FY2020 Q2 EB-5 Form Processing Data

USCIS has published the All Forms report for FY2020 Q2 (January to March 2020), including entries for EB-5 forms I-526, I-829, and I-924. I look forward to these quarterly reports on the USCIS Immigration and Citizenship Data page because they provide information about EB-5 demand trends (receipts), processing trends (number of approvals and denials), and backlog trends (number of pending petitions).

FY2020 Q2 Data        
Form Receipts Approvals Denials Pending
I-526 21 714 190 16,633
I-829 604 730 57 10,309
I-924 48 10 50 137

IPO Chief Sarah Kendall had indicated at the March 2020 EB-5 stakeholder engagement that “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.” Now we can see that indeed, completion rates improved significantly. IPO processed almost twice as many I-526 and I-829 in FY2020 Q2 as in FY2020 Q1. That’s a most welcome update. The productivity in FY2020 Q2 is still three times lower than it was in 2018 with the same staff, so still not a recovery. But “a step in the right direction,” certainly. If IPO can manage more such steps in Q3 and Q4, I will start praising IPO Chief Sarah Kendall instead of pointing out inexcusable mismanagement of resources.

There were just over a handful of I-526 and I-924 receipts in January to March 2020 (21 I-526, and about 48 I-924). That’s no surprise. I would not expect many I-526 filings immediately after a deadline that nearly doubled the minimum investment amount. And I would not expect many I-924 filings considering that USCIS has essentially stopped processing I-924, as indicated by both the volume report (only 10 approvals in three months) and the processing times report (which gives an “estimated time range” for I-924 processing of 53 to 99 months).

Low receipt numbers are part of a trend throughout USCIS, and  help explain why the agency is now complaining to Congress about budget trouble. It turns out, measures to discourage immigration can result in falling revenue from immigrant fees. USCIS faces a reckoning from having operated on the Ponzi principle: depending on incoming fee revenue from new petitioners to pay for adjudicating a large backlog of forms whose fees were already spent without performance. I am heartened to see that at least in 2020, IPO did not use plummeting fees as an excuse to reduce productivity. In 2019, the coincidence of EB-5 receipt and adjudication numbers had me wondering whether IPO had decided to process only as many forms as justified by incoming fee revenue. I’m happy to see FY2020 Q2 firmly contradict that suspicion.

Denial rates remain comparatively high for Form I-526, but lower than in 2019. And it’s unclear whether IPO is actually denying more I-526 than usual, or just approving fewer than usual. Form I-924 denial rates remain astronomical – but no surprise, considering that most Form I-924 just request pre-approval for proposed investment projects. When I-924 processing times extend to four to eight years, the typical proposed project will no longer even exist by the time USCIS gets around to reviewing the application. Significant room for improvement in this area.

The charts below put FY2020 Q2 data in context of previous reports. I also included charts of recent processing times reports for reference and comparison. My timing consultation service remains available to people who want the numbers explained and interpreted as applied to their specific circumstances. So far I can only offer this service for I-526, because I have quite a bit of I-526 data available. I hope that I-829 processing will become more transparent in the future.

6/16 Oppenheim webinar updates (visa number usage and estimate, processing, retrogression)

I appreciated IIUSA’s June 16 webinar A Discussion With Charlie Oppenheim: Chief, Visa Control and Reporting Division, U.S. Department of State. IIUSA has a recording available for purchase, and it’s worth the price. Mr. Oppenheim spoke for 45 minutes and answered many questions in detail. Well-informed IIUSA panelists followed up with another 45 minutes of interesting and helpful discussion about how they are adjusting to current conditions.

Here are a few highlights from Mr. Oppenheim’s remarks. (6/22 UPDATE: See also the analysis published on the IIUSA blog by panelist Cletus Weber: “Highlights and Analysis of June 16, 2020 IIUSA Presentation on Visa Numbers, COVID-19, etc.”)

Consular processing and COVID-19

Department of State has been discussing when and how consulates can get back to full operations, but there are no decisions or forecasts at this point. It remains a “wait and see game.” Mr. Oppenheim expects that there will not be a “one size fits all” approach, but that different overseas posts will be coming back online at different times and with different capacities. The DOS website remains the best source for updates going forward (https://travel.state.gov/content/travel/en/News/visas-news.html and https://www.usembassy.gov/). Meanwhile, however, the National Visa Center remains operational. Applicants are encouraged to proceed as far as they can at NVC, so that they’ll be ready to go as soon as consulates can give interviews.

