Processing, TEAs, Virtual Meetings

Processing Developments

USCIS has not yet updated the Check Case Processing Times page to a new format or with any new content to reflect the Visa Availability Approach that’s now being implemented for I-526. The page update may not happen until June, considering that the report is nominally based on the situation two months earlier. Or the update may never happen, considering the long-term disconnect between this page and reality. However, I see positive signs that IPO is picking up the pace of adjudications, at least with I-526. The USCIS historical processing times page indicates a significant drop to the average I-526 processing time for October 1, 2019 to January 31, 2020, despite what the check case processing times page said (with the historical average reported at 12.6 months,  vs. 19.8 months average for FY2019). And I’ve personally noticed a significant uptick in volume of decision reports since the COVID-19 situation started.  I guess that the lockdown has two benefits for EB-5 adjudications: (1) that IPO adjudicators now have nothing to do but work on IPO adjudications, where before their time was also occupied with non-adjudicative work like meetings and interagency coordination and site visits and agency priorities outside IPO, and (2) that current conditions make it no longer such a fun game to strain for reasons to delay and deny petitions that represent economic development and job creation.

TEA Resources and COVID-19 Unemployment

As U.S. unemployment skyrockets, what will this mean for the EB-5 program, which exists to promote economic development and job creation, and particularly to incentivize investment in areas of high unemployment?  Under current policy and practice, EB-5 is not positioned to react in a timely manner. We see unemployment rising in real time, but will not have the data to prove it for TEA analysis until 2021.  Next year, TEA analysis will be based on annual averages for 2020, which may or may not be astronomical depending on how long the current crisis lasts, and whether or not job loss will become permanent based on employers going out of business. Incentive programs are currently trying hard to prevent such an eventuality.  If by chance the entire country ended up with absolute high unemployment, the EB-5 TEA incentive would not help because it defines “high” in relative terms: local as 150%+ of the national. So future changes to the TEA map will depend on relative economic impacts on different areas. It will be interesting if New York City, which the “TEA reform” drafters tried so hard to eliminate from the TEA incentive, ends up in play again after all thanks to disproportionate COVID-19 impact. Alternatively, Congress could make statutory changes to EB-5 with the goal to make it more flexible and able to react and be a genuine tool to help in our current economic crisis. For that to happen, people lobbying for EB-5 reform should get realistic, proposing changes that can possibly be enacted because they’re designed to look reasonable and public spirited and reflect well on the enacters, not greedy and blind to repercussions from the next day’s headlines.

Resources:

Virtual EB-5 Meetings and Resources

EB-5 Investors Magazine is holding a Virtual EB-5 Expo this week April 16-17. This includes virtual exhibiting and real-time networking opportunities besides educational panels. Significant discounts are now available.

IIUSA has been holding webinars with expert panels in lieu of the usual Spring conference.  There are two live panels coming soon:

Recordings are available for previous IIUSA courses and panels:

EB5 Talk Podcasts remain a helpful resource

Industry-specific resources for COVID-19

This post begins to collect practical resources for project companies and investors who are concerned about specific COVID-19 business impacts, stimulus effect, and economic outlook in sectors that particularly use EB-5 investment.

Commercial and Multifamily Real Estate

Hotel Industry

If you want to better understand the risks facing and help available to a particular EB-5 project, I suggest not only looking at industry-specific analysis such as the above, but also consulting resources from the state, county, and municipality where the project is located. Here in Utah, for example, state and local government and private organizations have been very aggressive and proactive in addressing the COVID-19 economic challenge, supplementing resources available at the federal level. The near-term and long-term outlook for a business will vary depending on its location as well as industry, so location and industry resources are helpful. EB-5 investment is less material to the outlook, so immigration consultants are less helpful here.

EB-5 updates and resources under COVID-19

[Update: for newer information, see instead my 5/28 post EB-5 Impact of COVID-19 (processing, eligibility, visa numbers)]

As the war against COVID-19 heats up around the world, EB-5 work continues, but with some changes. A few notes on developments over the past two weeks:

USCIS continues to operate despite COVID-19, with modifications

USCIS offices have been closed to the public since March 18, but USCIS staff are continuing to perform duties that do not involve face-to-face contact with the public. (Except where otherwise noted, the information in this section is from uscis.gov/coronavirus, which gets updated regularly.)

That means IPO (which needless to say lacks public contact) is continuing to adjudicate I-526, I-829, and I-924, and to terminate regional centers. In fact, the latest processing times report (updated March 20) recorded a decrease to I-526 processing times. I’ve heard multiple personal reports of EB-5 decisions received. The USCIS list of regional centers got a significant update this week, recording three new approvals and 24 terminations. Service centers also continue to process I-485 status adjustments.

EB-5 investors at the visa stage will be affected by the fact that all biometrics appointments have been temporarily suspended since March 18 until at least April 7 May 3 June 4, with all appointments to be automatically rescheduled once USCIS again resumes normal operations.

On March 20, USCIS announced flexibility in submitting required signatures. “For forms that require an original “wet” signature, per form instructions, USCIS will accept electronically reproduced original signatures for the duration of the National Emergency.”

On March 27, USCIS announced flexibility for responses to Requests for Evidence and Notices of Intent to Deny. “For applicants and petitioners who  receive an RFE or NOID dated between March 1 and May 1, 2020, any responses submitted within 60 calendar days after the response date set forth in the RFE or NOID will be considered by USCIS before any action is taken.”

On March 30, USCIS expanded this flexibilty: “A response received within 60 calendar days after the response due date set forth in a Request for Evidence, Notice of Intent to Deny, Notice of Intent to Revoke, or Notice of Intent to Terminate will be considered before taking any action if such request or notice is issued and dated by USCIS between March 1 and May 1, 2020, inclusive.”(uscis.gov/coronavirus)

Other IPO Activities

The EB-5 Resources page on the USCIS website was updated on March 23 with Sarah Kendal’s prepared remarks from the 3/13 Public Engagement, as well as with Q&A on the Visa Availability Approach. The Q&A gives a detailed, clear, and helpful overview of the new visa availability approach to I-526 processing that will officially launch next week.

EB-5 visa applications and COVID-19

EB-5 visas are temporarily not being issued through consular processing. On March 20, 2020, DOS announced suspension of routine visa services. “In response to significant worldwide challenges related to the COVID-19 pandemic, the Department of State is temporarily suspending routine visa services at all U.S. Embassies and Consulates. Embassies and consulates will cancel all routine immigrant and nonimmigrant visa appointments as of March 20, 2020. As resources allow, embassies and consulates will continue to provide emergency and mission critical visa services. Our overseas missions will resume routine visa services as soon as possible but are unable to provide a specific date at this time.”

With applicants overseas temporarily unable to claim available visas, this may mean more visas available to applicants in the U.S., since I-485 status adjustments are still being processed (as of now). Depending on how long it takes overseas visa services to get back on track, Department of State faces a challenge to allocate all available visas for the fiscal year.  So long as consulate closures prevent people overseas from claiming visas, that could cause the Visa Bulletin final action dates to advance rapidly to accommodate those few who are placed to receive visas. At the beginning of the year, Department of State had anticipated issuing a total of 11,112 EB-5 visas, including 778 each to Vietnam and India, with an estimated 5,270 leftover for the oldest priority dates (i.e. China).  In the first five months of FY2020 (October to February), consulates had issued 237 EB-5 visas in India, 345 EB-5 visas in Vietnam, and just 1,088 EB-5 visas in China. (Data from adding up monthly tallies of EB-5 visas issued by consulate. Unfortunately USCIS does not publish data on EB-5-related I-485 approved and pending.)

Politico Rumor

Last week someone launched an EB-5 virus – an implausible story that Senator Lindsey Graham was pushing to increase EB-5 visas to 75,000 and decrease the minimum investment amount to $450,000 as part of the emergency stimulus bill. Politico published the story, Senator Graham himself responded publicly that the story was false (listen starting at minute 2:50 in this 3/19 Fox News interview), and yet the story continues to spread and mutate, inspiring a storm of media criticism of the EB-5 program and EB-5 investors. As IIUSA says “Although the EB-5 industry would like to see program reforms, it would never support these extreme and unfounded shifts. It did not do so last week, and it will not do so in the future.” I wonder which interest group planted the rumor, with what intent. Possibly it came from an anti-immigrant faction that’s now chuckling with glee at the backlash? Or a misguided industry insider hoping to stoke the market with false hopes? Certainly, this story has damaged EB-5 just when it’s in a position to be a helpful tool in our current economic state.

EB-5 risks and opportunities under COVID-19 conditions

Martin Lawler’s article COVID-19 Impact on EB-5 Hotel Projects (April 6, 2020) discusses issues related to maintaining EB-5 eligibility in an industry particularly threatened by COVID-19

Green Card by Investment continues to come out with EB-5 Talk podcasts on timely topics, most recently “Restructuring your NCE operating documents for redeployment” with Mark Katzoff (March 23), and “Investor options with troubled projects” with Robert Divine (March 17).

Matthew Galati has a helpful article on Filing I-829s During a Coronavirus Economic Downturn (March 26, 2020)

A reminder of my July 2019 article on Priority date retention and redeployment, which includes a flow chart to clearly illustrate the different project change and redeployment options at various points in the EB-5 process.

IIUSA has started to roll out a new Investor Market Webinar Series.

If no one else does, I will write in April about high-unemployment Targeted Employment Areas, and options for TEA analysis in response to our abruptly increasing unemployment.

EB-5 processing times and visa wait times remain a constantly moving target, but I’m still grappling with the timing estimate problem as well.

Meanwhile, my business plan service remains available to the brave few seeking to launch new ventures, and to the many who may need to describe how updated circumstances still support EB-5 investor eligibility.

Report from 3/13 USCIS Engagement on Visa Availability Approach

The March 13 EB-5 Immigrant Investor Program: Public Engagement provided a few program updates, and discussed the new visa availability approach to I-526 processing. IPO Chief Sarah Kendall mainly spoke, with additional input from DOS Visa Control Office Chief Charles Oppenheim.

As usual I am sharing my recording, so that anyone can review the meeting for themselves. (3/23 Update: Sarah Kendall’s prepared remarks and a Q&A on the Visa Availability Approach have now been posted in the EB-5 Resource Room on the USCIS website.)

Prior the meeting, my many questions boiled down to two: the priority question and the volume question.  How will IPO apply the visa availability approach to decide which I-526 to process when? How many I-526 does IPO have on hand and intend to process, going forward? I was indeed pleasantly surprised by detailed and helpful answers to the priority question. Thank you Sarah Kendall! Particularly, thank you for taking live audience questions, which proved very important. But no thanks for deflecting the volume question.

Key information from the engagement:

What is the visa availability approach? (VAA)

  • Consistent with the initial USCIS announcement, Kendall describes the VAA as an inventory management approach that will prioritize adjudications for I-526 petitions where visas are immediately available or soon to be available.

Who is affected by the visa availability approach?

  • Kendall said that the VAA will apply to all I-526 petitions not assigned as of March 31, 2020, including pending petitions currently in the pipeline, and including petitions to be filed after March 31, 2020. USCIS will continue to work on I-526 assigned for adjudication before March 31.
  • My comment: That is, the VAA will not limit decisions on cases that were already issued a Request for Evidence or Notice of Intent to Deny. The VAA does apply to all unassigned pending I-526, no matter when they were or will be filed.

Who will be held back by the visa availability approach?

  • Kendall said that in deciding which I-526 NOT to assign for adjudication, IPO will consult the monthly Visa Bulletin Chart B Dates for Filing. If a petition’s filing date is not within the dates that can file a visa application or I-485 according to that month’s Visa Bulletin Chart B, then the petition will not be assigned for I-526 adjudication that month.
  • My comments:
    • In practice, this means that for now, only pending I-526 from China will be limited by the VAA. (The April 2020 Visa Bulletin Chart B has a December 15, 2015 cut-off date for China, but current for all other countries.) It’s good news that IPO will at least look at Chart B, not Chart A, to determine visa availability for I-526 purposes.
    • The VAA will create a chicken-and-egg situation between Department of State and USCIS. The visa bulletin moves in response to demand for visas, demand for visas is created by I-526 approvals, and now I-526 adjudications will move in response to the visa bulletin.
    • Vietnam and India will benefit from the VAA in the near term, since they are current in Visa Bulletin Chart B. They will eventually be held back by VAA, since the number of pending I-526 from Vietnam and India exceed the annual visa limit. When they will be affected depends on the rate of I-526 approvals for Vietnam and India. If many Indian and Vietnamese I-526 shortly get assigned for adjudication and soon approved by USCIS, then many visa applications will soon result, creating excess demand that triggers DOS to put cut-off dates in the visa bulletin Chart B, triggering USCIS to stop assigning I-526 for adjudication.  Alternatively, if USCIS continues to approve just a few I-526 for Indians and Vietnamese, then the visa bulletin will stay open due to low visa demand, and the trickle of India and Vietnam I-526 adjudications can continue unchecked by the VAA.  (DOS apparently anticipates the second scenario, according to Oppenheim’s comments on the call.) Either way, whether the flow of I-526 adjudications is limited by the visa bulletin or by IPO’s natural slowness, the VAA would allow USCIS to, in theory, only adjudicate as many I-526 for India and Vietnam per year as needed to produce a years-worth of visa applicants. That would mean about 350 annual I-526 adjudications for India and 250 adjudications for Vietnam (considering Oppenheim’s most recent ratio of pending I-526 to visa applicants). If USCIS used the VAA as an excuse to keep to such minimum volume, within the visa caps, then long I-526 waits for India and Vietnam would result (considering that there were about 2,500 India I-526 pending and 770 Vietnamese I-526 pending as of 10/1/2019).
    • However, Sarah Kendall did not specifically say that I-526 adjudications would be limited to visa availability. The VAA just allows such limitation, as needed to prioritize as many petitions as have a visa available. And this competitive rest-of-the-world demand has historically been low, and likely to remain so considering the EB-5 price increase. China, Vietnam, and India will only have I-526 adjudications limited to visa availability to the extent that IPO can maximize its I-526 capacity with other-country adjudications.
    • The VAA guides which petitions will NOT be assigned for adjudication; it does not promise which petitions WILL be assigned for adjudication. As of 10/1/2019 (most recent available data), there were 7,472 pending I-526 from countries other than China. Those 7,472 petitions won’t all be immediately assigned for adjudication, even though they’re prioritized based on having visas available for them, unless IPO improves its volume from the FY2019 average of 390 I-526  adjudications per month.

Will IPO make any exceptions to the visa availability approach?

  • Kendall stated that:
    • Petitions with approved expedite requests will continue to be promptly assigned for adjudication, regardless of the petitioner’s country of origin.
    • If the Petitioner is from a country that would be held back by the VAA, but could have a visa available due to the spouse’s nationality, then the petitioner should email IPO to explain the situation, and IPO may assign the case based on the spouse’s nationality. Listen starting at minute 25:45 of the recording for detail.
    • Aside from the above two circumstances, IPO does not contemplate offering opportunity for petitioners to opt out, opt in, or request to be treated as an exception to the VAA policy.
    • USCIS currently plans to continue the VAA approach indefinitely.

Will the visa availability approach affect visa distribution, and number of visas available?

  • The VAA does not change the rules for visa availability. The EB-5 quota and per-country cap remain the same. The variable component in visa availability is the number of “leftover” visas available to the oldest priority dates (in the EB-5 case, to Chinese) after demand under the country caps has been satisfied. The VAA is explicitly designed to reduce the number of leftovers (being intended to help rest-of-world applicants to maximize their available visas), but Oppenheim opined that the number of leftover visas would remain unchanged for about the next 12 to 18 months.
  • My comment: When Oppenheim estimates that the number of visas available to any one country will not change for the next 12 to 18 months, he must be assuming that USCIS will not, near-term, approve more rest-of-the-world I-526 than it would have otherwise, without the VAA approach. Visas available to China are a function of rest-of-the-world visa demand, and rest-of-the-world visa demand is a function of number of I-526 approvals. Apparently, Oppenheim expects IPO to actually reduce I-526 completion rates under the VAA (since if completion rates stayed the same, fewer China I-526 completions would be counterbalanced by more rest-of-the-world completions, resulting in fewer visas available to China). I wonder if Oppenheim’s assumption is based on anything Sarah Kendall told him?

Will the visa availability approach improve I-526 completion rates and processing times?

