Analysis of USCIS Fee Schedule Final Rule and EB-5 fee increases

Today the Federal Register published a Final Rule for USCIS filing fee changes scheduled to take effect on April 1, 2024.

The Final Rule includes major increases to EB-5 form filing fees, which is a near-term gift for EB-5 marketing (“Hurry! File now before the fees go up!”), a challenge for service providers (as we try to accommodate the feast of applicants rushing to beat the fee increase and to plan for the subsequent famine), and a long-term benefit to USCIS coffers and burden on EB-5 users (to the extent that EB-5 forms still get filed under the disincentive of increased fees on top of insufficient EB-5 visa availability).

The new EB-5 fees will take effect from April 1 unless or until blocked by litigation or superseded by another EB-5 fee rule. Litigation successfully cancelled the last USCIS fee increase attempt in 2019/2020; I don’t know about litigation prospects this time. DHS is separately working on a different fee study for EB-5 that was mandated by the EB-5 Reform and Integrity Act and due by March 2023. The RIA-mandated study will eventually result in different EB-5 fees designed to support timely processing, but “that effort is still in its early stages” according to the Final Rule. DHS explains that “the provisions of the law are not effective until DHS takes the steps it requires to be implemented.” We fans of Yes Minister know how to interpret the Final Rule statement that DHS has so far “initiated a working group to begin drafting the rule” required to support timely EB-5 processing.

The EB-5 fee increases in the Final Rule are identical to those proposed last year in the Notice of Proposed Rulemaking (NPRM). Good old DHS listened to the chorus of public criticism on the NPRM and accepted some of our corrections – including on the key variable of EB-5 filing volume – but did not recalculate the EB-5 fees in the Final Rule. Multiplying projected annual receipts by filing fee, we can see that the NPRM anticipated generating $80.7 million in EB-5 fee revenue, while the Final Rule projects $139.7 million in EB-5 fee revenue. DHS initially calculated high EB-5 fees based on the need to spread costs across projected low fee-paying receipt volume, then realized receipt volume could actually be much greater, but still decided to keep the high fees.

Summary of EB-5 filing fee changes

Here is the formula that DHS uses to calculate filing fees according to its “full cost recovery model,” and how the inputs changed for EB-5 between the NPRM and Final Rule.  (For detail, see my exhaustive article for IIUSA on the NPRM fee-setting methodology.)

In the Final Rule, DHS increased its estimate of EB-5 fee-paying receipts while deciding to keep EB-5 filing fees the same. In other words, DHS apparently decided to increase cost reallocation to itself instead of passing along anticipated economies of scale to the customer. As the Final Rule notes with satisfaction: “Increasing the fee-paying receipt forecasts for these workloads conversely increased the estimated revenue generated by EB-5 fees. DHS also revised the USCIS budget to reflect these changes.” The EB-5 program not only has no cost to the US taxpayer, it actually helps to fund the government with form filing fees calculated to generate millions of dollars to USCIS above the anticipated cost to process EB-5 forms. Table 11 in the Final Rule quantifies cost/benefit impacts, and notes that “Annual transfer payments from EB-5 investors and regional centers to USCIS will be approximately $44,746,040.”

As the Final Rule explains: “Full cost recovery means not only that fee-paying applicants and petitioners must pay their proportionate share of costs, but also that at least some fee-paying applicants and petitioners must pay a share of the immigration adjudication and naturalization services that DHS provides on a fee-exempt, fee-reduced, or fee-waived basis. …Under the ability-to-pay principle, those who are more capable of bearing the burden of fees should pay more for a service than those with less ability to pay. The requirements of immigrant investor program indicate that immigrant investors and regional centers have the ability-to-pay more than most USCIS customers.”

(To be fair the net windfall to USCIS is only theoretical, since actual receipt volume will likely fall far below USCIS estimates. It’s not wise for the government to plan on ongoing fee revenue from 600 new EB-5 projects and more than 4,000 new EB-5 investors per year when it only offers enough visas to accommodate fewer than 2,000 new EB-5 investors per year on average, considering set-aside visa numbers and spouses/children.)