FY2020 Visa Usage

Mr. Oppenheim did not have exact numbers available, but estimated that over 4,500 EB-5 visas have been issued in FY2020 to date. (With 11,111 EB-5 visas authorized for this year, that could mean over 6,000 EB-5 visas would have to be issued in the next four months to maximize the FY2020 visa limit.) Mr. Oppenheim said that there is still potential for FY2020 numbers to be utilized if oversees posts open soon. USCIS does not allow Mr. Oppenheim to say how many I-485 are pending for EB-5, but he disclosed that they “don’t have a lot,” and that he’s “not sure there are enough I-485 out there to maximize visa usage this year.”

Based on the information Mr. Oppenheim provided, it appears likely that China will lose EB-5 visa numbers this year. China was expected to have over 5,000 EB-5 visas in FY2020, but in fact just over 1,000 visas were issued in Guangzhou before interviews stopped in February. Mr. Oppenheim said in the webinar that the July 2020 visa bulletin makes about 400 Chinese eligible for final action through adjustment of status, and about 3,000 Chinese eligible through consular processing. But he does not think Guangzhou could handle that many visa interviews this year even if it reopened tomorrow. (For reference, in the three years that I’ve logged monthly EB-5 visas from Guangzhou, the high was 781 visas issued in December 2017.)

Meanwhile, India has already used “well over 500 numbers, possibly 550 or more” for FY2020 (out of 778 visas expected under the quota), partly thanks to rapid movement of the visa bulletin. Mr. Oppenheim made India current for final action in the July 2020 visa bulletin, and expects India to remain current through the end of the fiscal year. (That must mean that he does not see many India I-485 pending or forthcoming, and/or is not optimistic about the number of visa interviews that can be scheduled in India this year.  If Mr. Oppenheim did foresee well over 250 Indians ready to claim a visa by September, then India would not be current for final action in the visa bulletin.)

Mr. Oppenheim did not mention how many visas have been issued to Vietnam so far in FY2020. He said that the visa bulletin dates for Vietnam would likely move “consistent with those moves through the end of the fiscal year” (referencing recent visa bulletin movement for Vietnam) but did not further explain that statement.

Mr. Oppenheim encouraged people to become documentarily qualified as soon as they can, so that they’ll be ready to go immediately when consulates can resume interviews. That means responding promptly when notified by NVC to assemble and submit documents. He said that overall, over half of people eligible to become documentarily qualified and pay fees have not done so. The more people are ready to claim a visa, the better chance of maximizing visa number usage this year.

FY2021 Visa Availability

On the bright side, EB-5 visa number loss in FY2020 is likely to be at least offset and possibly far exceeded by gain in numbers in FY2021. Mr. Oppenheim estimates that the EB visa limit, normally around 140,000, will be “at bare minimum” over 200,000 in in FY2021, and probably “well in excess” of 200,000. EB-5 gets 7.1% of total EB visas, so that means the EB-5 visa limit in FY2021 will at least be over 14,200 – and probably significantly over. This will happen because unused family-based visas from one year roll over into employment-based categories the next year. And consulate closures mean that many family-based visa numbers are going unused this year. I have a separate post coming on this topic, to explain the minimum and maximum benefit to EB-5 from unused FB visas in FY2020, and the potential impact on EB-5 wait times.

Mr. Oppenheim confirmed that the offset from the Chinese Student Protection Act will be completely satisfied in FY2020. So in FY2021, China will have the same EB-5 visa rights as other countries – i.e. 7% of the total limit, plus access to leftover visas according to priority date order. Since the number of leftover visas in FY2021 is likely to be very large, and Chinese have the oldest priority dates, FY2021 should be a good year for China EB-5.

Visa Bulletin Movement and Retrogression

Mr. Oppenheim spoke extensively about the thinking behind visa bulletin movement, and surprised me by indicating that he does not expect EB-5 retrogression. I haven’t figured out how this is possible for India in particular, considering the backlog and how visa bulletin dates have jumped in 2020, but Mr. Oppenheim made the statements strongly and repeatedly.  He described the visa bulletin date movements this year as “measured,” “not just moved for the sake of movement,” and “trying to avoid retrogression.” He aims to avoid a situation where people get qualified only to see time-sensitive documents expire. When specifically pressed on India, he said that “I don’t think that India is facing a retrogression in the foreseeable future” and “I think the previous wait time [estimate from October 2019] has dropped significantly for somebody that would be filing today.” This considers the possibility that a number of Indian applicants on file at NVC might be able to receive visas this year, and the increased visa quota next year.

