction over the entities that were formerly designated as regional centers, and that are still handling billions of dollars of EB-5 investment. The written Q&A states that USCIS will no longer require these entities to file annual reports about what they are doing with those billions of dollars, or to file amendments when they change plans or ownership. Unless and until they choose to apply for new designation, the entities holding pre-enactment EB-5 investment are now apparently exempt from the new EB-5 integrity measures, and also from such oversight as USCIS used to provide for regional centers. This follows from USCIS’s interpretation that “regional centers previously designated under section 610 are no longer authorized,” and thus no longer have any status for USCIS to regulate. But I doubt this was intended. I understand the rationale to make regional centers demonstrate compliance with the new law before raising new investment (and to buy more time for USCIS to figure out how to implement the new law). I doubt USCIS thought about the negative integrity side effects of cancelling the only status that allowed USCIS to monitor or dictate to pre-existing regional centers. “USCIS abrogates oversight of entities currently deploying $27 billion dollars in immigrant investment.” This is a true and shocking headline, unless USCIS scrambles to make some clarifications on the status of formerly-designated regional centers.

The written Q&A and the listening session provide welcome clarity about grandfathering of regional center investor petitions. Regional Center I-526, I-485, and visa applications are already being processed as of April 2022. Pre-enactment I-526 are judged “according to the applicable eligibility requirements at the time such petitions were filed,” and with opportunity to demonstrate eligibility “despite the previously approved regional center associated with your petition no longer being designated.”

In the listening session, we heard for the first time from new IPO Chief Alissa Emmel, a career civil servant who was appointed to her position in September 2021 after having previously worked at IPO as an economist starting in 2013, and managing the IPO Compliance Division since 2017. On the call she sounded upbeat, relaxed, and unworried about the challenges of performance improvement or law implementation. She stated one firm plan for EB-5 law implementation: to publish a form and instructions for a new Form I-956, Application for Regional Center Designation, by May 14, 2022. If she has other implementation plans yet, she did not articulate them. No mention of a timeline for publishing the new project approval form or revising Form I-526 or I-829, no mention of processing time targets for regional center application adjudications, and no mention of plans for training adjudicators in the new law. If IPO has started tackling the major challenge of assessment metrics for new regional center compliance plans – a task that will presumably require coordination with the SEC and other outside experts – Chief Emmel didn’t mention it. I came to the call prepared with sympathy for the enormous burden that law implementation puts on USCIS, and for how harassed and panicky the USCIS staff would sound as they grappled with that burden, and with the intense time pressure. But I did not get a chance to deploy my sympathy. I couldn’t tell that much grappling has yet been undertaken or foreseen, or that much pressure has yet been felt.  

The call included a Policy Analyst with USCIS Office of Policy and Strategy, who spoke to the need for new policy and regulations. She divulged one plan: “to hold another engagement in late May to gather individual feedback from impacted stakeholders on those areas or topics from the legislation that require rule-making or other sub-regulatory policy considerations.” And she expressed one specific “hope”: to roll out substantive policy manual revisions “over the next few months.” She also noted that “USCIS fully intends to follow appropriate rule-making procedures for implementing regulatory changes, which is by no means a quick process.” As background, the current EB-5 policy originated with a three-year process (with a policy memo drafted in 2011 and finalized in 2013), redeployment policy took three years (promised in 2014, draft released in 2015, published as policy in 2017), and the EB-5 Modernization regulation emerged over three years (promised in 2016, Notice of Proposed Rulemaking in 2017, Final Rule in 2019). With that background, to rewrite all EB-5 policy based on the RIA in a matter of months will be a herculean task. I would love USCIS to manage this; we badly need speed so that investor I-526 can be filed based on known guidance as soon as possible! But the Policy Analyst on Friday’s call did not sound stressed, as I’d expect she would be if herculean efforts were underway. She announced without audible shame what her office has done in 1.5 months so far: added a one-sentence “alert” to the Policy Manual (without deleting or revising the two other contradictory alerts), and archived one of the five Policy Manual chapters already made obsolete by the new law.

Regarding processing, Chief Emmel stated that “I want you to know that we are taking critical steps to reduce processing times for I-526s and I-829s, knowing that this goal will take some time to achieve for the reasons I’m about to discuss.” The steps cited were to resume regional center I-526 processing (“one of our predominant adjudication goals for our I-526 staff is to work through the large volume of I-526 petitions that were in process pre-sunset”), and to increase staffing levels (Emmel did not offer specifics, but I see that USAJobs.gov has listed two open positions at IPO).  Chief Emmel expects that improved processing will take “time to achieve” because “it is important to note that in addition to adjudicating cases, IPO requires the time and subject-matter expertise of our adjudication staff to address other necessary efforts including implementation of the new legislation, litigation responses, FOIA requests, public inquiries, and others.” IPO processed over a 1,000 I-525 per month under Julia Harrison’s leadership, around 300 per month under Sarah Kendall, and 20 per month under Alissa Emmel in her first quarter at the helm. In Chief Emmel’s words on Friday, I heard positive intent to achieve incremental improvement over recent performance. I did not hear a plan for the exponential improvement that would be required to regain past performance levels or achieve new processing time targets in the foreseeable future. I listened closely for a sense of whether Chief Emmel intends to change the culture of IPO, which since 2019 has taken a time-is-no-object extreme-vetting approach to EB-5 adjudications, with gratuitously lengthy and hostile RFEs, high denial rates, and low completion rates. Chief Emmel spoke about the EB-5 program and investors in very positive terms, and she repeated the new service-oriented USCIS mission statement promising “fairness, integrity, and respect for all we serve.” She then went on to say that “for our office, what that means is to accurately and efficiently adjudicate petitions and applications, as well as safeguard the integrity of our nation’s immigration system through our efforts to combat fraud, protect national security and pubic safety, and maximize our law enforcement, intelligence community, and other federal agency partnerships.” Other than the word “efficiently,” those are still Stephen Miller/Sarah Kendall-era enforcement-centric talking points. I am still waiting for a changing tide in EB-5 adjudications, and to see efficiency, fairness, and respect treated as integrity issues by the Investor Program Office. 

4/29 USCIS Engagement!

Welcome to the first EB-5 stakeholder engagement since March 2020! (Only a listening session, but still a good sign!) I look forward to the updates with bated breath.

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: April 19, 2022 10:10 AM
Subject: USCIS EB5 Reform and Integrity Act of 2022 Listening Session

U.S. Citizenship and Immigration Services - Public Engagement Division   Engagement  
USCIS EB–5 Reform and Integrity Act of 2022
Listening Session Friday, April 29, 2022 | 2-3:30 p.m. Eastern

U.S. Citizenship and Immigration Services (USCIS) invites you to participate in an engagement on the EB-5 Program, in line with the EB-5 Reform and Integrity Act of 2022 on Friday, April 29, 2022, from 2-3:30 p.m. Eastern. This will be a virtual meeting.

The EB-5 Reform and Integrity Act of 2022 requires all entities seeking regional center designation to provide a proposal in compliance with the new program requirements, which will take effect on May 14, 2022.

Director Jaddou will provide opening remarks, and USCIS will share updates on the implementation of the EB-5 Reform and Integrity Act of 2022 and guidance about the new designation filing process to entities desiring to be designated as regional centers under the new program. We will then hold a listening session to hear feedback from stakeholders regarding statutory changes made by the EB-5 Reform and Integrity Act of 2022.

USCIS is committed to public engagement, and sessions such as these provide us with valuable feedback as we work to improve our programs. We will not address case-specific questions, questions outside the scope of the engagement, or issues currently or likely to be in litigation.