Here is an index with links to content in the Final Rule relevant to EB-5 stakeholders.

• Feedback opportunity: Invitation to public engagement on Feb 22, and to submit questions by Feb 8.
• Tables showing the fee increases for all forms, including EB-5
• Discussion of Changes to EB–5 Volume Forecasts
• Reference to the RIA-mandated EB-5 fee study.
• Summary of public comments on EB-5 form fee changes, and USCIS response to the public comments.
• Summary of economic impacts from the fee changes, including for EB-5 forms.
• Discussion of small entities in the EB-5 context, and USCIS excuses for being unable to judge how many regional centers may deserve consideration as small entities.

EB-5 Questions and Answers (updated by USCIS December 2023)

I just happened to notice that on December 21, USCIS made unannounced additions to the EB-5 Resources page. The section formerly titled EB-5 Questions and Answers (updated Oct. 2023) has been replaced by a different EB-5 Questions and Answers (updated Dec. 2023). A document comparison between the October and December versions shows that USCIS did not edit the previously-published content, but added four new questions and answers related to regional center withdrawals, I-956G and Integrity Fee requirements, investor eligibility following regional center termination, and how the sustainment period change affects the conditional permanent residence requirement.

New Q&A quoted from EB-5 Questions and Answers (updated Dec. 2023)

13. How can an approved regional center that does not wish to continue participation in the Regional Center Program withdraw from the Regional Center Program?  

The EB-5 Reform and Integrity Act of 2022 (RIA) did not change the process for withdrawing from the Regional Center Program and requesting a termination of a regional center designation. When an approved regional center does not want to continue participating in the Regional Center Program for any reason, a regional center may withdraw from the program and request a termination of its regional center designation pursuant to 8 CFR 204.6(m)(6)(vi). The regional center must notify USCIS of its withdrawal in the form of a letter or as otherwise requested by USCIS. Once USCIS receives a termination request is received, we will evaluate the request and notify the regional center of our decision on the termination request in writing.

Regional centers can mail the letter to:

U.S. Citizenship and Immigration Services 
Immigrant Investor Program Office, 
131 M Street, NE, 3rd Floor, Mailstop 2235, 
Washington, DC 20529

Or the regional center can email the letter to: uscis.immigrantinvestorprogram@uscis.dhs.gov

14.  Where can I find information about approved or terminated regional centers and the reasons for termination?

USCIS publishes a list of approved and terminated regional centers on our website. In addition, USCIS publishes termination notices that are final agency actions in the electronic reading room.

USCIS approved regional centers

USCIS terminated regional centers

USCIS regional center termination notices

15. Do all designated Regional Centers, including those approved prior to March 15, 2022, need to file an I-956G by December 29?

Yes, INA 203(b)(5)(G) requires that each designated regional center shall submit an annual statement, in a manner prescribed by the Secretary of Homeland Security. The Secretary has designated the Form I-956G, Regional Center Annual Statement, as the manner to collect this information. The instructions for the Form I-956G implement the statutory requirement and provide that each approved regional center must file Form I-956G for each federal fiscal year (Oct. 1 through Sept. 30) on or before Dec. 29 of the calendar year in which the federal fiscal year ended. It’s important to note that these dates relate to regional center designation. If a regional center is designated but has a pending amendment, they still need to file the Form I-956G. Form I-956G and its filing requirements were published in the Federal Register on Sept. 2, 2022, 87 FR 54233.  Following public notice and comment, Form I-956G was approved by OMB on July 24, 2023, and subsequently published for use by USCIS. USCIS has also mentioned the filing requirements previously at stakeholder engagements as well as via alerts on our website, including most recently at the Oct. 30, 2023, joint engagement with the CIS Ombudsman and the Nov. 6, 2023, alert on the USCIS website.

For regional centers that fail to file Form I-956G by the required filing date, INA 203(b)(5)(G)(iii) states that USCIS shall sanction designated regional centers that do not file the required annual statement (which DHS designated as Form I-956G). In accordance with this statutory directive, USCIS will sanction regional centers who fail to comply with the requirement to file their Form I-956G, up to and including termination from the Regional Center Program.  