I’m still trying to think this through, considering what we’ve been previously told about backlogs. But I credit Mr. Oppenheim’s predictions, because he has much more data than we do. He clarified that USCIS and IPO report to him monthly on processing status, including how many petitions they have at various stages of processing, and how many they are working on. (Why, IPO, do you persistently refuse to provide such reports to the public, even as you claim to stand for integrity?) Meanwhile, the National Visa Center gives monthly updates on the number of applicants who have become qualified and could potentially be scheduled for interviews.

Mr. Oppenheim acknowledged the remote possibility that all countries could become current for EB-5 final action in the visa bulletin in FY2021, for a period of time. This could happen in the first half of FY2021, if consulates remain closed into the new fiscal year, if there were a sufficient number of status adjustment cases to justify the movement, and if the system had the capacity to accommodate the resulting demand.

Other

Mr. Oppenheim clarified that absent change to U.S. immigration law, Hong Kong will continue to be treated as a separate country for the purpose of U.S. visa issuance.

Mr. Oppenheim conveyed mixed messages about IPO productivity. IPO itself has not yet published any processing data for 2020, so we’re left to guess whether their current I-526 completion rates are more like 2019 (horrible) or 2018 (great). Mr. Oppenheim, who does have recent information on volume of I-526 approvals, said that IPO has been “deciding petitions at a rapid pace” and “forwarding petitions at high volume.” He particularly noted a large number of I-526 approvals for Chinese – which must mean that many China I-526 were assigned for adjudication before the new visa availability approach took effect as of April 1, 2020. That all sounds promising. On the other hand, Mr. Oppenheim provided updated information about the NVC backlog that does not clearly reflect many people advancing from I-526 to the visa stage. The following chart compares the number of cases at the National Visa Center between October 1, 2019 and June 1, 2020.

Country Number of EB-5 applicants at NVC as of 10/1/2019 Number of EB-5 applicants at NVC as of 6/1/2020 Difference
Brazil 212 204 (8)
China Mainland 35,264 42,575 7,311
India 607 677 70
South Korea 221 193 (28)
China Taiwan 101 112 11
Vietnam 1,771 1,550 (221)
Rest of World 1,011 1,070 59
Grand Total 39,187 46,381 7,194
Total for countries other than China 3,923 3,806 (117)

The numbers show that only China has seen a significant net increase this fiscal year in EB-5 visa applicants at NVC. Mr. Oppenheim credited this increase to IPO productivity. However, the increase could also be explained by the fact that the visa bulletin has moved to allow many more Chinese to file documents, even as the consulate has not been issuing visas. For the rest of the world, incoming visa applicants have not been sufficient even to counterbalance the few EB-5 visas issued this year. If IPO were doing its job to adjudicate petitions, we should see more visa applicants. There is a lag between I-526 approval and becoming qualified at NVC, and some approved I-526 go on to status adjustment rather than to NVC. So there’s room for hope that IPO has indeed performed well recently, and I-526 approval numbers just aren’t reflected yet in visa applicant numbers. But Mr. Oppenheim hedged about the amount of visa demand he expected to make it out of USCIS. “I’ve had to temper my expectations with the immigration service because they are under certain processing constraints.”

Interpreting Processing Times Reports

And now, to demystify the USCIS Check Case Processing Times page, which as of today gives these processing times reports for EB-5 forms.

I’ve written a guest article for LCR Capital on Interpreting the USCIS processing times report. The article examines the disconnect between the content and application of the report, and goes in-depth on the following questions:

  • Does the USCIS Check Case Processing Times Page reflect the way that USCIS currently processes petitions?
  • Does the “estimated time range” on the Check Case Processing Times Page refer to the age of petitions that USCIS is processing now?
  • Does the “receipt date for case inquiry” define the limit between normal processing and unreasonable delay?
  • Why does the “receipt date for case inquiry” move so erratically, and sometimes retrogress?
  • Why are the “historical average” processing times reported by USCIS so different from the reported “estimated time range” for processing?
  • How can I estimate the processing time for my petition?

I wrote the article to give clarity and well-researched ammunition to people who may be discouraged and blocked by the USCIS processing times report, but should not be. My article addresses this core conflict:

  • USCIS uses the processing times report to create expectations about “normal processing,” and to shut down inquiries.
  • If you look at what the reported times represent, they in fact define abnormal and delayed processing.

For example, 29.5 months for I-526 indicates, specifically, that 50% of I-526 recently processed had been pending less than 29.5 months. So if my I-526 has been pending for 30 months, the report tells me that I’m being left behind – that over half of recent decisions were on cases younger than mine. And yet some people – including IPO, if I inquire – will blindly treat 29.5 months as the starting point for normal processing, not as the marker it is for delayed processing. Meanwhile, 44.5 months reportedly represents the 93rd percentile of delay in recently-adjudicated cases – by definition, an extreme outlier. Why should we accept the USCIS position that a petitioner doesn’t have a right to inquire unless and until he or she is an extreme outlier?