To Register: 1. Visit our registration page 2. You will be asked to sign up for updates or to access your subscriber preferences, please enter your email address and select “Submit” 3. Select “Subscriber Preferences” 4. Select the “Questions” tab 5. Complete the questions and select “Submit.” Once we process your registration, you will receive a confirmation email with additional details. If you have not received a confirmation email within three business days, please email us at public.engagement@uscis.dhs.gov. If you wish to provide written feedback on this topic in advance of this session, please email us at public.engagement@uscis.dhs.gov. To request a disability accommodation to participate in this engagement, email us at public.engagement@uscis.dhs.gov by 4 p.m. Eastern on Friday, April 22, 2022.  Note to media: This webinar is not for press purposes. Please contact the USCIS Press Office at media@uscis.dhs.gov for any media inquiries. We look forward to your participation!          

May 2022 Visa Bulletin with Reserve Visas

The May 2022 Visa Bulletin is out, reflecting seismic changes for EB-5.

For discussion, I recommend Joseph Barnett and Bernard Wolfsdorf’s article EB-5 Visa Availability for the May 2022 Visa Bulletin and Reservations on Reserved Visas-Skipping the Waiting Line is Un-American.

The tragic situation described in my article on reserved visas is being realized.

Text of EB-5 law enacted as of March 15, 2022

H.R.2471 – Consolidated Appropriations Act, 2022 was enacted on March 15, 2022, and contains the EB-5 Reform and Integrity Act of 2022 in Division BB (PDF page 1022 of the enrolled bill). This means that the regional center program will have a new authorization and new requirements as of May 15, 2022, and other EB-5 program changes are effective as of March 15, 2022 as I discussed in my previous post.

Now we wait for USCIS and Department of State to react with their interpretation and applications of the new EB-5 law. So far, the USCIS EB-5 page has still not been updated since December 2021. I hereby predict that the USCIS page will be updated later this week with one sentence saying “We are evaluating the EB-5 Reform and Integrity Act enacted on March 15, 2022 and will provide additional guidance as soon as practical,” followed by silence. But surprise me, USCIS! (3/17 UPDATE: The USCIS page is now updated to say almost exactly what I predicted.) The April 2021 Visa Bulletin published today has RC category Unavailable in Part A and mostly Current in Chart B, makes no changes yet to reserved visa categories, and says “The Consolidated Appropriations Act, 2022, which reauthorizes and reforms the EB-5 Immigrant Investor Regional Center Program, was signed by the President of the United States on March 15, 2022. Certain Regional Center Program aspects of this legislation go into effect 60 days after the date of the enactment of this Act. More information will be published in coming editions of the Visa Bulletin.”

Pending official interpretation, I’m continuing to update the Reauthorization page on this blog with links to a selection of industry articles and upcoming webinars, as they come to my attention.

In case this helps anyone else’s sanity and clarity, I’m sharing a folder of Word documents that I made for myself. The folder includes:

  • The text of the EB-5 Reform and Integrity Act of 2022 with heading styles applied. The text is copied from the “enrolled bill” version of H.R.2471 at Congress.gov (which has a few minor tweaks from the EB-5 bill text first released on March 6). I formatted to flag six layers of headings so that I can always track where I am using Word’s Navigation Pane.
  • The text of Immigration and Nationality Act sections referenced in the EB-5 Reform and Integrity Act of 2022, with headings applied. I didn’t redline the new law changes onto the INA (I just copied INA excerpts as-is), but at least this facilitates looking back and forth to see changes in context. We must be able to follow section headings in order to translate innocuous-looking sentences like “An alien seeking to pool his or her investment with 1 or more additional aliens seeking classification under section 203(b)(5) shall file for such classification in accordance with section 203(b)(5)(E)” and realize the explosive meaning: “from now on, an EB-5 investor may only invest with other EB-5 investors through a regional center; pooled direct EB-5 is no longer an option for new I-526.”
  • A document comparison showing the EB-5 Reform and Integrity Act of 2022 red-lined on the base of S.831 – EB–5 Reform and Integrity Act of 2021. S.831 is the bill that Senators Leahy and Grassley introduced back in March 2021 and  tied to pass last June before the RC program expired. No surprise considering Senator Leahy’s negotiating position, document comparison shows that the new EB-5 law largely reproduces S.831. There were no changes to the S.831 integrity measures, and no backlog relief additions. Negotiations just added higher investment amounts, new visa restrictions, new TEA definitions, redeployment policy, and grandfathering protection for the future.

I’m occupied with business plan deadlines at the moment, but will write more as soon as possible about reserved visas, the new EB-5 law change that most concerns me as resident EB-5 data collector and backlog Cassandra.

EB-5 Reform and Integrity Act of 2022

The EB-5 program faces a second life thanks to the EB-5 Reform and Integrity Act of 2022, which passed the House on Wednesday and the Senate on Thursday night as part of the Consolidated Appropriations Act, 2022 (H.R.2471), and set to be signed by the President. For a content summary, I recommend Robert Divine’s March 8 article Analysis of New EB-5 Reform Bill Destined for Omnibus by March 11, 2022.

I appreciate the miracle that an EB-5 bill exists at all, considering the conflicting interests and story behind it. I am bubbling with reactions, but will start with what I love about this bill – that it passed. The bill is not the greatest good for the greatest number, but it’s some good for someone, and better than nothing for everyone. The immigration and economic promises of the regional center program still need a fight, but at least they’re still alive to be fought for.

The EB-5 Reform and Integrity Act of 2022 puts both the direct and regional center programs on a new footing, and makes changes that affect EB-5 investors past and future. USCIS will need to rewrite its policies and training and forms, I get new topics to address while marking my 12 years of past articles as all outdated, regional centers and direct EB-5 project companies will reorganize their processes and rethink their plans, past EB-5 investors will recalculate their wait time expectations and success prospects, and future EB-5 investors will enjoy new protections (including grandfathering protection, thanks to AIIA) and face new feasibility considerations.

While I wait for the Act as finalized with the President’s signature, I’ll start with a few points on timing, based on effective dates written in the text.