3.    Can EB-5 investors continue to pursue their immigrant visa petitions and receive benefits if their regional center is terminated for failure to pay the EB-5 Integrity Fund Fee, provided all other eligibility requirements are met?

Yes, EB-5 investors associated with a terminated regional center may retain eligibility and receive benefits under certain circumstances as provided by INA 203(b)(5)(M).  However, pre-RIA investors and post-RIA investors may need to take different actions to retain their eligibility because of the different requirements and legal provisions that apply to them.

Pre-RIA investors may, in certain situations, remain eligible based on indirect jobs, as applicable to their petition before the RIA was enacted notwithstanding termination of their associated regional center. Accordingly, where regional center termination is based on failure to pay the EB-5 Integrity Fund fee, which would generally not otherwise directly affect or implicate the underlying investment or job creation, officers may generally determine, in their discretion and on a case-by-case basis, that a pre-RIA investor associated with a terminated regional center continues to be eligible for classification as an immigrant investor, despite the regional center termination and without the need to reassociate with another approved regional center or make an investment in another new commercial enterprise. Such determinations will be made in accordance with applicable USCIS policy regarding deference to prior determinations to ensure consistent adjudication. Also, USCIS will generally not consider such termination a material change that impacts continued eligibility. While regional center termination for failure to pay the required EB-5 Integrity Fund fee may generally not have an effect on pre-RIA investor eligibility in many, or even most, circumstances, it is certainly possible that an investor may invest with a regional center that both fails to pay the required EB-5 Integrity Fund fee and also have project-related eligibility concerns, such that petitioner eligibility is affected separate from the regional center’s termination for failure to pay the required EB-5 Integrity Fund fee. If the pre-RIA investor’s eligibility is affected, they may need to reassociate with another approved regional center or make an investment in another new commercial enterprise to retain eligibility under INA 203(b)(5)(M) since they may not continue to be eligible.

Post-RIA investors, however, are not subject to the same grandfathering provisions of the RIA as pre-RIA investors but are subject to the new requirements added by the RIA, such as the requirement under INA 204(a)(1)(H)(ii) to remain associated with an approved project application under INA 203(b)(5)(F) (Form I-956F). Consequently, post-RIA investors associated with a terminated regional center may retain their eligibility under INA 203(b)(5)(M) if:

Their new commercial enterprise reassociates with another approved regional center (regardless of the regional center’s designated geographic area); or

They make a qualifying investment in another new commercial enterprise. In either case, post-RIA investors should generally continue to be associated with an approved Form I-956F (filed by their new regional center for their existing new commercial enterprise or otherwise associated with the different new commercial enterprise into which they have invested) for purposes of remaining eligible under all applicable requirements.

USCIS will notify investors of the termination of their associated regional center, and impacted investors generally have 180 days after USCIS has provided them such notice to amend their petition to meet applicable eligibility requirements.

4.    Is it possible for an immigrant investor who has invested their capital for the requisite time period and created the requisite number of jobs prior to obtaining lawful permanent resident status to become a lawful permanent resident without conditions under INA 216A, effectively skipping the conditional residence period?

No. The RIA did not change the requirement under INA 216A that all EB-5 investors obtain lawful permanent resident status on a conditional basis subject to having those conditions removed by satisfying applicable requirements under INA 216A. All EB-5 investors who obtain conditional permanent resident status subject to INA 216A must file a Form I-829 within the 90-day period immediately before the second anniversary of their adjustment of status or their admission to the United States as a conditional permanent resident to remove their conditions.

CIS Ombudsman EB-5 Engagement (Oct. 30)

In more good news for future EB-5 process improvements, the CIS Ombudsman has focused attention on the EB-5 program. The CIS Ombudsman’s mission is to “assist individuals and employers in resolving problems experienced when seeking immigration benefits from USCIS; identify trends and areas in which individuals and employers have problems dealing with USCIS; and recommend changes in USCIS’ administrative practices to mitigate problems and enhance processes.” Having recently met with IIUSA, AILA, and AIIA about EB-5, the CIS Ombudsman now invites all EB-5 stakeholders to The CIS Ombudsman’s Webinar Series: Engagement with USCIS on the EB-5 Immigrant Investor Program on Monday, October 30, 2023, from 2 to 3 p.m. Eastern Time.