  • Processing times are a function of backlog, processing priority, and processing volume. The VAA changes priority in a way that will benefit petitioners from low volume countries. The size of that benefit depends on what happens concurrently with processing volume (completion rates).
  • Sarah Kendall declined to answer questions about the size of the I-526 backlog, and the number of petitions that could benefit. “As a general matter, we refrain from discussing any kind of numbers with the public outside of our OPQ posting process.”
  • Kendall repeated the same reasons for low I-526 completion rates that she gave in 2019 (recorded in my previous post). Most are related to extreme vetting efforts to seek out signs of fraud and abuse. Kendall stated that “USCIS leadership views these initiatives as absolutely vital to the success of the EB-5 program. We acknowledge that case completion rates have decreased partly because of these activities, and we understand the concerns that raises for our stakeholders. With a lot of the infrastructure development now behind us, IPO is better situated to improve productivity. In fact, preliminary data for February shows a step in the right direction. The USCIS Office of Performance and Quality anticipates publishing new data in the coming month.”
    • I take this to be saying that IPO expects to adjudicate a few more I-526 in 2020 than in 2019, but not many more. IPO’s per-quarter productivity would have to be seven times higher than it was in FY2019 Q4 just to regain 2018 productivity levels. “A step in the right direction” from recent performance is good news, and Kendall mentioned later in the call that she expects such incremental improvement to continue – also good news. But this does not sound like a promise of exponential improvement to counterbalance last year’s exponential productivity loss. Kendall emphasized that the lengthy new review procedures requiring time-consuming multi-agency coordination are “absolutely vital” to program integrity, suggesting that she does not intend to change those factors in long processing times. There will be some improvement this year from the mere fact that the procedures are at least set up, while last year included time lost due to setup/training.
  • In response to my question about number of adjudicators assigned to I-526, Kendall reported that IPO had about 240 dedicated personnel as of the beginning of the fiscal year – a record high number. “This number includes support staff, adjudicators, economists, fraud detection and national security personnel, and other positions vital to the IPO mission. The number of personnel and adjudicators assigned to each EB-5 form type varies according to workload demand and agency priorities.”
    • My comment: I note that Kendall pointedly did not answer the question about I-526 resources. The VAA reduces workload demand for I-526 by reducing the number of petitions that require prompt adjudication, which may be a sign for I-526 resource allocation. I wonder how much of the fees petitioners pay for adjudication actually funds adjudicative staff, and how much goes to staff devoted to seeking fraud.
  • Kendall gave an ambiguous answer to a question about whether or not we can expect to see a reduction in rest-of-the-world I-526 processing times as a result of the VAA. (minute 54 in the recording)

Will IPO provide transparency about its processing under the visa availability approach?

  • Kendall said that the Office of Performance and Quality would revise the I-526 processing times report to reflect the VAA change, but she also said that there’s no plan for the report to show country-specific processing times – the only possible way to reflect the VAA change for EB-5. So it’s hard to visualize how helpful the report could be. As noted above, she also declined to provide any I-526 data (and the IPO Customer Service email continues to refuse or ignore my requests for per-country I-526 data).
  • Note to IPO: you could be commended for a change that moves the EB-5 constraint to the beginning of the process, rather than leaving people to pile-up midway at the visa stage. But only if you are transparent. When you keep I-526 processing a black box, you leave people to file I-526 in ignorance, unable to assess the nature of the backlog, and inventory pileups will still occur. To avoid this, you must give the public timely data about the country composition of the I-526 backlog, and  country-specific information in the processing times report. If you make I-526 processing transparent in this way, you will actually move the constraint to the start of the process, thus improving the whole process. With transparency, demand will self-regulate as people can make informed decisions about filing I-526.  Otherwise, you have made no improvement and the process will remain broken.
  • If petitioners whose cases are not ripe for adjudication under the VAA try to make a case inquiry, they will be sent a stock response that refers them to the visa bulletin.

Other Updates regarding India, China, and regional centers:

  • Regarding the Visa Bulletin Final Action Date for India, Charles Oppenheim said “at this time, I believe that India will become current some time in the summer, and once it becomes current it would stay for the foreseeable future, pending receipt of larger volumes of approved petitions at our National Visa Center.” (Minute 33 and 44 of the recording) (My comment: apparently, Oppenheim expects USCIS to continue low productivity, with the visa bulletin to open for India due to few Indians making it past the I-526 stage and to the visa stage. See my comments above on the connection between I-526 adjudication volume and visa bulletin movement.)
  • A caller asked Charles Oppenheim about the impact of the current shutdown of consular processing in China due to COVID-19, and whether that could result in EB-5 visas that would have been given to China going to Vietnam instead. Oppenheim said: “This is a very unique situation where there is not a lack of applicants which is preventing the numbers from being used, but the situation where at this time the consulate is closed. So this will continue to be monitored throughout the year, and we’ll just have to do the best we can. But again, if it does appear that all the numbers would not be used, then we would go to the next country in line, which would be Vietnam, which is oversubscribed.” (minute 43-44 of the recording) No one asked about other potential visa impacts of COVID-19 (i.e. closures of other consulates besides China, or possible interruptions to service center operations in the U.S.)
  • USCIS has sent out 100 Notices of Intent to Terminate so far in 2020 to regional centers that did not file I-924A in FY2019.
  • Sarah Kendall announced the regulations FAQ that I flagged last week: Questions and Answers: EB-5 Immigrant Investor Program Modernization Rule.

I worked hard on this post, trying to record and explain answers, as available, to many of the questions that I anticipate regarding the visa availability approach. Regarding personalized EB-5 timing estimates, it’s difficult. The timing complications are so many at this point, and limited data makes any estimate time-consuming and not definitive. The best I can offer now, as time permits, is personalized conversations about timing, with some data support. I will soon be announcing a schedule to allow reserving appointments, for those who would like to discuss individually.

And as always, my PayPal link is open. If my work is helpful and time-saving for you, consider making a contribution to support the work. Thank you!

I-526 processing context, 2017-2019

On Friday 3/13, USCIS will hold a meeting (now by teleconference only) that promises to “address program updates, including the agency’s change from a first-in, first-out case-processing approach to a visa availability approach for Form I-526.”

I look forward to being pleasantly astonished when USCIS provides substantive, detailed information at the meeting, and answers questions. (By the way, USCIS recently posted an unannounced new page with Questions and Answers: EB-5 Immigrant Investor Program Modernization Rule. Note that this page includes some guidance not previously provided regarding targeted employment area analysis.)

In the meantime, as we face the visa availability approach to take effect as of April 1, 2020, another post with context for the I-526 processing adjustment.

EB5 Diligence/EB5 Marketplace has posted a helpful podcast: Analysis of Visa Availability Processing and March 13 USCIS Stakeholder Meeting. The discussion features a wide range of industry perspectives on what the visa availability approach means, and its potential benefits and downsides in practice.

As additional background, I’ve created a compendium of things that USCIS has disclosed about EB-5 processing leading up to the change.

First, a picture of the data for EB-5 form processing in recent years.

And a log of recent statements made by USCIS/DHS to explain what’s happened to date with I-526 processing.

  • Factors related to long processing times and low volume of I-526 adjudications in 2019:
    • “Complying with court orders related to the EB-5 program” (5/13/2019, USCIS letter)
    • “Temporary assignment of IPO staff to other agency priorities” (9/9/2019, Kendall)
    • Adjudication time lost due to I-526 training in May 2019 (10/29/2019, Kendall)
    • Disruption to processes due to regional center program sunset (12/22/2018-1/25/2019) (10/29/2019, Kendall)
    • “IPO has made structural changes to ensure continued program integrity” (10/29/2019, Kendall)
    • “More robust quality assurance and control programs” (10/29/2019, Kendall)
    • “A growing number of cases where we have worked with our law enforcement and other partners, including the SEC, related to civil and criminal investigations” (10/29/2019, Kendall)
    • “We also work with USCIS and Department of State officials abroad to perform overseas verification checks on various questions that arise in our petition pool, such as for source of funds and other key elements of the program” (10/29/2019, Kendall)
    • “In the next year [2019] we anticipate putting additional resources to the I-829 so that we can address the needs of the particular line of adjudication.” (10/5/2018, Kendall)
    • The average touch time per I-526 had increased to 8.65 hours by 2019 (+33% since 2016) (2019 fee rule as compared with 2016 fee rule)
  • Factors in the higher volume of adjudications in 2018:
    • At the end of 2017, IPO launched multidisciplinary teams of cross-trained economists and adjudicators to focus on I-526 adjudications (11/7/2017, Harrison)
    • In 2018, IPO focused on standardizing and better managing assignment of EB-5 cases (5/11/2018 USCIS response)
    • “I believe that this [increase in our productivity in 2018] represents that it was a good decision for the leadership here to invest additional resources in the program. We are fully staffed now. And with the normal continuing rotation of having to hire to replace people that are moving on, right? But we are fully staffed and we anticipate that we will continue to be as productive and we’re aiming to be more productive. I say that within the limits of the parameters for integrity that the Director has laid out and that you all have embraced in your discussion with us. So the productivity on the 526s was very good this year. But we’re not sitting on our laurels. We recognize that this is a business community. There are business There are people, the individuals behind every application. And that the credibility of that application’s likelihood of being adjudicated in a timely way is important. So we hear you. And the agency has made long-term investments to make sure that we can reasonably manage the work load that comes in.” (10/5/2018, Kendall)

Other context factors:

  • The IPO staffing level has increased from 110 as of February 2016 to 185 as of July 2017 to 212 as of September 2019.
  • Government Executive reported in February 2020 that “The Trump administration has issued a hiring freeze for non-asylum officers at U.S. Citizenship and Immigration Services.”
  • The latest fee rule, which sets filing fees to fund resources for adjudications, did not propose significant increases to EB-5 form fees. (2019 fee rule)
  • IPO mentioned the idea of a visa availability approach in 2017, and asked for stakeholder input. (11/7/2017, Harrison) The data from Department of State and USCIS does not show that IPO started to implement a visa availability approach before this year, though obviously adjudications have not been simply FIFO.
  • The theory of FIFO processing for immigration forms goes back to the Operations Instructions of legacy-INS at OI 103.2(q), which provided: “(q) Chronological processing of applications and petitions. To deal fairly and equitably with applicants and petitioners, it is Service policy that cases be processed in chronological order by date of receipt.” The Check Case Processing Times page for I-526 still says “We generally process cases in the order we receive them.” And the Adjudicator’s Field Manual instructs careful receipting for petitions because “The receipt date is important to ensure fair, chronological processing.”
  • Since 2015, I have kept a log of public comments by USCIS about I-526 processing factors in this Word file and a log of monthly processing times reports for I-526, I-829, and I-924 in this Excel file.

Complete I-526 and I-829 data for FY2019 Q1, by country

Buried deep in the Electronic Reading Room, where USCIS probably hoped no one would ever find them, are two Freedom of Information Act files that individually record every I-526 and I-829 receipt and adjudication from October to December 2018 (FY2019 Q1).

Being diligent, I discovered the files, and immediately converted them to Excel and got to work with pivot tables. This data allows fact-based answers, at least for one quarter, to questions generally subject to rumor and speculation.

  • How do USCIS processing times reports relate to actual processing times?
  • Have petition processing times differed by country?
  • Do approval rates differ by country?
  • From which countries are I-526 receipts coming?

Before considering answers to these questions from FY2019 Q1 data, consider FY2019 Q1 in context.

IPO apparently made dramatic processing changes between 2018 and 2019, and FY2019 Q1 has one foot on either side of that change.  So what happened in FY2019 Q1 isn’t necessarily representative of what came before or after. But for what it’s worth, here’s analysis of exactly what happened in that one quarter.

  • Processing Times Questions
    • Back in December 2018, the USCIS processing times report gave an “Estimated Time Range” of 20.5-26 months for I-526, and 30-39 months for I-829.  USCIS claims that in this range, “The first number is the time it takes to complete 50% of cases (the median). The second number is the time it takes to complete 93% of cases.” Presumably, these percentages get calculated from data for the previous month or two.
    • In reality, according to FY2019 Q1 data reports, 64% of I-526 adjudicated in October-November 2018 had been pending less than 20.5 months. 79% of I-829 adjudicated in October-November 2018 had been pending less than 27.5 months. Meanwhile, 16% of I-526 and 14% of I-829 adjudicated had been pending longer than the outer limit of the reported estimated time range.
    • In FY2019 Q1, the actual processing times for adjudicated I-526 and I-829 were quite a bit lower on average than the processing times report would suggest, and also had more deviation from average. The link between the contemporary processing times report and actual performance is not clear. Generally, the reality was somewhat better than the report.
    • The average I-526 approved in FY2019 Q1 had been pending 17.5 months, while the average approved I-829 had been pending 26 months.
  • Country Questions
    • Data on I-526 adjudications for FY2019 Q1 shows differences by country, but not enough to suggest that USCIS was already using a visa availability approach last year.
    • The average processing time for Chinese I-526 approved in FY2019 Q1 was just two months longer than the average for other countries.
    • The average processing time for India I-526 approved in FY2019 Q1 was almost five months shorter than the worldwide average, likely due the influence of expedite requests. Indians accounted for 30 of the 36 I-526 processed in FY2019 Q1 within six months of filing.
    • Indians accounted for a majority (31%) of the I-526 filed in FY2019 Q1, followed by China (15%), Vietnam (11%), and South Korea (6%). Indians filed enough I-526 just in Q1 to use up over a year and half of the EB-5 visa quota for India.
    • Chinese, as might be expected considering past demand trends, accounted for the majority of I-829 filed (81%) and adjudicated (81%) in FY2019 Q1.
    • The I-526 approval rate in FY2019 Q1 was over 90% for most countries, but just 81% for China. I suspect this is due to USCIS’s surreptitious policy change regarding currency swaps, which particularly affects China.
  • Other Notes:
    • The records show that USCIS codes at least two kinds of I-526 denial: Denied Fraud, and Denied Others. In FY2019 Q1, only one petition was denied due to fraud.
    • USCIS may not have its best and brightest on data entry and record-keeping. The “country” column for I-526 receipts, for example, includes 20 petitions coded as coming from Falkland Islands (presumably standing for Great Britain, where DOS categorizes Falkland Islands), 13 from “Unknown,” 8 from USSR, and 1 from United States. Also the totals for the quarter do not exactly match the official report of I-526 and I-829 data for FY2019 Q1.  (For example, 1,808 I-526 receipts in the official quarterly report; 1,743 I-526 receipts recorded in this detailed report.) However, please do not be shy USCIS: publishing slightly inaccurate records is a thousand times better than hiding data, leaving the industry to rumor and speculation.
    • It’s always been clear that EB-5 processing is not simply First-In-First-Out. The USCIS Estimated Time Range for processing would obviously not be so broad under a FIFO system, and the range in actual processing times is even broader. But what explains why some petitions have been processed years earlier or later than others? One factor that’s obvious in the data — denial decisions go “out” much later than approvals.
    • To repeat: petition processing has not been strictly FIFO.  This is clear, looking at the dates of petitions that received decisions in this one quarter. The PDF files linked above record individual decisions. If the FY2019 Q1 record shows that one I-526 with X filing date got approved or denied, does that mean that every I-526 with X filing date has been adjudicated? No.

And now some charts based on the FY2019 Q1 data.

I’m compiling materials for a new data room, and hope to launch a new processing time estimate service later this month following the EB-5 stakeholder meeting with USCIS.

And a few legislative notes. Senator Mike Lee continues to work on the S.386 Fairness for Highskilled Immigrants Act to eliminate country caps and reorganize the order of EB visas. Could the bill that’s been on the table since 2011 actually move in 2020? I doubt, but Lee is pushing hard.  The competitor RELIEF Act has just a few sponsors so far.

Meanwhile, bright-eyed representatives Cardenas (D-CA) and Stivers (R-OH) have introduced H.R. 5971 Case Backlog and Transparency Act of 2020. This bill refers back to P.L. 106-313, which was passed in the year 2000 with this beautiful sentence in section 202: “It is the sense of Congress that the processing of an immigration benefit application should be completed not later than 180 days after the initial filing of the application.” (p. 12) H.R. 5971 proposes to revive that deadline, and require DHS to report in detail on backlog reduction efforts. Lovely! If only the current Congress could agree that immigration benefit applications should be processed efficiently.

And as always, my PayPal link is open. If my work to find and analyze data is helpful and time-saving for you, consider making a contribution to support the work. And thanks to my past contributors!

FY2019 EB-5 Visa Stats by Country

The Report of the Visa Office 2019 has been published, with EB-5 visa statistics in Table VI Part IV (visas issued through consular processing) and Table V Part 3 (consular processing plus I-485 status adjustment).  The statistics reflect number of green cards issued for conditional permanent residence by country of origin.

In a sense this is old news – not only because Charles Oppenheim summarized this data at the IIUSA conference last October, but also because EB-5 visas issued in FY2019 reflect EB-5 investment decisions made at least two years ago (for most countries, considering I-526 processing times) or five years ago (for China, considering the visa bulletin). To understand current EB-5 demand, we need per-country I-526 data from the beginning of the process. But USCIS resists disclosing such I-526 data, so we make do with visa statistics that reflect usage midway through the EB-5 process.

A few questions that occur to me, as I look at visa statistics:

  • How close did Department of State get to its goal of issuing the total visas available for the year under numerical limits?
  • How are EB-5 applicants divided between people living abroad and people already in the US? What populations in the United States are using EB-5 to adjust status?
  • Beyond the few top countries, how is the EB-5 market diversifying or concentrating?
  • How many EB-5 visas are actually going to investors, and how many to spouses and children?
  • Which data points deserve a film contract?

The EB-5 numerical limit is not a fixed number, but 7.1% of a total number of EB visas that varies each year, further divided by the 7% per-country cap. The EB numerical limit for FY19 was 141,918 visas, which put the EB-5 share for FY19 at 10,076 visas, and the individual country share at 705 visas. In practice, it’s not possible to hit the targets exactly. In FY2019, DOS unluckily undershot the worldwide target (issuing only 9,478 total EB-5 visas) but slightly overshot the per-country target for India and Vietnam (which each ended up with more than 705 visas).  The worldwide visa numbers don’t reflect lack of demand (there were plenty of visa applications left pending at the end of the year), but complications in the process (p. 2-3 of this article explains some reasons).

