EB-5 Events | EB-5 Updates

April 25, 2023 Stakeholder Engagement

April 25, 2023 6 Comments

The April 25, 2023 “EB-5 Stakeholder Engagement” had a Microsoft Teams webinar format, with IPO staff speaking on video and a chat box where the public had a chance to type questions viewable to admins only. I cannot disprove the hypothesis that all of us were sitting there watching pre-recorded video, and typing questions into the void.

The engagement managed to fill 1.5 hours with exactly no significant content. I won’t publish a recording. The meeting was 95% technical clarifications on Form I-956K – the regional center promoter registration form that functions to feed paper to the black vaults of USCIS, which neither adjudicates the form nor (at least so far) makes it actionable by divulging form compliance or non-compliance to prospective/current investors or regional centers. If USCIS cares about Form I-956K and the additional instructions and technical clarifications that they provided on today’s call, then they can publish said instructions and clarifications somewhere findable by the public. USCIS announced that no transcript or talking points would be provided for today’s call. I will not waste time transcribing information that USCIS apparently does not consider reliable enough to record or publish themselves.

Alissa Emmel kicked off today’s engagement by announcing that speakers would not address two significant issues that the engagement was called in January 2023 to address: the critical questions of investment period (“the new requirement under the EB-5 Reform and Integrity Act of 2022 (RIA) that capital must be expected to remain invested for at least two years”) and 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”). Both of these issues are hugely consequential. USCIS’s answer on the investment period will make the difference between whether Chinese, Indians, and Vietnamese who risk an EB-5 investment today can expect to exit the investment after as little as two years (the artificial sustainment period apparently in the Reform and Integrity Act) or as long as over a decade (the time it could take investors to reach the I-829 stage considering current processing time/volume trends and the visa backlog risk in categories with small per-country visa availability under TEA percentages and country caps). Regional centers who love the profits of redeployment and investors who hate the risks of redeployment both snowed USCIS in conflicting passionate feedback on this topic. (For example see IIUSA’s letter here, the joint industry letter here, and AIIA’s letter here.) I’m guessing that USCIS first delayed the stakeholder meeting (originally scheduled for March) and then finally avoided the topic today because they’re rationally afraid that whatever they say about the investment sustainment period will immediately occasion a lawsuit. The Regional Center operations questions are less divisive among EB-5 stakeholders, but a huge open question with USCIS. Are thousands of good faith investors about to start seeing their I-526 and I-829 denied and their residence status revoked through no fault of their own, and for no fault in the investment or job creation, but simply because their good faith regional center sponsor decided to go passive (instead of choosing to solicit new investment under the Integrity Act, with compliance steps specifically relevant to soliciting new investment)? It’s dreadful that this question remains open.

In addition to avoiding two of the three agenda topics previously announced for the engagement, the IPO speakers also provided no update on IPO operations or staffing, no update on form processing or procedures, and no estimated delivery dates for the many initiatives IPO ought to have in hand, including policy publication, regulations, timely processing study, website updates, or digitization. At the same time, the speakers all put on a good face, as if they believed they were doing a good job, engaging substantively, and answering questions. Surely it’s not possible to be that clueless and incompetent? Could I at least have the hope of believing that today’s non-engagement was an act of intentional malice by people who know what they’re doing? Or maybe we and the IPO speakers on today’s call are equally victims of a system that paralyzes communication by subjecting every decision and talking point to a thousand steps and checks.

Filed under EB-5 Events

March 20–April 25 EB-5 Engagement Invite

January 30, 2023 19 Comments

3/14 UPDATE: The EB-5 engagement has now been postponed to April 25, 1-3 ET. Visit the invite page to register again. The postponement email said “We appreciate all the feedback and questions you submitted in advance and are very closely reviewing this helpful information.”

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: January 30, 2023 1:00 PM
Subject: USCIS Immigrant Investor Program (EB-5) Stakeholder Engagement

USCIS Immigrant Investor Program
(EB-5) Stakeholder Engagement

Monday, March 20, 2023
1:30 – 3 p.m. Eastern

U.S. Citizenship and Immigration Services (USCIS) invites you to participate in a stakeholder engagement on Monday, March 20, 2023, from 1:30 to 3 p.m. Eastern.

During the first part of the engagement, USCIS will discuss three specific areas within the Immigrant Investor Program.

The three topics are:

Direct and Third-Party Promoters: A promoter should submit Form I-956K, Registration for Direct and Third-Party Promoters, before operating on behalf of any of the specified entities or promoting any offering under the EB-5 Regional Center Program. The promoter must submit Form I-956K separate from the Form I-956F, Application for Approval of an Investment in a Commercial Enterprise, to seek an approval of an investment in a commercial enterprise.

Investment Period: USCIS will discuss the requirements for an immigrant investor to sustain their investment if they filed Form I-526, Immigrant Petition by Standalone Investor, before March 15, 2022, and the new requirement under the EB-5 Reform and Integrity Act of 2022 (RIA) that capital must be expected to remain invested for at least two years for those who filed an I-526 or Form I-526E on or after March 15, 2022.

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.

We will then hold a Q&A to hear questions, comments, and individual feedback from stakeholders on these three topics. Although we are interested in receiving overall feedback about the EB-5 program, we would appreciate focusing the Q&A portion of the engagement on the topics above.

We will not address case-specific questions, questions outside the scope of the engagement, or issues under active litigation or likely to be litigated. We are committed to public engagement, and sessions like this provide valuable feedback as we work to improve our programs. Participation in this engagement will be virtual.

Questions for consideration:
If you would like to submit a question in advance on one of the three topics we will be covering during this engagement (direct and third party promoters, sustainment, or regional center operations), please send your question to the Public Engagement mailbox at public.engagement@uscis.dhs.gov with the subject line “Question: EB-5 Engagement March 20, 2023” by 4 p.m. Friday, Feb. 10.

To Register:

1. Visit our registration page.

2. You will be asked to provide your email address and select “Submit.”

3. On the next screen, you will see a notification that you successfully subscribed to this event.

Once we process your registration, you will receive a confirmation email with additional details.

To request a disability accommodation to participate in this engagement, email us at public.engagement@uscis.dhs.gov by 4 p.m. Eastern, Monday, March 13.

Note to media:

This webinar is not for press purposes. Please contact the USCIS Press Office at media@uscis.dhs.gov for any media inquiries.

We look forward to your participation!

Filed under EB-5 Events

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

October 19, 2022 12 Comments

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

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

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

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

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

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

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

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

Filed under EB-5 Events, EB-5 Law & Policy, Updates from USCIS

Genuine EB-5 Engagement Promised

September 1, 2022 35 Comments

I’m overjoyed to report a positive development. For the first time in years, USCIS is holding an EB-5 stakeholder engagement that promises to include engagement — not just updates and not just listening, but “a question-and-answer session to answer questions“(!!!) From 2010 to 2017, USCIS used to hold quarterly EB-5 engagements with updates and live Q&A. I complained at the time about the quality of these engagements, but at least they happened. Communication between USCIS and the EB-5 world started to break down with the end of quarterly meetings in 2018. Over the last five years, there have very few EB-5 updates from USCIS, and only three events that could be considered “engagements” in the sense of involving any dialogue between USCIS and EB-5 stakeholders. No wonder we’ve ended up in such a mess of frustration, hostility, and litigation. But now, USCIS is reaching out with a chance to talk. What a good sign!

USCIS Immigrant Investor Program Stakeholder Engagement Wednesday, Oct. 19|2-3 p.m. Eastern

U.S. Citizenship and Immigration Services (USCIS) invites you to participate in a stakeholder engagement on Wednesday, Oct. 19, from 2 to 3 p.m. Eastern.

During the first part of the engagement, we will share updates on the EB-5 Immigrant Investor Program. We will then hold a question-and-answer session to answer questions, listen to your comments, and seek your individual feedback. We will not address case-specific questions, questions outside the scope of the engagement, or issues under active litigation or likely to be litigated.

We are committed to public engagement, and our stakeholder engagements provide valuable feedback as we work to improve our programs. Participation in this engagement will be virtual. If you would like to submit a question in advance, please send your question to the Public Engagement mailbox at public.engagement@uscis.dhs.gov with the subject line “Question: EB-5 Engagement October 19, 2022” by 4pm Friday, Sept. 16.

