RIA Implementation Status, one year later

On March 15, 2022, the EB-5 Reform and Integrity Act of 2022 (RIA) became law as part of the Consolidated Appropriations Act, 2022 (Public Law No: 117-103).  One year later, how far have we come? How much of the law has been implemented?

The following bullet points give status as of March 31, 2023 for steps that need to be taken to implement RIA.

Updating policy, forms and guidance based on the new law

• USCIS Policy Manual: Incomplete. On October 7, 2022, USCIS updated only the introductory Chapters 1-2 of the Policy Manual EB-5 section 6G, while EB-5 Chapters 3-6 remain untouched. The chapters still still not updated with RIA-compliant policy cover I-526 adjudication, I-829 adjudication, and regional center designation and reporting requirements.
• USCIS website: Incomplete.  Some new EB-5 content has been added to the USCIS website over the course of the year, and some outdated content remains in the mix. It’s still impossible to go to the USCIS website to find out which regional centers are approved or active under the new law.
• EB-5 forms: In Process. All EB-5 forms required by the new law have been published or revised but remain subject to change. (Indeed, new versions of all I-526 and I-956 were just published today.) USCIS has yet to respond to (and for I-956, even to post) the second round of public comments to the Federal Register on I-526E and I-956.

Prescribing regulations required by the new law

• Regulation for parameters on capital redeployment: Not done. (RIA does not state a deadline for this regulation.)
• Regulations prohibiting foreign involvement in a regional center: Not done. (The RIA deadline, 270 days after the date of enactment, has passed.)
• Regulation to ensure that EB-5 capital is not used on publicly available bonds: Not done. (RIA does not state a deadline.)

Monitoring and enforcing regional center compliance with new requirements

• Clarify how RIA requirements apply to previously-approved RCs not active under RIA: Not done.  The EB-5 stakeholder meeting previously scheduled for March 20, then delayed to April 25 is slated to address this question. (UPDATE: The April 25 meeting did not after all address expectations for regional centers with pre-RIA but not post-RIA investors.)
• Review and approve regional center compliance procedures: Status Unknown. USCIS has not reported any decisions on I-956 Regional Center Applications. (We hear anecdotally about approvals received, but USCIS does not report I-956 approvals or denials on the USCIS Regional Center page or the USCIS Immigration and Citizenship data page.)
• Vetting and background checks of persons involved with regional centers: Status Unknown. USCIS has not reported any decisions on I-956H forms.
• Review Regional Center Annual Statements and Certifications: Not done.  Form I-956G were not filed for 2022 because “USCIS is extending this deadline until we publish guidance that clarifies the requirements of these forms.”  Such guidance has yet to be published.
• Review regional center projects: Status Unknown. USCIS has not reported any decisions on I-956F Applications for NCE approval.
• Review registrations by direct and third party promoters: Status Unknown. USCIS has not reported any decisions on I-956K registrations, and has not made any lists publicly available.

Implementing visa availability changes

• Reshuffle visa availability to reserve visas for new TEA investment: In process. The Visa Bulletin and Annual Report of the Visa Office show new visa categories as required by RIA. Zero reserved visas were issued in FY2022, due to slow USCIS processing.
• Carryover of unused reserved visas: In process. The FY2023 Annual Limit report says cryptically “The employment chart (above) does not include numbers carried over from the previous fiscal year in the EB-5 category.” (UPDATE: the April 26, 2023 DOS/AILA Liaison meeting (question 22) confirms intent to carry over visas.)

Other requirements

• Timely Processing Fee Study: Not done. (RIA gave a deadline of 1 year from the date of enactment to complete a study of fees levels required to achieve timely processing goals, and this study has yet to be published. The USCIS Fee Study does not address timely processing for EB-5.)
• Announce appropriate channels of communication: Done.  The bottom of the EB-5 Support page has been updated with Channels of Communication.
• Publish Log of communications: Not done. The FOIA page for USCIS does not show a log of communications with Congress regarding EB-5.
• Transparency regarding Publication of Information: Mixed. (For example, we know that USCIS is having court-ordered quarterly meetings with litigation plaintiffs. So far one set of meeting minutes has been published, and publication happened more than 30 days after the meeting.)

Other questions

• Other Rule-Making: Not done. In response to I-956 comments in the Federal Register, USCIS indicated in December 2022 that it could not yet answer questions about but “may consider rule-making to address” each of the following issues:
  • Evidence to establish regional center geography;
  • Whether regional center policies and procedures need to be provided or only described;
  • What circumstances require an I-956F amendment;
  • Whether stand-alone investors need to use fund administration;
  • The definition of an infrastructure project;
  • Whether regional center annual reports need to cover funds raised prior to RIA.
• Implementing the RIA change to the sustainment requirement and investment period: Not done, but the USCIS April 25 stakeholder meeting is slated to discuss the topic. (UPDATE: USCIS stated at the 4/25 meeting that they were after all “unable to discuss” the topic yet, while “USCIS is engaged in ongoing efforts at the immigrant investor program office and across the agency to ensure that when we do have updates, we’re equipped to provide the EB-5 stakeholder community with clear guidance.”)