US entrepreneurs promoting EB-5 investments may wonder: should I buy plane tickets, or can I find potential EB-5 investors in my own back yard? Visa statistics for consular processing vs adjustment of status can help answer this question. The data shows, for example, that nearly half of South Americans who received EB-5 visas in FY19 were not living in the South America, but already residing in the US on different visas. Likewise 31% of the EB-5 visas to Europeans, and 34% of those to Indians, went through status adjustment in the U.S. By contrast, 90% of EB-5 visas issued to China-born people in FY19 went through consular processing. (But China being China, even the 10% from status adjustment in the U.S. is still a large number: 433 people). Africans got a record (for Africa) 334 visas in FY2019, most of them issued abroad.

The Report of the Visa Office does not itemize visas by principals and derivatives, but the DHS Yearbook of Immigration Statistics does. I’ve added a pie chart below with the most recent data (2018) as a reminder that the 10,000 or so annual EB-5 visas do not – as Congress intended – support 10,000 investments in the US economy, or 100,000 jobs. Because Department of State believes that it needs to fit whole families into the numerical limit, the EB-5 quota is only able to incentivize around 3,300 investments annually. In FY2018, just 3,363 EB-5 visas went to principals i.e. EB-5 investors. The majority of EB-5 visas (42%) went to children. (Interestingly, nearly a third of EB-5 applicants in FY18 apparently immigrated without spouses.)

Back to the Report of the Visa Office, FY2019 was similar to FY2018 in terms of country diversification, with similar regional distribution and number of countries contributing to the visa total.  Growing diversification was more evident between FY17 and FY18. The number of visas leftover for Chinese dropped significantly between FY17 (about 7,500) and FY18 (about 4,500), but remained about the same in FY19 (about 4,300). (That could change in FY21, if the visa availability approach succeeds in pushing a larger volume of rest-of-world applicants out of I-526 to the visa stage.)

I would like to see the film about the high-net-worth Chadians and North Koreans who managed to connect with EB-5 projects, document source of funds, and secure EB-5 visas in FY2019. And all those ones promise poignant stories – I’m curious about that one Croat, the one Kazahk, the one Surinamese, and the lone Kiwi who immigrated through EB-5 in FY19.

A few charts to highlight features of interest to me.


And finally, a reminder that visas can only be issued to people with active visa applications. The March 2020 visa bulletin ends with a reminder to Chinese with I-526 approval to get documentarily qualified at NVC, or risk losing place in line. The China Final Action date just jumped five months — not due to lack of Chinese with approved I-526, but due to lack of Chinese eligible to be called for a visa interview.

E. EMPLOYMENT-BASED FIFTH PREFERENCE VISA AVAILABILTY (note from March 2020 visa bulletin)
There has been a very rapid advancement of the China-mainland born fifth preference final action date for the month of March. This action has been taken in an effort to generate an increased level of demand. Despite the large amount of registered China fifth preference demand, currently there are not enough applicants who are actively pursuing final action on their case to fully utilize the amount of numbers which are expected to be available under the annual limit.
Once large numbers of applicants do begin to have their cases brought to final action, some type of corrective action may be required to control number use within the annual limit. It is important to remember that applicants who are entitled to immigrant status become documentarily qualified, and potentially eligible for interview, at their own initiative and convenience. By no means has every applicant with a priority date earlier than a prevailing final action date been processed for final visa action.

This brochure from DOS gives an overview of the NVC process and what it means to be documentarily qualified.

I-526 backlog by country and priority date

Last week USCIS announced a process change for I-526 adjudications, replacing the (nominal) first-in-first-out approach with a “visa availability approach” that gives priority to petitioners from countries who have visas immediately available, or soon available. This replaces a system that depends on I-526 priority dates with a system that depends on priority date plus country of origin.

To interpret the change, we need to know the composition of the I-526 backlog, by priority date and country of origin. IPO can, at any time, print out and publish a report of this data. IPO did this once, in October 2018, then deleted the report. IPO now refuses to disclose current data for the currently-pending I-526 itemized by petitioner country and priority date month/year. Why? There are obvious wicked reasons – intent to obscure processing, or gratuitous naysaying – and no good reason that I can think of. Please, reconsider, IPO.

In absence of answers direct from USCIS, here’s my estimate of the I-526 inventory as of October 1, 2019. (I can’t guess for a more recent date, not knowing anything about I-526 receipt or adjudication numbers since October.)

The total inventory estimate (Column A) should be nearly accurate, because it’s based on a Department of State applicant estimate that we can deconstruct into a pending petition estimate, with a few given clues. (Calculation and sources at the base of this post.)

Columns B, C, and D would be nearly accurate, if processing since October 2018 had been FIFO as USCIS claims. (According to the October 2018 pending petition inventory report, 4,630 petitions had priority dates earlier than March 2017, and 9,583 petitions had priority dates from March 2017 to September 2018. USCIS processed 4,673 I-526 from October 2018 to September 2019. So if USCIS processed the oldest petitions first, the remaining inventory as of October 1, 2019 should have no pending I-526 left from before March 2017, while all priority dates since March 2017 would still be pending. Reality contradicts the FIFO theory, judging by the I-526 processing times report and individual experience.  But I leave the theoretical calculation in Table II as a reference, until USCIS finally consents to give us the real numbers.)

Look at my estimated I-526 inventory above, and imagine the difference a “visa availability approach” will make once it starts being implemented in April.

If IPO is guided by the current Visa Bulletin Chart B (where China is in 2014, and all other countries current), then it would take only China I-526 off the table for now. That would cut about 6,000 petitions from the current workload.  At the other extreme, If IPO is guided by Charles’ Oppenheim’s long-range estimates for visa availability, then it could remove the following from the table for now: China priority dates from 2015 on; Vietnam priority dates from 2017 on; India priority dates from 2018 on; and South Korea, Taiwan, and Brazil priority dates from 2019 on. That would cut at least 9,800 petitions from the active inventory.

The impact on I-526 wait times, for majority and minority countries, will depend on how IPO interprets visa availability – but even more, on IPO’s decisions about volume of adjudications. If IPO exercises its ability (proven in 2018) to adjudicate over 15,000 I-526 per year, then minority-country I-526 can all be processed in a few months, and majority country petitions not far behind. But last year, IPO approved only 3,660 I-526. If that low performance level continues into the future, then IPO could use up its entire capacity for the year just working on minority-country petitions. That would significantly delay majority country-petitions. (Perhaps not coincidentally, 3,660 is almost exactly the minimum number of annual I-526 approvals needed to produce enough applicants for the 10,000 annual visa quota, given the historical average visas per principal. I hope IPO isn’t taking the visa quota as an excuse to shirk I-526 adjudication responsibilities, take resources away from I-526, and let the backlog of fee-paid petitions gather dust as long as can possibly be excused by visa waits.)

Theoretically, the I-526 wait time ( w ) for a petition equals inventory (i) of petitions with priority to get adjudicated earlier than that petition, divided by number of petitions that can get adjudicated per period (t). w=i/t  The visa availability approach changes i – making it smaller for minority countries and larger for majority countries, with obvious results for w. For what it’s worth, I can calculate i for different countries and priority dates, and quantify the effect of FIFO vs. visa availability approach on i.  But my EB-5 timing estimates page is still empty for the moment, as I don’t know what to make of t. Was last year’s very low volume an aberration, as IPO Chief Sarah Kendall suggested when asked about it last year, or a new strategy to be continued? I hope we can get some sense at the stakeholder meeting next month.

And finally FYI, the detail of my I-526 inventory estimate above. The sources: Department of State report of EB-5 Applicants with Petitions on file at NVC and Estimated USCIS Applicant Data as of 10/1/2019 (slide 8 in this IIUSA presentation), Department of State report of average percentage of EB-5 principal investors in visa applications (slide 15 in this IIUSA presentation), USCIS’s FY2019 quarterly I-526 data report (linked here), and the log of pending petitions as of October 2018 (my version of the file formerly posted on the USCIS website saved here).



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Questions for USCIS about the Visa Availability Approach (revised)

On March 13, USCIS will hold a public engagement to discuss and field questions about its recent announcement that “USCIS Adjusts Process for Managing EB-5 Visa Petition Inventory.” Here are my questions, so far. I may revise in response to reader comment. The deadline for submitting questions is February 11.

— Revision —

I attempted to condense my questions, hoping that will maximize the likelihood that USCIS may answer any of them. Here’s the revised list that I’m actually sending to USCIS:

  1. Why is USCIS proposing an operational change to select just a few petitions to be processed “in a timely fashion” instead of using available resources to process all I-526 in a timely fashion?
  2. In 2018, IPO had about 50 adjudicators working on I-526 and processed over 15,000 I-526 petitions. After implementing the “visa availability approach,” how many adjudicators will IPO allocate to I-526, and how many I-526 does IPO aim to process per quarter?
  3. If IPO has reduced staff committed to I-526 adjudications, and downgraded its productivity goals, why?
  4. The “visa availability approach” could appear to be an excuse to reduce I-526 adjudication volume from 2018 levels – is it?
  5. How does IPO plan to identify the “individuals from countries where visas are currently available, or soon available”? (Does “available” look at the current visa bulletin Chart A or Chart B, visa bulletin projections, or long-range visa availability projections? Will “individuals” account for the fact that the family may claim visas based on the nationality of the petitioner’s spouse?)
  6. Does the visa availability approach aim to limit adjudications to individuals with visas immediately or soon-to-be available? (In other words, does IPO aim to match a petition’s I-526 wait time to the visa wait time, however long that may be?)
  7. Does the visa availability approach aim to adjudicate only enough I-526 annually to claim annual visas available under the country caps? If so, what processing time and visas-to-I-526 assumptions will IPO use to choose how many I-526 to adjudicate?
  8. How far in advance of visa availability will IPO assign an I-526 for adjudication, considering the processing times associated with I-526 and I-485 or consular processing?
  9. How will IPO change the processing times report for I-526, after March 31, 2020?
  10. After March 31, 2020, will the visa availability approach apply to pending petitions that were issued an RFE or NOID prior to March 31?
  11. What meaning will Exemplar I-526 approval have after March 31, 2020?
  12. What meaning will an approved Expedite request have after March 31, 2020?
  13. How does IPO intend to ensure fairness for petitioners who invested at the same time in the same project, but who will not get concurrent adjudication due to the visa availability approach?
  14. A FIFO approach aims to minimize the time between the EB-5 investment and USCIS review. This is important for program integrity, giving IPO opportunity to catch frauds as early as possible, trigger investigations while there’s still time to act, and investigate source and path of funds before trails have gone cold. The “visa availability approach” aims to defer USCIS review for some countries. How does IPO intend to help protect security in EB-5 investments and source of funds, under conditions of deferred review?
  15. As described in the USCIS Policy Manual, the I-526 stage is, by its nature “the preliminary filing stage,” with eligibility requirements defined by the preliminary stage. Will USCIS revise the Form I-526 if the form will, as a matter of policy, often not be adjudicated in time to assess the preliminary stage?
  16. In what sense does USCIS consider I-526 comparable to I-130?
  17. Under a visa availability approach, I-526 processing times depend on the country composition of the I-526 inventory. USCIS does not currently publish data on the country composition of the I-526 inventory. When will it start to publish this data?

— Original Post —

Original question list:

1. Inventory management is not only about priority. There’s also the question of resources and productivity.

  • In FY2018, IPO had about 50 adjudicators assigned to I-526, and completed over 15,000 I-526. That same resource commitment and volume could clear the entire current backlog of pending petitions in about a year. What staffing allocation and specific volume goals does IPO have for I-526 in FY2020? If I-526 resources, commitment, and volume are much lower in FY2020 than they were in FY2018, what is the explanation and justification?
  • The visa availability approach intends to “give priority to petitions where visas are immediately available, or soon available.” Does it also, conversely, intend to delay I-526 for petitions where visas are not soon available – not only incidentally as a side effect of taking current countries first, but as a strategy to match I-526 wait time to visa wait time, providing a justification to reduce the volume of petitions that call for timely attention from IPO? If IPO clears the backlog of pending petitions from current countries, will it move resources away from I-526 adjudications, leaving I-526 from non-current countries to wait, pending visa availability?

2. How will IPO will balance visa availability priority with other forms of priority? Consider the following hypothetical scenarios. The answers should not be case-specific, but should express the general guidelines that would clear up the ambiguities illustrated by practical example.

  • The I-526 petition has an approved expedite request, but it’s for a Chinese petitioner with 2019 priority date that won’t be current for over a decade. The backlog of pending petitions includes many petitions with no expedite requests, but current visa availability.
  • The petition is for a project that has Exemplar approval, but it’s for a Chinese petitioner with 2019 priority date.
  • Two Vietnamese have identical 2019 priority dates. One invested in a project with Exemplar approval; the other invested in a project without Exemplar approval.
  • The petitioner is Chinese with a 2017 priority date that won’t be current for at least a decade. He’s part of a pooled investment in project for which IPO has already reviewed all the project documents, and denied all I-526 for other investors in the project.
  • The petitioner is Chinese with a 2017 priority date. He’s part of a pooled investment in project for which IPO has already reviewed all the project documents, and approved all I-526 for other investors in the project.
  • The petitioner is Chinese with a 2017 priority date. The petition was issued a Request for Evidence prior to March 30, 2020, but a decision has not yet been made.
  • The petition is affected by a court order, but it’s for a Chinese petitioner with 2019 priority date.

3. The visa availability approach will result in petitioners in a pooled investment who file I-526 at the same time but come from different countries potentially reaching adjudication at very different times. How will this affect the policy that “The 2-year period is deemed to begin 6 months after adjudication of Form I-526. The business plan filed with the immigrant petition should reasonably demonstrate that the requisite number of jobs will be created by the end of this 2-year period. ”

4. Which metric will IPO use to select the “petitions where visas are immediately available, or soon available.” Will the decision be based on public predictions by Charles Oppenheim for visa availability in the coming 12 months? If so, will USCIS look at his “best case scenario” or “worst case scenario” prediction for visa availability? Or will USCIS wait to react to the monthly visa bulletin? If so, how will it respond to monthly fluctuations and retrogression? Or does IPO plan to rely on private and undisclosed information about future visa availability? Or does IPO simply plan to shelve all I-526 from countries that are not current, regardless of petitioner priority date, in favor of adjudicating current-country petitions when the volume of current-country petitions is large? What assumptions does IPO make about I-526 touch time and visa application and I-485 processing times, when IPO decides how far in advance of visa availability an I-526 should be assigned for adjudication? How will IPO recognize the issue of cross-chargeabiltiy, and the fact that a visa may be available to the petitioner based on the spouse’s nationality?

To assist in answering these questions, the following scenarios highlight areas of ambiguity. The answers need not discuss the specific hypothetical examples, but the answers should express practical guidelines that resolve the practical ambiguities illustrated by the specific examples. (The answers would only be case-specific if IPO plans to implement the visa availability approach on an arbitrary case-by-case basis, lacking generally-applicable principles.)

India

  • Circumstances:  India has been “current” in the Visa Bulletin Chart B Dates for Filing, which means that Department of State considers all Indian priority dates to be “within a timeframe justifying immediate action in the application process,” and USCIS has been accepting I-485 for all India priority dates. Meanwhile, the Visa Bulletin Chart A Final Action Date for India is September 1, 2018. Charles Oppenheim predicted that in the next few months, this date could either progress to being “current” (best case scenario) or retrogress to November 1, 2017 (worst case scenario). [1]
  • Implications: Considering this, starting in April 2020, will IPO:
    • Let all India I-526 stay in the queue together with current countries for FIFO adjudication, since the Visa Bulletin Chart B signals that that all Indian priority dates are  currently“within a timeframe justifying immediate action,” and Oppenheim predicted that India could be current in the Visa Bulletin Chart A in October 2020; or
    • For now, shelve India I-526 with priority dates more recent than November 1, 2017, since Department of State predicted that could be the worst case cut-off for India visa availability by October 2020; or
    • For now, shelve India I-526 with priority dates more recent than September 1, 2018, since these dates are not authorized for visa issuance per the current visa bulletin. Then react month-by-month to future visa bulletin date shifts; or
    • For now, prioritize India I-526 with priority dates older than September 1, 2018, since these dates are authorized for final action per the current visa bulletin (in the spirit of the stated goal to make each country “better able to use their annual per-country allocation of EB-5 visas”).

Vietnam

  • Circumstances:  Vietnam is included in the “all chargeability areas except those listed” in the Visa Bulletin Chart B Dates for Filing. This category has been “current,” and USCIS has accepted Chart B for Vietnam I-485 so far in 2020. This indicates that Department of State and USCIS consider all Vietnamese priority dates to be “within a timeframe justifying immediate action in the application process.” Meanwhile, Vietnam has a Final Action Date of December 15, 2016 in the February 2020 Visa Bulletin. Charles Oppenheim predicted that by October 2020, the Vietnam Final Action Date will progress to either June 1, 2017 (best case) or April 1, 2017 (worst case).
  • Implications: Considering this, starting in April, will IPO:
    • Let all Vietnamese I-526 stay in the queue together with current countries for FIFO adjudication, since the Visa Bulletin Chart B signals that that all Vietnamese priority dates are “within a timeframe justifying immediate action,” and USCIS has been accepting I-485 for all Vietnamese priority dates; or
    • For now, shelve all Vietnamese I-526 with priority dates before June 1, 2017, Oppenheim’s outside estimate for final action visa availability for October 2020? If so, how will USCIS decide when to advance the “adjudication date” cut-off for Vietnam?