To Register: 1. Visit our registration page. 2. You will be asked to provide your email address and select “Submit.” 3. On the next screen, you will see a notification that you successfully subscribed to this event. Once we process your registration, you will receive a confirmation email with additional details. If you have any questions, or if you do not receive a confirmation email within three business days of submitting your registration, please email us at public.engagement@uscis.dhs.gov. To request a disability accommodation to participate in this engagement, email us at public.engagement@uscis.dhs.gov by 4 p.m. Eastern, Friday, Oct. 14. Note to media: This webinar is not for press purposes. Please contact the USCIS Press Office at media@uscis.dhs.gov for any media inquiries. We look forward to your participation!

Filed under EB-5 Events

USCIS EB-5 Feedback Invitation

September 7, 2021 37 Comments

The last time USCIS held a public engagement that engaged with EB-5 stakeholders (i.e. went beyond prepared remarks to respond to stakeholder questions) was November 7, 2017. The last time USCIS engaged with EB-5 stakeholders in any form whatsoever was November 15, 2020, when a video of prepared remarks was uploaded to Youtube. (I keep a log of stakeholder meetings back to 2010.) At last, we’re being offered a chance to ask questions, at least. USCIS is not offering a stakeholder meeting yet, but hinting that one may come in the future. I am encouraged by this evidence that USCIS remembers the existence of EB-5.

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: September 7, 2021 10:29 AM
Subject: Ask USCIS a Question: EB-5 Immigrant Investor Program
EB-5 Immigrant Investor Program
Do you have questions about the EB-5 Immigrant Investor Program, also known as the EB-5 program? USCIS would like to hear from you. Your feedback will help us plan future engagement events, update program content on our website and prepare communications materials.
Statutory authorization related to the EB-5 Immigrant Investor Regional Center Program expired at midnight on June 30, 2021. If you have questions about the EB-5 program, the sunset of the Regional Center Program, or any non-case-specific concerns, we invite you to submit them by emailing public.engagement@uscis.dhs.gov by Sept. 23 at 4 p.m. Eastern. Put “EB-5 Question” in the subject line. We will not address case-specific questions. Note to media: Please contact the USCIS Press Office at media@uscis.dhs.gov for any media inquiries.

Filed under EB-5 Events

Policy Updates, Webinars

June 9, 2021 24 Comments

USCIS Updates Policies to Improve Immigration Services

Today USCIS announced policy updates “to clarify the criteria and circumstances for expedited processing; improve request for evidence (RFE) and notice of intent to deny (NOID) guidance; and increase the validity period for initial and renewal employment authorization documents (EADs) for certain noncitizens with pending adjustment of status applications.”

These actions are part of a series of planned improvements designed to modernize USCIS and “to eliminate policies that fail to promote access to the legal immigration system.” The USCIS press release quotes Acting USCIS Director Tracy Renaud: “USCIS is committed to promoting policies and procedures that ensure we operate in a fair, efficient, and humane manner that reflects America’s heritage as a land of opportunity for those who seek it.”

Yay! Looking forward to several more years of improvements like this!

AIIA Webinar Invitation

In debates over regional center program reauthorization, EB-5 legislation, and USCIS processing, EB-5 investors have had little voice and influence. A few investors are trying to change that, and have formed American Immigrant Investor Alliance, a non-profit organization with plans for investor-focused advocacy and community development activities. “AIIA hopes to provide investors a seat at the table with respect to the decisions that directly affect them. As investors, we believe our stories and our investments are the best representatives of the good that the EB-5 program brings to the United States.” Interested in this effort? The organizers are hosting an introductory webinar on Saturday, June 12 at 8 am PDT/11 am EDT to discuss goals and plans and invite participation. UPDATE: A recording of this excellent webinar is now available on YouTube.

Behring Companies Webinar Recording

On June 7, Behring Companies hosted a webinar covering topics including the Behring V Wolf et. al. lawsuit on the EB-5 regulations (including goals, arguments, and potential outcomes), EB-5 program reauthorization efforts, and reform priorities from a holistic perspective. Register to view the recording.

Know of other EB-5 advocacy events and activities that should be mentioned? Email me at suzanne@lucidtext.com

Filed under EB-5 Events, EB-5 Law & Policy

2/3 Government Affairs Webinar Invitation

January 7, 2021 3 Comments

IIUSA invites the public to join a free Government Affairs and Association Update on February 3, 2021. Promised topics include legislative updates, Grassley/Leahy integrity reform discussion, IIUSA USCIS Ombudsman Meeting recap, ongoing FOIA litigation, and how you can be an advocate. You can register here, and are invited to email questions in advance to info@iiusa.org. Thank you IIUSA! Take advantage of this opportunity, and convey your questions. My sacrifice before the camera this week was not in vain, I like to think, if it helped encourage this very welcome engagement. Those wondering about potential post-election changes may also appreciate Episode 18 of the KlaskoLaw podcast “2020 Post-Election Immigration Breakdown.”

As a reminder of where we’ve been, here’s the most recent update to my history of regional center program authorizations. The regional center program was established in 1992 and typically extended for several years at a time, until 2015. Since then, it’s been a bumpy ride thanks to the chaotic appropriations process, with funding bills and continuing resolutions extending government funding (and incidentally, associated immigration program authorizations) for a few months at a time. Now a new regional center program sunset date of June 30, 2021 separates the regional center program from the appropriations drama, and creates the challenge and opportunity of dealing individually with EB-5.

What would happen if Congress did not reauthorize the regional center program in time? The last time we seriously asked this question was back in 2012, when we were coming off a three-year authorization and depending on Congress for another long-term reauthorization. At a January 2012 stakeholder meeting, I noted this exchange: “A stakeholder asked what procedures might be employed in the event that Congress does not extend the EB-5 Regional Center program past its current sunset date of 09/30/2012. Rachel Ellis responded that this as a question that will just have to be addressed when and if it occurs, and that the Service does not have a response at this time.” After the May 1, 2012 stakeholder engagement, USCIS published a Q&A with a similarly vague answer to a question about how a regional center sunset might affect current and future applications and projects. “If Congress does not reauthorize the Immigrant Investor Pilot Program, all existing regional center designations will expire automatically. Following the sunset of the Immigrant Investor Pilot Program, USCIS will no longer possess authority to approve a regional center designation. USCIS will continue to monitor Congressional actions pertaining to the EB-5 Immigrant Investor program, and will keep stakeholders informed as new information becomes available.” I think the bottom line is that there’s no developed policy for a sunset because it’s just not possible to contemplate that a multi-billion dollar program would get abruptly terminated mid-stride with those billions of dollars and over 80,000 pre-CPR investors in the balance. Certainly regional centers and their lobbyists are motivated to do what it takes to avoid that eventuality, and politicians who like jobs and investment should be too. I could imagine a temporary lapse in authorization thanks to Congressional inefficiency, which would presumably play out like the temporary authorization lapses we’ve seen in connection with government shutdowns. Scroll to the bottom of my Washington Updates page to see further discussion. The regional center program strongly needs the stability of long-term if not permanent authorization, and has proven its value for economic development and job creation. I look forward to seeing long-term authorization accomplished this year.

I’m reminded of this EB-5 Legislation? post I wrote just over a year ago, reviewing what happened with EB-5 legislation between 2015 and 2019. The dynamics described in that post are still presumably at play as we look at a renewed legislative effort in 2021. But now a near-term deadline gives extra pressure and encouragement to actually cross the finish line.

Filed under EB-5 Events

EB-5 Outlook 2021: questions about legislation and reauthorization

January 4, 2021 9 Comments

2/17/2021 Update: Please visit my new Reauthorization Page, which collects resources that answer many of my questions below.

— Original Post —

On Wednesday January 6 at 2 pm EST, Carolyn Lee is hosting an EB-5 Outlook 2021 Webinar (register here) with guests Bill Gresser, Adam Greene, and me. Carolyn is Legislative Counsel to IIUSA, a 4-term Chair of the American Immigration Lawyers national EB-5 Committee, and industry godmother. Bill is Vice-Chair of IIUSA’s Board of Directors, and both Bill and Adam are former chairs of IIUSA’s Public Policy Committee and industry leaders. [1/5 update: Bill Gresser and Adam Greene no longer plan to join the webinar.] I am famous for asking questions.