Or take the appalling 58.5-119 month “estimated time range” reported for Form I-924. How many regional centers have been discouraged by that report from even trying to file Form I-924, despite the importance of that form for project review and program integrity? And yet the report does not actually indicate that I-924 filed now will wait a long time. The processing times report does not claim to report future wait times, average recent wait times, or the age of the inventory. The report merely reflects the fact that half of petitions recently processed happen to have been waiting a long time. At last report, there were only 149 Form I-924 still pending at USCIS. In 2018, USCIS processed that many I-924 every quarter. Who then accepts the current estimated time range of 5-10 years as any reflection on normal processing?

For full discussion, see my article Interpreting the USCIS processing times report.

Bonus Features

Comparing Report and Reality: The following chart illustrates the processing reality for one quarter for which we have happen to have comprehensive data: October to December 2018. The USCIS processing times report during that quarter gave an estimated time range of 20.6 to 26.5 months for I-526 processing. Meanwhile, we now know that most I-526 processed in that period had been pending 10 to 15 months. And the chart shows the reality behind the USCIS claim: “We generally process cases in the order we receive them.”

Country-Specific Processing: When USCIS implemented the new visa availability approach to I-526 processing, they promised that the processing times report would be updated to reflect the new reality. The new approach took effect April 1, 2020, and the report has still not been revised as of June 2020. It still states “We generally process cases in the order we receive them,” and the time estimates have not been updated appreciably since March. While the report has never been a guide to future processing times, it’s particularly unhelpful now that it’s unmoored from the new reality of country-specific I-526 processing times. My I-526 processing time consultation service attempts to provide the service that USCIS should give, but does not. I approach the visa availability impact by piecing together data from different sources to estimate the current composition of the I-526 backlog by country and priority date. Having this picture in view, I then pick out the portions of the inventory that may be sidelined or fast-tracked by the visa availability approach, considering visa availability predictions, and consider the timing outlook in terms of light of volume trends.

 

 

Cooperating to share experience and support the program

Thank you to EB5 Investors Magazine for launching an initiative to showcase positive EB-5 stories. Regional Centers and project companies, please make this effort succeed by taking time to reach out and contribute information about your completed EB-5 projects. The airwaves desperately need stories of real-life experience with EB-5 success. Otherwise, the conversation and our reputation will continue to be defined by the few projects that make the news for bad reasons.

Showcase the positive impact the EB-5 program has had in America
EB5 Investors Magazine is launching a special feature to showcase how the EB-5 visa program has provided a positive impact across the nation by creating American jobs while stimulating our economy.

Please share how your completed EB-5 projects have had a beneficial effect on America. Details of your completed EB-5 projects will be used in material to promote the success and economic impact of the EB-5 program!
Let’s show our policy makers, industry influencers, interested EB-5 program participants and everyday Americans how much investment and jobs the EB-5 program creates!

Click here to share your EB-5 project details!

IIUSA has also emerged with calls to action to support the industry.

  • The IIUSA Public Policy Committee, of which I am a part, is preparing to engage with USCIS on the topic of unreasonable adjudication practices. To this end, we are collecting examples of recent Requests for Evidence and Notices of Intent to Deny that reflect new adjudication trends and make unreasonable requests. Do you have examples? If so, please redact personal information out of the RFE or NOID, and email to education@iiusa.org. The committee will use these examples to inform a robust response. (https://twitter.com/EB5IIUSA/status/1262832809162530819)
  • IIUSA is calling on all EB-5 stakeholders, economic development professionals, and businesses around the country to sign a public letter of support. The letter, addressed to members of Congress, highlights the economic benefits of EB-5 investment, including job creation and retention for U.S. workers and local economic development.
  • IIUSA offers a template to assist stakeholders in submitting op-eds to their local publications.

Interpreting the Visa Bulletin

The monthly visa bulletin guides who can apply for and receive visas.  The visa bulletin can be confusing, because it gives information about sequence for a process that is not strictly sequential. It’s easy to misinterpret the swift movement of EB-5 final action dates, for example. This post discusses the June 2020 visa bulletin and then, as an alternate/additional approach to the question, discusses how priority does and does not work in context of a couple simplified analogies.

Visa Bulletin Example

Consider the June 2020 Visa Bulletin Chart A Final Action Dates.