EB-5 Integrity Fund FAQ, with notes on regional center status and investment period

Today, USCIS sent out an email alert with the title USCIS to Start Collecting Fee for EB-5 Integrity Fund, published a new EB-5 Integrity Fund page on the USCIS website, posted a Federal Register notice with information about the Integrity Fund, and created a new page for EB5 – Annual Fee for Regional Center at Pay.gov.  

We’ve known that annual regional center fees were coming, since Section 103(b)(J) of the EB-5 Reform and Integrity Act (RIA) created this new requirement. But we’ve been waiting for USCIS to clarify questions around the fee, including how and when to pay it, who qualifies as the “each regional center designated under subparagraph (E)” who needs to pay the fee, and who counts as “investors in the preceding fiscal year in its new commercial enterprises” for the purposes of calculating how much to pay.

Here are answers gathered from the documents published today by USCIS.

Who needs to pay the new EB-5 Integrity Fund fee, and when?

USCIS interprets RIA to mean that every regional center, regardless of when designated and regardless of when or if it sponsored investors, needs to make its annual Integrity Fund payment of $10,000 or $20,000 to USCIS between tomorrow and March 31, 2023. The fee due this month will apply to FY2023. (The next annual fee, for FY2024, will then come due in October 2023.) The Federal Register notice indicates that USCIS expects that all 630 previously designated regional centers will pay the fee, including those with no investors at all. The announcements give no indication that USCIS considered exceptions for regional centers that were not designated under the new law and do not have investors under the new law.  

What does the USCIS fee policy imply about USCIS treatment of previously-approved regional centers?

The fee policy apparently takes for granted that when RIA created a fee requirement applicable to “each regional center designated under subparagraph (E),” RIA did not actually specifically mean RIA subparagraph (E), but also the 1993 law Section 610.  

USCIS has yet to designate any regional centers under subparagraph (E) by approving I-956 applications. An unknown number of previously-approved regional centers have filed I-956 and chosen to solicit investors under RIA. This creates a grey area for the many regional centers that were only approved and only raised investment under the old law.  USCIS admitted as recently as October 2022, in meeting with the litigation plaintiffs, that “USCIS has not determined what will happen to regional centers that choose not to file Form I-956” and “whether any of the RIA requirements apply to them.”

But whoever drafted today’s USCIS fee policy did not recognize a grey area. The policy simply assumes, without argument or explanation, that new requirements applicable to regional centers designated under RIA also apply to regional centers previously designated under Section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993. The drafters of the fee policy apparently did not consider the arguments in my Comment on the RIA impact on pre-RIA Regional Centers and investors.

What will happen to any regional center that does not pay the EB-5 Integrity Fund fee by March 31, 2023?

On May 31, 2023, USCIS will start to send out Notices of Intent to Terminate to every regional center whose fee was not received on-time. (For some RCs, the NOIT may be the first they hear about the fee requirement. USCIS explained that today’s publications will be the only notice, and that USCIS will not individually notify or send invoices to regional centers.) A regional center’s designation will be terminated following the NOIT, unless the regional center can document that it did indeed submit the full required fee amount by the deadline of March 31, 2023.

The termination threat is a concern primarily because the new law defines devastating investor consequences from regional center sponsor termination (as further discussed in my previous post). INA 203(b)(5)(M) stipulates that I-526 petitions will be denied and even conditional permanent residence status terminated upon regional center termination. And the escape route offered in (M) is only theoretical, since USCIS permission is no guarantee that a good faith investor or NCE can – in fact – have a viable option to associate with another regional center. The termination consequence places great weight on today’s fee announcement.

What is the required amount of the EB-5 Integrity fee? What does the fee policy imply about who’s an investor, and what’s the investment period?

RIA states that the required fee for a regional center depends on the regional center’s number of investors in the previous year  – with the $20,000 annual fee reduced to $10K for “each such regional center with 20 or fewer total investors in the preceding fiscal year in its new commercial enterprises.”

But who counts as “investors in the preceding fiscal year” for the purpose of fee calculation? The statutory language could justify a reading as limited as “people who invested and filed I-526/I-526E in the previous fiscal year under RC sponsorship” to as broad as “people at any immigration stage whose investment was still in some sense under RC custody in the previous fiscal year.” The USCIS fee policy published today in the Federal Register presents this reasoning:

• A possible interpretation of “investor” is “someone still in the investment period”
• “Investment period” means the period from I-526 filing through the point of I-829 filing, on the authority of a 2021 blog post by Canadian financial professional Rupy Cheema of EB5 Diligence. (I don’t know whether to laugh or cry at this evidence that the USCIS Office of Policy and Strategy was apparently not sweating over statute, regulations, or precedent decisions or its own Policy Manual but just casting about the Internet to find a policy for the EB-5 investment period, but props to EB5 Diligence for catching OPS’s eye and earning the footnote citation in the Federal Register notice!)
• Since Rupy said in 2021 that the investment period goes approximately from I-526 filing to I-829 filing, and since USCIS has ready data for number of I-526 and I-829 filings while other calculations would be hard, therefore USCIS intends to estimate “total investors in the preceding fiscal year in its new commercial enterprises” as equal to the total number of pending and approved I-526 at year-end less the total number of I-829 filed at any time by principals. With the qualification that “USCIS adjudicators retain discretion to evaluate the Integrity Fund fee due and the number of investors on a case-by-case basis, accounting for any other facts or evidence in the record in the totality of the circumstances, including any evidence provided by a regional center that believes it has greater or fewer total investors.”