UPDATE: Here is my recording of the CIS Ombusdman webinar, featuring Ombudsman Chief of Staff Gary Merson asking questions of IPO Chief Alissa Emmel. The discussion covered treatment of pre-RIA investors following regional center termination, policy for the investment sustainment period, and a variety of questions and filing tips. The discussion seemed to show that Mr. Merson had listened intelligently to stakeholder concerns, and that Ms. Emmel was making good faith attempt to engage with and not just deflect the questions. The Ombudsman will be publishing remarks and Q&A from the call, and I’ll link those documents here as soon as I see them.

Complete USCIS Policy Manual EB-5 Update

On October 26, 2023, the USCIS Policy Manual EB-5 section (Volume 6 Part G) received its first complete update since the EB-5 Reform and Integrity Act of 2022 (RIA) was enacted 18 months ago. I have been waiting eagerly for RIA changes to be translated into policy, or at least discussed in one place for ease of reference, and welcome the policy manual update.

Until yesterday, the Policy Manual featured a mix of current content (Chapters 1-2, updated in October 2022), and outdated content (Chapters 3-6, not revised since July 2021, before the law change). As of today, the entire USCIS Policy Manual EB-5 section has been brought up to date, with three chapters significantly revised, two all-new chapters added, and one chapter deleted.

Here’s my summary of the changes, together with links to document comparisons that redline differences between the October 26, 2023 version and the previous October 2022/July 2021 versions. (I typically do a document comparison of the whole volume, but compared individual sections in this case because USCIS reorganized the chapters. For reference, here is the folder I keep of all Policy Manual iterations.)

Summary of the October 26, 2023 update to the USCIS Policy Manual Vol. 6 Part G

Chapter 1 Purpose and Background and Chapter 2 Eligibility Requirements

• These chapters were previously updated on October 7, 2022 in response to RIA, and the October 26, 2023 version is nearly unchanged. (Here for reference is my Chapter 1-2 redline, showing the minor tweaks between the 10/2022 and 10/2023 versions.)

Chapter 3: Immigrant Petition Adjudication

• This new chapter significantly revises the previous Chapter 4 on I-526, and incorporates part of the previous Chapter 6 on deference. See my redline of changes to Chapter 4 and also changes to Chapter 6 deference language, comparing the July 2021 and October 2023 versions.

Chapter 4: Regional Center Applications

• This new chapter has extensive revisions to the previous Chapter 3 on Regional Center Designation. See my redline of changes.

Chapter 5: Project Applications

• The Project Applications chapter is all-new to the Policy Manual, and covers eligibility, documents and evidence, adjudication, and amendments to I-956F Applications for Approval of an Investment in a Commercial Enterprise. The content has some overlap with Chapter 2 on Eligibility Requirements.

Chapter 6: Direct and Third Party Promoters

• The Promoters chapter is all-new to the Policy Manual, and rehearses I-956K requirements. (The previous Chapter 6, on the topic of deference, has been deleted from the Policy Manual, but much of its content folded into the I-526 chapter.)

Chapter 7: Removal of Conditions

• This new chapter has minor revisions to the previous Chapter 5 on I-829 adjudication. See my redline of changes.

I haven’t had time yet to read everything in detail, but I expect to be surprised less by what is there (more quoting the law and forms than interpreting the law, at first glance) than by what isn’t there (which will take some time and thought to identify).

Top things I learned from the October 11, 2023 EB-5 Questions and Answers from USCIS

Since the EB-5 Reform and Integrity Act of 2022 (RIA) was enacted, stakeholders have had urgent open questions about the status and treatment of pre-RIA investors and regional centers, and about how to interpret RIA provisions related to the investment period and redeployment.