Interpretation

  • EB-5 is the 5th Employment-based preference. There are separate rows for non-regional center (direct) and regional center EB-5, because these categories get treated differently in case the regional center program authorization lapses. Otherwise, these two rows will be identical to each other each month.
  • The letter “C” means that visa numbers are currently authorized for issuance to all qualified applicants, regardless of when they filed petitions. For EB-5, all countries except China, Vietnam, and India are current for now.
  • The 15Jul15 final action date for China EB-5 means that qualified China-born visa applicants who filed I-526 BEFORE (but not on or after) July 15, 2015 may now proceed to finish the process to get conditional green cards. The 10Jan20 final action date for India EB-5 means that qualified India-born visa applicants who filed I-526 before January 10, 2020 may now move forward to receive visas. The final action dates mark the cut-off for visa availability.
  • The final action date indicates the qualified applicants who MAY move forward – not necessarily those who CAN move forward.  As it happens, all applicants outside the U.S., regardless of priority date and qualification, are currently prevented from getting visas by the fact that consulates are sheltering in place and not giving visa interviews.  At the moment, the population of people who CAN move forward is practically limited to qualified applicants able to finish the visa process through adjustment of status in the U.S. Department of State would take this practical limitation into account, when defining the final action date-barrier for visa availability. The dates in the June 2020 visa bulletin presumably do not account for the inventory of visa applicants pending at the National Visa Center, since those applicants aren’t practically able to demand visas in June. When it’s possible to temporarily discount many pending applicants, it’s possible to move the final action date quickly to accommodate the few applicants who are practically able to claim visas.
  • Even without a pandemic, the final action date does not mean that everyone who filed I-526 before that date can proceed to get visas now. The key word is “qualified” applicants – meaning people who already have I-526 approval and have active and complete visa applications on file. If someone from India filed I-526 in 2019, that person can only proceed to final action in June 2020 if qualified at the visa stage. If still waiting for I-526 approval or visa document review, that person is not eligible yet to claim a visa regardless of the visa bulletin.
  • The final action date in the visa bulletin does not mean that most people who filed petitions before that date already have visas. Department of State issues visas in order by priority date, but processing at USCIS may not be sequential. We know that hundreds of Indians with 2018 and 2017 priority dates (and even some 2016 PD) are still waiting at USCIS for I-526 approval. So when the Visa Bulletin has a January 1, 2020 final action date for India, that can’t mean that most India priority dates from 2019 and earlier are already through the system. It just means that earlier priority dates aren’t yet able to claim visas (thanks, USCIS processing delays and COVID-19), and thus had to be temporarily skipped over for visa issuance. When those earlier PD do reach the point of being able to claim visas, the visa bulletin final action date will need to retrogress (move back in time) to accommodate them.  By contrast, the numbers suggest that few I-526 filed before July 2015 should still be pending at USCIS. So the July 2015 final action date for China could indeed reflect the actual progress of China visa issuance, not just the accident of who’s currently positioned to claim a visa. Knowing who’s in line at different stages, I’m certain that the India final action date will retrogress significantly in future visa bulletins. It’s possible that the China and Vietnam date movement might just slow down rather than moving back in time.

Hypothetical Examples

Basically, the key to understanding the visa bulletin is understanding the extent to which the EB-5 process is and is not sequential by priority date. To that end, I’ve made a couple simplified hypothetical scenarios, with pictures. The first scenario reflects how some people assume the EB-5 process works. The second scenario is more analogous to how it really works.

In hypothetical Scenario A:

  • Each person receives a priority number when entering the “File Petition” door.
  • People wait in line in order of priority number, and proceed in this order to and through the “Get visa” door.
  • Three people per month are allowed go through the Get Visa door.
  • The bulletin over the Get Visa door is updated monthly to post the priority number of the first person who can’t fit through the door that month.
  • When the bulletin posts #4, that means number 1, 2, and 3 may go through the Get Visa door.
  • Considering the queue and how it moves sequentially at a rate of three/month, we can confidently predict the following future bulletin updates: Month 2: #7, Month 3: #10, Month 4: #13.
  • The person with #9 can confidently predict that his turn to get a visa will come no earlier and no later than 9/3=3 months.
  • Scenario A shows a process that’s predictable because strictly sequential from beginning to end. In that sense, it differs from the EB-5 process.