This webinar aims to start 2021 right, with dialogue. I look forward to hearing perspectives, and to raising questions. So far I’ve prepared a list of questions regarding prospects for EB-5 legislation and regional center program authorization before the new sunset date of June 30, 2021. Of course a small panel speaking informally can’t possibly answer all these big questions, but any discussion is a good start. I hope that the discussion will grow, and that IIUSA/the industry will eventually speak to questions like these. (I may also volunteer my labor to ask questions on a larger scale — currently contemplating a conducting a survey to assess the range of regional center interests and concerns with respect to legislation and specific Grassley/Leahy proposals. Regional centers, contact me if you’d like to see this and have suggestions.) Meanwhile, feel free to add your questions re 2021 outlook to the comments on this post.

Suzanne’s questions regarding 2021 outlook for EB-5 legislation and regional center program authorization

Legislative activity coming soon…
- Is there any chance of a “clean” regional center program extension beyond June 30, 2021, or will regional center program reauthorization certainly come with significant program changes?
- Do you expect to see Grassley and Leahy reintroduce their EB-5 Reform and Integrity Act promptly in 2021?
- Is it possible/probable that anyone else in the House or Senate might introduce EB-5 legislation shortly? If so, would such alternative legislation have a chance to proceed?
- How much attention is EB-5 likely to get between now and June? Do you expect things like committee hearings and significant discussion around stand-alone EB-5 legislation, or is it more likely that RC program authorization would get tacked on to some other more important legislation? (And if so, what might that be?)
Regarding the Grassley/Leahy EB-5 Reform and Integrity Act…
- What are the major concerns/barriers in Congress for the Grassley/Leahy bill?
- What are the major questions/concerns in the industry for the Grassley/Leahy bill?
- What has been done/will be done to identify and address those questions, concerns, and barriers?
- To what extent is the Grassley/Leahy bill still open to negotiation?
- If you think the Grassley/Leahy bill as-is represents the best possible option for regional center program authorization, what’s the reason for thinking that?
Interests and goals…
- What are Grassley/Leahy trying to accomplish with the bill? Whom are they trying to benefit?
- What have industry negotiators been trying to accomplish with legislation? For what priorities have they been advocating?
- Is there any hope/plan/timeline to realize these items not in the Grassley/Leahy bill: More visas for EB-5; More marketable EB-5 investment amount/TEA definition
Options for participation, collaboration, and engagement…
- How can a concerned regional center get a hearing for their input to EB-5 legislation?
- Any options for concerned investors to assist or influence the process?
- What can IIUSA do to identify and address concerns, and broaden involvement in and support for EB-5 legislation?
- What needs to happen in the next few months to ensure that the regional center program gets extended?
Outlook for reauthorization…
- Do you see any chance of the regional center program being allowed to sunset? If that happened, what would be the likely reason?
- Do you see any chance of regional center program authorization being allowed to lapse for a time? If that happened, what would be the likely reason?
- EB-5 legislation has been actively discussed since 2015, but not passed. What reason is there to hope for a result in the next six months?
- As people involved in the process, what lessons have you learned from past legislative efforts that you intend to apply going forward?

Filed under EB-5 Events, EB-5 Law & Policy

Report on Nov 2020 IPO Non-Engagement

November 13, 2020 12 Comments

This week, the USCIS Investor Program Office used three venues to dismay the public with a disingenuous presentation of ostensible EB-5 program updates. You can find this non-engagement posted in PDF form in the USCIS Electronic Reading Room, recorded on Youtube, and as a presentation by IPO Chief Sarah Kendall to IIUSA. (The three are essentially identical.)

I learned a few things from the presentation.

To start with the positive, IPO says that they recognize and are actively working to fix two problems: the issue that family members have been scheduled on different days for I-829 biometrics (a system glitch), and the issue of delay in sending approved I-526 to the National Visa Center (a temporary staffing issue).

The most negative update: not a word in answer to many urgent clarification questions about redeployment; only insulting parroting of previously-published language with no acknowledgement of industry feedback.

IPO’s dedicated staff is currently at 232 people – down but not much from the last-reported level of 245 people as of March 2020. I’m happy to hear that the furlough threat between March and August didn’t result in more attrition. Almost 100% of staff have been working from home since March.

IPO indirectly responded to the question of whether the process for assigning I-526 is first-in-first-out, for petitions with visas available. In the presentation and also an additional Q&A on the Visa Availability Approach FAQ page, IPO highlights project review as a second factor in determining I-526 processing order. “IPO manages Form I-526 petition inventory through workflows factoring in whether: (1) A visa is available (or will be available soon); and (2) The underlying project has been reviewed. Workflows are generally managed in FIFO order when a visa is available or will be available soon.” This helps to explain what we see anecdotally – that I-526 are not necessarily assigned in filing date order even for people with identical visa availability circumstances. Petitioners associated with projects already reviewed in previous petitions can apparently expect swifter attention than those who invested in novel projects — creating an asymmetry that’s understandably practical but with negative results from a public policy and integrity perspective.

I-526 and I-829 productivity have not continued to improve. From March 2020 to August 2020, the presentation says that IPO averaged 304 I-526 completions per month and 265 I-829 completions per month. That’s no improvement on January to March 2020, and still three to four times lower than the IPO’s productivity in 2017 and 2018, before Sarah Kendall took over as Chief at IPO. (See the table at the base of this post for detailed reference.) Most disheartening: Kendall did not regret the dismal productivity over the past few months or foresee future improvement, but actually boasted about the numbers up to August 2020 by comparing them favorably to her own worst record in mid 2019. There were 16,633 pending I-526 at last report. If the current abysmally low productivity continues, an average I-526 filed today won’t even get looked at until 16,633/304=55 months from now. (The visa availability approach offers a time discount for I-526 from low-volume countries, but at such low productivity even they would wait three years for attention, according to per-country data, while high volume countries would be looking at well over five years unless IPO performance improves.)

“What are you doing to ensure program integrity today, USCIS?” The answer: “Sorry we can’t know what’s going on with EB-5 investment today because due to our low productivity we’re nowhere near being able to examine new files – and at our current rate we won’t even look at investments happening now and petitions being filed today for another three to five or more years in the future.” That answer should make Congress very angry. It certainly angers and frustrates the industry, as we try our best to maintain integrity even as USCIS won’t examine or let us know what’s going on. Until USCIS improves productivity, it’s basically saying “Welcome wannabe fraudsters, come over to EB-5 where we’ll offer you many years to operate in the dark while we waste resources implementing a time-is-no-object process on old petitions, actively discouraging new honest use of the program.” And still Kendall dares to claim that there’s integrity in using an office of 232 people to implement a new process so slow that it can only process about 570 investor petitions per month – less than 3 per IPO employee – while large backlogs wait unexamined. Biden administration, note that the USCIS Investor Program Office needs changes, and quickly. As recently as 2018, before Sarah Kendall took over, IPO was more than three times more productive with fewer people. We need that performance back as soon as possible.

Overall, IPO’s presentation is a masterclass in non-engagement. The playbook:

Ignore questions. (Among the ignored questions, see this list from IIUSA, most of which I wasted my time writing. USCIS particularly went out of its way to avoid answering questions about policy manual feedback, redeployment policy changes, source and path of funds policy changes, and I-526 data by country.)
In the guise of answering questions, reiterate word for word what the public already knows from information previously published. (This method was used to not answer our clarification questions about processing times, the visa availability approach, and redeployment policy updates, and to provide non-information about Form I-924A.)
Allow no interaction whatsoever. While Sarah Kendall did at least appear live at the IIUSA meeting, it was only to read aloud her talking points from the PDF and Youtube Video – no questions or comments were allowed. “Public engagement” used to mean that USCIS would have a quarterly call or meeting to talk to and listen to stakeholders; now all we can do is listen to a YouTube video and give it a thumbs down, or take the public engagement survey to indicate that we are very dissatisfied. (At least do this, everyone, for what good it does.) IPO is showing simply zero good faith or willingness to take stakeholders as partners.

Sarah Kendall said that “Program integrity is at the forefront of everything we do. IPO is continually fielding questions from Congress and others on performance in this area.” I choked. As someone who actually does care about and stand for program integrity, I wish I could field questions about IPO’s performance. Congress and others: contact me. Senator Grassley’s office: I understand your concerns and would love to tell you true stories that USCIS and the lobbyists won’t tell you. David North, I’d even be happy to chat with you. I can provide detail and evidence regarding specific IPO practices and policies that have – by malice and/or simple stupidity — gutted EB-5 program credibility, invited abuse, and undercut every Congressional objective for EB-5, from job creation impact to promotion of economic growth in rural and distressed areas. (In these efforts the lobbyist side has a culpable role as well, but that’s a conversation for another day. If only the majority of EB-5 users had any voice at all in the industry!)