In the April 25, 2023 EB-5 stakeholder engagement, IPO Chief Alyssa Emmel said: “While we’re unable to discuss the regional center operations and investment period topics today, please rest assured that 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.” Now we have a substantial first installment of that promised guidance, with the EB-5 Questions and Answers (updated Oct. 2023), published on the USCIS website on October 11, 2023.

I appreciate that this Q&A engages with stakeholder questions, and dares to provide some interpretation. I can tell that whoever wrote the Q&A read the feedback on regional center operations and investment period sent to USCIS in advance of that April meeting, including from IIUSA and AIIA. And the Q&A sticks its head out to provide specific some guidance, not only giving safe cop-out responses that rephrase what we already know – a brave move, considering that any new interpretation is going to displease someone and probably inspire litigation.

I also appreciate the spirit of the Q&A, which expresses an intent to protect both regional centers and investors from adverse retroactive impacts from the new law. To my welcome surprise, the Q&A seems to be trying to say “we care, and here’s our best effort to be clear, generous, and fair and to avoid harming anyone.” Or to give an actual quote from the Q&A: “After a consideration of reliance interests and potential retroactive impacts, we believe the interpretations and guidance explained above provide flexibility and lessen the burdens on EB-5 entities.” It’s important to account for that spirit and expressed intent as we respond to any interpretations that we find to be unclear, ungenerous, unfair, retroactive, or burdensome in fact.

Here are my top takeaways the Q&A.

1. Grandfathering: The Q&A suggests that USCIS broadly interprets the investor grandfathering provision in RIA Section 105(c), such that it not only protects future investors from expiring legislation (the literal language of the law), but also protects pre-RIA investors from retroactive impacts of RIA. (The Q&A interprets this to be the spirit of the law with reference to Senator Grassley’s quote: “the bill allows petitions filed by immigrant investors under the old pilot program to continue to be adjudicated under the law as it existed when they were filed.”) I am not sure how far this will apply in practice, but delighted to see the intent by USCIS to be generous and fair with grandfathering for pre-RIA investors.
2. Good faith investors: USCIS interprets the RIA provision for “treatment of good faith investors following program noncompliance” (INA 203(b)(5)(M)) to apply to pre-RIA investors. This surprises me, and I’m trying to think whether it’s good news.  For investors with regional center or project problems, pre-RIA policy had the disadvantage of no change options for pre-green card investors, but the advantage of protections and flexibility during Conditional Permanent Residence. Subsection M offers change options, but they’re fraught, and subsection M presupposes no protection from CPR status. More analysis to come once I’ve had more chance to consider and discuss this. (See also Robert Divine’s analysis.) One major concession that USCIS already makes in the Q&A, in attempt to make the subsection M recourse more usable, is to change the deadline for investor action following a regional center termination or NCE debarment.
3. Regional Center Termination Impact: The Q&A expresses USCIS intent to mark out a path to eligibility for pre-RIA investors in terminated regional centers, which is good news for regional centers. In my previous post on the Integrity Fee and I-956G, I concluded that regional centers would be forced into expensive compliance just for the sake of protecting past investors, regardless of their own EB-5 activity or plans. If USCIS does offer investors a viable option to support eligibility apart from regional center sponsorship, then otherwise inactive regional centers face much less pressure. (I say “if,” because so far I’m more sure of the USCIS intent than the practical outcome. But I’m cautiously optimistic.)
4. Regional Center Termination Likelihood: USCIS expects that “there is a large volume of investors that could be affected by terminations of previously designated regional centers based solely on noncompliance with certain new administrative requirements added by the RIA” considering that “Before March 15, 2022, there were 632 regional centers and as of June 30, 2023, we have received only 357 Form I-956, Application for Regional Center Designation, applications or amendments for previously designated regional centers, and only 250 of previously designated regional centers have paid the Integrity Fund Fee.” So, again, it’s good to hear that “We interpret the RIA in a manner we hope permits good faith investors of terminated regional centers to retain their eligibility.” (Also, I note that USCIS has yet to officially say whether filing I-956 is an administrative requirement for a regional center that wishes to avoid termination.)
5. Status of Previously-Approved Regional Centers: USCIS states a position that the new RIA provisions and requirements apply equally to all regional centers, regardless of whether the regional center was designated before or after RIA, and regardless of whether the regional center intends to promote new projects for new investors under RIA. This has been the subject much litigation over the past year.
6. Investment Period: USCIS confirms its interpretation that RIA does change the minimum investment period for post-RIA investors. Instead of being required to sustain their investment throughout the period of conditional permanent residence (the pre-RIA law), investors who filed I-526 or I-526E post-RIA are expected to maintain investment at least two years from the time that investment was made available to the job-creating entity (plus at least until I-526 filing, and at least until the job creation requirement is satisfied). I would’ve expected USCIS to also say that the investment at least needs to be sustained until the I-526 is adjudicated, but no – USCIS agrees that post-RIA investors could theoretically have return of capital even before I-526 approval so long as they met the two-year investment and job creation requirements. As before, the USCIS-required investment period is only a minimum – the Q&A reminds us that USCIS does not control the maximum time that EB-5 investment can be held. Post-RIA investors are also still subject to the redeployment requirement — but decoupling the investment period from unpredictably-long immigration times almost eliminates redeployment risk. The investment period change will have a seismic effect on the industry, and will no doubt be targeted by litigation. (Again, see Robert Divine’s analysis.)
7. Redeployment: The Q&A focuses on RIA interpretation and does not address other longstanding questions around redeployment for pre-RIA investors, such as whether the “at risk” requirement actually justifies/forces serial investments decoupled from any job creation requirement. The Q&A does convey some sympathy when it recognizes “the burden on the investor to keep their investment in place for an extended period, due to circumstances beyond the investor’s or the NCE’s control, such as visa backlogs or other such circumstances.” The redeployment conversation will continue, drawn by the established reliance by regional centers on redeployment policy and the rebellion by investors against that policy.
8. Practical questions: The Q&A answers some technical questions and provides filing tips for a number of EB-5 forms. (Robert Divine’s analysis also covers this nicely.)