In hypothetical Scenario B:

  • The same rules apply as in Scenario A, except that the process includes multiple stages, and only strictly organized by priority number in the last stage.
  • The queue is mixed in Scenario B due to the first stage, which does not necessarily respect priority numbers. Some petitions are unreasonably delayed here, while others were apparently advanced out-of-order from stage one to the later stage.
  • In Scenario B, the bulletin over the Get Visa door only considers people in the final stage – in a position to claim visas — when posting who gets through that month.
  • The bulletin in Scenario B currently posts “10,” because 10 happens to be the first eligible number not possible to accommodate under the three/month limit. Posting #10 allows eligible 1, 3, and 6 through the green door. It does not allow 2, 4, 5, 7, 8, or 9 through the door, because those numbers happen to be still stuck at ineligible stages. (If those numbers had all been in the eligible stage, then the bulletin would’ve posted #4.). If it happens that 2, 4, 5, 7, and 8 reach the final stage by next month, then the next month’s bulletin will “retrogress” to #7, the earliest number not possible to accommodate under the three/month limit.
  • The person holding #9 has a complex visa wait time calculation. His future turn at the Get Visa door isn’t simply a function of being #9 in queue that moves at a rate of three per month, since the first stage mixed the queue. His turn isn’t now, despite the #10 posted in the current bulletin, because he’s not yet at the stage of being able to claim a visa. It may or may not be his turn once he does reach the eligible visa stage: it depends on who’s at various stages, and when they are able to reach the final stage. We can see that six other people with lower numbers are still in the queue as well. They’re not yet recognized by the bulletin since they’re also not eligible yet, but will be eventually.
  • The priority numbers create order within the visa stage, but not necessarily before that. The more people are concentrated in the final stage, the more order and predictability in the process. The more people are stuck in the first stage, the more potential for disorder and unpredictability.
  • Scenario B is relatively comparable to how priority dates function in the EB-5 process.

Bonus Features

For those about to make a comment asking about visa timing for a specific situation, please see my timing consultation page. Timing estimates are tough, as evident in this post. My consultations are rooted in my attempt to quantify (by piecing together sporadic reports from USCIS and Department of State) the current breakdown of the EB-5 backlog by country, priority date, and process stage. Having this picture in view, we can think about the timing outlook for someone at a given place in that backlog.

The following images show sides from Charles Oppenheim’s visa presentation at the 2018 AILA & IIUSA EB-5 Industry Forum October 29–30, 2018 Chicago, IL. These slides illustrate how EB-5 cases can get mixed up in practice, instead of proceeding in date order from the I-526 stage to the visa stages.

And finally, a log of visa bulletin updates so far in FY2020, illustrating how EB-5 dates have moved this year.

EB-5 Impact of COVID-19 (processing, eligibility, visa numbers)

EB-5 Processing at USCIS under COVID-19

USCIS has continued to process Form I-526, I-485, and I-829 during the pandemic, since this processing generally does not involve public contact. Domestic USCIS offices that were closed to the public are now slated to re-open on or after June 4, and USCIS continues to offer deadline extensions for RFE and NOID notices issued between March 1 and July 1 (per the latest update to the USCIS Response to COVID-19 page). No EB-5 form processing data has been published yet for 2020, but individual reports suggest a steady flow of EB-5 decisions throughout 2020.

Possibly the most important COVID-19 impact for EB-5 processing involves lawyers. In 2019, the Investor Program Office at USCIS simply dropped the ball on adjudications, becoming FOUR TIMES less productive than previous years, and they got away with it. But in 2020, EB-5 lawyers have little to do and few ways to make money except to convince EB-5 investors to file Mandamus and APA actions to sue USCIS to do its job. With unreasonable delay being so blatant in EB-5, especially in the wake of the 2019 processing meltdown, USCIS does not have a good defense against these suits except to finally adjudicate petitions. The logical defensive strategy for IPO now would be to buckle down and work as hard as they can to clear the delayed backlog that’s inviting and justifying the blizzard of lawsuits. And that may indeed be what’s happening. In the meantime, I have an article forthcoming on the USCIS processing times reports, and my Timing Estimates service is up.

COVID-19 and EB-5 Eligibility

A pandemic presents obvious challenges for immigration that depends on sustained investment and job creation. I’ll write more about this as time permits, but a few timely articles:

COVID-19 and EB-5 Visa Availability

The pandemic has effectively stopped EB-5 visas from being issued through consular processing. Department of State cancelled “all routine immigrant and nonimmigrant visa appointments as of March 20, 2020,” and the DOS News page has yet to announce any timeline to resume routine visa services worldwide. Individual consulates also make no promises. The consulate in Guangzhou is silent regarding services. The consulate in Ho Chi Minh City announced May 26 that it will resume some regular services but for American citizens only starting June 1, with no promise for when visa appointments will resume. As of May 25, the embassy and consulates in India are still indefinitely closed to the public for routine consular services. There’s no executive order blocking EB-5 visas, but the lack of visa appointments has created a barrier in practice.