As USCIS acknowledges in the presentation: “we have seen that the vast majority of petitions and regional centers are engaged in legitimate business activities and endeavor to strengthen U.S. communities by creating jobs.” The same cannot be said of IPO under current leadership. If you’re part of the new administration, and motivated to heal our legal immigration system from the recent efforts to savage it, the Investor Program Office at USCIS needs your urgent and early attention. EB-5 can and should be a credible and effective tool for economic growth, job creation, and immigration by people who immediately benefit the United States. For that to happen, the program needs competent and responsible new management. (And indeed, this need applies to USCIS as a whole.) [12/2020 update: Sarah Kendall has left IPO, replaced for now by someone named Todd Young serving as acting chief. Now I feel bad. In Ms. Kendall’s defense, she probably did exactly and simply what she was hired and directed to do at IPO.]

Calendar Period	Number of employees reported at IPO	Average I-526 processed per month	Average I-829 processed per month	Average total investor petitions processed per month	Average employee productivity, in terms of petitions processed per month
2016	110	934	95	1,029	9
2017	185	985	286	1,271	7
2018	200	1,221	193	1,414	7
2019	212	213	142	355	2
2020 Jan-March	245	301	262	563	2
2020 March-August	232	304	265	569	2

Filed under EB-5 Events, Updates from USCIS

11/7 EB-5 Engagement Invite

September 13, 2017 Leave a comment

EB-5 Immigrant Investor Program: Stakeholder Engagement from New York City
U.S. Citizenship and Immigration Services (USCIS) invites you to participate in a stakeholder engagement on Tuesday, November 7, from 1 to 2:30 p.m. Eastern to discuss the Immigrant Investor Program, also known as the EB-5 program.

Filed under EB-5 Events, Updates from USCIS

Listening Session (EB-5 regs), EB-5 as securities (Hui Feng), RC Audits, RC List Changes

July 17, 2017 Leave a comment

EB-5 Immigrant Investor Program Engagement July 13

At the EB-5 listening session on July 13, the USCIS participants stuck to their resolve to listen only, and did not provide input or feedback. The call solicited stakeholder comments on the questions raised by the Advance Notice of Proposed Rule-Making, which addressed regional center designation and participation and exemplar project approval. The ANPRM inspired few written comments to its preliminary questions, and this call also got tepid response. What did USCIS want to know from us, beyond what those of us who care said already in our written comments? USCIS would not specify, and we weren’t sure what to say. The Wolfsdorf Rosenthal blog has diligently summarized stakeholder comments, and my recording is available for anyone who’s really interested. I hope USCIS learned something from the call, but I did not. People with more to say on the designated topics of RC life-cycle (designation, participation, termination), RC exemplar process, RC compliance audits, or indirect job creation methodologies may email ipostakaeholderengagement@uscis.dhs.gov.

USCIS let slip one bit of info. Lori MacKenzie said that “the agency is working to finalize that rule” — referring to the regulation that people care about, the NPRM dealing with investment amounts and TEAs. No indication of timeline, however, or whether the listening session call reflects intention to combine NPRM and ANPRM topics in one new rule. (On July 3, Senators Dean Heller, John Cornyn, Rand Paul, and Thom Tillis had sent DHS a letter asking that the agency not move forward with the proposed EB-5 regulations. The listening session indicates that DHS is indeed moving forward, however slowly.)

Here is my favorite listening session caller comment, from a Mr. Fuentes in minute 45: “We have a bottleneck of processing in an environment where resources are not the limit.” Yes – that’s exactly what’s wrong and fixable in EB-5. So many problems for EB-5 projects and investors result from the fact of long processing times, and long processing times are traceable to constraints that need not exist in a program of multi-million-dollar projects and high-net-worth immigrants. I’ll write more on this soon.

The call also reminded me that we need to talk more about direct EB-5, and the kinds of business and investment that are and are not workable in that environment. Purchasing an operational existing business rarely works for direct EB-5. The history of AAO denial decisions is thick with business acquisition cases that foundered on the “new commercial enterprise” requirement and/or the requirement to create new jobs. EB-5 rules specify that mere ownership change does not make an enterprise or jobs in that enterprise new. I have a couple related posts (one on the difference between direct and regional center EB-5, and one on options for investing in an existing business), but see the need for a simpler article addressed to entrepreneurs contemplating direct EB-5.

EB-5 and Securities Law

Immigration lawyers happen to be well-placed to match EB-5 investors to EB-5 projects, and are pressured by the market and tempted with commissions to play a match-making role. This role is perilous, however, considering securities laws. In 2015 and 2016, the SEC made examples of several immigration lawyers who had received transaction-based compensation for facilitating investments, and of one of the regional centers that paid such compensation. The message: it’s illegal to be on the giving or receiving end of payments to someone acting as a broker without appropriate license.

One of the law firms targeted by the SEC fought back. Hui Feng (subject of a complaint published in December 2015 by the SEC against himself and his firm Law Offices of Feng & Associates, P.C.) argued that the SEC’s claims fail because EB-5 investments are not securities and the immigration lawyer does not act as a “broker” when receiving finder fees. He pointed out that EB-5 investments are primarily motivated by the visa, without expectation of profit, that his commissions were contingent on visa approval rather than in connection with securities sale, and that the attorney role has its own fiduciary duties and that broker requirements are inapplicable – i.e. the EB-5 process and investment and lawyer’s role are fundamentally immigration matters, not securities matters and not the SEC’s business. (My layman’s paraphrase; see the court filings for the actual legal arguments.) The US District Court, Central District of California, however, has come down on the SEC’s side in its Motions for Summary Judgment (June 29, 2017). The decision has the longest discussion I’ve seen yet in support of the point that yes, EB-5 investments are securities. It also enumerates the activities supporting the conclusion that yes, this immigration lawyer acted as a broker, and explains why the fee arrangement details were material and should have been disclosed to investors and regional centers. If you pay or receive EB-5 finders fees, pay attention to this decision. You may also want to review IIUSA’s Best Practices for Engaging with Sales Intermediaries.

Regional Center Compliance Audits
The Regional Center Business Journal has a helpful article by Mariza McKee, Kimberly Hare, and Clete Samson “USCIS Compliance Audits – Preparing Regional Centers for the First Wave”

RC List Changes
USCIS continues to cull the list of approved regional centers, with 50 terminations so far this year. 2017 termination letters haven’t been published yet, but I’ll guess that most of these terminations are for lack of recent activity.

Additions to the USCIS Regional Center List, 6/26/2017 to 7/17/2017:

No new regional centers.

New Terminations:

North Country EB-5 Regional Center, LLC (New York) Terminated 7/7/2017

Guam Strategic Development LLC RC (Guam) Terminated 7/7/2017

Good Life EB5 Georgia Regional Center, LLC (Georgia) Terminated 6/30/2017

Tri-Cities Investment District, LLC (California) Terminated 6/30/2017

Prosperity Regional Center (former name U.S. Prosperity Regional Center) (Florida) Terminated 6/23/2017

Filed under EB-5 Events, EB-5 Law & Policy, New RC

I-924 Webinar, Amendment Requirements

April 26, 2017 1 Comment

In case anyone would like to review it, here is a link to my audio recording and copies of the slides from today’s webinar on the revised Form I-924 Application for Regional Center Designation. (6/2017 UPDATE:You can now get the sound and slides together, as USCIS has posted a recording of the webinar.) The big news was a comment that the page for the March 3, 2017 EB-5 stakeholder meeting now contains remarks from Lori MacKenzie modifying what she had said at the meeting about geographic area amendments. My original blog post complained about this buried new policy posting, but shortly thereafter USCIS sent out a stakeholder email and posted a statement prominently on the EB-5 section of the USCIS website.

Update to EB-5 National Stakeholder Engagement Remarks: Regional Center Geographic Area Amendments and Form I- 526 Petition Eligibility
On March 3, 2017, USCIS held an EB-5 national stakeholder engagement. This national engagement was part of our ongoing effort to enhance dialogue with our stakeholders in the EB-5 program. Remarks from the EB-5 national stakeholder engagement are available here.