  • Date of enactment: The President has until March 15, 2022 to sign the Consolidated Appropriations Act; the date of enactment should be as soon as that happens (could be as early as today).
  • Regional Center program authorization timing: In the EB-5 law in Division BB of the Act, the new regional center program authorization is in Sec. 103(b), which has an effective date of “the date that is 60 days after the enactment of this Act.” So we’re looking at RC authorization in May. The regional center integrity requirements also in Sec. 103(b) share the 60-day effective date (giving RCs some time to organize compliance for a host of new rules, and USCIS some time to figure out new forms and procedures).
  • Investment amounts and TEAs: The new investment amounts ($1,050,000 or $800,000) and TEA definitions are in Sec. 102 of the new law, which has an effective date immediately “on the date of enactment of this Act.” Investment amount and TEA changes apply prospectively. Sec. 105 repeats the principle that “a petitioner shall establish eligibility at the time that he or she files a [I-526]. A petitioner who was eligible for such classification at the time of such filing shall be deemed eligible for such classification at the time such petition is adjudicated.”
  • New direct I-526 filings: Sec. 105 of the new law provides that immediately from the date of enactment, direct EB-5 I-526 can only be filed for projects with a single EB-5 investor. (If a project has more than one EB-5 investor, new I-526 must be filed through the regional center route).
  • New regional center I-526 filings:  The new law stipulates that regional center I-526 can be filed after the regional center sponsor has filed an “application for approval of investment in a commercial enterprise.” This application will be similar to an I-924 exemplar, but with different content requirements. At minimum, new regional center I-526 filings will wait for 60 days until the program is authorized. The wait could be longer if USCIS claims longer than 60 days to figure out the new process to accommodate the regional center approval filings that must now precede investor I-526. It will also be longer if USCIS interprets the repeal of the old statute to mean that all regional centers authorized under the old statute are voided and must reapply for designation under the new statute. (Considering processing times, I sincerely hope that’s not the interpretation.)
  • Regional center visa issuance: Department of State must wait to issue regional center visas until the regional center program is authorized. But since authorization in May is now certain, I hope DOS chooses to redeem the time in March and April with advancing paperwork and interviews at least up to the point of visa issuance. (But consular and I-485 processing have been backlogged and inefficient across the board since 2020, so I am not counting on very swift action specially for EB-5 – much as we need it to minimize the impending loss of over 10,000 FY2022 EB-5 visas.)
  • Visa issuance generally: The reserved visa provision in the new law is in Sec. 102, which is effective immediately on the date of enactment. The provision will not be felt immediately in practice because FY2022 has so many extra visas available in theory and so constrained by consular/USCIS processing capacity in fact that visa loss in FY22 was already overdetermined, regardless of the additional role of set-asides. I’ll write separately on this reserved visa issue, which is complicated in detail (thanks to the backlog and country caps and how EB visas roll over), but an obvious and serious concern on its face given the basics that 100%-32%=68% and that “reserved” means “reserved.”
  • Concurrent filing of I-526 and I-485: The nice provision that allows I-485 filing any time “if I-526 approval would make a visa immediately available to the beneficiary” is in the Sec. 102 of the Act that’s effective immediately. I’m not sure how the visa availability condition will play out. The Visa Bulletin will show regional center visas generally available starting in May, with likely changes to final action and filing dates. The window of availability for India and Vietnam will depend on how long it takes the thousands of petitions now stuck in I-526 processing to register as backlog for the visa stage.  If I were a direct investor with pending I-526, I’d talk to my lawyer about filing I-485 right away before the Visa Bulletin or USCIS have a chance to think about the regional center crowd. It looks to me as if the I-485 language in Sec. 102(d) simply references the EB-5 category, and doesn’t mention qualifications such as when the underlying I-526 was filed, but I defer to the lawyers.
  • I-526 processing: Section 105(c) says that DHS should continue to process I-526 and I-829 petitions during the implementation of this Act and its amendments. It’s not perfectly clear that this directive includes regional center I-526, and I wouldn’t put it past USCIS to wait 60 days before taking up RC I-526 processing. But at least there’s zero basis for USCIS to start bulk denials of RC I-526 after March 11, since RC petitions now certainly have statutory authorization coming. The major barrier for I-526 processing is that USCIS has just been hardly working at all on EB-5, for months. Here is the recent history of Form I-526 approval volume: three approvals in December, eight in January, and eight in February. Seriously! I hope the staff that hasn’t been working on I-526 adjudication since July 2021 hasn’t been lost permanently. But even if EB-5 can get its adjudicators back very soon, I don’t expect an instant pivot from <10 I-526 approvals per month to the 300+ decisions per month that we had before July 2021 (not to mention the 1,000+ decisions per month we had before Sarah Kendall). The battle to get USCIS to process petitions is only beginning. Thankfully the new law offers new resources for the battle. Sec. 106 of the new law mandates DHS to at least make a plan for “timely processing.”
  • Law interpretation: Having watched the progress of EB-5 policy and regulations since 2010, and witnessed how much time the agency takes to think or write about anything, I’m feeling faint as I contemplate how they’re going to deal with translating the hefty EB-5 Reform and Integrity Act into policies and procedures. Time to start praying for another miracle: this time, efficiency and sense at DHS. (And at the same time, to move advocacy energies toward assisting that miracle.)

Every so often, I put out the reminder that I welcome reader support for my effort on this labor intensive and otherwise unmonetized blog.  I have Paypal and Zelle accounts linked to my email address suzanne@lucidtext.com (and a Paypal button), and appreciate any contributions. Regardless, I will keep writing as time permits to support the community that’s developed here, and my clients who are still bravely trying to make good use of EB-5. I appreciate all of you who have taken time to write comments and share your insights and experience here, especially over the difficult past year.

Looking to March 11, 2022 (legislation and litigation)

The drama of regional center program reauthorization is racing toward the zero hour of March 11, 2022: the date when the FY2022 omnibus appropriations bill is now finally, firmly likely to pass with or without EB-5 legislation on board. The omnibus text should be released at the end of next week, and we’ll know then whether the industry has agreed with Senator Leahy on reauthorization (and/or grandfathering language). Advocacy groups have been working hard, taking the deadline seriously, and cautiously optimistic about a favorable outcome (including EB5IC, IIUSA, and AIIA in last week’s donor call). USCIS apparently believes in March 11 as a hard deadline as well. I heard 4th hand from multiple sources that USCIS told the U.S. Chamber of Commerce lobby that the current abeyance policy for regional center petitions will be ended after the omnibus passes. Such a message, assuming true, places scary but helpful pressure on the omnibus to actually carry reauthorization or at least protections for RC petition eligibility. Not that USCIS is likely to act very quickly starting March 12, whether on approvals or NOID (it appears that the Investor Program Office has maybe two employees left working on I-526), but at least there’s a line in the sand for Congress/industry to see. Now is the time for the legislative debate to produce a result.

For timely updates, look to your primary-source advocacy channels. Or look away and focus on your health, remembering that life is precious, whatever happens with EB-5. Comments are open, with the reminder that my blog is not a widely influential platform, and not Twitter.

Personally, I have been busy with business plan work, but also overcome with pity and fear over the EB-5 scene. Some people believe that this is some kind of modern Hollywood story full of sophisticated conspiracy and slick villains, but I don’t think so. The ingredients look to me like plain old-fashioned tragedy, with hubris and hamartia driving the action. As the end unfolds and pressure builds I’m torn between wanting to hide my eyes, just run from the theater, or maybe stand up and wave my arms and try to shout to the players onstage. Not that that works, but here’s what I’d say.

Regional center self-interest calls for action to protect past investment, because the past is also the future. EB-5 visa availability constraints necessarily limit how much more new EB-5 capital can be raised going forward, regardless of other factors. Meanwhile a huge fund of existing EB-5 investment remains to be either deployed into the future or lost. Profit depends on regional center actions today to protect the immigration eligibility that keeps past investors on board.

Please don’t let negotiations die in an investment threshold battle that couldn’t have helped even if won. We must avoid misjudging the role of investment amounts. Demand for regional center investment is based first on a chance to immigrate, and secondarily on the price of that chance. The large crowds who flocked to affordable investment levels in 2012-2018 did so because they believed in the promise of a visa, and weren’t apprised of overall or per-country visa limits. Those unsustainable crowds can’t return again, even with a good win on investment/TEA terms, because the ignorance that underwrote that excess demand has dissipated, and backlogs are in view for all major markets. With 80,000+ people queued up for visas only available at 10,000 per year, and backlogs concentrated by country caps on the few large EB-5 markets, the future has already been sold.

The visa availability/awareness damper on future demand precludes the possibility of any RCs with large past EB-5 raises depending on a Ponzi principle for their future. “But I need to replicate the past EB-5 investor stream or I can’t keep operating or repay past investors” (besides being a statement that the SEC might like to investigate) is not a reason to hijack legislation over investment amounts, since affordability alone couldn’t restore past demand anyway. Appetite for what’s possible has a point, but grasping for the impossible is not the vice of greed so much as of stupidity.

There are strong public policy arguments for accessible EB-5 investment thresholds, especially for small direct EB-5 projects, but it’s not a rational dealbreaker issue for the big regional centers.