In October 2019, Department of State announced that it had 11,112 EB-5 visas available for FY2020, of which India and Vietnam could expect 778 visas each, and an estimated 5,270 could be leftover for China. DOS normally issues available visas gradually over the course of the year, about a quarter per quarter. But the actual pace of visa issuance has been slow with consulate closures, according to monthly reports of visas issued abroad.

What will happen to the EB-5 visa numbers currently not being issued at consulates? A few possibilities:

  1. Visa numbers can go to applicants who are already in the U.S. and able to complete the process through I-485 adjustment of status. We don’t know how many applicants are currently in this category, because USCIS stopped publishing data on number of pending I-485. However, historically few EB-5 visas have been claimed through status adjustment. In FY2019, the figures for EB-5 adjustment of status were: China, 433 visas; India, 257 visas; Vietnam, 52 visas. (And in FY2018: China, 481; India, 191; Vietnam, 35.) The Visa Bulletin provides one clue to visa demand. If Department of State can see many people ready to claim a visa, then the Visa Bulletin Final Action Date advances slowly to regulate that demand. If few people are in a position to claim visas, then the FAD must advance rapidly to maximize visa issuance. In 2020, the FAD has advanced extremely rapidly for India, and somewhat rapidly for Vietnam and China. This suggests that the I-485 backlog is small and/or mainly composed of recent priority dates.
  2. Consulates might resume routine visa services soon enough, and work hard enough scheduling appointments, that they can catch up with visa issuance before FY2020 ends on September 30, 2020.
  3. If consulates aren’t able to resume visa services soon and there aren’t enough EB-5 applicants in the U.S., then DOS might not manage to issue 11,112 EB-5 visas in FY2020. Any unused visas would then roll over to EB-1 next year. (That loss might be counterbalanced by the roll-over to EB categories of family-based visas that couldn’t be issued in FY2020.)

IIUSA Webinar with Charles Oppenheim on 6/16

In recent years, IIUSA Conferences in the Spring and Fall have featured presentations from Charlie Oppenheim, Chief of the Visa Control and Reporting Division at the U.S. Department of State. I look forward to these presentations for valuable updates on number of EB-5 visas issued, the current size of the backlog, and updated estimates for EB-5 visa wait times and visa bulletin movement.

This pandemic Spring, IIUSA can’t hold a conference, consulates have paused visa services, the Visa Bulletin is jumping wildly to accommodate the few EB-5 applicants lucky to be in a position to claim visas, and visa availability has become a wide-open question. In the midst of all this, Mr. Oppenheim has still kindly consented to join a live webinar with IIUSA to address industry questions about EB-5 visa availability.  Register here for the webinar on June 16 at 1 PM EST. Mr. Oppenheim will only be able to discuss visa availability in general terms, rather then providing data and predictions, because even Department of State can’t say at this point what is happening and will happen with EB-5 visa numbers and visa processing. But I appreciate the willingness to engage with the public, and share as much as possible.

 

Unleashing the economic and job creation benefit of EB-5

Washington has been busy considering how to use immigration policy as a tool in midst of the current COVID-19 crisis. The flurry of immigration-related activity includes:

So far EB-5 has not been harmed, except by threats. EB-5 might benefit indirectly next year from measures that prevent visas from being issued in other categories this year. But EB-5 has not yet been targeted for any benefit. Why? Our administration and legislators are tinkering with immigration policy for the express purpose of protecting jobs for U.S. workers and promoting economic growth. The EB-5 category exists “to stimulate the U.S. economy through job creation and capital investment.” Surely EB-5 is exactly what we need to encourage now?

EB-5 could and should be a potent tool to support our recovery, but faces political and administrative challenges.

The U.S economy and labor markets obviously benefit from a program that incentivizes foreign investors to invest in capital-starved U.S. business that will create jobs for U.S. workers. But politicians get more short-term benefit from talking points than from facts. Immigrant investment does not fit Republican rhetoric, which currently depends on painting immigration as an economic and social threat – the visible scapegoat needed to distract from the frustratingly invisible real foe of COVID-19. Immigrant investment does not fit Democratic rhetoric, which avoids being seen to side with business interests and wants to be seen supporting the most vulnerable first. Who wants to talk about immigrants who do not take jobs but create them, who aren’t to be seen limping across the border but shopping at Nordstrom, who come from success, who support business and developers, and who arrive flush with tax dollars to give? EB-5 investors are a practical help to everyone and politically awkward for all sides.

