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How does the EB-5 Program view hawala?

If someone earned legal funds in Foreign Country A, then transferred that income to Foreign Country B by using hawala, are those funds still considered "legal" for source of funds purposes? This same person now wants to use the funds in Foreign Country B to invest into an EB-5 project and they can transfer out of Foreign Country B by a bank transfer. However, this person is worried the funds have already been "tainted" with the hawala transfers. How does EB-5 handle this source of funds issue?

Answers

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    Ed Beshara

    Immigration Attorney
    Answered on

    The foreign national investor has to authenticate the source and transfer of their personal investment funds from the original receiving bank to the sending bank.

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    Barbara Suri

    Immigration Attorney
    Answered on

    What do you mean by “tainted”? Was one of the owners involved in criminal activities? My opinion is that you should set out very clearly the source and ownership of the funds that are transferred to the U.S.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    USCIS requires not only that the investor prove the lawful source of funds by a preponderance of the evidence, but it also requires that the path of the funds from the investor to the new commercial enterprise is clearly established. If it appears there is a break or gap in the custody of the funds, the USCIS will question whether the funds actually invested in the NCE came from a lawful source. That is why the use of hawala is not appropriate for EB-5 cases.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    Due to the fact that hawala usually does not leave a precise paper trail, tracking Source of Funds would not be possible. Also, USCIS has maintained that, if a transaction is illegal in U.S. or the country where the investor is located, it will be illegal for the purpose of EB-5 adjudication. One exception has been using friends and family to transfer more than per person exchange limit. However, there has been some movement by USCIS to make this more problematic.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    Hawala path of funds works for EB5 as long as it is documented in a specific way. You need an EB-5 attorney with experience in hawala networks.

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