Please don’t let negotiations die over a visa relief battle that couldn’t have been won. Getting actual extra visas for EB-5 would be a wonderful win, and essential to holistic reform, but it’s not on the table for March 11 — or anywhere outside multi-category immigration reform, considering that Republicans don’t want to increase overall immigration at all, Democrats have suggested relief for almost every visa category except EB-5, and no one would let EB-5 get first and only what more powerful interests want just as badly. This is all unfortunate, but understood. But there’s lingering thought in some corners: what’s the closest we could get to the unobtainable good? In absence of visa relief, what if we could at least manage half-measures? Something is better than nothing, and we might restore the historically-effective illusion of an immigration opportunity, if nothing else. Thus the ideas of set-asides and advance parole. Visa set-aside categories could only support a few hundred new annual Chinese investments before creating their own backlogs, but could still be effective marketing tools if the limits went unnoticed upfront. Regional centers with previous success in raising four Chinese investments for every one visa actually available to China might believe that a new set-aside category would significantly beguile/reopen the China market, despite not numerically supporting the desired demand. Advance Parole also sounds very promising, so long as one doesn’t look up what Advance Parole is and how it’s implemented. However, the China market is on the alert now, and equipped to calculate visa incentives and avoid illusion. Unexaggerated, how much could the small set-aside allocation or a limited advance parole program possibly help the market? On the other hand, how much could insisting on such half-measures in face of opposition still hurt the chance to pass any legislation at all? Advance Parole in particular, while not controversial for industry, is very controversial in Congress because it involves allocating immigration benefit, looks like expansion, and triggers the interests of other factions. The limited actual good of advance parole is worth at least trying for, but not worth forcing negotiation death in the attempt to get, if (and assuming) it’s too controversial for assent from the Congressional leaders who need to sign off on EB-5 legislation. Meanwhile, the extended legislation fight is losing already-available extra visas by the day: the nearly 20,000 EB-5 visas technically available in FY2022 will be lost without immediate action to restore RC investor eligibility.

Do not reckon without the gods. In calculating what’s possible in March 2021, remember Senator Leahy’s power over the omnibus, and his long-standing and passionately expressed personal motivations and public commitments with respect to his legacy in EB-5. Note that Senator Grassley sounds as unbending as ever, telling Roll Call last week: “The program is now dead, and it’ll remain that way until all corners of the industry wake up to the reality that Congress is not going to allow these abuses to continue.” Observe that Senator Schumer is powerful and there for his constituents, but can be counted on to do what’s expedient (which includes negotiating with but not railroading idealist and noisy Leahy and Grassley in an election year). Though motivated by his campaign contributors, Senator Graham is not placed to unilaterally include favorable legislation on the omnibus, Considering this configuration of the gods over the March 11 opportunity, industry compromise looks like the only possible path to March 11 success, painful as that will be. Our boldest industry ambitions will have to be modified or else fall from the sky with melted wings. See recent articles by Carolyn Lee and Ishaan Khanna for further discussion and insights and the lobby state of play and need for compromise.

Go ahead and try the Hail Mary pass, but do not rely on it. How about if we escape the regional center lapse tragedy by denying its existence? The regional center program itself is not temporary, but was established without time limit in 1992: so goes the case recently brought forward by multiple lawyers (e.g. Michael Chen last year, in a case that has a decision, and now with modifications by Wasden Banias/Orbit Law, GreenbergTraurig/Behring/EB5IC, Joseph and Hall/Galati/IMMPACT, and counting.) The basic case turns on a program authorization/visas authorization distinction that seems like it ought to exist, although grammar doesn’t put it in the regional center statute. The case stares down 30 years of recorded history, including Senator Leahy’s many published comments on his understanding of the program he has shepherded over the years (e.g. from 2008 and 2012), records from multiple Congressional hearings on the RC program, 12 reauthorizations (not counting CRs), and decades of agency and EB-5 industry communications. It seems we were all mistaken about RC program status all that time — even those Senators who are somehow still on the scene now 30 years after attending the birth of the regional center program. The litigation has attractions because it implies that we don’t actually need reauthorizing legislation, with its excruciating process and delays and unpalatable reforms. Even better for some purposes, it places full blame and responsibility for the current dreadful limbo of visa-less regional center investors on USCIS and DOS, exculpating the industry and Congress and getting them off the hook for further effort. How expedient if USCIS and DOS just made an administratively-fixable error of interpretation in December 2019 (repeating previously-published errors going back to at least 2009).  I understand that this Surrealist litigation has sophisticated legal nuances and represents the best that smart and well-regarded lawyers can offer us, under the circumstances, accommodating our demand for some kind of litigation alternative, and also having ancillary strategic functions.  But if I could shout more advice to the actors on the RC lobby stage, I’d say: do not count on this litigation to function as a plausible alibi for letting the legislative effort fail. You, we, and the Internet know too much for this line to fly: “But we genuinely believed that this litigation would protect regional center investors as a fallback, allowing us to give up a hard compromise for reauthorization or grandfathering legislation.” (For further comment on litigation, see attorney Robert Divine’s article EB-5 Reaches Crescendo of Confusion for Past and New Investors.)

My hope for our EB-5 industry future and face depends on some kind of EB-5 legislation passing with the March 11, 2022 omnibus. No matter how much painful sacrifice that will take, to avoid wider tragedy to come. Let’s get this done.

Looking to 2022

I will start 2022 by attempting a comment on where we are with regional center and direct EB-5, and what should be done

Regional Center Situation

Regional Center Legislation

In 2021, Congressional reformers and the industry lobbies delivered their best offers on EB-5 legislation, worked harder and more successfully than ever before to establish industry consensus around their respective proposals, and still ended up on the horns of their differences, demonstrating power to block each other and inability to overcome each other’s blocks.

Where can we look for resolution to an industry/Congress impasse that’s been ongoing since at least 2015? I’d say it’s theoretically impossible that personally-motivated reformers Senator Leahy and Senator Grassley will change their EB-5 priorities this year, or exercise less power in 2022 than in 2021.  Industry theoretically has more motivation to compromise our priorities, because we have more to lose from continued delay and growing investor frustration. Industry priorities are also more open to self-reflection. For example, simple calculation shows that 1,000 or even 3,000 set-aside visas would not accommodate enough investors to significantly re-open a now quota-aware China market, and would not significantly incentivize rural investment. The very limited practical benefit would not justify a bloody battle. Side-by-side comparison of the largely similar industry consensus vs Grassley/Leahy integrity measures begs a blushing question “and this is what we’re still fighting about?”. Narrowing the TEA investment differential to insignificance would be too-obviously bad politics and bad press today, and would be a worthless win in the future if an investor explosion in 2022 gets a chance to permanently stain the reputation of EB-5 at any price. I believe everyone now understands the near-term political impossibility of genuine EB-5-specific visa relief while larger immigration priorities remain unresolved. So maybe there’s realistically not much left to fight about this year. We shall see how realistic advocates will be in assessing costs, benefits and political possibilities in 2022. I hope that the sunk cost fallacy will be recognized and avoided.

At this point, my personal best hope for 2022 legislation is that everyone will unite around a few-sentence grandfathering provision to resume the immigration process for past investors. This would be an interim expedient to protect time for negotiations around substantial reauthorization legislation, otherwise threatened by the imminent mass bloodbath of past investor frustration. My slim hope would depend on all regional centers with lobbyists correctly realizing that near-term grandfathering is in their best interest to buy time, given the political realities delaying holistic reform and the increasing pressure from desperate investors who cannot tolerate further delay. It also depends on Senator Leahy not suspecting the regional center self-interest motive and time-buying tactic in grandfathering, but rather recognizing the unquestionable case of fairness and responsibility to people who invested in the authorized RC program, and/or the real need to protect existing EB-5-funded U.S. jobs and economic activity from being derailed by investor frustration. There’s a long road to making these cases, to regional centers especially, but I see a theoretical possibility at least.