The EB-5 program would get more recognition and support if people realized what it is and does. American entrepreneurs get capital to enable them to open businesses and complete projects. The foreign investors get visas only if those ventures create jobs for U.S. workers. Most American entrepreneurs are honest. Many EB-5 projects involve small businesses and most employ vulnerable workers. EB-5 investors come from around the world, and tend to be upper middle class professionals. EB-5 uses a tiny percentage of total visas. The visas cannot be bought at any price, only granted in exchange for job creation. But who knows this? One headline out of a hundred tells that story. Most headlines instead shriek these words: fraud, scandal, buy-a-visa, pay-to-play, super-rich, Manhattan, China. Out of many thousands of EB-5 projects, the 20 with salacious features get covered. Where headlines lead, our government representatives follow. EB-5 can only thrive if the industry gets much better at education and public relations, showing a true picture of the program that legislators can afford to come out and support.

To achieve Congressional intent, the EB-5 program needs to be administered in a way that promotes job creation and capital investment. The regional center program needs to be available in geographies around the country, especially rural and distressed urban areas with naturally low investment activity. Applications for new projects need to be vetted promptly, to create opportunity for new projects to raise capital and discourage misuse. Investor petitions need predictable and timely treatment, so foreign investors will trust the program. At the moment, the Investor Program Office at USCIS is doing precisely the opposite at every point. IPO is busy eliminating opportunity for rural and distressed areas by making robust investment pipeline and frequent activity the bar for regional center designation. IPO posts a 4-6 year processing time to vet new regional center projects, and has been taking nearly 3 years to get around to reviewing investor petitions. Such administration is obviously not conducive to attracting capital investment to good projects, creating new jobs, or facilitating timely contribution to the country’s urgent economic needs. EB-5 can only thrive if USCIS remembers that it’s administering an investment-based program that involves the fate of U.S. business and jobs, not simply an immigration program.

To create economic benefit for America, EB-5 needs to be used. To be used, it needs to be attractive. Currently the U.S. investor visa has less availability with more trouble and expense than alternative visas in other countries. This makes it a tough sell for U.S. entrepreneurs trying to find investors to help launch and save businesses. EB-5 could become more attractive if Congress made more visas available to EB-5, walked back the regulatory change to triple the investment threshold, and forced USCIS to start administering the program with integrity and efficiency. Congress could take steps to do all this if they felt the need – just as they’re now proposing immigration interventions, including visa recapture and processing improvements, to help retain foreign health care workers. Congress realizes that America needs health care workers for COVID recovery. When will it realize that America could use investment and job creation for economic recovery, and treat EB-5 accordingly? Probably, when we finally successfully convey that that is, in fact, what EB-5 can offer. This story must be urgently told, by everyone who can tell it. Otherwise, EB-5 may get folded into the blind effort to scapegoat employment-based immigration in general.

UPDATES:

  • EB5 Investors Magazine is launching a special feature to showcase how the EB-5 visa program has provided a positive impact. Please share how your completed EB-5 projects have had a beneficial effect.
  • IIUSA invites EB-5 users to add signatures to this support letter to Congress, and to submit op-eds with stories of EB-5 success.

In other news, the latest IIUSA Regional Center Business Journal is worth the effort to read, with substantial and timely content. I particularly appreciated the articles on TEAs, EB-5 visa numbers, I-526 processing order, and installment investments.

FY2020 Q1 EB-5 Processing Statistics

The USCIS Immigration & Citizenship Data page has posted the long-awaited EB-5 form data for October to December 2019 (FY2020 Q1).

The main questions in my mind before I saw the data:

  • Was there really a massive I-526 surge ahead of the November 2019 deadline to increase the investment amount?
  • Did IPO show any trend toward improved productivity?

I made my data summary charts go back to 2015 this time, to put recent trends in context. As the charts illustrate, there was a large but not historically large surge in I-526 receipts last quarter.  So far from clocking any productivity improvement, IPO once again broke its record for fewest adjudications of all time. Clearly, adjudication was not among IPO’s priorities in 2019.  IPO did not even accomplish the minimum of adjudicating sufficient I-526 over the past four quarters to claim a full annual visa quota. I-924 adjudications remain near 0, while I-829 adjudications continue at a steady low level. Now we’re left to hope for FY2020 Q2 data, which IPO Chief Sarah Kendall promised us last month would show some improvement — improvement we’ve been seeing anecdotally. To quote again from Kendall’s remarks about new processing procedures:

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.

This quarter’s data release included a new table that I’ll analyze separately in another post.




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!