China

  • Circumstances:  China has a Final Action Date of December 1, 2014 in the February 2020 Visa Bulletin. Charles Oppenheim predicted that by October 2020, this date will progress to February or March 2015.  Meanwhile, If Charles Oppenheim’s past predictions are correct, China priority dates since 2016 all face long waits to visa availability:
    • 2016 priority dates may have visas available around 2023[2]
    • 2017 priority dates available around 2027[3]
    • 2018 priority dates available around 2032[4]
    • 2019 priority dates available around 2035[5]
  • Implications: Considering this, starting in April, will IPO:
    • Even contemplate the option of leaving China I-526 unadjudicated for a decade or more, to free bandwidth for other work?
    • If so, what kind of “preliminary stage” adjudication and security checks does IPO think would be possible for the I-526 a decade or so after the investment was made and the project implemented? In other words, would the I-526 be possible to adjudicate as an I-526 after such extended delay?
    • Assuming it would be unthinkable to defer any currently-pending petitions to the 2030s, how will IPO decide when to adjudicate China I-526? Assuming there will be a continual inflow of new current-country I-526, how will IPO decide when to take not- current China I-526 off the shelf and give them attention? What is the principle of fairness applied to pending I-526 from China?
    • What if the primary applicant is China-born with a 2018 priority date, but the spouse was born in Europe, and thus visas would be currently available to the family based on her place of birth, were the China petition approved?

South Korea, Taiwan, and Brazil

  • Circumstances:  South Korea, Taiwan, and Brazil are all “current” in the February 2020 Visa Bulletin, and expected to still be current in the October 2020 visa bulletin. [6] However, Charles Oppenheim stated that as of October 1, 2019, each country had sufficient applicants on pending I-526 petitions to exceed the approx-700 annual visa quota: 1,900 for South Korea, 1,241 for Taiwan, and 765 for Brazil). [7]
  • Implications: Considering this, starting in April, will IPO:
    • Let all South Korea, Taiwan, and Brazil I-526 stay in the queue together with other current countries for FIFO adjudication, since they are current in the Visa Bulletin and expected to remain so at least through October 2020; or
    • Actively prioritize I-526 from South Korea, Taiwan, and Brazil this year, since they have potential to reach the visa quota per Oppenheim’s calculations, if only IPO can adjudicate enough of the pending petitions in time (in the spirit of the stated goal to make each country “better able to use their annual per-country allocation of EB-5 visas”); or
    • Demote petitions from South Korea, Taiwan, and Brazil behind petitions from countries that are not even on Oppenheim’s radar to exceed the annual visa limit?

Countries other than China, Vietnam, India, South Korea, Taiwan, and Brazil

  • Circumstances Any country becomes not current if annual visa demand reaches about 700. The USCIS press release for the “visa availability approach” indicates that a goal of the I-526 priority change is to make countries “better able to use their annual per-country allocation of EB-5 visas.”
  • Implications: Considering this, starting in April, will IPO:
    • Keep a certain I-526-to-visas multiplier in mind for each country, and adjudicate only a maximum number of I-526 per year per country to avoid exceeding the per-country visa allocation?
    • Publish timely data on I-526 receipts by county, so that the market is able to judge if countries are meeting or in danger of exceeding the annual per-country allocation, and moderate or encourage demand accordingly?
    • Consider any factor other than/in addition to priority date order, when adjudicating I-526 for countries with visas immediately available? For example, whether the project has Exemplar approval?

[1] IIUSA Conference presentation October 2019 https://wolfsdorf.com/blog/2019/11/01/important-updates-on-eb-5-from-u-s-department-of-state-indian-eb-5-estimates-reduced-prepare-to-file-last-chance-cases-before-november-21-2019/

[2]IIUSA Panel with Charles Oppenheim https://event.crowdcompass.com/la2016/page/rFpfQUiXJw

[3] 2017 CIS Ombudsman Report (EB-5 visa backlog calc on p. 32-33) based on data and calculations from Charles Oppenheim https://www.dhs.gov/publication/2017-annual-report-congress

[4] Charlie Oppenheim presentation at AILA/IIUSA conference https://iiusa.org/blog/wp-content/uploads/2018/11/EB-5-AILA.IIUSA-Visa-numbers-panel-for-EB-5-Conference-October-2018.pdf

[5] Charlie Oppenheim at IIUSA Conference https://iiusa.org/wp-content/uploads/2019/10/IIUSA_Visa-Update-w-Charlie-Oppenheim-and-Roundtable-Discussion.pdf

[6] IIUSA Conference presentation October 2019 https://wolfsdorf.com/blog/2019/11/01/important-updates-on-eb-5-from-u-s-department-of-state-indian-eb-5-estimates-reduced-prepare-to-file-last-chance-cases-before-november-21-2019/

[7] Charlie Oppenheim at IIUSA Conference https://iiusa.org/wp-content/uploads/2019/10/IIUSA_Visa-Update-w-Charlie-Oppenheim-and-Roundtable-Discussion.pdf

 

Why I-526 processing time is relevant

Another response to the announcement “USCIS Adjusts Process for Managing EB-5 Visa Petition Inventory.” Today’s question: Does timely I-526 processing really benefit, or make a difference, to everyone? What about people from countries facing long visa wait times regardless? Does someone from Vietnam care about getting I-526 approval in 2020, if he can’t expect a visa until 2024 anyway? In fact, shouldn’t he rather wait as long as possible for an I-526 decision, since his children are protected from aging out so long as the petition is pending?  Assuming he chose a good project and prepared a solid petition, why care whether the I-526 gets approved early or late?

I argue that processing time is relevant for all petitioners, and that the limited benefit of delay does not outweigh the major drawbacks.

  • Extended child status protection is indeed a benefit of extended I-526 processing time for someone with a long visa wait anyway.
    • If I’m guessing correctly about how USCIS would implement the “visa availability approach,” and near-term processing volume, USCIS may take about a year longer to adjudicate China and Vietnam I-526 than it would’ve taken under the supposed current FIFO approach. If so, that would add one more year to the time that the dependents of Chinese and Vietnamese petitioners can have their ages frozen. (I’m not contemplating the possibility that USCIS might look at Oppenheim’s visa wait time estimates, and plan to just shelve Chinese I-526 for sixteen years, and Vietnamese I-526 for seven years, regardless of rest-of-world demand. Because that would be crazy, from every angle besides helping child status protection.)
    • However, children only benefit if the immigrant petition ultimately succeeds. Delay increases the likelihood that the I-526 may be denied due to circumstances outside the petitioner’s (and often outside the project company’s) control, and the pain of such failure.
  • Adjudication timing can affect the adjudication outcome, even for investors in successful projects.
    • In a fair world, a petition that’s approvable when it’s filed should still be approvable whenever it’s adjudicated, provided that project problems don’t emerge in the meantime. In practice, USCIS sometimes denies originally approvable petitions in projects that succeed. This happens when USCIS policy interpretations shift between the time of filing and the time of adjudication. At the base of this post, I’ve compiled some specific examples of this happening, when USCIS changed thinking over time about investment structures, source of funds, and evidence requirements. (When USCIS admits a policy change, there’s protection from retroactive application, but this protection doesn’t apply when the shift isn’t officially acknowledged as a change.) Long processing times maximize vulnerability to such interpretation shifts. A petition is most likely to be judged by the standards that prevailed when it was filed if it’s adjudicated somewhere near the time it was filed. That’s a major reason to advocate for timely processing for everyone. People won’t file I-526 if they can’t predict the standards that will apply when the I-526 is adjudicated.
  • Timely I-526 adjudication has benefits, even if the visa is not yet available.
    • If the petition will be approved, it’s best to get the approval as soon as possible. I-526 approval establishes a priority date, and the protections that come with having a priority date. (For example, grandfathering under existing rules in case of adverse legislative changes.)
    • If the petition will be denied, it’s best to get the denial as soon as possible. A prompt denial decision reduces uncertainty, increases transparency, helps to catch and stop frauds, and opens the possibility for investor protections and recourse such as denial-triggered exit strategies and approval-contingent escrows.
    • If material changes could happen during the course of the visa wait, it’s best if they happen after I-526 approval. The priority date of the approved I-526 may be retained even if material change necessitates moving investment to a new project, under the priority date retention policy. If the material change happens prior to I-526 approval, there’s no recourse. Also, consular officers are less likely than USCIS to flag changes as material for hypertechnical reasons.
  • I-526 processing times can be relevant to visa wait times. For example:
    • There were enough I-526 filed in FY2012 to use the full annual EB-5 visa quota. But due to I-526 processing delays, Department of State issued less than the full quota of EB-5 visas in FY2013. Visa numbers went to waste in 2013 because USCIS didn’t move people to the visa stage in time. At recent dismal processing volumes, USCIS will have to hustle to advance sufficient India petitions to maximize annual available visas.
    • Charles Oppenheim of Department of State estimated in October 2019 (a) that Indians filing “today” faced a 6.7 year visa wait, and (b) that India could possibly be “current” in the October 2020 visa bulletin. How could (a) and (b) both be true? Answer: if most of the India backlog stays stuck at USCIS, instead of advancing to the visa stage. Currently, I-526 processing is creating the visa bulletin for India, as Department of State moves the Final Action Date depending on how many I-526 approvals for Indians come out of USCIS, and the priority dates on those approvals. The “visa availability approach” concept predicates I-526 processing priority on visa availability. The current India situation shows how visa availability results from I-526 priority. I don’t know whether USCIS has considered how to handle such a Catch 22.

Examples of how I-526 adjudication timing has been relevant even for I-526 with no project problems

Project Documents Examples

  • In 2018, IIUSA wrote a letter to USCIS that discussed problems with long processing times, including changing policy interpretations that occur over the course of the wait time. The letter noted that “IIUSA member Regional Centers report an increase in requests for evidence (RFEs) on pending I-526 petitions, even for projects with I-526 and I-924 petitions already approved.” Some RFEs simply requested updated project information, and would have been unnecessary had the I-526 been adjudicated in a timely manner, when its project documents were still up-to-date. Other RFEs suggested that USCIS was applying new internal policy guidelines. For example, bridge financing arrangements that had previously been approved were being held to unpublished new standards regarding the timing and flow of funds. “The lack of consistent adjudication, and the application of policies developed without public input or visibility, applied retroactively, threatens the viability of the entire EB-5 program: How can projects start and investors invest, based on today’s policies, only to find that the projects and investors are adjudicated based on new policies developed while the petitions wait years for adjudication?”
  • According to the precedent decision Matter of Izummi (1998), EB-5 applicants who are guaranteed repayment of their capital contributions have not made true investments. Historically, USCIS applied Matter of Izummi to prohibit only arrangements which give an EB-5 investor the contractual right to receive back some or all of her capital contribution. However, in recent years USCIS began denying I-526 based on an interpretation that redemption rights given to the new commercial enterprise are also impermissible. [Kurzban & Pratt] The case Chiayu Chang, et. al., v USCIS concerns six investors who made investment and filed I-526 between December 2013 and September 2014. Their Limited Partnership Agreements included a call option of a kind that had been standard in many EB-5 offerings, and previously been approved by USCIS. The investors received RFEs in July and August 2015 that mentioned no problem with the Limited Partnership Agreement. Then in December 2015, the investors received Notices of Intent to Deny based on the call options in their LPA.

Source of Funds Example: Currency Swap

  • Historically, USCIS accepted currency swaps as an acceptable method for transferring funds to the US, and generally did not examine the background of the party providing US dollars in the currency swap. [Hermansky]
  • In 2017, for the first time, USCIS started issuing RFEs to Chinese investors who used third party money exchangers to transfer money to the US. [Klasko] No explicit policy change was ever made, but RFEs starting in 2017 indicated that USCIS was changing its policy interpretation and adjudication practice.
  • JAN142020_02B7203.pdf is an example of a petitioner who made an EB-5 investment in 2016, using the then-accepted currency swap practice to move funds out of China. The petition was not adjudicated until 2018 or 2019, at which point USCIS applied the new policy interpretation regarding currency swaps, and requested source-of-funds documentation for the third party who facilitated the currency swap. No one knew back in 2016 that such documents might be requested, and the petitioner did not have them in hand. The third party, when approached with USCIS’s belated evidence request, “was not willing to provide any financial documentation due to concerns regarding his privacy and security.” USCIS then denied the petition for insufficient source of funds. The petitioner appealed, claiming “it was unreasonable to request [the third party’s] financial documentation because, at the time of I-526 filing, USCIS did not require a third-party exchanger to provide his or her personal banking, business, and financial records, and it was not anticipated by the [Petitioner], his parents, or the [Petitioner’s] attorney, that such a requirement was forthcoming.” AAO did not accept this argument, and dismissed the appeal. The currency swap issue that did not exist at the time of I-526 filing was the sole basis for denial. If the petition had been adjudicated promptly, based on the policy interpretation and adjudication practice that prevailed at the time of filing, it could have been approved because it had all the evidence then required. And this approval, once made, would not have been revisited later despite new policy interpretations, since source of funds are not an issue at the visa application or I-829 stages.

Source of Funds Example: Indebtedness (fact pattern described in Zhang v. USCIS)

  • The EB-5 regulations have long specified that “capital” invested in an enterprise can include indebtedness secured by assets owned by the alien entrepreneur, provided that the investor is personally and primarily liable, and that NCE assets are not used to secure the indebtedness.
  • On December 23, 2013, Mr. Huashan Zhang made a $500,000 cash investment in an EB-5 NCE. He obtained the invested cash via a loan from a company that he owns, secured by his undistributed profits held by the company.
  • In a stakeholder meeting on April 22, 2015, IPO Deputy Chief Julia Harrison expressed an interpretation of the regulations that, for the first time, introduced a “collateralization test” on the value of assets used to secure cash obtained from third party loans.
  • USCIS made a decision on Mr. Zhang’s I-526 on May 28, 2015, and denied the I-526 based on a finding that Mr. Zhang’s loan was not properly secured, as expressed in the collateralization test stated the April 22, 2015 stakeholder meeting.
  • In June 2015, Mr. Zhang and another petitioner filed suit in district court on behalf of themselves and all other investors who had filed I-526 prior to 2015, and subsequently denied based solely on the ground that the loan used to obtain the invested cash fails the collateralization test described in the 2015 IPO remarks. They claimed that the 2015 interpretation was erroneous, put out without proper notice and comment, exceeded authority, and wrongly applied to their I-526 filed before the interpretation. The court agreed with them, resulting in the class action decision Zhang v. USCIS, No. 15-cv-995. This decision was issued on November 30, 2018, and subsequently appealed by USCIS on January 28, 2019.
  • To review, then, the condition of I-526 filed in 2012/2013 if they had one common factor — investments including cash based on indebtedness – but were adjudicated at different times:
    • If the I-526 was adjudicated promptly in 2013/2014, it was probably judged based on policy interpretation at the time of filing. Mr. Zhang’s petition could’ve been approved.
    • If the I-526 was adjudicated 2015 to 2018, it faced the collateralization test first defined in 2015. Mr. Zhang’s 2013 petition was denied in 2015 for a factor not applied to earlier adjudications. (The log of AAO appeals include other examples – for example NOV092016_02B7203, a petitioner who invested and filed I-526 in 2012, and was denied based on the 2015 policy interpretation when her case was finally adjudicated in 2016.)
    • If the I-526 was adjudicated in December 2018, it could be approved with no limitation from the “collateralization test” thanks to the Zhang v. USCIS
    • If the I-526 had still not been adjudicated by January 2019, when USCIS appealed Zhang v. USCIS., it is currently still on hold at USCIS. Whether and when it can eventually be approved or denied depends on the outcome of the appeal.

In summary: timely I-526 processing is important and relevant. Let’s fight for it for everyone!

Other Reactions

Here’s my full agenda for posts in response to the announcement “USCIS Adjusts Process for Managing EB-5 Visa Petition Inventory.”

  1. Argue that when USCIS has proven capacity to give timely processing to all I-526 currently pending, it should not be reducing capacity, necessitating policy to restrict who gets timely processing. [Addressed in last week’s post.]
  2. Discuss how and why I-526 processing time is relevant even for petitioners from high-volume countries who still face a visa wait following I-526 approval. [This post.]
  3. Discuss what a visa availability approach could mean for petitioners from low-volume countries, and calculate the potential processing time impact of the change. [Coming later this week.]
  4. Discuss how and why I-526 processing time makes a practical difference for USCIS, and how delays impact the nature and quality of adjudications. [Coming soon.]
  5. Define questions that I’d like USCIS to answer regarding how it would implement the visa availability approach. [Coming soon.]
  6. Discuss the significance of processing times and processing order for businesses that use EB-5 investment. [Not sure if I’ll have time for this, but someone should write it.]