At the engagement, USCIS noted that a May 2013 policy memo had previously provided guidance that a formal amendment was not required to expand a regional center’s geographic area, and permitted concurrent filing Form I-526, Immigrant Petition by Alien Entrepreneur prior to approval of the geographic scope amendment. The May 2013 guidance was superseded by the recent publication of the final Form I-924 ,the Application for Regional Center Designation Under the Immigrant Investor Program and instructions. The I-924 revisions included changes to the Form I-924 instructions and require that regional centers file a Form I-924 when seeking an expansion of their geographic area. The revised Form I-924 became effective on December 23, 2016, following publication of the revisions in draft form in the Federal Register in May of 2016, and a period during which the public had the opportunity to comment.

During the engagement, USCIS addressed questions regarding how requests to change a regional center’s geographic area should be filed and the timing of such a filing. Specifically, where a regional center has a filed and pending Form I-924 amendment requesting an expansion in geographic area, stakeholders asked whether or not Form I-526 petitions may be filed prior to approval of the I-924 amendment, relying on such proposed expanded geography. USCIS has reviewed stakeholder concerns raised during the engagement and has updated the engagement remarks to clarify how the agency is implementing the above policy. Specifically:

Where the regional center’s geographic area expansion request was submitted either through a Form I-924 amendment or Form I-526 petition filed prior to February 22, 2017 (the date on which use of the new Form I-924 became mandatory), and the request is ultimately approved, USCIS will continue to adjudicate additional Form I-526 petitions associated with investments in that area under the guidance reflected in the May 30, 2013 policy memo.

Any requests for geographic area expansion made on or after February 22, 2017 will be adjudicated under the current guidance; namely, a Form I-924 amendment must be filed, and approved, to expand the regional center’s geographic area.

For geographic area expansion requests made on or after February 22, 2017, the Form I-924 amendment must be approved before an I-526 petitioner may demonstrate eligibility at the time of filing his or her petition based on an investment in the expanded area. Form I-526 petitioners who believe they may be unable to demonstrate eligibility at the time of filing on this basis may wish to contact USCIS at ipostakeholderengagement@uscis.dhs.gov.

Sincerely,
USCIS Public Engagement

And here, since the I-924 Form and Instructions are apparently our new venue for policy guidance, is the official word on amendment requirements.

Quoted from the I-924 Instructions (version expiring 12/31/2018), page 1
Request an amendment to a previously approved regional center.
A. You must file an amendment to:
(1) Seek approval for any changes to the regional center’s name, ownership, or organizational structure, or any changes to the regional center’s administration that affect its oversight and reporting responsibilities, or to add or remove any of the regional center’s principals, immediately following the changed circumstances; or
(2) Change the geographic area of a regional center.
B. You may also file an amendment to:
(1) Change the industries of focus of the regional center;
(2) Add a new commercial enterprise associated with the regional center and/or seek a preliminary determination of EB-5 compliance for an exemplar Form I-526, Immigrant Petition by Entrepreneur, for that new commercial enterprise, before individual entrepreneurs file their petitions; or
(3) Notify USCIS of changes in the name, organizational structure or administration, capital investment instruments, or offering memoranda (including changes in the economic analysis and underlying business plan used to estimate job creation) for a previously added new commercial enterprise associated with the regional center.
NOTE: An I-924 amendment is not required to report changes of address, contact information, a change of duties among the regional center principals, changes to non-principal managing companies, contracting agents or similar changes, or information described in Item 2.B. above. The regional center must notify USCIS within 30 days of such changes. Notification of these changes can be made by sending an email to the EB-5 Program mailbox at: USCIS.ImmigrantInvestorProgram@dhs.gov. USCIS will review any changes submitted by email and may require or recommend, as appropriate, the regional center to file an I-924 Amendment.

“You must file an amendment to seek approval for….” sounds like it could be discretionary (i.e. you needn’t file an amendment if you’re not seeking approval for…), but apparently it isn’t. (Previously, IPO said that I-924 amendment was recommended to seek approval for management changes, with an option to just notify the IPO email box. No longer.) Today’s webinar slides restated the I-924 instructions as “You must file an amendment in case of…,” and the presenter said that the required amendment must not only be filed but also approved. (But approved “before what”? This point doesn’t go without saying. Before I-526s are filed? Before I-526s can be approved? Before the regional center can take any action at all? IPO needs to clarify the “before what” for each required type of amendment, and whether the requirement is to file or file plus wait for approval.)
Otherwise, today’s webinar mainly just read through the new Form I-924 content, pointing out changes for the benefit of people who hadn’t previously noted just how much the form changed, or implications of those changes. The audience asked few questions. USCIS emphasized two concerns behind Form I-924 revisions: vetting regional center principals and managers, and limiting geographic area. The revisions take effective steps toward the first objective, but make little difference to the second. Geographic area requests are limited only by imagination and chutzpah so long as USCIS continues to allow and even encourage applicants to base their requests on hypothetical/fictitious projects.

Filed under EB-5 Events, EB-5 Law & Policy, Updates from USCIS

4/26 USCIS Webinar on I-924

April 5, 2017 Leave a comment

Note: The subtext to this webinar may be the storm over IPO’s claim that the revised Form I-924 justifies the new policy to require amendment approval for expanded geographic area prior to I-526 filing. However, the invite doesn’t solicit any advance comments or indicate whether the event will allow questions.

From: U.S. Citizenship and Immigration Services [mailto:uscis@public.govdelivery.com]
Sent: Wednesday, April 05, 2017 10:34 AM
Subject: USCIS Invitation: Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program, 04/26/2017

Dear Stakeholder,

U.S. Citizenship and Immigration Services (USCIS) invites you to participate in a webinar on Wednesday, April 26, from 1 to 2 p.m. to discuss the Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program. This webinar will discuss certain changes to the Dec. 23, 2016 edition of Form I-924.

Form I-924 is used by any economic unit, public or private, in the United States that is involved with promoting economic growth (including increased export sales, improved regional productivity, job creation, or increased domestic capital investment) to:

Ask USCIS to be designated as a regional center under the Immigrant Investor Program; or

Request an amendment to a previously approved regional center.

Form I-924 and its instructions are available at https://www.uscis.gov/i-924.

To Register:

Please email ipostakeholderengagement@uscis.dhs.gov with your full name and the name of your organization. Also, please place “I-924 Webinar” in the subject line. Once we process your registration, you will receive a confirmation email with additional details.

If you have any questions regarding the registration process, or if you have not received a confirmation email within two business days, please email us at the same address.

Note to Media: This engagement is not for press purposes. Please contact the USCIS Press Office at (202) 272-1200 for any media inquiries.

We look forward to engaging with you!

FINAL+Invitation+Form+I-924+Webinar.pdf

Filed under EB-5 Events, Updates from USCIS

3/3 USCIS EB-5 Stakeholder Engagement (I-829 division, RC geographic area, site visits, filing tips)

March 3, 2017 Leave a comment

Today’s EB-5 Stakeholder Engagement with USCIS provided a number of important updates. (3/20 UPDATE: USCIS has now uploaded copies of prepared statements by Colucci and Harrison.) I have uploaded my recording, and summarized a few highlights.

