By Anayat Durrani
The Department of Homeland Security has posted a Federal Register notice alerting EB-5 stakeholders that the USCIS will begin collecting funds for the EB-5 Integrity Fund to administer the EB-5 Regional Center Program, as required by the EB-5 Reform and Integrity Act of 2022.
“As long as the collection of this fee achieves the intended purpose, it will be welcome by all EB-5 stakeholders,” says Marko Issever, chief executive officer for America EB5 Visa, LLC.
Beginning Mar. 2, 2023, the USCIS will collect an annual fee from each designated regional center to finance the EB-5 Integrity Fund. The annual fee, which is due by April 1, 2023 for the current year, is $10,000 for EB-5 regional centers with 20 or less investors and the fee is $20,000 for regional centers with more than 20 investors. The fee can be paid online via Pay.gov, which is managed by the U.S. Department of the Treasury.
EB-5 Regional Centers required to pay up to $20K fee to USCIS in April
Beginning in fiscal year 2024, the fee will be due at the start of each fiscal year, between October 1 and Oct. 31 (starting Oct. 1-31, 2023).
“The decision by USCIS to collect a $20,000 ($10,000 for those with 20 or fewer investors) Integrity Fee from regional centers in addition to all the other fees collected, is highway robbery, especially when coupled with the threat to terminate the designation of any regional center that does not pay the fee within 90 days of the due date,” says Bernie Wolfsdorf, managing partner of WR immigration.
The alert stated that the filing fee for Form I-526E, Immigrant Petition by Regional Center Investor increased by $1,000 on Oct. 1, 2022, to include the Integrity Fund fees.
“This is in addition to the recently imposed $1,000 filing fee increase for the I-526E, and the proposed massive increase in filing fees for visa applicants. What’s worse is adjudication times get longer and longer despite all the fees collected which makes one wonder what all this money is used for?” says Wolfsdorf.
The alert said the agency could use the fees from the EB-5 Integrity Fund “to detect and investigate fraud and other immigration crimes.” Late fees will not be placed for payments due in FY2023. However, the agency said they will begin collecting late fees starting October 2023 for payments more than 30 days past the due date. The agency said they will announce the amount of the late penalty and the process for collecting that penalty soon.
EB-5 regional centers could face termination if fee is not paid
Regarding termination of regional centers, the USCIS states that they are required to terminate a regional center, per RIA law, that fails to pay the fee within 90 days of it being due.
“If a regional center wants to retire from the business, or wind down, will they still have to pay this fee, or be terminated, which is perhaps what they are seeking. USCIS needs to figure this out before imposing these kinds of fees without notice and the opportunity to comment,” says Wolfsdorf.
Before sending a notice of termination, the agency will send a notice of intent to terminate and a chance to provide proof that the fee was paid on time, per the alert.
“None of this makes sense. Also, they need to be a little clearer than only saying, ‘We may use fees collected for the EB-5 Integrity Fund to detect and investigate fraud and other immigration crimes,’” says Wolfsdorf.
Issever does not believe that the collection of the fee will deter new EB-5 applications. He says, however, that the long processing times and increased scrutiny in the source of funds is the most significant investor complaint his firm is receiving.
“We all know that USCIS is understaffed to process the current backlog. The RIA also mandates much faster adjudications. Since they cannot redirect these fees to solve the other pressing issues, we must find a way to clear the backlog,” says Issever.
To address this, he says the USCIS “could free up some staff by removing the necessity for licensed US broker-dealers like us, already FINRA and SEC-regulated, to file Form I-956K.”
While the RIA law brought with it increased supervision requirements, many in the EB-5 community have felt that the agency's staffing issues have prevented it from doing more.
“The least USCIS could do is to require Form I-956K to be filed only by unregulated foreign migration agents and exempt US broker-dealers, lightening up some of their work,” says Issever. “They could then use the freed talent to focus on other pressing issues.”