The topic is important, because the viability and integrity of the EB-5 program depend on fair and efficient processing.

Are these posts helpful? If so, please consider making a contribution to support the work.

I-526 processing times: volume and priority (Comment 1 on the “visa availability approach”)

I’m in my car at the terminal, waiting to board the ferry. There are 15 cars waiting.  The ferry can hold 15 cars. The deck hand comes out and tells the cars to reorganize. “We’re not doing first come first up anymore – today we’re boarding day-trippers first.”  I’m puzzled – why this bother? Why are they troubling to rearrange the cars, when in any case there’s room for everyone to board? Are they fussing about priority because they’re reducing the ferry capacity, and preparing to leave some cars behind?

I’m an EB-5 investor today with an I-526 pending. Say there are about 15,000 other I-526 petitions pending now. (There were just 13,763 pending at last report as of 9/30/2019.) We know IPO adjudicated over 15,000 I-526 petitions in FY2018. 15,000/15,000 = 1. Calculating from IPO’s proven capacity for adjudications, all pending I-526 can be processed and to the visa stage in about one year.  Whether the adjudications are in FIFO order, or in order by country, or alphabetical, or totally random, I-526 wait times from today will all be about a year at very most for anyone and everyone in the current backlog (and even shorter for new petitions in an era of low receipts), if IPO does its job and uses its capacity.  In that case, all minority country petitioners will reach the visa stage in time to claim annual visas, regardless of how IPO orders I-526 from China, Vietnam, and India. If IPO has proven capacity to clear the entire current backlog in a year, why does it now announce a new policy for choosing which I-526 get “approved in a more timely fashion to receive consideration for a visa,” going forward? Why not adjudicate everyone in a timely fashion, when that’s a plausible option? Are they fussing about priority because they’ve reduced capacity, and gathering excuses to leave petitions behind?

Today’s press release “USCIS Adjusts Process for Managing EB-5 Visa Petition Inventory” provokes us to focus on the order of I-526 processing, and who should get attention first. But why even accept that discussion before pointing out the more significant factor: volume of processing. Petitioners from traditionally underrepresented countries are not threatened by pending I-526 petitions from China, Vietnam, or India, when there’s room on the I-526 ferry for everyone. The threat is the processing volume trend line. USCIS has not explained how it’s fair to reduce the size of the ferry, and carry fewer and fewer people to the visa stage.

For people from China, Vietnam, and India, a potential perceived benefit from a “visa availability approach” is extended child status protection. (Such a benefit could emerge if USCIS is proposing to not only prioritize not-backlogged countries, but actually to shelve I-526 from backlogged countries until visa availability, be that 1 year or 15 years. regardless of other country demand. The press release isn’t clear on this point.) Some people might welcome an artificial delay for the children. But think about it: how much do frozen children benefit when the petition upon which they depend becomes less and less possible to approve – or indeed, even to adjudicate – as the years pile up? Businesses do not freeze, financial records don’t last forever, USCIS policy continues to evolve, and every year adds to the changes of fact and circumstance that can cause an I-526 to be denied. Such factors may contradict this point: “For many nationals of countries subject to retrogression, the I-526 petition processing time is largely irrelevant unless the primary applicant has a dependent child approaching the age of 21, in which case, this new processing approach can be extremely helpful.” The adjudication time is relevant when it make a significant difference in whether or not the petition will be approved, when it’s finally adjudicated. Not only that, but I-526 approvals bring some protection – they establish priority dates, open the possibility of priority date retention with project change, and offer protection in case of legislative changes. Those benefits are especially important to people facing long visa waits regardless. And furthermore, timely I-526 adjudications judge the petition on its merits at the time of filing, and consistent with its very nature as  preliminary-stage filing. Delayed adjudications effectively create a new stage with new requirements – as we see today from RFEs on delayed petitions that request years of documents not available at the time of filing, and traditionally belonging to the I-829 stage rather than preliminary I-526 stage. Meanwhile, for China, a “visa availability approach” has the further complication that it’s explicitly designed to maximize rest-of-the world demand reaching the visa stage, which directly minimizes visa available to China. And India, with its recent visa bulletin jumps due to “low demand” i.e. few I-526 approvals, exemplifies the complication that delays at USCIS actually skew visa availability.

For pending I-526 petitioners who are not from China, Vietnam and India, let’s consider what would help your processing times. If there are 15,000 pending I-526 now, I estimate there are about 5,000 of you. Consider which adjustment you’d rather have USCIS make:

  1. Address priority: Keep FY19 Q4’s dismal processing volume of 550 adjudications, but prioritize your petitions over the 10,000 from countries that aren’t current. 5,000 minority-country petitions divided by 550 adjudications per quarter equals 9 more quarters to finish processing.
  2. Address volume: No change to priority, but return to FY18 Q4’s processing volume of 4,000 adjudications. 15,000 worldwide petitions divided by 4,000 adjudications per quarter equals less than 4 quarters to finish processing.

The main point of this post: we should be talking about volume, before priority.

And not only that, but what’s this claim about a “visa availability approach” (a term that made its world premier today, according to Google) aligning with “congressional intent” for EB-5 and with “other visa-availability agency adjudications processes.” I’d like chapter and verse on this “Congressional intent” and how the approach has worked out for other Forms pending at USCIS. And additionally…. But even kind bloggers have to sleep sometimes, and keep time for the day job.

For everyone asking me individual timing questions, please be patient. I’ll get a paid service up as soon as I can, to explain as much as I can individually. With both volume and priority up in the air, it’s complicated and time-consuming.

3/13 EB-5 Engagement Invite

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: January 29, 2020 12:21 PM
Subject: EB-5 Immigrant Investor Program: Public Engagement, March 13, 2020

EB-5 Immigrant Investor Program: Public Engagement
Friday, March 13, 2020
11:00 a.m.-12:00 p.m. Eastern

U.S. Citizenship and Immigration Services invites you to participate in a public engagement meeting on Friday, March 13 11:00 a.m.-12:00 p.m. Eastern on the Immigrant Investor Program, also known as the EB-5 program.

This engagement is part of our ongoing efforts to enhance dialogue with the public on the EB-5 program. USCIS will address program updates, including the agency’s change from a first-in, first-out case-processing approach to a visa availability approach for Form I-526, Immigrant Petition by Alien Investor. You will have an opportunity to ask questions during the engagement.

Participation Details:
You may attend this engagement either in person at USCIS, 111 Massachusetts Ave. NW, Washington, D.C., or by teleconference. [UPDATE: now by teleconference only.]

If you wish to attend in person, please email us at public.engagement@uscis.dhs.gov. Seating is limited, so we encourage you to email early to request in person registration. Once we process your registration, you will receive a confirmation email with additional details.

To submit non-case-specific questions as agenda items before the engagement, email us at public.engagement@uscis.dhs.gov by 5 p.m. Eastern on Tuesday, Feb. 11.

To join the event via teleconference:
Call in Toll Free number: (888) 946-7792
Toll number for international callers: (517) 308-9375
Participant Passcode: 3996336

We recommend calling in 10 to 15 minutes before the teleconference begins.

To request a disability accommodation:
Email public.engagement@uscis.dhs.gov, and put “EB-5 Engagement” in the subject line.

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!

USCIS Adjusts Process for Managing EB-5 Visa Petition Inventory

USCIS has officially announced an I-526 priority change I saw coming. People from China, Vietnam, and India with pending I-526: you need to organize to inform IPO how you feel about this. I plan to write about an aspect I doubt IPO recognizes: how USCIS adjudication order can create and skew EB-5 visa availability, with particular reference to the examples of China and India. I also have to go back and revise the new I-526 timing estimate service that I’d been almost ready to post.

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: January 29, 2020 8:33 AM
Subject: USCIS Adjusts Process for Managing EB-5 Visa Petition Inventory

Change Addresses Fairness Issues in Visa Allocation

WASHINGTON— U.S. Citizenship and Immigration Services today announced a process change for Form I-526, Immigrant Petition by Alien Investor, from a first-in, first-out basis to a visa availability approach.

This new operational approach aligns with other visa-availability agency adjudications processes, is more consistent with congressional intent for the EB-5 Immigrant Investor Program, and increases fairness in the administration of the program.

“Changing our approach from a first-in, first-out adjudication process to one that prioritizes petitions connected to individuals from countries where visas are currently available better aligns the EB-5 program with congressional intent and makes it more consistent with other USCIS operations,” said USCIS Deputy Director Mark Koumans. “This new approach increases fairness, allowing qualified EB-5 petitioners from traditionally underrepresented countries to have their petitions approved in a more timely fashion to receive consideration for a visa.”

This operational change is consistent with the agency’s processing of Form I-130, Petition for Alien Relative, in cap-subject categories. The new visa availability approach simply gives priority to petitions where visas are immediately available, or soon available, and will not create legally binding rights or change substantive requirements. Applicants from countries where visas are immediately available will now be better able to use their annual per-country allocation of EB-5 visas. The new visa availability approach will apply to petitions pending as of the effective date of the change. USCIS will implement the visa availability approach on March 31, 2020.

USCIS will hold a public engagement on March 13, 2020, from 11:00 a.m. to noon Eastern, to provide information and answer questions from the public about these operational changes to the management of Form I-526 petition inventory.

2/2020 Visa Bulletin India FAD

The February 2020 Visa Bulletin has a Final Action Date of September 1, 2018 for India.  This represents another dramatic jump (with the January visa bulletin having a May 1, 2018 final action date). I previously wrote about overall EB-5 visa timing in 2020. This post attempts additional clarifications specific to EB-5 petitioners and applicants born in India.

February’s visa bulletin does mean:

  • that visas can be issued in February to qualified Indian applicants with priority dates before 9/1/2018 (Qualified applicants are at the visa stage, having already received I-526 approval)
  • that there are few Indian applicants at the visa stage (A note at the end of the January 2020 visa bulletin explains that the India final action date will proceed rapidly in 2020 so long as demand is low — i.e. so long as few Indians are in a position to apply for a visa)

February’s visa bulletin does not mean:

  • that India demand is low at the I-526 stage
  • that visas are available to people with pre-9/1/2018 priority dates whose I-526 are still pending
  • that USCIS has processed or will soon process most India I-526 with pre-9/1/2018 priority dates
  • that Department of State has already finished issuing visas to all Indians with priority dates before May 1, 2018 (the final action date in January 2020’s visa bulletin)
  • that having reached September 2018, India’s final action date will continue to advance in the future, and will not turn back

In fact, USCIS indicates that it is currently working on I-526 filed 32.5 to 49.5 months ago (i.e. 2015 to 2017 priority dates). I-526 adjudications are not guided by the visa bulletin. Ideally, USCIS would process petitions in the order received, so that people reached the visa stage more or less in order by priority date. But evidently, this is not the case. Some 2018 priority dates are getting visas now even as some earlier priority dates remain at the I-526 stage.

We know that Indians filed at least 525 I-526 petitions from January through August 2018. (That’s how many I-526 were pending from those priority dates as of October 2018, when USCIS published this I526list report.) Over 500 I-526 would conservatively result in over 1,000 visa applications. Over 1,000 visas would take over one year to issue. So when the Visa Bulletin jumps from January to September 2018 in just three months, it’s evident that most people with those priority dates just haven’t even reached the visa stage. If they had, the visa bulletin would slow down to the time needed to issue over 1,000 visas.  And recall the 781 Indian I-526 with pre-2018 priority dates that were still pending at USCIS at the end of 2018 — some of those must still be in the system as well.

For Indians with priority dates before 2019, I suggest gazing at the I526list report from October 2018. Add up the number of pending I-526 with priority dates before yours. Estimate the number of visa applicants associated with those I-526. Subtract the number who could possibly have received visas since then, considering the number of I-526 adjudicated worldwide and number of visas issued to Indians since October 2018. The result estimates the number of people still with priority to get a visa before you do — assuming they can reach the visa stage. That result divided by 700 is your approximate wait time, in a FIFO world. But we’re not in a FIFO world, as the disconnect between USCIS processing time reports and the visa bulletin shows. As things stand, some people from India will get a visa unexpectedly early, and some unfairly late.  The visa bulletin will jump around, depending on who reaches the visa stage when. There’s room for hope, and room for fear — just not much predictability at this stage.

 

FY2019 Q4 Petition Processing Statistics

USCIS has published processing data on the Immigration & Citizenship Data page for July through September 2019 (FY2019 Q4).

I eagerly awaited this update, with three questions in mind. Would IPO start to recover processing volume in Q4, considering that previous reductions were credited to relatively minor and temporary factors (the RC authorization lapse in Q2 and I-526 training in Q3)? Would denial rates remain high? How large was the I-526 filing surge ahead of the regulations?

Now we know that IPO performance did not recover — yet —  in Q4. I-526 and I-829 denial numbers have not increased significantly. The I-526 denial percentage rose in Q3 and remained elevated in Q4 because approval numbers were so much lower than before.  People who filed I-526 by the end of September apparently got in before any significant pre-regs I-526 surge.

I-924 was a minor part of IPO’s FY19 workload, with few receipts and few pending forms. Denial numbers are remarkably high, but I suspect that many are actually withdrawals due to delayed processing. I-924 requests for exemplar approval lose value to the applicant if not adjudicated quickly.

I have a few questions for IPO Chief Sarah Kendall.

  1. IPO adjudicated 2.8x more forms in FY2018 than FY2019. Please explain.
  2. In one year under your leadership, IPO reversed five years of processing improvements, regressing to 2013 performance levels. Do you consider this reduced processing volume a problem that you plan to fix, or an expected outcome in your overall strategy?
  3. IPO had almost twice as many staff in FY19 as it had in FY15 (214 vs 110), yet adjudicated 41% fewer forms in FY19 than FY15. Productivity per staff member was 69% lower in FY19 than it was in FY15. Do you consider this productivity loss a problem that you plan to fix, or an expected outcome in your overall strategy?
  4. Looking at service-wide processing data between FY18 and FY19, EB-5 forms are the only EB forms that fell behind – other EB forms show increased approval numbers year-on-year. In fact, Form I-526 and I-924 rank #3 and #1 for worst performance in the entire service (with, respectively, 74% and 88% fewer approvals in FY19 and FY18). Only Form I-821 for Temporary Protected Status can compete, with approvals falling by 87%. Should we take a political message from these facts? Or does DHS see a problem and plan improvements in 2020?
  5. Do you recognize the connection between efficiency and integrity? Do you see the problem in denials that come too late to stem bad deals, and approvals that come too late to save good deals? Do you have a plan to strengthen program integrity by improving efficiency?
  6. If IPO continued FY19 processing volume into the future, then the current I-526 backlog would take three years to process, and the current I-829 backlog would take six years to process. How does IPO plan to improve going forward, to avoid such long times becoming the reality?
  7. What is your goal for processing volume in FY2020? How do you plan to reach that goal?

The decade in review

January 2020 marks the 10th anniversary of this blog, and 12 years since I started writing business plans for immigrant investment. I’ve been looking back on years of work and EB-5 reporting, picking out significant milestones on the path that led us to today.

This post is long, because each of the past ten years brought major developments to the EB-5 drama – a drama involving the real-life fate of billions of dollars, thousands of businesses, and tens of thousands of immigrant families.

(Note: I wrote this post without links, but have references for all points. The blog archives are open, named articles can be Googled, and my consulting service is available to people seeking specific detail and evidence related EB-5 developments over the years.)

2010

  • EB-5 was still small, in 2010. The year began with 75 regional centers nationwide, and ended with 104 approved RCs plus about 200 applications pending. The new Form I-924 with filing fee took effect for the first time on November 23, 2010, and the deadline encouraged a surge in regional center proposals.
  • About 2,000 I-526 petitions were filed in FY2010, with the top countries being China (66%), South Korea (8%) and Iran and Taiwan (3% each). Fewer than 2,000 EB-5 visas were issued for FY2010, a fraction of the available quota. 41% went to China.
  • USCIS had an “established processing target” of five months for Form I-526 and Form I-829. The California Service Center stayed within one month of meeting those targets. The magic words “visa fast track” appeared frequently in EB-5 promotions, and held true through about 2013.
  • The regional center program was riding on a three-year authorization through 2012, with proposals to make the program permanent.
  • USCIS began holding quarterly EB-5 stakeholder engagements that provided substantive information and answered questions. (The Meeting Log page off the Resources tab on this blog links to notes from all EB-5 engagements since 2009.)
  • Reuters picked up “Special Report: Overselling the American dream overseas,” an investigative report about the emerging EB-5 market. This report helped to raise awareness about integrity issues, and likely contributed to some subsequent denials and litigation. The term “Wild West” frequently appeared in industry conversations in those days, as we discussed the rapidly-growing and not-yet-quite-civilized EB-5 frontiers.
  • A majority of the EB-5 business plans I wrote were for shopping center developers. Tenant jobs could be counted.