USCIS posts Q&A addressing many EB-5 questions

Today USCIS published a page of EB-5 Questions and Answers (updated Oct. 2023), with the most extensive guidance to date on USCIS interpretation of the EB-5 Reform and Integrity Act. For historical reference, here are images as the Q&A posted on October 11, 2023, in case the content is subsequently challenged and revised.

USCIS Provides Additional Guidance (sustainment, termination)

Integrity Fees and I-956G Annual Report in 2023 (Who really has to file, and why)

10/11/2023 UPDATE: USCIS has now published a Q&A that discusses the impact on investors of regional center termination, beginning with the statement that “Given the large volume of investors that could be affected by terminations of previously designated regional centers based solely on noncompliance with certain new administrative requirements added by the RIA, such as paying the annual Integrity Fund fee, we interpret the RIA in a manner we hope permits good faith investors of terminated regional centers to retain their eligibility.” Please refer to the USCIS Q&A before reading my post, which I will need to revise as time permits.

[ORIGINAL POST]

Since the EB-5 Reform and Integrity Act (RIA) passed in March 2022, there’s been some confusion and dispute about how RIA applies to regional centers and EB-5 investments that pre-date RIA. After all, RIA creates new rules and procedures primarily for capital raising activities. How do these reasonably apply to regional centers with no post-RIA capital raising activities? Do regional centers that were designated and investments made pre-RIA get any different treatment post-RIA?

After a year and half of conflicting notices on the USCIS website, industry comments, litigation, and other bits and pieces of guidance (more on that below), one point has become clear: USCIS expects every regional center without distinction to pay the annual Integrity Fee of $10,000 or $20,000 and to file the I-956G Annual Report. In 2023, every regional center must pay two years of Integrity Fees (for both FY2023 and FY2024) and also file I-956G, or else be terminated in 2024.

If a regional center has no post-RIA project plans anyway, why jump these expensive hoops and why care about termination? But the regional center’s past investors must care. An EB-5 investor’s continued eligibility depends on having a regional center sponsor in good standing throughout the investor’s EB-5 process, however long that process may take. According to INA 203(b)(5)(M), a regional center termination will be followed by denials, revocations, and conditional permanent residence status terminations for all of the regional center’s past investors, unless the investors can manage to affiliate with another regional center. (Separate article coming shortly on this topic.) [UPDATE: the 10/11 USCIS Q&A contradicts this point.]