I expect and hope that education will be a major difference between 2022 and 2021. Last year, a large part of the EB-5 ecosystem did not know what was going on. Industry associations tended to provide messaging rather than information. Most of us had no access to intel from lobbyists and Congressional staffers. The typical first-line advisors for EB-5 investors – immigration attorneys, regional centers, and agents – were often honestly unable or sometimes strategically unwilling to inform investors. We witnessed a few concerted efforts to spread misinformation, and some genuine (if still culpable) simple ignorance from advocates about their own proposals and the legislative process. All this ignorance had a function in 2021, deferring delay repercussions and avoiding dissension. But it came with a fearful cost for business and personal decision-making.

In 2022 and going forward, I see the EB-5 ecosystem demanding and getting better information and accountability. The fact and consequences of RC program expiration have had time to sink in. Messaging has had time to stand the test of history. Recent comments on this blog show how sentiment has developed, and the growing investment in education and action far beyond this occasional little blog. Personally, I donate to the EB-5 association AIIA because AIIA is motivated to communicate what their lobbyist finds out and what they hear in meetings with Congressional staffers.  I would love every EB-5 investor, service provider, and regional center to take advantage of donor access to the AIIA Microsoft Teams group and Telegram chat for the sake of the intel and collaboration offered, if nothing else. I do not know how much AIIA can accomplish in terms of advocacy in a few months, but even their emerging role in obtaining and sharing info about who’s doing and saying what in Washington DC is gold for accountability and educated action. No wonder my blog comments are filling with advertising “Donate to AIIA! Learn from AIIA!” and also “Do not donate to AIIA! Nothing happening there! Don’t look!”

Hopefully everyone on the front lines of regional center advocacy will step up their game this year, realizing that they are being watched. “Speak and act as those who will be judged” could be a good mantra for all of us in 2022. Along with the reminder “We’re all in this together.”

AIIA is holding a town hall webinar on Saturday January 15th at 6pm PT to discuss reauthorization and provide updates. Free to the public: register here.  [UPDATE: A partial recording now available on the AIIA Youtube channel.] AIIA’s informative December newsletter is also still available, in case you missed it.

If anyone else is holding RC-related events to share information plus host discussion, please let me know so that I can promote them. Let the year of information and accountability begin.

Regional Center Petition Processing

The USCIS website continues to have one alert saying that USCIS will hold regional center I-526, I-485, and I-924 and “at the end of calendar year 2021, unless there is new legislation for regional centers, we will reevaluate whether to keep this hold in place.” Now a second alert as of 12/30/2021 adds “USCIS is reevaluating the decision [and] will provide additional guidance as soon as practical.” I am not holding my breath for guidance or action from USCIS.

So far this month, IIUSA has filed a brief arguing that USCIS should process regional center petitions during a regional center program lapse, and sent a letter arguing that USCIS should not process regional center petitions during the regional center program lapse. Each document makes the argument for the sake of investor protection. I can’t tell whether a contradiction has been noticed.

In the case of Yuhua Zhu et al v. Antony John Blinken et al, 111 EB-5 investors with pending I-485 sued USCIS “to either adjudicate their applications, or issue them visas, under the EB-5 Immigrant Investor Regional Center Program.” On January 3, 2022, a judge assessed and dismissed the claim: “The court is persuaded that because the lapse in congressional authorization for the Regional Center Program prevents the court from granting effective relief, the claim is moot and must be dismissed.” (Thanks to Jason and Bunuel Yang who brought the litigation to our attention in their comments on my previous post.)

Unfortunately, we do depend on Congress to act to provide regional center petitions with a basis for approval and visas.

Direct EB-5 situation

Investment Amount

The stability of direct EB-5 investment improved since January 5, 2022 when DHS dismissed its appeal of the Behring Regional Center lawsuit. With the appeal pending, we had operated under the risk that DHS might eventually win the appeal, and that a future win could make today’s direct I-526 retroactively ineligible. With the appeal dismissed, that risk has disappeared, thankfully. I feel more comfortable now that each I-526 may be judged by the rules under which it was filed. (My confidence would be boosted if Congress passes the proposed grandfathering language to that effect.) The EB-5 investment amount is still subject to change, but at least not retroactive change for filed I-526. I’d also worried that the recent lack of I-526 processing might reflect an appeal-related abeyance policy. With the appeal dismissed, that possible explanation for processing delay disappears. All good news for direct EB-5 at least, though the Behring suit and the dismissed appeal complicate regional center legislation negotiations.

I-526 Processing

 I-526 processing times for direct EB-5 investors remain in question, as USCIS continues to have apparently almost no one working on I-526 adjudications. Here’s the total I-526 processing activity since January 5, 2022:

  • Thursday January 6: One RFE sent to an I-526 filed in 2016
  • Friday January 7: One I-526 filed in 2018 approved
  • Monday January 10: One notice sent to an I-526 filed in 2016
  • Tuesday January 11: No action
  • Wednesday January 12: Denied one I-526 filed in 2015 and one I-526 filed in April 2019

In the entire month of December 2021, USCIS approved three I-526 and denied four I-526 and that’s all. (I updated my previous processing post with the full month log.) The estimated I-526 processing time will be very long if we have to assume that the many hundreds of pending direct I-526 will continue to be processed at a rate of less than 10 completions per month. We should not have to assume an indefinite meltdown, since USCIS has over 200 EB-5-fee-funded employees who could be and ought to be working on EB-5 forms. For direct EB-5 to remain an attractive option for project companies and investors, pressure must mount on USCIS to use its EB-5 resources to adjudicate EB-5 forms. And for regional center investment to have a future, we must also press USCIS to retain and use its EB-5 processing resources today.

Direct EB-5 visa timing and availability

Today’s Visa Bulletin is wide open for EB-5, because RC program expiration combined with processing barriers means that the visa stage currently lacks excess demand to control. The future visa availability outlook and timing calculation are complicated. Incoming direct EB-5 investors from China, Vietnam, and India have a slender chance to avoid future delay at the visa stage. This chance is unrelated to visa bulletin conditions today, which only apply to people later in the process. The chance for incoming investors exists if rapid USCIS processing plus delayed Congressional action combine to allow incoming direct investors to eventually reach the visa final action stage while regional center investors are still prevented from claiming visas. If that window closes, and older regional center investors are able (and willing) to rejoin the queue while newer direct investors are still waiting for I-526 processing, then the Visa Bulletin will jump and recent investors from China, Vietnam, and India will find themselves at the back of large regional center crowds (a 7-10+-year queue) at the visa stage. I prefer to avoid bets on USCIS promptness and regional center program failure.

Direct EB-5 project availability and due diligence

I plan to write more about finding and assessing direct EB-5 projects, and I am considering a directory of direct EB-5 contacts. If you have a current or future direct EB-5 project available and might be interested in such a directory, please email me at suzanne@lucidtext.com.

As a business plan writer, I’ve been working with a number of direct EB-5 ventures that could be wonderful for the economy. I hope that EB-5 policy and administration will improve to better reward good projects and their investors.

USCIS website alert update: I-924A

Thank you to Carolyn Lee for noticing that the USCIS EB-5 page was quietly updated yesterday 12/20 to include this paragraph in the alert on regional center program expiration:

We will still accept and review Form I-924A, Annual Certification of Regional Center, including those filed on or after July 1, 2021. Regional centers should continue to submit Form I-924A, for fiscal year 2021.  

Regional centers have been asking about I-924 since September, and USCIS waited until Christmas week, just a few days before the deadline to file I-924A, to say yes, we do want you to file this form and especially to send us the fees, even though the program is expired and we’ve said we’re not reviewing I-924A. Happy Holidays.

The only nice thing I can think of to say is that the request for I-924A filings can only be based on USCIS assumption that the program will be revived. And if USCIS is making that assumption for I-924A purposes, they could hardly justify making the contrary assumption in context of deciding whether to keep holding regional center investor petitions.

How and why RC program law affects RC petition processing

I observe confusion about how and why regional center program expiration affects various stages of the EB-5 process.