2011

  • USCIS Director Alejandro Mayorkas prioritized the EB-5 program, and pushed for more professional staff, accelerated processing, and better communication between USCIS and stakeholders. In 2011, USCIS began hiring economists, business analysts, and economic development specialists to improve EB-5 adjudications.
  • There were 211 approved regional centers by the end of 2011, and 3,805 I-526 petitions were filed in FY2011 (both about double the previous year). Demand from China increased 130% in one year. A factor in this growing usage was the partial shutdown and then major price increase for Canada’s immigrant investor programs, which had been popular in China. (Previous experience with the Canadian programs contributed to misconceptions in the China market about the level of US government control over EB-5 regional centers and projects.)
  • The House Judiciary Committee held a hearing titled “The Investor Visa Program: Key to Creating American Jobs” in which all speakers praised EB-5. The Senate also held a generally positive hearing on extending the regional center program.
  • Stakeholder meetings and RFEs questioned whether or not a census tract group qualifies as a “geographic area” for TEA designation. RFEs challenged regional center applicants to justify the size of the geographic areas for which they were applying.
  • USCIS released a first draft of the EB-5 Policy Guidance memo that would eventually be finalized two years later. Existing EB-5 policy guidance was sparse.
  • The industry site now called EB5news.com published the article “Huge Chicago EB-5 Multi-Hotel Project Under Scrutiny by Investors.” This scrutiny proved wise, as the Chicago Convention Center project went on to become, in 2013, the target of the first major SEC enforcement action in EB-5.
  • Regional centers filed I-924A Annual Reports for the first time.
  • The regional center directory at uscis.gov was reformatted to remove regional center contact information and business detail, leaving names only. I had to work harder to update the blog RC List page.
  • A majority of the EB-5 business plans I wrote in 2011 were for new regional center applicants, many of them Chinese Americans.

2012

  • Senators Grassley and Leahy co-sponsored a bill to grant permanent authorization to the “successful, job-creating” regional center program. Leahy’s press release proudly noted that EB-5 had “brought economic development and job growth to Vermont since 1997.” President Obama eventually signed S.3245 (sponsored by Senator Leahy), giving the Regional Center program another three-year authorization. This was the last time the regional center program got an authorization that was more than a few months long, and not part of an appropriations bill.
  • USCIS Director Mayorkas announced the creation of a “new dedicated program office” for EB-5 designed to ensure that “this important and complex program is appropriately resourced and managed under a single leadership structure.” Hiring began for the new Immigrant Investor Program Office (IPO) in Washington D.C.
  • The “tenant occupancy” issue emerged. We had heard about petitions and applications “on hold at USCIS headquarters pending resolution of an issue,” and gradually discovered the nature of the issue as RFEs began to question counting jobs associated with tenants in buildings constructed with EB-5 capital. By the end of the year, USCIS released Operational Guidance for Tenant Occupancy that made it effectively impossible to get credit for tenant jobs.
  • I-526 filings jumped to 6,041 in FY2012, with 87% filed by people born in China.
  • The December 2012 Visa Bulletin announced that due to volume of demand, there would likely be a cut-off final action date for China-born EB-5 investors as early as June 2013. The EB5 Insights blog noted that “Ultimately, this could stymie the demand for EB-5 visas by Chinese nationals and have an adverse impact on regional center operators.” This fact was not well-publicized in China, however. EB-5 demand at the visa stage was still well under quota in FY2012, with 6,628 visas issued worldwide.
  • With the tenant occupancy problem discouraging EB-5 investment in retail developments, I found myself writing many business plans for new hotels.

2013

  • By April 2013, the Investor Program Office in Washington DC was open and adjudicating I-924 applications. USCIS Director Mayorkas continued to hold many EB-5 stakeholder meetings and to fight for more resources, professionalism, and transparency for EB-5 adjudications. The political backlash hit when he was nominated as DHS Deputy Secretary, and subject to investigation over his EB-5 efforts.
  • I-526 processing was reported at about one year through 2013, and Director Mayorkas stated a goal to reach 90-120 day processing times for all EB-5 forms. (If we believe current USCIS processing times reports, IPO is still, to this day, processing I-924 filed back in 2013.)
  • President Obama announced immigration objectives that included making the regional center program permanent. EB-5 legislation got a chance as part of S.744, the Border Security, Economic Opportunity, and Immigration Modernization Act that passed the Senate. This comprehensive immigration reform bill would have increased EB-5 visa numbers, among other improvements, but it died in the House.
  • The May 30, 2013 EB-5 Adjudications Policy Memo took effect, providing the first comprehensive collection of EB-5 policy guidance. This memo finally settled the census tract group issue, stating that USCIS should defer to state determinations as to TEA area. In a surprise twist, the memo freed regional centers to sponsor projects outside of pre-approved focus areas. (This freedom was later curbed just as abruptly in 2017 with a stakeholder meeting comment on an I-924 form revision.)
  • The Chicago Convention Center SEC complaint dropped, the first major SEC enforcement action in EB-5. The SEC held a joint stakeholder engagement with USCIS about EB-5 securities issues, and published an investor alert “Investment Scams Exploit Immigrant Investor Program.”
  • The Office of Inspector General conducted an audit which found that “USCIS cannot administer and manage the EB-5 regional center program effectively.” OIG particularly recommended additional authority for regional center termination and more SEC coordination. Prior to this report, there had been five regional center terminations and one EB-5 SEC action.
  • IIUSA first published a list of recommended best practices for regional centers, and industry produced many due diligence articles such as “Protecting the integrity of the EB-5 investment market” (Butler) and “Perspectives on EB-5 Due Diligence” (Klasko).
  • By the end of the year, there were 424 approved regional centers. I-526 filings totaled about the same in 2013 as in 2012, with 83% from China.
  • When visa demand was lower than expected (i.e. the many pending I-526 petitions got approved more slowly than expected), Department of State indicated that China might not, after all, reach the per-country limit in 2013. The EB5 Insights blog reported this in February 2013 with the comment “This means that Chinese EB-5 applicants may continue to file EB-5 petitions without being subjected to a backlog.” (In fact, a couple more months of Chinese I-526 filings avoided backlog. China remained current in the visa bulletin until May 2015. But the first final action date for China, when posted in 2015, went back two years to cut off at May 1, 2013.) Industry articles on the retrogression issue in 2013 include “The myths of retrogression of the visa numbers in the EB-5 program” (Greenberg Traurig) and “The impact of Chinese quota retrogression on EB-5 investors and EB-5 investments” (Klasko).
  • In addition to regional center work, I started writing many business plans for direct EB-5 investment in new franchises. Meanwhile, I was pleased to see investors in my first EB-5 business plans start to receive I-829 approvals in 2013. Once upon a time, the entire EB-5 process could fit within five years.

2014

  • I-526 and I-829 adjudications were gradually transferred from the California Service Center to IPO, which had a staff of 94 by the end of 2014.
  • USCIS began collecting stakeholder input for proposed new EB-5 regulations. This process eventually resulted in a proposed rule in 2017 and a final rule in 2019.
  • USCIS started regional center termination efforts in earnest, issuing over 50 notices of intent to terminate in 2014. These notices began to result in actual terminations in 2015, primarily for inactivity or missing an annual report. Increased SEC activity become evident with five complaints targeting EB-5 projects in 2014/2015. The new IPO office included a 15-member Fraud Detection National Security Team with plans to expand site visits and compliance reviews.
  • Recognizing a growing problem in processing times, I started to record monthly USCIS processing times reports in the Excel log that I continue to update to this day. Through 2014, processing times averaged 13 months for I-526 and 9 months for I-829. We thought that was too long.
  • I-526 filings nearly doubled again, with 10,950 filed by the end of FY14 (88% from China). Meanwhile, growing demand finally reached the visa stage, and EB-5 hit its annual quota for the first time with over 10,000 visas issued in FY2014.
  • The industry continued to discuss the problem of visa availability for China, with articles such as “IIUSA VP Robert C. Divine on Saturday’s Announcement of EB-5 Visa Unavailability for China for Remainder of FY-2014” (IIUSA blog), “FAQs on EB-5 Quota Backlog by H. Ronald Klasko” (IIUSA blog), and “Surviving and Thriving in Times of EB-5 Quota Backlogs” (Klasko). China remained current in the Visa Bulletin, as most future visa applicants were still waiting for I-526 approval.
  • USCIS first promised to work on a guidance memo for retrogression issues. (There was, at that time, no redeployment policy.)
  • Hotels and restaurants continued to provide a significant amount of my EB-5 business plan work, and for the first time I had more ethnic Indian than Chinese clients.

2015

  • The decade’s peak EB-5 demand came in FY2015, with 14,373 I-526 petitions filed, 85% of them from China.
  • The I-526 surge clustered around the sunset of the regional center program authorization that had been in effect since 2012. Over 6,000 I-526 petitions were filed in the quarter leading up to the original sunset date of September 30, 2015, and another 6,000 in the quarter ending in December 2015, when Congress finally granted EB-5 a one-year clean extension instead of enacting proposed changes. This volume has not been equaled since. (And IPO is still, to this day, adjudicating I-526 filed in 2015.)
  • The 2015 regional center program sunset date brought a rush of legislative activity, with five bills proposed that would’ve increased the minimum EB-5 investment amount (with $1.2M or $800K in a TEA being the most common proposal) and tightened TEA rules. Language from Grassley and Leahy’s S.1501 reportedly nearly became law in December 2015. But instead, “the legislation was defeated by a group of lawmakers led by New York Democrat Chuck Schumer, who argued that security improvements were a good idea, but the way the reform was written would unfairly hurt investments in his home state.” This story was to be repeated yearly for the rest of the decade.
  • Friedland & Calderon published “A Roadmap to the Use of EB-5 Capital” that included a Large-scale Projects Database profiling 25 EB-5 projects – of which 19 were in New York, mostly Manhattan. While regional center projects in 2013-2015 had an average 15 EB-5 investors each program-wide, according to DHS data, the top ten projects in Friedland & Calderon’s 2015 database averaged over 600 EB-5 investors each. These large-scale projects helped fuel the surge in I-526 filings in 2014 and 2015. They also fueled political controversy, as billions of EB-5 capital concentrated in a few high-profile urban projects that used the TEA incentive.
  • China began to have a cut-off date in the May 2015 Visa Bulletin, and advanced through most 2013 priority dates by the end of 2015. But the massive filing surge in late 2015 dramatically worsened the China visa backlog problem. Robert Divine’s article “The Realities and Implications of Chinese EB-5 Investors’ Wait for Visa Numbers” (IIUSA blog) noted that Chinese filing I-526 as of the end of 2015 likely faced at least a six-year wait for visa availability.
  • USCIS first raised the redeployment issue in August 2015, releasing a draft memo of “Guidance on the Job Creation Requirement and Sustainment of the Investment for EB-5 Adjudication of Form I-526 and Form I-829.” This memo was never finalized. (Two years later, in June 2017, some redeployment language finally became policy through addition to the EB-5 section of the USCIS Policy Manual.)
  • The Government Accountability Office published “Immigrant Investor Program: Additional Actions Needed to Better Assess Fraud Risks and Report Economic Benefits” and DHS Director Jeh Johnson wrote a letter to Senators Grassley and Leahy that recommended EB-5 changes. These two documents strongly influenced subsequent legislative efforts, particularly by Senator Grassley.
  • My mix of EB-5 business plan work started to include more apartments and assisted living facilities. And I wrote a record number of direct EB-5 plans for franchise businesses.

2016

  • EB-5 demand fell in FY2016 but not by much, thanks to another I-526 filing surge ahead of the September 30, 2016 regional center program sunset date. A total 14,147 I-526 were filed, with somewhat fewer from China (77%) and more from Vietnam and India (3% each). Charles Oppenheim estimated a seven-year wait for new Chinese applicants as of the end of the year.
  • 2016 saw more EB-5 bills introduced and a lot of open discussion in Congress, with two EB-5 hearings in the Senate and one in the House. Unlike the generally positive tone of 2011, the 2016 hearings included some negative voices, and particular concern over perceived abuse of the TEA incentive. However, the new EB-5 bills progressively negotiated down the TEA incentive, and in the end no changes were passed.
  • The SEC filed a complaint in 2016 alleging fraud in EB-5 offerings sponsored by Vermont Regional Center. Vermont Senator Leahy, formerly an EB-5 champion, declared that “Without reform, I believe the time has come for the program to end,” and legislative efforts became more difficult.
  • The OMB and DHS Secretary Jeh Johnson averted us to possible new EB-5 regulations in 2017.
  • USCIS began to deny I-526 petitions based on finding loan proceeds to be nonqualifying capital, call options to be impermissible redemption agreements, and RC sponsor termination to be material change. These findings were not based on stated policy. Lawsuits eventually ensued, with some success so far.
  • The EB-5 chapter of the USCIS Policy Manual was released on November 30, 2016, and became effective the same day. Though nominally a handy compendium of existing policy and guidance documents, in fact the PM also introduced new policy related to material change, regional center applications, regional center amendments, and regional center termination.
  • The trend of sprawling multi-state regional centers began to emerge, as USCIS surrendered the founding logic and very definition of a “regional center” – that it have jurisdiction over a geographic area limited for the purpose of concentrating pooled investment. (By the end of the decade, a five-state “regional center” was unremarkable.)
  • Hotels and restaurants continued to account for a significant number of my EB-5 plans.

2017

  • DHS published a Notice of Proposed Rulemaking for the EB-5 Modernization Regulation in January 2017, with comment period closing in April. The proposed reg introduced a new source of deadlines for potential EB-5 changes. The OMB anticipated Final Action in February 2018. I submitted a comment arguing that the TEA threshold should be reduced from the proposed $1.35M to $900,000.
  • 2017 saw continued struggles with EB-5 legislation, and five regional center program sunset dates followed by short-term authorizations.
  • A New York real estate titan took office as U.S. President, but defied expectations that he would give favorable (or indeed, any) attention to the investment-promoting and job-creating EB-5 program. Other immigration concerns took center stage, and a period of DHS leadership changes and staff attrition ensued.  DHS lost Secretary Jeh Johnson, replaced by soon-to-be-lost John Kelly, replaced to by soon-to-be-lost Kirstjen Nielsen. USCIS got soon-to-be-lost Director Lee Cissna. IPO lost Chief Nicolas Colucci.
  • USCIS finally made an official EB-5 redeployment policy in June 2017. The policy raised questions that have yet to be answered. Meanwhile, revised editions of Form I-526 and Form I-924 introduced new requirements, and I-526 RFEs implied unannounced new policy on currency swaps.
  • The 2017 CIS Ombudsman report noted that the EB-5 visa wait for China had likely reached over ten years. Apparently this report, unlike earlier cautions, did get some publicity in China. New China I-526 filings dropped by 2,000 from the previous year.
  • Overall, I-526 filings dropped 13% in 2017. There were still filing surges ahead of legislative deadlines in April and December, and increased demand from India and Vietnam (with over 500 I-526 filed from each country).
  • IPO improved processing volumes, but reported processing times continued to increase despite the concurrent fall in receipts. USCIS reported average pending time of 19 months for I-526 and 28 months for I-829 in FY2017.
  • In 2017, I wrote an increasing number of EB-5 business plans for projects sponsored by an unaffiliated “rented” regional center.

2018

  • We spent the year thinking that regulations were just about to double or triple the EB-5 investment amount, with successive OMB agendas predicting a Final Rule in February, then April, then August, then November. But nothing happened, yet.
  • The regional center program faced six sunset dates and briefly lapsed twice in 2018. No EB-5 legislation was officially introduced, but negotiations occurred and faltered behind the scenes. Meanwhile, the legislative effort to eliminate the per-country cap on EB visas picked up steam, and remained a factor through 2019.
  • Charles Oppenheim of Department of State continued to make presentations about EB-5 visa availability, and increased the level of detail provided. His 2018 visa wait time estimates looked serious for Vietnam and India as well as China (14-15 years China, 6-7 years Vietnam, 5-6 years India). The Vietnam and India estimates reflected I-526 volume in 2016/2017, while the China estimate reflected increasing rest-of-the-world demand. (These estimates were somewhat downgraded in 2019.)
  • Vietnam got a cut-off date starting from the May 2018 Visa Bulletin. India, whose filing surge occurred slightly later, stayed current until 2019.
  • Overall, EB-5 demand tumbled in 2018, in response to news about visa waits and associated redeployment challenges on top of political uncertainty. I-526 filings in 2018 were 50% fewer than in 2017, and 70% fewer than in 2015. Chinese apparently filed fewer than 1,500 I-526 in 2018 (about the same number as in 2010, in fact), while demand from Indians surged ahead and resulted in over 850 I-526 filings.
  • USCIS made four updates to the USCIS Policy Manual, to modify previous guidance regarding regional center geographic area, tenant occupancy, redemption agreements, and documentation for conditional permanent resident status.
  • Under Acting Chief Julia Harrison, IPO broke the tradition of holding quarterly stakeholder meetings, but processed a record number of EB-5 forms (over 18,000 total forms adjudicated in FY2018). With about 23,000 forms left pending at year-end, the IPO backlog looked possible to clear in just over a year. (If only that processing volume had continued or improved!)
  • Sarah Kendall took over as IPO Chief in June 2018, and held the year’s first stakeholder engagements in October.
  • The IPO customer service mailbox made its best-ever response in October 2018, when it provided a breakdown of I-526 petitions pending by nationality and priority date. This document gave us power, for the first time, to make our own visa timing predictions, and proved extremely valuable for program integrity. (Alas, this transparency has not been repeated since.)
  • My EB-5 business plan clients felt a sense of urgency that this was, truly, the last chance to raise funds under the investment amount and TEA rules set in 1990. I wrote difficult blog posts to report and interpret EB-5 developments, and added a PayPal button to the blog (to which 56 kind readers responded with a contribution).