Here are the instructions, followed by the background of ambiguities and arguments around these requirements.

• Regional Center Integrity Fee: The latest USCIS “Alert” on Integrity Fee payments, published on September 29, 2023, can be found here: https://www.uscis.gov/IntegrityFund. The Alert acknowledges that “information about the due dates and penalties might not have been clear” but gives another chance for payment with the bold-face warning that “we will take steps to terminate any regional center that, on or before Dec. 30, 2023, has not paid the required EB-5 Integrity Fund fees for FY 2023 and FY 2024. NOTE: We will reject Integrity Fund fee payments for FY 2023 and FY 2024 we receive after Dec. 30, 2023, including those made in response to a Notice of Intent to Terminate.” (To avoid the FY2024 late fee, pay before October 31, 2023.) 
• Regional Center Annual Report: The latest I-956G annual report form, dated as of July 2023, can be found here https://www.uscis.gov/i-956g. Unlike the initial I-956G edition of July 2022, which asked for reporting specific to post-RIA NCEs (I-956F), the current form explicitly covers pre-RIA activity and NCEs. It asks the regional center to report on “each capital investment project undertaken by such NCE with active EB-5 investors (i.e. those who are seeking classification under INA 203(b)(5) or who have obtained conditional permanent resident status and not yet filed for removal of conditions),” and to provide data not only for recent activity but “over the lifespan of the project.”

In theory, RIA’s new rules should apply prospectively, not retroactively, but it’s complicated. Regional centers with only pre-RIA capital raises are still asked to grapple with Form I-956G and its questions about compliance with new rules for post-RIA capital raises. Regional centers with no new capital raises are still asked to pay $10,000 or $20,000 every year to fund oversight for new capital raises. EB-5 investors who started the process pre-RIA are still dependent on their sponsor’s ongoing eligibility post-RIA.

How did we get here, and what arguments have been made along the way?

Initially, USCIS interpreted RIA as creating a new regional center program and terminating the previous program — meaning a clear break between past and future. Under that interpretation, pre-RIA regional centers were no longer designated and had no grounds to file annual certifications or amendments (according to the April 2022 Q&A on the USCIS website), while pre-RIA investors were protected as a function of the protections around expiring legislation. But Behring Regional Center filed suit to challenge that interpretation, instead fighting for continuity between pre-RIA and post-RIA regional center designation. The litigation ended in August 2022 with a Settlement Agreement in Behring’s favor. The Settlement specified that “previously approved regional centers sponsoring new projects or new investors under the Integrity Act will comply with all the requirements of the Integrity Act” and “if a previously approved regional center fails to file a Form I-956 application or amendment by December 29, 2022, it may no longer engage in any activities under the Integrity Act, including sponsoring I-526E visa petitions or the development of new projects.” Sadly, the Settlement Agreement was silent on the question of what happened to previously approved regional centers NOT sponsoring new projects or new investors under the Integrity Act, but merely needing to stay designated for the sake of past investor eligibility.

USCIS told Behring plaintiffs on October 14, 2022 that “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.”

On December 23, 2022, USCIS published an “Alert” on the website (which remains on the site to this day), that “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.”

Also in December 2022, USCIS slipped a file called I-956-001 NEW 60-Day Public Comment Response Matrix 20221207 among the Federal Register supplementary documents for Form I-956. This deeply buried file is the most extensive available Q&A on the various I-956 forms, with 126 responses by USCIS to public comments. For example, Q&A #90 addresses a comment by Ron Klasko who suggested “that a regional center that wishes to continue to exist solely to meet its contractual and fiduciary obligations relating to pre-RIA projects, but does not intend to file form I-956 to sponsor new post-RIA projects, should not be required to file Form I-956G, which requests information and references forms that do not apply to these regional centers.” USCIS did not take this fine point, but simply responded to Klasko that “Each approved regional center must file Form I-526G.” Q&A #51 addresses a I-956G comment from AILA arguing that “regional centers designated prior to the RIA that still choose to operate under the RIA are not required to provide data for fiscal years prior to the RIA passage.” USCIS disagreed in its response: “The statute does not distinguish between capital invested before or enactment of the RIA (EB-5 Reform and Integrity Act of 2022) for purposes of reporting under INA 203(b)(5)(G).” (AILA then shot back with a follow-up letter arguing in detail that some I-956G questions retroactively apply RIA requirements, and why that’s wrong, but AILA’s suggested changes to I-956G still did not make it into the revised form.)