EB-5 Petition Statistics: In October to December 2016, IPO saw a continued surge in petition filings, with 4,395 I-526 petitions received, 752 I-829 receipts, and 184 I-924 receipts. During that quarter, IPO processed 3,583 I-526 petitions (a record high), 112 I-829 petitions (a near-record low), and 88 I-924 petitions. IPO is now reorienting resources toward I-829, after having previously prioritized I-526 and I-924. Mr. Colucci commented that IPO processed more I-829s last month than in all of last quarter.
IPO Staffing: IPO is subject to the executive freeze on Federal agency hiring; however, USCIS has requested exemptions for certain “mission-critical” positions, and IPO has received an exemption for its adjudicator position. IPO now has 157 employees (below their target of 171 employees for the end of last year). IPO is authorized to hire up to 247 employees this fiscal year, subject to the hiring freeze and any exemptions. Increased staffing is IPO’s primary strategy for improving processing times.
I-829 Processing: In October 2016, IPO created a new division to focus on Form I-829 adjudications and customer service inquiries. The division will have three teams, with eight adjudicators and economists on each team. The most senior member of each team will interview I-829 petitioners, with most interviews conducted remotely with assistance from local field offices. (As previously stated, the I-829 petitioner can bring her counsel, qualified interpreter, and a representative from the regional center if applicable.) IPO expects I-829 adjudication output to improve significantly once this division is fully staffed and trained. There are currently 18 of 24 people on board, including three senior economists and three senior adjudicators who are working to cross-train for improved efficiency.
RC Reporting: IPO says that they will “soon” publish regional center termination notices in the USCIS Electronic Reading Room to promote transparency about reasons for termination. They are also planning to publish petition approval and denial statistics for each regional center.
Compliance, Audits, Site Visits: IPO has grown its compliance unit to become a division that oversees pooled investments (both regional center and pooled direct investments) with three branches to review I-924A, issue termination notices, and oversee audits (the first of which is scheduled for next month). IPO has trained 13 site inspectors from around the country, and expects to conduct about 250 EB-5 project site visits this year. IPO reassured stakeholders that IPO would interpret any site visit results in context, and would not make decisions based on the info before notifying petitioners through RFE or NOID. There are two types of site visits: for-cause visits triggered by questions about the project, and random visits that are scheduled at some point between I-526 approval and I-829 filing.
Policy: IPO plans to publish content related to sustained investment “in the near future” in the USCIS Policy Manual (rather than finalizing the draft August 2015 policy memo). IPO reviewed comments on the Policy Manual but does not plan any changes in response to the comments.
Regional Center geographic area expansion must now be approved BEFORE I-526 petitions can be filed: Here is a transcription of what Lori Mackenzie said (starting at minute 25 of the recording):

UPDATE: These remarks from the meeting have now been superseded by Lori MacKenzie’s published remarks.
We also received some questions related to the new Policy Manual publication as well as to the new I-924 Form release, which was effective on December 23^,2016, and the question really does relate to an expansion of geographic scope of a regional center. So just to give everyone a little bit of background around that. There is some guidance in the May 2013 Policy Memo that talks about how to expand geographic scope. After that guidance, we published the Policy Manual in November of 2016 which superseded that guidance, and then on December 23 we issued some guidance with respect to the Form I-924 and the instructions for filing the Form I-924. And so the question really relates to ‘if a Regional Center has filed an I-924 amendment requesting an expansion of geographic scope, may concurrent I-526 petitions be filed in the meantime relying on such proposed expanded geography?’ And the response to that is a little tricky, so you might want to take a few notes. We will continue to adjudicate all petitions filed prior to December 23, 2016, which is the effective date of the new Form I-924, under the prior guidance. So the May 2013 policy guidance holds for that. Petitions filed on or after December 23, 2016 must follow the current guidance, which means that Form I-526 petitions based on an area not previously approved will be deniable due to ineligibility at the time of filing. Note that in May 2016, prior to publication of the final revised Form I-924, we did provide the public with an opportunity to comment on this process by publishing the draft form in the Federal Register.

I had been wondering about this issue, ever since I noticed that the November 2016 USCIS Policy Manual dropped two little words — “geographic area” – out of the May 2013 Policy Manual’s sentence about changes not requiring an amendment. However, both the Policy Manual and the new I-924 Instructions only said that amendments need to be filed, and we didn’t hear until today that IPO also demands that they be approved before investors can file I-526. Stakeholders strongly encouraged IPO to reconsider this surreptitious policy change, which has major implications for in-process projects that relied on previous policy, and which is unworkable considering that USCIS may take over a year to process amendment requests. Robert Divine has published a helpful article that explains the issues and suggests how industry and investors can respond to USCIS’s move:
USCIS Reneges on Sponsoring Projects Outside Approved RC Area, Claiming it Gave Notice Through “Stealth” Disclosures
Filing Tips: IPO noted practices that would facilitate adjudications. They requested that petitions come with a cover letter and table of contents and tab-separated sections; that documents be single-sided, with page-numbers, and not permanently bound; and that copies be clear and legible and come with full translation if applicable. The petition should indicate whether it’s direct or regional center, and whether it’s part of a dual I-924/I-526 filing. I-924 applications need not include organizational and transactional documents unless associated with an Exemplar I-526. If submitting an interfiling with revised documents, highlight changes with yellow highlighter or some other method that is readily noticeable. Petitioners who have decided to abandon the process are requested to notify IPO of the decision to withdraw their petitions.

Filed under EB-5 Events, Updates from USCIS

7/28 Meeting Notes (RC site visits & audits, I-829 interviews, redeployment), New AAO Decisions (RC geography, indebtedness)

July 28, 2016 2 Comments

7/28 Stakeholder Meeting

If you would like to review today’s USCIS EB-5 stakeholder engagement, best talk to someone who attended the meeting in person in Miami. I’ve uploaded my recording as usual, but much of it is barely audible. (Updates: USCIS emailed on 7/29 to apologize for the sound quality for phone participants, and published prepared remarks from Colucci and Mackenzie on 8/16 at the above link. Also, Cletus Weber has posted a summary more comprehensive than mine on the IIUSA blog.) Here are points of significance that I think I heard:

New Policy: IPO has a new Policy and Performance Division responsible for drafting policy. They’ve been working on revised EB-5 forms (i.e. revised Form I-526 currently out for comment) and on chapters on EB-5 for the in-progress USCIS Policy Manual. Eagerly-awaited policy on the requirement to sustain investment through the period of conditional residence (including the issues of redeployment and what happens to investors in case of regional center termination) will be part of these forthcoming policy manual chapters or amendments to the manual. USCIS will send this policy out in draft form for comment before finalizing it. We can expect to see the draft “in the near future” but “not tomorrow.” Until then, we can look back to the August 2015 draft memo to “see what we’re thinking,” but may also expect changes based on public feedback to that draft and IPO’s consultation with securities professionals.

New Regulations: No update on when exactly we may see new regulations published for comment.

Compliance: IPO Chief Colucci reports that his office is in contact with Immigration and Customs Enforcement (ICE) and the SEC at least weekly, and again encouraged the public to submit tips on any suspected EB-5-related malfeasance. Contact IPO through the website (https://www.uscis.gov/eb-5) or call the Fraud Detection and National Security (FDNS) team directly at (202) 357-9326.

Regional Center Site Visits and Audits: IPO provided this information:

Site visits will generally be at the job-creating enterprise site, unannounced, performed by local FDNS staff, and mostly observational (not necessarily interacting with people on site). Their purpose will be to assess whether what’s happening at the JCE site is consistent with what was proposed/represented to IPO.

Regional center audits will generally be at the regional center’s office, announced (by letter and by telephone call to the RC principal), involve interaction with management and staff, and may last a week or more. Their purpose is to assess RC compliance with applicable laws and regulations, and they will be conducted in accordance with generally accepted goverment audit standards.

I-829 Interviews: IPO is in a beta/testing phase with I-829 interviews, and developing a strategy for them in response to last year’s GAO report recommendations. Interviewees are currently selected at random. Interviews are conducted by video. It is understood that the petitioner may not have exhaustive info about the investment ready to hand, and petitioners will have opportunity to supplement the record in writing after the interview.

Processing: IPO has 25,000+ petitions pending. Premium processing continues unlikely as the Congressionally-mandated fee limit is low enough that nearly all EB-5 applicants could be expected to take advantage of PP, were it offered to them. Meanwhile, prospective investors are apparently starting to wonder whether even a lifetime is sufficient time to complete the EB-5 process. IPO addressed a number of questions on the topic of “what happens if the petitioner dies before I-829 is adjudicated” (short answer: case-by-case determination) and “can someone under 18 apply as the primary petitioner” (short answer: yes and no — not prohibited under the regs but IPO foresees practical issues such as capacity to enter into contracts that are binding on the petitioner).

Other items:

The Commerce Department study commissioned by IPO to assess the EB-5 program’s economic impact is “in the final stages of review” and will be released “in the next couple weeks.” The study covers FY2012-2013, so old news now, but its impact assessments are reportedly higher than estimates for the same period by industry groups (who had less data to work with).

Congress has approved funds for IPO to implement a new data system (hooray!) that will allow for better tracking.

I won’t bother repeating what Mr. Lyons said about feasibility studies (the obvious – IPO doesn’t require one by default, but may ask for one if the project’s feasibility isn’t established by other means) and pro forma financials (the obvious – that a business plan had better include them). I do appreciate clever Mr. Lawler’s insight into what would encourage Mr. Lyons to repeat himself so we all could hear.

Mr. Colucci emphasized that due diligence by regional centers is essential to the integrity of the EB-5 program, and that IPO is focused on regional center responsibility for monitoring and oversight of projects.