2019

  • The final rule for the EB-5 Modernization Regulation was published in July 2019, and took effect in November 2019. The promised investment amount increase to $1.8M ($900,00 in a TEA) spurred a flurry of marketing activity and rush to file I-526 ahead of the November deadline.
  • We do not yet know how much of a demand surge occurred in 2019, as USCIS has still only published data through June 2019. What exactly happened with I-526 from July to December will have major implications for the future of EB-5, and for visa wait times.
  • Charles Oppenheim from Department of State provided visa backlog estimates in April and October, with the October estimate being unexpectedly lower than previous estimates. This assumes a combination of changed assumptions about I-526 receipt volume, I-526 denial rates, and family size.
  • India EB-5 visa demand hit the per-country limit for the first time in 2019. But the Visa Bulletin final action date for India progressed more quickly than expected and filing dates became current, due in part to slow I-526 adjudications.
  • IPO experienced some kind of meltdown in 2019, with exponential decreases to processing volume, and major increases to processing times, denial rates, and pages of RFEs issued. Processing times exceeded 2-4 years for each form. This has variously been credited to new training, new guidance, staff reshuffling, staff turnover, and overall political pressure to decimate legal immigration. We clung to the memory of much better performance in 2018, and prayed for a turnaround.
  • Having long hoarded EB-5 data points, I started a timing estimate service to help interpret and apply the data to individual circumstances. The service eventually had to go on hold as USCIS and DOS became more stingy and slow with data updates, disorder increased, and too many variables became unknown.
  • Despite USCIS, EB-5 investors won a number of victories for fair and efficient adjudication thanks to lawyers taking unreasonable denials and unreasonable delays to court, and winning.
  • Regional center terminations exceeded approvals for the first time in 2019. The decade, which began with 75 regional centers, ended with 794 regional centers on the approved list, and 394 on the terminated list.
  • The regional center program faced four sunset dates during the year. December 2019 brought a clean 9-month reauthorization – the longest authorization since December 2015. Two EB-5 bills remain active in the Senate.
  • Expectation that EB-5 regulatory changes might be blocked by litigation or superseded by legislation proved unfounded in 2019. The investment amount increases and TEA changes took effect on schedule. Industry vowed to continue efforts to keep EB-5 viable into the 2020s. Many urgent fronts present themselves, including renewed legislative efforts, more litigation, visa relief, policy clarifications, processing reform, and processing time improvements.
  • I continued to write EB-5 business plans (but fewer than in previous years), assisted with many project updates for I-526 RFEs, and added more E-2 business plan and non-immigration work. I worked hard to track and interpret EB-5 developments for this blog, received support from 47 blog readers, and considered future changes. The blog closed the decade with 127,000 annual visitors and 1,134 followers – a fair share of the total market for tough technical detail about a minor immigration program.

To the readers of this blog, I hope I have been of service through a decade full of challenges and opportunities. And I appreciate your company as we face the future. Stories that started in the 2010s will continue to unfold for years to come.

EB-5 Visa Timing in 2020

At least 70,000 people are currently in the stage between I-526 filing and receiving visas (conditional permanent residence). Who will receive EB-5 visas in 2020? The answer depends on visa availability, I-526 timing, and the role of country caps.

Visa Availability

Thanks to roll-over of unused numbers from other categories, EB-5 has a few more visa numbers than usual to work with this year.  Department of State has allocated 11,111 visas to EB-5 in FY2020, of which any one country can get up to 778 visas (7%) under the country caps.  (China is the exceptional case, having access to 288 visas by right plus – in practice – all the numbers unclaimed by low-volume countries. About 5,200 EB-5 visas will be leftover and available to China in FY2020, DOS estimated in October – almost 1,000 more than last year.)

I-526 Timing

For many people, I-526 processing time is the major factor determining the visa wait time. We have three primary sources of information about petition processing times: the USCIS Check Case Processing Times page (which has updates about twice monthly that I log here), the Historical Average Processing Times Page (with annual averages), and the Immigration & Citizenship Data page (which has quarterly updates on processing volume). The sources present this puzzle about I-526 processing times to date:

  • the Check Case Processing page currently reports an estimated time range for I-526 processing of 32.5 to 49.5 months, and has reported times in the range of 27 to 52 months since June 2019;
  • the Historical Average Processing page says that I-526 were pending an average of 19.8 months in FY2019;
  • the January 2020 Visa Bulletin has a final action date of May 1, 2018 for India, suggesting that there are Indians who filed I-526 21 months ago and already at the visa stage
  • the Immigration & Citizenship Data page last reported 13,000 I-526 petitions pending as of June 2019. That workload could possibly take 3-5 years to process only if USCIS processed fewer than 4,000 petitions a year going forward. But as recently as 2018, USCIS was processing that many I-526 every quarter.

Looking at the puzzle (and at my charts below, which plot the bi-monthly processing time report updates against the reported annual average), I incline toward the theory that USCIS started, mid-FY2019, to inflate the months reported on the Check Case Processing page to discourage complaints and inquiries, not because the average I-526 petition has been or will be pending 3-5 years. But we’ll have a better sense of the processing reality when more recent volume numbers get published. I hope that USCIS processing improvements will be a major focus of efforts in 2020 to improve EB-5 program integrity and viability.

Visa Timing by Country:

EB-5 investors today can expect to apply for a visa promptly upon I-526 approval, unless they are from China, Vietnam, or India – countries whose demand currently exceeds the 7% of annual EB-5 visas available to each country under the country cap. The country cap adds a constraint to the EB-5 process, creating backlogs and wait times for high-demand countries while keeping the path clear for new applicants low-demand countries. This status quo has been challenged by the Fairness for High-Skilled Immigrants Act. H.R.1044 passed the House in July 2019 (365 – 65), and Senator Mike Lee has worked tirelessly since then to push the companion S.386 in the Senate, negotiating his way progressively through blocks from Senator Paul, Senator Purdue, and most recently, Senator Durban. The Fairness for High-Skilled Immigrants Act bill has been around for five Congresses without ever becoming law (with a previous version also passing the House in 2011 before dying in the Senate), so I do not really expect it to pass now. But I also do not ignore the possibility, considering the intense lobbying push in 2019, and the bill’s major consequences. If by chance it passed, the bill would remove the country cap from all EB visas, thus decreasing the EB-5 visa wait for the backlog of China applicants while increasing the wait for people with more recent priority dates. If passed, new EB-5 investors from any country could expect to wait about seven years for conditional permanent residence, based on the size of the total EB-5 backlog. Most people currently awaiting I-526 approval would face a 3-7 year wait for visa availability, depending on priority dates, if the bill passed.

Visa Bulletin

Assuming no statutory change, the January 2020 Visa Bulletin provides the following projections for EB-5 visa availability through April/May 2020:

  • The EB-5 category will remain “current” for most countries, meaning that people from most countries can file visa applications as soon as they qualify, regardless of priority date.
  • The final action date for China “may be possible to advance at a slightly faster pace.” (The China FAD advanced an average of just one week per month in 2019, and is at November 22, 2014 as of January 2020.)
  • The final action date for India will “likely to advance at a very rapid pace until the level of demand increases.” (The India FAD has advanced a year since being set in July 2019, and jumped from 1/1/2018 in December 2019 to 5/1/2018 for January 2020.)
  • The final action date for Vietnam will likely have “limited forward movement.” (The Vietnam FAD advanced 26 weeks in 2019, and has reached 12/8/2016 for January 2020.)

Here are the stories I see behind the Visa Bulletin projections:

  • EB-5 will remain current for most countries, because most countries have fewer than 778 people who could possibly reach the EB-5 visa application stage this year.
  • The China final action date may advance due to an increase in visa supply, but the advance will likely be slight due to concurrent increase in visa demand. DOS expects to have nearly 1,000 more EB-5 visas to give China in FY20 than in FY19, as discussed above. Greater capacity would help the queue advance more quickly. However, Chinese filed over 3,000 more I-526 in FY15 than in FY14 (13,530 vs 9,722, to be precise). The Visa Bulletin is moving into that filing surge as it starts to accept visa applicants for FY15 priority dates. Greater volume of visa applicants for FY15 priority dates would tend make the line advance more slowly.
  • The India final action date has advanced rapidly because “the level of demand” has been low, and expected to remain so. “Demand” means the number of Indians documentarily qualified for a visa – i.e. with I-526 approval and visa application or I-485 in order. That number is low only because USCIS is slow and erratic with I-526 adjudication. Charles Oppenheim estimates that there were 4,000 to 5,000 Indians in line for an EB-5 visa in 2019 – enough to claim many years of visas.  But about 85% of that queue was stuck in the I-526 stage, and thus not yet qualified to demand a visa. Department of State has 788 visas to give Indians this year. Which of those 4-5K Indians in the queue gets one of the 788 visas depends on which I-526 USCIS can approve this year. So long as USCIS is very slow, only approving a few petitions, and particularly delaying old petitions, the Visa Bulletin will continue to advance the India FAD to open the door for those few who have reached the visa application stage. If USCIS increases volume of I-526 approvals, then more Indians will be able to compete for this year’s visas. In that event, the India FAD will slow its advance, or even move back in time to accommodate an influx of applications with older priority dates. Personally, I expect the India FAD to retrogress this year. Indians filed at least 330 I-526 petitions from January to May 2018, enough to absorb at least a year of visa numbers. Indians filed at least 806 I-526 petitions between April 2017 and May 2018 (April 2017 being the near end of the estimated time range for I-526 processing, according to the current USCIS processing times information page). That’s enough to absorb more than two years of available visas. All that demand will pull the India FAD back, assuming it can ever emerge from I-526 processing.  The Visa Bulletin FAD for India advanced from May 2017 to May 2018 in just seven months, and from January 2018 to May 2018 in just one month – which tells us that DOS simply hasn’t yet received the surge of visa demand that’s on the way from those early priority dates. The 300 or so Indian investors plus family from early 2018 could not possibly have all received visas in December 2019. When the petitions stuck in I-526 processing finally arrive at the visa stage, the visa bulletin will have to recalculate and may retrogress the India FAD.
  • The Vietnam FAD is expected to advance slowly from the current date of December 8, 2016. One would expect the movement to be slow because Vietnamese filed many I-526 in FY2017 – 523, to be precise, as compared with 404 petitions filed the previous year. This higher volume means that FY17 priority dates will take longer to move past the visa window than FY16 priority dates. Meanwhile, many FY17 petitions have completed I-526 processing, and thus the applicants are qualified and ready to claim available visas. However, we can see that the full surge of FY17 demand from Vietnam has not yet hit the visa stage, since the Visa Bulletin Chart B is still current for Vietnam, and USCIS is still allowing applicants to file I-485 using Chart B. That window could close as the pool of qualified Vietnamese applicants grows.

Visa Retrogression

People from China, Vietnam, and India who apply for visas through adjustment of status will be interested in this document, which gives helpful Q&A on visa availability and the I-485 process: USCIS Responses to Questions from the American Immigration Lawyers Association (AILA)

RC List Updates

And to close the year, an update on changes to the USCIS lists of approved regional centers. Note that I update approvals on my blog RC List page (together which such contact info as I can find) and terminations in my Excel Terminations log (together with a log of termination reasons and links to all termination letters posted so far by USCIS).

Additions to the USCIS Regional Center List, 08/27/19 to 12/30/19.

  • EB5 Affiliate Network Southeast Regional Center, LLC (Alabama, Georgia, Mississippi, South Carolina, Tennessee)
  • Plymouth Park Regional Center, LP (Texas)
  • Protogroup, Inc. (Florida) — Reinstated after termination in 2018
  • Southeast Regional Center LLC (Alabama, Georgia)

EB-5 form filing fees

We have opportunity to review and comment on the U.S. Citizenship and Immigration Services Fee Schedule. The proposed rule was published on 11/14/2019, and comments are due by 12/16/2019.

The proposed rule appeared at a busy time in EB-5 and I haven’t heard much talk about it. But this could be important. Future processing times could depend on today’s fee decisions. And EB-5 processing is a major factor in the future survival and integrity of the EB-5 program.

The fee review asks this important question: what resources does USCIS need to provide adequate service? Considering what has changed since the existing fees were set in 2016, how do filing fees need to change?

The fee review reports that the work associated with EB-5 forms has increased significantly since the last fee adjustment in 2016, but the 2019 rule proposes only minor increases to EB-5 filing fees.

Proposed Rule Table 6 — Completion Rates per Benefit Request*
Form  in May 4, 2016 Proposed Rule in November 14, 2019 Proposed Rule Change
I-526 6.5 hours 8.65 hours +33%
I-829 5.5 hours 8.15 hours +48%
I-924 40 hours 34.95 hours -13%
I-924A 5 hours 10 hours +100%
Proposed Rule Table 19 — Proposed Fees by Immigration Benefit
Form Current Fee (Proposed May 4, 2016) New Fee (proposed November 14, 2019) Change
I-526 $3,675 $4,015 +9%
I-829 $3,750 $3,900 +4%
I-924 $17,795 $17,795 0%
I-924A $3,035 $4,470 +47%

* Completion rates “reflect what is termed ‘touch time,’ or the time an employee with adjudicative responsibilities actually handles the case.”

How do we feel about this fee proposal? To me, that small fee increase over 2016 looks like bad news. A 9% fee increase for I-526 does not look equal to addressing the 33% increase to per-form touch time, not to mention the 100% increase to I-526 processing times and 50% decrease to processing volume that occurred between 2016 and 2019. If the labor to adjudicate Form I-829 has nearly doubled since 2016, how will a 4% fee increase give resources to handle that? Does the 0% increase to the I-924 fee indicate that USCIS considers the currently-posted 62 to 115-month I-924 processing time acceptable?

The fee rule aims “to determine the USCIS resources needed to process benefit requests within established adjudicative processing goals.” The rule does not disclose what processing goals it uses. But the goals can’t differ much from the status quo, if the rule expresses little need for additional resources for EB-5.  (To review the dire status quo: according to the current Check Case Processing Times page, a petition is only “outside normal processing” after 1,527 days for I-526, 1,339 days for I-829, and 3,452 days for I-924. But, side note for people filing Mandamus complaints, note that the Historical Processing Times page has a quite different statement of average processing times in 2019.)

I don’t only worry that proposed fee increases are not proportional to the reported increase in work per form. Total revenue is also a concern. Revenue equals price times quantity. If form fees stay about the same, and receipts plummet, then USCIS will have a smaller and smaller EB-5 budget to work with. The fee review estimates $83 million average annual revenue from proposed EB-5 fees, assuming about 19,000 EB-5 forms get filed in FY2019/2020. (This is summing I-526, I-829, I-924, and I-924A.) In reality, annual average EB-5 receipts were only about 10,000 for FY2018/2019 per USCIS data, and will be even lower going forward assuming that the law of demand holds following the doubling of the EB-5 investment amount. The picture won’t be pretty, if IPO ends up having less than half the new fee revenue that it expected, while still needing resources to adjudicate years-worth of pending forms on top of new receipts.  I wonder if the terrible performance we saw at IPO in 2019 wasn’t linked in part to low revenue due to dropping receipts, even as workload remained heavy due to pending petitions. (Sadly, there’s apparently no GAAP revenue recognition principle for USCIS accounting.) And the fee-setting methodology employed by USCIS apparently assumes that for any given year, receipt volume = workload volume. That’s not the reality for EB-5, given long processing times and fluctuating but generally falling demand.

In commenting on the proposed rule, I’m inclined to advocate for much higher EB-5 form filing fees. That considers the current unacceptable processing situation, and assumes that future resources depend on future fee revenue.  But I can see other arguments. EB-5 fees are linked to EB-5 adjudication costs in theory, for calculation purposes, but not necessarily in reality. If EB-5 fee revenue increased, that might buy more resources to improve EB-5 adjudications. Or the added revenue might help subsidize fee-exempt forms, get appropriated for ICE, or cover other USCIS shortfalls and overhead.  Even if the increased EB-5 fees stayed with EB-5, a new petitioner wouldn’t technically be paying the cost of her own adjudication, but helping to cover the cost of adjudicating the 20,000+ EB-5 petitions still pending from previous years. I see the unfairness in calculating fees for the incoming few at a rate needed to subsidize the cost of adjudicating the many still pending. (Though I also don’t see an alternative.)  Furthermore, one could argue that the longer completion times and ballooning processing times aren’t due to lack of adjudicative resources, but to bad policy and management that should be addressed before increasing fees. And finally, it’s possible that although the proposed rule invites public comment, it’s actually to late too influence decisions about resource allocation. I don’t know. But for those interested in this topic, I welcome your thoughts. Here is a draft of a comment that I wrote, and shared with IIUSA. This comment has not been submitted to USCIS, and I welcome input, objections, corrections, and improvements before the submission deadline. At least I’m sure that we shouldn’t miss the chance to speak to USCIS about the critical issue of processing. USCIS has long way to go to achieve its goal “to recover the full operating costs associated with administering the nation’s immigration benefits system, safeguarding its integrity, and efficiently and fairly adjudicating immigration benefit requests, while protecting Americans, securing the homeland, and honoring our country’s values.”