In January 2023, USCIS announced a stakeholder meeting where “We will discuss issues related to regional center operations,” including “those who do not wish to solicit investments for new projects under the RIA.” USCIS received so much written feedback that they first delayed the meeting, to give more time to review all the feedback, and then cut the meeting agenda.  As IPO Chief Alyssa Emmel said in the April 25^th meeting: “While we’re unable to discuss the regional center operations and investment period topics today, please rest assured that 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.”

In meeting with the Behring plaintiffs on May 1, 2023, USCIS reiterated that “Form I-956 and I-956G filing date deadlines still not set. These deadlines continue to be pushed back until the agency publishes guidance clarifying the requirements of these forms.”

The promised “guidance that clarifies the requirements of these forms” has not yet been published, so far as I know.  But I believe that I-956G, at least, nevertheless has a real deadline for all regional centers in December 2023, and that the Integrity Fee requirement is being applied to all regional centers this year without exception. I believe this from the latest fee and form instructions, and because USCIS has yet to grant the rationales for making any exceptions. [10/11 UPDATE: the new USCIS Q&A is part of the promised guidance.]

Everyone agrees that regional centers designated and active under the new law must tick all the compliance boxes under the new law, including filing I-956G annual reports and paying the Integrity Fee. The open question has been over which compliance boxes reasonably apply to regional centers that were designated under the old law and not taking any more investors under the new law. But so far, USCIS has not entertained that question because it has not granted any distinction between types of regional centers. This comes out in USCIS response to litigation. In Sunshine State Reg’l Ctr., Inc. v. Jaddou (23-cv-60795), “Plaintiff alleges that the Act distinguished between those Regional Centers created before the Act was passed, ‘Legacy-Regional Centers,’ and those after the Act was passed, ‘RIA-Regional Centers.’” But both USCIS and ultimately the judge disagreed. To quote the Opinion of May 30, 2023, “Plaintiff has not shown that it is likely to succeed on the argument that the statute unambiguously distinguishes between Regional Centers created before and after the Act for purposes of the Integrity Fund Fee.” In Gulf States Regional Center, LLC v. USCIS (2:2023cv01354), “Gulf States attempts to distinguish between the phrases ‘each regional center designated under subparagraph (E)’ and ‘any regional center’ used throughout the RIA,” (the logic that I also used in my February 2023 suggestion to USCIS about fairly applying RIA requirements).  But USCIS disagreed (as of Doc 49-1 filed 9/13/2023) that “subparagraph (E) is not limited to regional centers approved after the RIA’s enactment, but governs all regional centers in existence, regardless of their time of designation.” At least in litigation, USCIS has not entertained any ground of distinction that would allow treating regional centers differently depending on the time of designation and whether or not they choose to raise new EB-5 investment under RIA. Did the Behring Settlement force this position? Anyway, it seems to be the reality.

Back in October 2022, USCIS said it had then “not determined what will happen to regional centers that choose not to file Form I-956” to sponsor new projects and investors under RIA, including “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.” USCIS has not yet published a revision to this statement as of October 6, 2023. But based on the above sources, I gather that USCIS has, at least, firmly decided that the requirement to file I-956G and pay the Integrity Fee apply universally this year — and prepared to terminate regional centers that do not comply. Regional centers should prepare accordingly for Integrity Fee(s) due by the end of this month and annual reports due by the end of December. (And let me know if there are other court cases or buried sources of USCIS guidance that I should cite in this post.) [UPDATE: See EB-5 Questions and Answers as of October 11, 2023.]

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