IPO is translating some EB-5 web content.

New I-924 AAO Decision: Geographic Area

Matter of R-T-E-R-C-, LLC (JUL152016_01K1610) addresses a grey area for regional center designation – how to justify a request for a certain geographic area. The statute and regs say that a regional center is to be designated for a “limited geographic area,” but naturally applicants want to claim the largest area possible. The common way to accomplish this goal, especially since the May 2013 policy memo, is to formulate a hypothetical project (often flag hotels, because they are easy to write up and pack a fairly wide economic impact) and then hypothetically locate that project at strategically chosen locations throughout the desired geography – strategically chosen so that the aggregate impact areas of each project essentially blanket the desired geography. USCIS has approved many RC applications and amendment requests that use this method, but apparently the amendment request in JUL152016_01K1610 came before a new adjudicator who didn’t feel right about designating a huge geographic area (all of Texas and part of New Mexico) just based on seven hypothetical projects. AAO agreed that “it is particularly challenging to define the geographical scope for a regional center that has only proposed hypothetical projects,” but AAO was compelled by the applicant’s arguments that commuting patterns show that the hypothetical projects would, if real, affect 249 of Texas’ 254 counties, and that worker spending habits and supply chain would also contribute to state-wide impact. AAO also found that “while the Form 1-924 instructions require that the geographic area be contiguous, there is no requirement for an applicant to show contiguous – for example, county-by-county – economic growth throughout the requested geographical area.” The appeal was sustained.

New I-526 AAO Decisions: Source of Funds

The latest AAO decisions on I-526 appeals (JUL072016_01B7203, JUL072016_02B7203, JUL112016_01B7203) continue to press the point that indebtedness only counts as capital placed at risk if secured by the petitioner’s own assets. JUL072016_02B7203 finds that USCIS remarks on indebtedness at the 4/22/2015 stakeholder meeting are a correct reading of relevant statutory and regulatory requirements. JUL112016_01B7203 further argues that remarks at that meeting were not a new rule or new policy, instituted without due procedure, but were just clarifying existing requirements. JUL112016_01B7203 adds a reminder that capital is not at risk if the NCE is overcapitalized (doesn’t show a use for the full amount of investment) and fails to present sufficient evidence of the actual undertaking of business activity (just entering into a lease is insufficient).

Regional Center List Changes
Additions to the USCIS Regional Center List, 07/05/2016 to 07/27/2016.

5 Starr Regional Center LLC [ID1504052589] (Oklahoma)

Advantage America Southern California Regional Center, LLC (California): www.aaeb5.com

AmerInvest Regional Center East, LLC (Connecticut, New York)

AmerInvest Regional Center West, LLC (California)

CV West Coast Regional Center, LLC (California)

Golden State Northern California Agriculture Development, LLC (California)

One World Development Fund, Inc. (Texas): www.oneworldrc.com

New Terminations:

US EB5 New York City Regional Center (Connecticut, New Jersey, New York, Pennsylvania) Terminated 7/13/2016

Harris Real Estate Fund LLC (former name U.S. Federal Investment Immigration Fund, LLC) (Arizona) Terminated 7/13/2016

California Regional Center, LLC (California) Terminated 7/12/2016

Harris Investment Immigration Fund, LLC (California) Terminated 7/13/2016

Filed under EB-5 Events, EB-5 Law & Policy, New RC, Updates from USCIS

4/25 meeting notes, RC list changes

April 25, 2016 Leave a comment

4/25/2016 Listening Session
Today’s EB-5 stakeholder meeting with USCIS was indeed a listening session — a venue for stakeholder opinions and not for tips and answers from USCIS. In case you’re a lawmaker or regulator and interested in reviewing insightful comments from the public, here is my recording. For the rest of us, who are mainly just curious about what USCIS has to say, here are a few tidbits that came out in the meeting:

USCIS will be initiating an IDEA community campaign to collect additional input on EB-5 regulation/policy changes. When that goes live, I’ll post a notice here.

I-829 interviews will begin this year, at first virtually, and interviewees may bring counsel, Regional Center representatives, and Regional Center counsel.

An audit program for regional centers is being implemented this year, and site visits are being expanded for direct and regional center projects.

IPO is up to 126 staff and on track to have 171 employees by year end.

IPO did not give any hints about the anticipated content of or timeline for revised regulations or new policy.

IPO will work closely with Congress up to the next deadline for regional center program reauthorization (September 30, 2016), and just in case will prepare “what if” guidance for two sunset scenarios: if the Regional Center program lapses but Congress apparently intends to reauthorize it, or if Congress indicates its desire to end the program.

IPO Chief Nicolas Colucci reported some preliminary processing data. Q2 2016 receipts: 849 (I-526), 886 (I-829), 40 (I-924). Completions from October 2015 to March 2016 (Q1-Q2 2016): 4,141 (I-526), 1,255 (I-829), 135 (I-924). The big story in these numbers is I-526 receipts, as illustrated in the following figure.

Regional Center List Changes
Additions to the USCIS Regional Center List, 04/19/2016 to 04/25/2016

Regional Center of the Pacific (California)

Additions to the USCIS list of terminated regional centers:

WRC EB-5 Regional Center, Inc. (Washington) Terminated 4/13/2016

Filed under EB-5 Events, EB-5 Law & Policy, EB-5 Statistics, New RC, Updates from USCIS

4/13 Senate Hearing Notes, RC Research, SEC Case (VT), RC List Changes

April 14, 2016 2 Comments

Senate TEA Hearing
You can now review video of the 4/13 hearing on EB-5 targeted employment areas on the Senate Judiciary Committee website (be patient, the video does start eventually), or download my audio recording. My main take-away from the hearing is that Senate leaders are on a long-term path to EB-5 reform and Regional Center reauthorization. They discussed very substantive potential changes in a very preliminary manner and sounded no-where near ready to sit down and agree on legislation. This is worrisome, considering that only a handful of Congress workdays remain before the 9/30/2016 Regional Center sunset date (what with conventions and vacation and holidays) – hardly enough time to hammer out the issues and questions that this hearing raised as important. The TEA issue is a thorny one because it comes down to a question of what kind of projects Congress wants to see incentivized, and our representatives don’t agree about that, much less on the question of what type and method of incentive would effectively focus on such projects.

EB-5 Project Research
Listening to Gary Friedland testify at the Senate Hearing reminded me that I’ve been remiss in reporting on the latest EB-5 research that Mr. Friedland and Professor Calderon have posted at the NYU Center for Real Estate Finance Research. Their paper EB-5 Mezzanine Financing: A Real World Example (3/23/2016) presents and analyzes an actual term sheet for a large EB-5 regional center deal, and will be very interesting for people seeking examples of EB-5 documents and deal terms. EB-5 Capital Project Database: Revisited and Expanded (3/29/16) follows up on last year’s paper A Roadmap to the Use of EB-5 Capital: An Alternative Financing Tool for Commercial Real Estate Projects (5/24/2015) by adding details of 27 additional EB-5 projects. The number 27 is small – representing a minority of EB-5 projects – and yet these few projects alone involve over $5.6 billion in EB-5 capital, which means over 11,000 EB-5 investors and almost three years of the total EB-5 visas available. I have to hope that Senators and journalists don’t examine the NYU database, because these few projects claiming so many dollars and visas could provide ammunition for criticism that EB-5 TEA investments have become a subsidy for luxury developments in tier one cities, a benefit for mega-developers and Chinese developers, an opportunity to replace existing financing rather than a source of needed capital, and a minor contribution to job creation. As a business plan writer I work with EB-5 projects that could be attractive poster children for the regional center program, but such modest projects usually don’t make the research papers or the news and their fate may depend on how the big players are seen to use EB-5.

New SEC Case (VT)
Also in the category of the last thing we need when facing a fight for Regional Center reauthorization: a venerable figure in the RC program is now subject of fraud charges and an asset freeze. According to today’s press release: SEC Case Freezes Assets of Ski Resort Steeped in Fraudulent EB-5 Offerings. The State of Vermont has filed a concurrent suit. The SEC Complaint does not name Vermont Regional Center, but it does call out Ariel Quiros, William Stenger, and a whole list of Jay Peak companies. I read the SEC complaint ready to make allowances, since I know that in real life it’s extremely difficult to produce documents that are completely free from omissions and misleading statements or that perfectly anticipate what subsequently happens, and I think one should be very hesitant to cry fraud. Sadly the SEC complaint leaves little room for charitable interpretation, and this situation looks like a mess likely to pass beyond Jay Peak and their investors to leaders who have been regional center program champions. Senator Leahy concluded his comments on the enforcement action by saying: “Given the significant problems plaguing this program, I will continue to push for meaningful reform. Without reform, I believe the time has come for the program to end.” Hurry up, reformers!