Targeted Employment Areas from November 21

The EB-5 Immigrant Investor Program Modernization Regulation Final Rule took effect on November 21, 2019, and  changed USCIS Policy for Targeted Employment Area (TEA) definitions and process.  Rather than reacting with questions and complaints, I carefully review the specific content of current TEA policy, place changes in context, and address the theoretical background and practical implications. This simple post took a great deal of work and thought.

POST AGENDA

A. Who is affected by the new TEA rules?

B. What areas can now qualify as a TEA?

C. What data can now be used to qualify a TEA?

D. Who determines TEAs, and how and when?

DISCUSSION

A. Who is affected by the new TEA rules?

New TEA rules apply specifically and only to all I-526 petitions filed on or after November 21, 2019. (The final rule for the EB-5 regulation gave a 120-day implementation/transition period: that period started upon publication of the final rule on July 24, and ended when the rule took effect on November 21.)

“Applies to Form I-526 filed on or after Nov 21” is a hard and fast rule. This is very clear in the final rule text, and confirmed by subsequent comments.  The new TEA rules apply to every I-526 filed from 11/21 – no matter if the project had previous investors or an Exemplar I-526 approval pre-11/21, and no matter if the investor is seeking to retain a pre-11/21 priority date when filing the new I-526. The new TEA rules do not apply to any I-526 filed before 11/21, even if the investor funds had not been fully invested in the NCE or deployed to the JCE before 11/21. IPO Chief Sarah Kendall reassured the IIUSA conference that her staff have been trained to adjudicate each pending I-526 based on the rules in place at the time that I-526 was filed. People who filed I-526 before 11/21/2019 are only indirectly affected by the new TEA rules, to the extent that open offerings must now be amended. But policy specifies that such conforming amendments will not count as material change for past investors.  As always, TEA qualification is not an issue at the visa application or I-829 stages.

While the new EB-5 regulation applies to all I-526 filed going forward, it does not apply entirely new rules. Rural areas, for example, have the same definition before and after November 21. The standards for a high-employment MSA TEA are no different now than they were under previous policy. Data recommendations remain unchanged. This post goes on to review what is and is not new.

B. What areas can qualify as a TEA?

The old rules gave the states authority and flexibility to designate geographic areas for TEAs. The new rules instead specify a limited list of possible TEA areas defined by DHS. From now on, a job-creating entity is in a TEA if it is in one of the following defined areas:

  1. A rural area, defined as an area that is not in a standard Metropolitan Statistical Area as defined by the Office of Management & Budget, and not within the outer boundary of any city or town having a population of over 20,000 or more based on the most recent decennial census; or
  2. A high unemployment area, defined as an area that has experienced unemployment of at least 150 percent of the national average rate. For high unemployment, “area” can only mean:
    1. A Metropolitan Statistical Area (MSA)
    2. A county within an MSA
    3. A county that contains a city or town with 20,000+ population
    4. A city or town with population of 20,000+ or more which is outside an MSA
    5. A single census tract, and/or
    6. A group of census tracts comprising the census tract where the job-creating entity principally does business, plus any or all directly adjacent census tracts (PDF p. 11-12 of the NPRM illustrate specifically what DHS has in mind.)

Option 2.4 and 2.6 were revised by the regulations; other options match previous policy. The new list of geographies that can qualify excludes several areas that states were willing to designate as TEAs: census blocks, census block groups, and sprawling groups of census tracts.

As before, the EB-5-funded job-creating entity must principally do business and create jobs within the TEA area.

If you have an EB-5 project in mind, how can you find out the potentially qualifying “areas” to which it belongs?  You can get a quick sense of geography just by looking up the city/town name on Wikipedia, which will tell you to what county and MSA (if any) the place belongs, and give ballpark population data. From there I’d go and enter the project address in the government’s FFIEC mapping system, which will identify the census tract for that address, show the directly adjacent census tract numbers, and confirm whether or not the address is in an MSA. Once having identified the possible geographic areas for a TEA determination, you’re ready to think about data.

C. What data can be used to qualify a TEA?

Since November 21, USCIS does not automatically approve any particular unemployment dataset for TEAs. Before November 21, USCIS also did not offer deference for unemployment data and methods. Regarding TEA data, the regulation simply repeats language that was introduced back in the May 30, 2013 EB-5 Policy Memo, and that has been included in (6)(G)(2)(A)(5) of each Policy Manual iteration since: “USCIS will review determinations of the unemployment rate” and “acceptable data sources for purposes of calculating unemployment include U.S. Census Bureau data (including data from the American Community Survey) and data from the Bureau of Labor Statistics (including data from the Local Area Unemployment Statistics).”  BLS data was specifically identified as acceptable in the December 2009 Neufeld Memo. By 2012, USCIS clarified that it would accept ACS data with census share methodology for subareas not covered by BLS. The point of this history lesson: we are not standing on new ground now, regarding data.  USCIS only changed its deference to state designations of TEA geographies — there never was deference for the data portion of TEA analysis, and suggested data sources remain unchanged. In fact, TEA requirements are, if anything, clearer now than they used to be.  To quote from discussion in the regulation final rule related to acceptable data:

  • The regulation “does not provide one specific set of data from which petitioners can draw to demonstrate their investment is being made in a TEA. Rather, the burden is on the petitioner to provide DHS with evidence documenting that the area in which the petitioner has invested is a high unemployment area, and such evidence should be reliable and verifiable.” [Consistent with previous policy.]
  • “The data necessary for the TEA designation determination is publicly available from the Bureau of Labor Statistics or U.S. Census Bureau. A TEA designation request alternatively can be supported with other data, public or private, provided that DHS can validate that data.” [Consistent with previous guidance.]
  • “Regardless of which reliable and verifiable data petitioners choose to present to DHS, the data should be internally consistent. If petitioners rely on ACS data to determine the unemployment rate for the requested TEA, they should also rely on ACS data to determine the national unemployment area to which the TEA is compared.” If considering state data, the rule cautions that “petitioners may not be able to compare the state census tract data to a national unemployment rate that utilizes the same methodology.”
  • To calculate the weighted average for a group of census tracts, the Final Rule opts to keep the cumbersome method described in Footnote 41 of the NPRM, except specifying that civilian labor force rather than total labor force should be used: (1) divide the labor force of a census tract by the labor force of the entire TEA area; (2) multiply this figure by the unemployment rate of that census tract to calculate a weighted unemployment rate for that tract; (3) repeat Steps 1-2 for each tract in the TEA area; (4) sum the weighted unemployment rates for all tracts in the group to calculate a total that can then be compared with the national unemployment rate.

The final rule optimistically states that the TEA process can be “easily navigated by any petitioner–whether associated with a regional center or not–for little or no cost,” because “unemployment data is readily available by which they can determine if an investment in a particular area satisfies applicable TEA designation requirements.”

The person who wrote the rule clearly never tried to pick an address, venture online, and find and interpret appropriate unemployment data for that location at the MSA, county, city, and census tract levels. It’s not easy.  In practice, most people will have to pay qualified consultants to help with the data portion of TEA determinations. But if you still want a sense of what’s available to the public, a few links:

  • Guidance for Labor Force Statistics Data Users, published by the U.S. Census Bureau, reviews the types and sources of unemployment data available for different types of geographic areas. The EB-5 regulation merely acknowledges that “no one dataset is perfect for every scenario”; Census Bureau guidance explains which dataset to use for which scenario.
  • The Bureau of Labor Statistics publishes monthly and annual unemployment data for the nation, MSAs, and counties. TEA designations have traditionally referenced the annual data –  one doesn’t want to update the TEA analysis every month, and annual data facilitates apples-to-apples comparisons across geographies. To find the annual average employment rate for an MSA or county, open the BLS Local Area Unemployment Statistics page to the section on Tables and Maps Created by BLS. Within that section, scroll down to the “Annual Average” subsection, and within that subsection to “Metropolitan Area Data” and “County Data.” (This link jumps directly to annual average county data.) Alternatively, perform a search using the Featured LAU Searchable Database. Either way, you will be directed to a table crammed with data that’s ugly and not convenient to print and share, but reliable and verifiable.  The nationwide annual average employment rate, for comparison, is on this page. Monthly data is less workable for TEA purposes, but has a benefit of coming in focused and print-friendly reports.  For county data, I like the BLS reports linked to the Geographic Information > Economic Summaries page. They’re in PDF format, and handily compare county unemployment with nationwide unemployment, as required for TEA designation. If my project were in a clear high-unemployment county covered by one of these reports, I’d consider this resource.  (Just keeping in mind that BLS refreshes these reports every month, and does not archive older versions, so they’re not directly verifiable over time. Archives of monthly MSA data can be found here, but monthly county data archives are tougher to locate.)
  • The U.S. Census Bureau’s American Community Survey comes in because BLS does not collect or report unemployment data at the census tract level, or for cities outside MSAs. One can search for ACS data for employment by geography, including at the census tract level, using the advanced search function in the old factfinder.census.gov or the new data.census.gov. The census bureau search functions are not friendly to casual human users, and their employment data is relatively outdated. State TEA designations would frequently update ACS employment data for census tracts with reference to the more recent BLS unemployment data at the county level using a method called census share (as described here by BLS and here in the EB-5 context, for example). But I don’t recommend trying this at home. You’ll want an experienced professional to crunch data for any TEA below the county level. But in the meantime, to get a preliminary sense of unemployment at the census tract level, try using one of the free mapping tools for EB-5, such as by IIUSA and Impact DataSource.
  • State workforce agencies also publish labor market information, as part of a nationally designed LMI infrastructure that connects BLS, the Census Bureau, and each state. Such state-reported data should also be acceptable, as it’s linked to the BLS and ACS data specifically name-checked by DHS as evidence that “should be reliable and verifiable.” The challenge is to determine which national unemployment rate is comparable to the state unemployment rate. (For example, should use the BLS national rate if the state is referencing BLS data or ACS data updated with census share methodology, the ACS 2017 5-year estimate unemployment rate if the state’s numbers are based on ACS 2017 5-year estimates, etc.)

D. Who determines TEAs, and how and when?

We’d gotten comfortable thinking about TEAs determined in advance by state agencies, via designation letters.  That TEA letter comfort was useful for marketing, but somewhat of an illusion.  In fact, TEA determinations were never fixed as of the date of a letter, because policy has required TEA status to be determined for each investor based on the date of investment or I-526 filing (whichever came first). As discussed above, state letters were not granted automatic deference; USCIS reserved the right to question the timeliness, data, and methods. We’ve long had to work with a degree of uncertainty and case-by-case discretion by USCIS when it comes to TEAs.  The new situation is not necessarily more ambiguous, just different.

Determining the geography component of TEAS

The regulations depart from previous practice primarily by eliminating state designation of TEA geography. The power to designate an “area” now lies with DHS, and DHS has made the geography determination once and for all in advance by specifying a limited and strictly defined list of possible areas in the final rule.  Petitioners just have to pick one of the defined area types (see the list in Section B above), and provide unemployment data for that area.

DHS intended for the new reg to eliminate ambiguity and individual discretion from the geography element of TEAs, and apparently succeeded.  There’s no need for anyone to “designate” the geography portion of a TEA; a list of acceptable geographic areas has already been defined.

Determining the unemployment data component of TEAs

As discussed above, the process for data remains unchanged in theory. Whoever provided the TEA data, USCIS has always reviewed and assessed that data in context of each investor petition, and determined as part of I-526 adjudication whether TEA requirements were met.

In the past, we’ve used letters from state agencies as a vehicle for presenting unemployment data to USCIS. Nothing in the regs would prevent us from continuing to do this. DHS has relieved state agencies of the extraneous responsibility of drawing boundaries for EB-5 incentive areas. DHS has not stripped state workforce agencies of their own mandate to supply workforce data.  State agencies may or may not be amenable to continued requests from EB-5 users for unemployment reports customized to DHS-defined areas. But state letters are a tidy and convenient vehicle for reliable unemployment data, and it doesn’t hurt to ask. State workforce agencies are subject to uniform, nationally-designed standards for Labor Market Information (LMI) reporting, so USCIS couldn’t suspect the agencies of being idiosyncratic or inventive with the data portion of a TEA determination.  At least, I would try the state workforce agency, before downloading hundred-column spreadsheets myself from the internet, and before requesting unemployment analysis from some former Uber driver Joe Smith now d/b/a TEA Designations, LLC.

In the past, we’ve used consultants, particularly EB-5 experienced economists, to help identify TEAs and approach states for letters. Now, we can ask those same consultants to prepare letters with unemployment analysis to present to investors and USCIS. We should demand that the consultant’s work product meet these standards: (1) define the geographic area with specific references to the latest EB-5 policy/regs, (2) identify the sources for population and employment data with sufficient specificity to allow the reader to go online and find the publicly-available data referenced, (3) show all the steps in any calculation, (4) explain, with references to the EB-5 regulation and BLS and/or Census Bureau guidance, why the analysis is reasonable. If you, as a reader, can verify the data and see that the analysis aligns with authoritative guidance, odds are the USCIS adjudicator will likewise find it reliable and verifiable. I’d demand more detail and footnotes from a consultant report than from a state letter. Compared with the Georgia Department of Labor, Joe Smith has a hurdle to prove his data and methods.

Whoever wrote the regulation seems to think that people can easily go online and get appropriate unemployment data to print out as evidence.  As briefly discussed above, BLS and ACS data is not that easy to navigate or interpret (or even print, for that matter), and info from third party mapping programs and other sources may or may not be up-to-date, reliable, and verifiable. It takes some expertise even to accomplish a simple task like choosing a national unemployment rate that’s internally consistent with a given local area unemployment rate. And it takes considerable expertise to bolster a TEA analysis with references and explanations that leave no crack for USCIS questions.  So I think we’re still in a world of securing TEAs using letters and reports – the only question is: who prepares them.

Some wondered whether DHS itself could start providing TEA designations in advance of investor petitions. The regulation states that “this rule does not establish a separate application or process for obtaining TEA designation from USCIS prior to filing the EB-5 immigrant petition and USCIS will not issue separate TEA designation letters for areas of high unemployment.” The regulation offers that a regional center may seek TEA determination by filing an exemplar petition, and “If the exemplar application is approved, the approval (including the TEA determination) will receive deference in individual investor petition filings associated with that exemplar in accordance with existing USCIS policy (for example, absent a material change in facts affecting the underlying favorable determination or its applicability to eligibility for the individual investor).” However, this offer is 100% useless and void, unless USCIS can start providing exemplar approvals in less than the time that it takes unemployment data to expire, and thus become inapplicable to individual investor eligibility.  The currently posted I-924 processing time is 62 to 115 months. No investor can claim TEA status at the time of investment or I-526 filing based on a TEA determination calculated five to ten years previously.

Regarding timing, the regulations do not imply a change from past practice.  A TEA determination has always needed to be valid at the time of an EB-5 investor’s investment or I-526 filing, whichever comes first. A TEA determination has always been valid so long as the underlying data is the most current available. Most state letters were effective for up to a year because they calculated unemployment rates from annual average data that is, naturally, updated just once a year. The regulations do not change what unemployment data is available, or when BLS and the Census Bureau publish updates. The regs do not suggest that DHS had a problem with the unemployment data and methods that states have used all these years, only a problem with how states were willing to gerrymander geographies. So I do not see any new policy or new ambiguity, when it comes to timing of TEA determinations.   When a consultant creates a TEA analysis, just be sure to specify the validity period for the underlying data, and point out that this defines the shelf life of the TEA determination.

11/21 Welcome to the New EB-5

The EB-5 Modernization Regulation takes effect today, November 21, 2019. As a reminder, the USCIS EB-5 Page summarizes what’s new, the full text of the final rule gives all the detail and background of the new regs, and the USCIS Policy Manual EB-5 section contains current policy as updated by the regs. It’s possible that rules will be changed again sooner or later by legislation, but that has not happened yet. (The regional center program’s most recent authorization also coincidentally expires today. It will be extended without affecting the regulation, assuming that the Senate and President sign off on the clean continuing resolution that the House passed on Tuesday. I track developments on my Washington Updates page.)

To recap what’s new beginning today, thanks to the effective regulations:

  1. I-526 filed from today through 2024 are subject to a minimum investment of $1.8 million, or $900,000 in a Targeted Employment Area (TEA). After that, investment amounts will be adjusted again based on inflation.
  2. I-526 filed from today have different TEA issues. The definitions are more restricted, and the process has changed. It’s no longer possible to simply order a TEA designation letter from the state, and expect USCIS to defer to that letter. Instead of pre-designation by the states or DHS, TEAs get confirmed on a case-by-case basis as part of I-526 adjudication, based on data provided by the petitioner. (This post discusses the detail.)
  3. From today, people can have the option of filing a new I-526 while retaining the priority date of a previously-approved I-526. (This post discusses the detail.)
  4. From today, people who are removing conditions can enjoy some process improvements related to I-829.

And that’s all. A few simple changes, but with significant consequences. EB-5 usage will be different now that the price tag is two to three times higher than it used to be, now that urban TEAs are more limited, and now that there’s no longer a deadline to hurry investment decisions.