What specifically is the “lapsed statutory authority” that USCIS cites as the reason for not accepting regional center I-526 and not acting on pending regional center I-526 or I-485, but continuing to act on I-829 for everyone (in theory)?

What specifically is the “legislative action extending this category” that the Visa Bulletin states as necessary before I5 and R5 visas may be issued overseas, or final action taken on adjustment of status cases?

What all is to blame for the fact that regional center I-526 petitions are currently not being processed and visas not issued, and – therefore – what are the possible options to change the situation?

To help think about these questions, let’s back up and look at the law and the process.

The Law

Statutory authority for the regional center program came from Section 610(b) of Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (Public Law 102-395). You can review the 1993 law (see PDF p 47), or even better this section from USCIS EB-5 training materials that presents the text together with amendments up to 2012. I’ve copied the 1993 language below, with underlines added at key points. This is it: three short paragraphs upon which stand billions of dollars. After the quote, I comment on significant points in the regional center statute.

Quoted from Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 SEC. 610. PILOT IMMIGRATION PROGRAM-
(a) Of the visas otherwise available under section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)), the Secretary of State, together with the Attorney General, shall set aside visas for a pilot program to implement the provisions of such section. Such pilot program shall involve a regional center in the United States for the promotion of economic growth, including increased export sales, improved regional productivity, job creation, and increased domestic capital investment.
(b) For purposes of the pilot program established in subsection (a), beginning on October 1, 1992, but no later than October 1, 1993, the Secretary of State, together with the Attorney General, shall set aside 300 visas annually for five years to include such aliens as are eligible for admission under section 203(b)(5) of the Immigration and Nationality Act and this section, as well as spouses or children which are eligible, under the terms of the Immigration and Nationality Act, to accompany or follow to join such aliens.
(c) In determining compliance with section 203(b)(5)(A)(iii) of the Immigration and Nationality Act, and notwithstanding the requirements of 8 CFR 204.6, the Attorney General shall permit aliens admitted under the pilot program described in this section to establish reasonable methodologies for determining the number of jobs created by the pilot program, including such jobs which are estimated to have been created indirectly through revenues generated from increased exports resulting from the pilot program

Discussion of the law

The 1993 law said “shall set aside visas” for a program that “shall involve a regional center.” Details here and there in the law have been amended over time, but note the key point that the regional center program difference is baked into visas. The Visa Bulletin therefore sets specific categories for regional center applicants — I5 and R5 – and stops issuing visas in the I5 and R5 categories whenever the regional center program authorization expires.

The 1993 law specified a time limit on setting aside visas for the regional center program: “five years.” It’s those two little words “five years” that have been replaced over and over again since 1993, in successive laws reauthorizing the regional center program. Reauthorizing legislation started by substituting the original “five years” with new time durations, and eventually moved to providing calendar date deadlines. The most recent reauthorization in 2020 simply said: “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 ‘June 30, 2021’ for ‘September 30, 2015.’” When no new law appeared to substitute the June 30, 2021 date, then regional center visas became unavailable as of July 1, 2021, and all the processing stages leading up to visa issuance therefore screeched to a halt. At its most basic, regional center program authorization has just meant giving a new expiration date in place of the five-year time limit in the 1993 law. (Here’s my log of reauthorizations to date.)

The 1993 law specified that regional center category visas are for “such aliens as are eligible for admission under section 203(b)(5) of the Immigration and Nationality Act and this section.” The law further specified that the government “shall permit aliens admitted under the pilot program described in this section to establish reasonable methodologies for determining the number of jobs created by the pilot program, including such jobs which are estimated to have been created indirectly.” These words help explain why regional center program authorization is an issue leading up to and at the visa stage, but not a problem for people who have already been admitted to the U.S. on a regional center visa, and now in the Conditional Permanent Resident or I-829 stages.

The key word is “admission” i.e. starting U.S. residence on an EB-5 visa. The 1993 law puts pre-visa regional center investors in a vulnerable position, because it specifies that they must be “eligible for admission” under the core EB-5 program at INA 203(b)(5) AND “this section” i.e. the temporary regional center program authorization. Lawmakers in 1993 surely did not foresee that inefficient USCIS processing and backlogs would insert many many years between (A) investing in the regional center program and (B) becoming eligible for admission to the U.S.  Proposed “grandfathering” language now seeks to rectify that vulnerable long gap between A and B by specifying that the investor eligibility can rely throughout the process on the statutory authority that existed at Point A: the time of filing I-526. By simply focusing on eligibility at the time of admission — the visa stage that can be delayed for years into the EB-5 process — the 1993 law provided no such protection.

Meanwhile, the 1993 law does at least effectively lock in/grandfather regional center eligibility from the time of admission on a visa. The government “shall permit aliens admitted under the pilot program described in this section to establish reasonable methodologies for determining the number of jobs created by the pilot program, including such jobs which are estimated to have been created indirectly.” If you were admitted under an I5 or R5 visa, you may then go on to remove conditions on that visa under the regional center rules that apply to that visa, including using economic methodologies to count indirect jobs. The 1993 law permits you to do so because you were admitted to residence under the RC program. Based on the statute, EB-5 policy confirms that even following loss of regional center sponsorship, “The conditional permanent resident investor will continue to have the opportunity to demonstrate compliance with EB-5 program requirements, including through reliance on indirect job creation.”

The Process

The following figure summarizes stages and actions in the EB-5 process. Under the law as described above, the regional center applicant needs the regional center program to stay authorized throughout the grey-shaded stages, such that the applicant stays eligible until the point of being able to cash in on regional center eligibility by getting an I5 or R5 visa at Step 4.

Suggested “grandfathering” language for EB-5 legislation would change this risky scenario by clarifying the law to lock in regional center eligibility based on regional center program authorization status at Step 1. Then future investors could start the process with confidence, knowing that their future eligibility at Step 4 — whenever that time comes — will still follow the rules and authorities that existed at Step 1. The proposed grandfathering language does not merely protect existing applicants (indeed, it’s irrelevant for many past investors if there’s a significant near-term reauthorization), but essential to protect all incoming demand from the future threat of expiring legislation. AIIA’s suggested grandfathering language proposes to amend the INA as follows: “(E) In the case of statutory provisions that establish temporary authority for visas to be made available under paragraph (A) to beneficiaries of such authority, the suspension or termination of such temporary authority shall not suspend or terminate the allocation of visas to such beneficiaries, provided that the petition seeking such allocation was filed when the authority was in effect.”

Note that all regional centers have a self-interest in ensuring that such protective language gets included in any new reauthorization legislation. Future investors will want to avoid the vulnerability to change that’s been on display during the current lapse. Who will commit to a program that’s liable to disappear before it’s needed? Eligibility should be securable at the time an investor commits to the regional center program, and such assurance requires an addition to the law.

Implications

I hope that looking at the regional center statute and contemplating the EB-5 process chart helps to clarify thinking about where we are now, and possible paths forward.

The key lesson that I take: the core problem in regional center program expiration is loss of authority to issue regional center visas and loss of eligibility to receive regional center visas. The current stop to all RC processing leading up to visa issuance is a side effect of that core problem, not the problem itself. Further, the authority to issue RC visas and eligibility for RC visas is based in statute, and thus the solution must be statutory: to get a law passed that renews authority and eligibility for regional center visas. It would not be a solution to simply force USCIS to receive and process regional center I-526 and I-485, and Department of State to process visa applications. If we did that, we could force USCIS and DOS to start denying applications. Because how could agencies possibly approve applications for benefits that don’t currently exist? To quote EB-5 immigration attorney Ron Klasko, from an email kindly sent to me on this topic: “I can advise you of the general legal principle that prevents a government agency from approving a petition or a visa unless there is statutory or regulatory authorization to do so.”