Additions to the USCIS Regional Center List, 04/05/2016 to 04/13/2016

America FX Regional Center, LLC (California)

EB5 International II, LLC (California)

Hawaiian Ohana Regional Center (Hawaii)

Luichi, Inc. (Nevada)

Manhattan Metropolitan Regional Center (Connecticut, New Jersey, New York)

Watercrest Florida Regional Center, LLC (Florida)

Removed from the list

Deictic Investment Group LLC (California)

Filed under EB-5 Events, EB-5 in the News, EB-5 Law & Policy, New RC

4/13 Hearing, 2016 AAO Decisions (NCE requirement), RC List Changes

April 7, 2016 Leave a comment

Senate Judiciary Committee Hearing Rescheduled 4/13
The Senate Judiciary Committee’s provocatively titled hearing on The Distortion of EB-5 Targeted Employment Areas: Time to End the Abuse has been rescheduled for Wednesday April 13th. The hearing will be streamed live at the above link.

AAO Decisions: Regional Center NCE, Jobs Allocation, At Risk Requirement
Several 2016 AAO decisions on I-526 cases have been posted on the USCIS website. I’m particularly interested in MAR252016_02B7203 (and the nearly identical _03 and _04), which deal with a regional center investment. Here’s what I’m particularly surprised or intrigued to hear AAO saying in the MAR252015 cases:

In the Regional Center context, the job-creating entity’s history and creation date are not relevant to the question of whether EB-5’s “new” commercial enterprise requirement has been met. When the regional center investment involves a new commercial enterprise and a separate job-creating enterprise, only the NCE has to qualify as “new.” In making this point, AAO argues against a position commonly taken by USCIS. In the MAR252016 case, the petitioner invested in a limited partnership formed in 2013 that deployed capital in a hospital established in the 1960s. In its denial, USCIS predictably cited Matter of Soffici and indicated that the NCE requirement wouldn’t be met unless the hospital were restructured or substantially expanded. (Soffici deals with a new enterprise’s purchase of an old hotel and says “It is the job creating business that must be examined in determining whether a new commercial enterprise has been created”.) AAO countered that: “We disagree with the Chief’s analysis. Soffici, unlike this case, did not involve a regional center project.” AAO argues that the relevant precedent is rather Matter of Izummi, which did deal with a regional center case, and “In Izummi, when determining what constituted a ‘new commercial enterprise’, we reviewed the date of creation of the entity in which a petitioner had invested or intended to invest, not the job creating entity where the funds were ultimately to be deployed.”

A petitioner can’t get credit for any jobs created by the project if the project didn’t create enough jobs for all EB-5 investors in the project (unless there is an agreement among all investors about how jobs will be allocated). In the MAR252016 case, AAO wouldn’t consider whether any of the 61 new jobs finally claimed could be credited to the petitioner, since there were 11 other EB-5 investors in the project and no job allocation agreement on file. This is not new policy, but an important reminder. Make and file a job allocation agreement, just in case!

An EB-5 investment does not meet the “at risk” requirement if the business plan does not “present a comprehensive analysis of the potential net profit available for distribution to each of the limited partners” and therefore fails to “sufficiently establish that there is a reasonable chance for gain, especially in the foreseeable future.” This is not technically a new point (the full “at risk” requirement is “at risk for the purpose of generating a return on the capital placed at risk”), but I haven’t seen AAO/USCIS focus on insufficient profit analysis as a basis for denial.

I’ll let you read the MAR252016 decisions for yourself to get the rest of the story. The case also involves the hot issues of troubled business qualification and the separation of ownership, management, and employment among multiple entities, and AAO doesn’t raise all the questions or reach all the conclusions I would’ve expected. What AAO doesn’t say in this case may be as significant as the points that are made. To assist in following the case, I’ve done my best to illustrate the fact pattern (reading around redactions, so mistakes are possible).
UPDATE: You can read more about this case in a civil suit filed by the petitioners. (Update: the petitioners won the suit.)

AAO Decisions: Search Function
The Administrative Appeals Office has launched a search tool for most non-precedent decisions since 2005. Just enter a search term in the box under “AAO Non-Precedent Decision Repository” and poof – links to all AAO decisions where that term is mentioned, with sorting options. I love it. (And now regret that weekend spent downloading EB-5 decisions one by one to make my own searchable master file.)

Regional Center List Changes
Additions to the USCIS Regional Center List, 03/21/2016 to 04/05/2016

Ark of the Ozarks LLC (Arkansas): www.arkoftheozarks.com

Education Fund SE Regional Center (Florida, Georgia, North Carolina, South Carolina): edufundamerica.com

Emerald Pond Regional Center (California):www.emeraldpondllc.com

Encore Washington/Oregon Regional Center, LLC (Oregon, Washington): encoreeb5.com

Golden State Southern California Agriculture Development LLC (California)

MCFI Pennsylvania LLC (Pennsylvania): www.mcfirc.com

Rio Grande Regional Investment Center, LLC (New Mexico): www.riogranderic.com

U.S. Virgin Islands Regional Center LLC (U.S. Virgin Islands (USVI))

WW Cornerstone Regional Center, LLC (California):www.ww-crc.com

Terminations

Path America KingCo, LLC (Washington), Terminated 3/23/2016

MCIG Regional Center (Florida) Terminated 3/29/2016

Velocity Regional Center (California), Terminated 3/24/2016

Filed under EB-5 Events, EB-5 Law & Policy, New RC

2/3 USCIS EB-5 Stakeholder Engagement

February 3, 2016 Leave a comment

2/12 UPDATE: You can now visit the USCIS’s 2/3 engagement page and download copies of the opening statements by Nicholas Colucci, Julia Harrison, and Lori MacKenzie, which were the most informative part of this engagement. Ron Klasko and Jessica DeNisi have a good summary on the IIUSA blog of significant content.

I’ve uploaded my recording of today’s EB-5 Immigrant Investor Program Stakeholder Engagement with USCIS, though I do not particularly recommend it. If you want an interesting and information-rich update, look at IPO Chief Colucci’s written testimony for yesterday’s judiciary committee hearing. We appreciate having stakeholder engagements with open Q&A, and practitioners will benefit from reviewing the updates and the answers that were given and withheld, but overall I didn’t learn much from the meeting. The next EB-5 engagement will be held on April 25 in Washington DC, with opportunity for in-person attendance.

Filed under EB-5 Events

8/13 Meeting Recording, GAO Report

August 13, 2015 Leave a comment

In case you missed today’s EB-5 stakeholder meeting, here is a link to my recording. The recording sound quality is not my fault; that’s how it sounded on the phone too. (Also, Peng & Weber have typed up a transcript of part of the meeting.) UPDATE: USCIS has posted opening statements.

Here is a link to the Government Accountability Office’s newly-released report “Immigrant Investor Program: Additional Actions Needed to Better Assess Fraud Risks and Report Economic Benefits” (August 2015).

Both the meeting and the report give an interesting look into details of actions already taken to protect and improve EB-5 program integrity. Congress may be busy vacationing and not passing bills, but agencies are still making change happen. The meeting did not reveal much about the draft policy memo, except to show that USCIS is as much at sea as everyone else when it comes to the practicalities of applying an investment requirement that’s divorced from job creation, and thus divorced from the governing logic of the EB-5 program and existing guidance for the parameters of acceptable EB-5 investment. Apparently USCIS plans to add more detail and clarification to the final memo, but hasn’t yet figured out how to clarify the sustainment issue. Stakeholders were repeatedly invited to submit their suggestions. The GAO report is worth reading, being well researched and much more serious and thoughtful than the narrowly political and personal-grievance-fueled March 2015 OIG report.

Filed under EB-5 Events

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7/28 Meeting Notes (RC site visits & audits, I-829 interviews, redeployment), New AAO Decisions (RC geography, indebtedness)

4/25 meeting notes, RC list changes

4/13 Senate Hearing Notes, RC Research, SEC Case (VT), RC List Changes

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