This is a sober recital of the content of the Federal Register notice.  What can we expect next from the Office of Policy and Strategy?

Everyone involved in the huge fight over defining the “investment period” (on the regional center side and investor side) will be interested in this paragraph from the Federal Register analysis:

“USCIS considered generally counting only the Forms I-526 that were filed within two years of the applicable period used for determining the EB-5 Integrity Fund fee given the expected two-year minimum timeframe for the investment, or sustainment period, under the 2022 Act. INA section 203(b)(5)(A)(i); 8 U.S.C. 1153(b)(5)(A)(i). However, that would likely be underinclusive given that many investors are actively in the process of investing (i.e. not yet fully invested) when they file their Form I-526 petition as permitted under applicable requirements and, additionally, would not align with the sustainment period for those who filed prior to the 2022 Act, which runs approximately to the point of the Form I-829 filing, regardless of when they filed their Form I-526 or made their investment.”

Do we have a chance to provide feedback on the fee policy?

The Federal Register notice states that “USCIS is imposing this fee without soliciting public comment prior because this is a general statement of policy and an interpretive rule exempt from notice and comment procedures.” The notice claims that “The statutory provision that requires the $20,000 and $10,000 fees contains little ambiguity for USCIS to resolve or explain.” (And this, after the notice grappled with ambiguities around the investor count and overlooked the major ambiguity of regional center applicability.)  I will update this post if I learn of a chance to respond with questions and concerns.

RIA impact on pre-RIA Regional Centers and investors (comment)

The following is the comment related to Regional Center Operations that I submitted to USCIS in advance of the EB-5 engagement on March 20, 2023. (The comment deadline is 4 ET today.) I approached the question theoretically, and would love to hear more input from regional centers and investors who are personally affected. How can we best navigate the threat of termination and the burden of how to operate and maintain investor eligibility since passage of the EB-5 Reform and Integrity Act? (Note that the table below only reflects my interpretation/suggestion to USCIS. I do not know what policy USCIS will create or how USCIS will interpret and apply RIA.)

From: Suzanne Lazicki <suzanne@lucidtext.com>
Sent: February 10, 2023 8:44 AM
To: ‘public.engagement@uscis.dhs.gov’
Subject: Question: EB-5 Engagement March 20, 2023

Regional Center Operations: We will discuss issues related to regional center operations, in particular those who wish to withdraw from the program and terminate their status and those who do not wish to solicit investments for new projects under the RIA.

Comment

Regional centers that do not wish to solicit investments for new projects under RIA may and should still wish to retain their designation, for the sake of protecting their pre-RIA investors. Not that RCs have much practically to do for in-process past investors; the issue is that INA 203(b)(5)(M) now defines devastating investor consequences from regional center sponsor termination. (M) stipulates that I-526 petitions will be denied and even conditional permanent residence status terminated upon regional center termination. The escape route offered in (M) is only theoretical, since USCIS permission is no guarantee that a good faith investor or NCE can – in fact – have an option to associate with another regional center. Such an option depends on real-world factors outside the investor’s or USCIS’s control, including the existence of another regional center willing to take the burden under livable terms, a willingness by the terminated entity to transfer sustained investment to the sponsorship of a new RC, and documents that practically allow for such a switch. Investors originally sponsored by bad actor regional centers may be thankful for a prospect – however slim – to change sponsors upon USCIS termination. But the risky, uncertain prospect is hardly solace or protection for investors who already have a good sponsor responsibly managing their investment.

If USCIS starts to terminate regional centers for no fault except declining to raise new funds under RIA, the result will be loss of eligibility among EB-5 investors due to RIA – an outcome that RIA sought to avoid in principle with Section 108 Protection from Expired Legislation. 

Regional centers wishing to retain designation for the sake of shepherding pre-RIA investment and projects, not for the purpose of soliciting new investment, could reasonably be held to RIA requirements that apply to shepherding investment, and not held to RIA requirements specific to soliciting investment.

Practically, this means that shepherd regional centers should continue to report on their management of EB-5 investment and be subject to penalties for reasons related to fund management, but should not have to file I-956 and I-956F, or to complete the portions of I-956G that are indexed to I-956 and I-956F and to requirements specific to capital raising activities.

The following table considers which requirements created by RIA are specific to raising and deploying EB-5 investment, and thus naturally not applicable to RCs/NCEs that raised and deployed EB-5 funds prior to RIA and will not continue such activity after RIA.

Table 1. Applicability of RIA requirements to Regional Centers not sponsoring new investors or projects under RIA

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

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

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

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 4^th 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.