USCIS and Department of State do not make laws or create benefits, they just administer them. By choosing to pause regional center application processing, USCIS and DOS chose to put the regional center patient in a coma, pending a RC program revival by Congress. The regional center processing coma is not the problem in itself – in fact it’s a kindness, to defer the final action of death.  In that case, begging or suing USCIS to resume processing RC petitions during an RC program expiration would not be a solution, and indeed would harm any RC applicants who do not want denials.

Congress must pass a law that enables EB-5 visas to be issued in the regional center categories. A law that reauthorizes the regional center program would accomplish that purpose. A reauthorization law will inevitably include many provisions in order to pass, but the minimum necessary content to protect existing investors is an RC program expiration date that’s in the future. Reauthorization legislation is the top priority, and Plan A. If Congress does not act to reauthorize the RC program for the future, Congress should at least pass a law that keeps faith with past investment by allowing applicants who filed I-526 while the regional center program was authorized to remain eligible for regional center visas. The one-sentence grandfathering proposal quoted above could be enough, if a minimal Plan B becomes necessary. So far, I have heard no Plan C path to regional center visa issuance that sounds promising to me. I do not know what litigation argument could work for visas in light of what’s in the law and EB-5 process as reviewed above. The top EB-5 lawyers will try their creative best if necessary, but do not speak optimistically about litigation prospects in lieu of legislative solution. The one RC visa lawsuit attempt I’ve read so far did not make sense to me (except for the couple pages of it that were copied from my blog). But if you can see a solid Plan C option, or note any problems with my analysis, please comment, and make your case in detail. Or email me at suzanne@lucidtext.com.

Updates: I’ll continue to update this final section with other ideas as they occur to me, or suggested in the comments. Lawyers, please weigh in on whether there’s any traction here.

  1. Regional Center Investor A has a clear and well-documented case that “I would have had a regional center visa by now were it not for egregious government agency processing delay.” Is that an argument that can be taken anywhere or accomplish anything? If so, with whom to pursue it?
  2. Is the USCIS “material change” policy the primary reason that people who filed I-526 as regional center investors cannot possibly get direct EB-5 visas? If so, is there any hope of or path to a policy-level remedy of changing the material change policy?

Call for investor stories to support RC program authorization

I do not have definitive news about regional center program reauthorization, but will pass on action items suggested by EB-5 advocates. (Personally, I have decided to celebrate EB-5 legislation as a miracle once it happens, and to avoid predictions before it happens. When a miracle is a necessity, it’s risky to comment in advance on its probability and timing.)

The first condition for EB-5 legislation is a vehicle to which it can attach, and that condition has not been available yet in our crazy Congress. The date for one hoped-for vehicle — the FY2022 omnibus appropriations — remains unknown. It was due by December 3, but political news shows that Congress is still heading to miss that deadline (due to issues much larger than EB-5). (12/3 UPDATE: We now know that a new CR has extended the deadline to February 18, 2022, and per usual is a brief bill with no special interest content, including no RC program authorization.) But knowing the new CR deadline will still not support predictions about EB-5 legislation, since I won’t know whether the new CR is the last CR, or whether appropriations remains the best/nearest available vehicle for EB-5 legislation. Everyone in the EB-5 industry feels the urgency, and will at least try for nearer opportunities as the appropriations act opportunity gets deferred by Congress. (FYI, here again is my Excel file logging the recent history of appropriations bills.)

 “Congress’s goal in December: Avoid shutdown and default,” reported The Hill yesterday. If only the headline referred to avoiding shutdown of the job-creating regional center program, and avoiding U.S. government default on the EB-5 visa promise to over 80,000 past foreign investors whose over $40+ billion investment is now at work in the U.S. economy! Those are major concerns, yet overshadowed. The shutdown and default threats occupying Congress involve funding for the entire federal government and the $20+ trillion national debt. Not to mention dealing with President Biden’s social spending and climate bill priorities.  No wonder EB-5 struggles for attention.

With the nation’s solvency and Biden’s legacy teetering on the brink, what room is there for any other concerns? And yet I notice the disproportionate power of catchy individual stories. Even reading The Hill, I have had to scroll far down the page to get to major news about the national debt and Build Back Better, down below headlines about the wheelchair shoplifter and Lindsey Lohan’s engagement. People respond to stories about individual experience, especially when featured in print and in a position to get shared.

EB-5 advocates have been thinking about the power of stories. The regional center lobby just conducted a PR blitz with a message to EB-5 investors: please call Senator Leahy and Senator Schumer and tell your story, to urge action on reauthorization. The word used to be: stand back and relax because we have this under control, the key Congressional representatives are on board, and we possess the political capital to get this done. The new messaging acknowledges that reauthorization is not in the bag, that Congressional support is not a given, and that we need all the political capital we can get, including from EB-5 investors who can talk about their important contributing work and/or investment projects in the U.S..  While the case for reauthorization has many planks, the case for urgent reauthorization comes specifically from the plight of past investors, whose pending immigration petitions may be reevaluated after December. The plight of past investors also provides the moral motive for reauthorization. Regional centers and investors equally need that plight to be highlighted, to help motivate urgent action on reauthorization legislation.

EB5IC representatives have particularly encouraged EB-5 investors to call or email Senator Leahy’s office, and tell a personal story about the impact of regional center program lapse. While Senator Leahy practically founded the regional center program and does not need to be educated about EB-5 or the need for reform legislation (as discussed in my previous post), investor stories may help stoke his sense of urgency about the current EB-5 situation, in midst of many competing priorities.  

Meanwhile, AIIA is working to gather and disseminate EB-5 investor stories for maximum impact in the media and in personal meetings with Congressional representatives. The media drive is supported by IIUSA and its PR firm FischTank, which can help to get stories placed. Additionally, AIIA is planning a trip to Washington DC next week, and has an urgent call for investors to join in meetings with Congressional reps. If you can assist either or both of these efforts, please reach out to them ASAP. I cannot promise the success of these campaigns, but the effort can only help. And the more participation, the more potential impact.

Quoted from https://goaiia.org/blog/f/eb-5-investors-share-your-story

FischTank would like to develop a media campaign that focuses on the investors’ personal stories, highlighting what you and your families have sacrificed, where you are in your immigration process, current obstacles you are facing, and what you have contributed to your local community.  Once FischTank has had a chance to connect with those of you who are willing to share your story, it would then like to package it together to focus on the importance of the program, the impact of the lapse on investors and the communities that have benefited from the program and pitch it to relevant local and national media. If you are interested, consent to your identity and story being made public, and are prepared to speak with members of the press about your story and how this program lapse has affected you, please reach out to us right away at info@goaiia.org

Quoted from an email sent by info@goaiia.org on November 28, 2021

Dear EB-5 Stakeholder,

You may remember we had previously sent an email asking for personal stories of how the EB-5 lapse has affected you. We received a few responses, although honestly, we would have liked to receive more.

As a result of that request, we received a response from Dr. Chandra Ojha, an interventional cardiologist, who lives in El Paso, Texas. Despite being a highly trained doctor, he was not able to extend his full service to the society during the raging pandemic last year as a result of the delay in processing his EB-5 visa. His story was published in a local newspaper. You can read it here: Opinion: I’m an El Paso doctor. The immigration system has put my future in jeopardy – El Paso Matters

Within hours of the publication of his story, the office of a sitting Senator reached out and asked to speak with him.

This is how grassroots campaigning works! It moves things one little step at a time. If this is the power of just one genuine story, published by a constituent living in America, imagine hundreds of such voices being heard all across America and the power they would have to move things in our favor.

We need more people to speak up and advocate for themselves. We need more voices to be heard. We need you to step forward to help our community that is hurting because of the Regional Center program lapse.

There is something we urgently need your help with now. We are looking for EB-5 investors (or their dependents) to visit lawmakers with us in Washington, D.C. on December 9 and 10.

We hope that issuers and immigration attorneys alike can also help us with this effort. We are lining up a series of meetings with members of Congress and are seeking investors that have invested in a project in these following areas:

–        Texas (especially Houston)
–        Iowa
–        South Dakota
–        South Carolina
–        Illinois
–        Vermont
–        California (specifically Silicon Valley)
–        Arizona (Phoenix)
–        Upstate NY (Syracuse)
–        Ohio (North of Cleveland)
–        Georgia (South of Atlanta)

As a reminder, locations of investment is more important than residence and we are seeking investors whose projects are located in the areas mentioned above. Attorneys, we request you to forward this email to your clients and we appreciate getting your support in working together to achieve our common goal of helping EB-5 Regional Center investors continue their immigration process.

Read more at https://mailchi.mp/goaiia/dc-trip

Understanding the Audience: Senator Leahy

The FY2022 Appropriations Act is the nearest-term hope as a vehicle for regional center program authorization, and I hear that all sides are committed to grasping that opportunity. (The appropriations act is due by December 3, 2021, and could well be delayed by Congressional fights unrelated to EB-5. But I’m relieved to hear that EB-5 negotiators are not counting on delay, but still hustling to be ready to catch the opportunity as soon as it could possibly come.) The appropriations opportunity focuses attention on Senator Leahy, who has a gatekeeper position as Chairman of the Senate Appropriations Committee. What are Senator Leahy’s interests and motivations when it comes to EB-5 legislation?

Senator Leahy is a long-time regional center program champion. His website celebrated in 2013 “Senator Leahy was the driving force behind every reauthorization since enactment.” He is also passionate about program integrity and reform, and long instrumental in EB-5 legislative efforts. The successes and difficulties of Vermont Regional Center have colored his efforts. Over the decades, Senator Leahy has published thousands of words about his EB-5 interests. I’m sharing below notes that I made when reading articles tagged with the “EB-5” category at leahy.senate.gov. I hope that reviewing Senator Leahy’s perspective can help shape advocacy that’s responsive to his priorities.

Senator Leahy’s EB-5 perspective as expressed in articles posted at leahy.senate.gov

Regional center program authorization

  • Committed supporter of long-term regional center program authorization with reforms
  • 7/22/2009: For years this program has been reauthorized on a temporary basis.   Currently, it is set to expire at the end of September.  Making this program permanent is a critical first step to its continuing success.  …I also remain committed to considering changes to improve the overall program. … I hope that this hearing will initiate a dialogue about how Congress, the agency and stakeholders can work together to ensure that the goals of job creation and security can be met, and at the same time make the program as effective and efficient as we can for those who are developing projects in communities around the country.  I strongly believe this program has the potential to grow as a meaningful source of positive economic development around the United States.”
  • 9/28/2012: “I appreciate the President’s support for this bill and the support we have drawn from both sides of the aisle.  The president’s signature on this bill is one more step toward my goal of a permanent charter for the EB-5 program, along with additional measures to give U.S. Citizenship and Immigration Services (USCIS) the tools it needs to keep this program a strong, secure and vital part of our economy.”
  • 12/4/2015: “The Regional Center should be reauthorized, but only if reformed.  There is now bipartisan consensus around these reforms, and we cannot squander this opportunity.”
  • 12/08/2016: “I believe we can still fix EB-5. But I cannot support simply extending it, yet again. While I do not come to this decision lightly, I cannot support a continuing resolution that leaves these flaws in place. The time has come to reform EB-5, or to end it.”
  • 01/12/2017: “I remain committed to protecting investors and rooting out the rampant fraud within the program.  If we cannot take these critical steps, I believe the time has come for the program to end.”
  • 9/25/2019: “We are hopeful that Congress will finally take decisive action to address the fraud and other vulnerabilities that have come to define this program.”
  • 6/25/2021: “Now that our bill has been blocked, the EB-5 visa program is unfortunately going to lapse in the days ahead and have untold economic consequences throughout the communities that rely on the program for development projects.  I remain committed to reforming the EB-5 program should there be another opportunity to do so.”

Integrity Measures

  • Promote accountability and transparency
  • Prevent fraud and address national security vulnerabilities
  • “Improve accountability of applicants, project managers and the projects themselves”
  • “I remain committed to doing more to protect investors and to root out fraud within the program, such as increasing fraud investigations and requiring additional oversight of investor funds.”
  • “Our proposal would require background checks and third party oversight of funds.  It would create protections for defrauded investors. It would ban foreign government ownership of an EB-5 company.”
  • “Congressional action is required to rectify documented fraud and national security vulnerabilities within the EB-5 Regional Center Program. The bipartisan EB-5 Reform and Integrity Act of 2021 establishes new disclosure requirements for EB-5 regional centers in order to protect investors and certify regional center compliance with program rules. It also requires the Department of Homeland Security to perform regular audits of and site visits to regional centers.”
  • “I will not support mere window dressing.  Proposals that do not require transparency and accountability for every EB-5 project are just that.”

TEA Incentives

  • Protect “central purpose of promoting investment in rural and economically challenged regions” by “reining in abusive gerrymandering”
  • The incentives that Congress created to promote investment and create jobs in rural and high unemployment areas—the sole reason why I championed this program—have been rendered obsolete through economic gerrymandering.
  • “The fact that a luxury hotel in Beverly Hills can use gerrymandering to claim it is located in a distressed community is troubling.  But the fact that this type of abuse now represents almost 90 percent of the entire EB-5 program is appalling.  And an untold number of these luxury developments would be pursued regardless of EB-5 financing, casting doubt on whether the program is creating any jobs at all.”

Investment amounts

  • Modernize EB-5 by providing “a much-needed increase” to “inadequate investment levels.”

Visa Relief

  • (The website posts do not discuss this topic. Leahy’s co-sponsored bills have included age-out protection and concurrent filing. He has spoken warmly about the general goal of protecting investors, but not discussed EB-5 visa relief.)

Industry Prejudices

  • “Small but powerful corporate interests must not be allowed to derail improvements that can help our most distressed communities. They must not be given credit for window-dressing reform proposals that do little to change the status quo.” (2/2/2016)
  • “Gluttonous, shortsighted corporate greed blocked these critical reforms.  Greed that was given a voice by the U.S. Chamber of Commerce.  Republican leadership has allowed a couple of powerful developers who exploit this program’s flaws to derail critical reforms.  I find it shameful: the worst abusers of this program have been given veto power over its reform.” (12/08/2016)
  • “It’s really unfortunate that a bipartisan bill supported by the overwhelming majority of EB-5 stakeholders was blocked at the behest of a small minority that blindly opposes much-needed accountability and transparency in the program.” (6/25/2021)

This history can be a resource for people speaking with Senator Leahy today. Assuming industry can’t all to agree to just ask Leahy to attach Leahy’s own proposed EB-5 reform bill to FY2022 appropriations (of if only!), let’s at least carefully frame the alternative proposed EB-5 legislation in Leahy’s terms. Show him how any alternate TEA provisions and integrity measures still check his priorities for distressed and rural areas, accountability, and transparency. Identify and preemptively concede any proposed language that projects the opposite message. Discuss the integrity measures that likely mean much to Leahy in light of the Vermont RC case: fund administration, investor reporting, and regional center audits (previously not included in the industry bill). In choosing the advocacy approach, be cautious to navigate Leahy’s unfortunate image of parts of the industry. Speak to his goals, commitments, and existing knowledge. I trust that negotiators are being smart and strategic, and thinking in terms of audience. We can maximize the FY2022 appropriations chance by presenting language that makes Appropriations Chair Leahy able to respond “yes, this is something I want to help advance because it addresses my priorities and will help to protect my legacy in EB-5 and my reputation in Vermont.”