By Anayat Durrani
The U.S. Citizenship and Immigration Services held a much anticipated EB-5 Stakeholder Engagement on Tuesday to address three specific areas: direct and third-party promoters, investment period, and Regional Center operations. The engagement, originally scheduled for March, was designed to share pertinent information, answer questions from stakeholders and obtain feedback on policies surrounding the EB-5 Investor Program.
“At the beginning of the call, two of the three main agenda items for the engagement call, sustainment period and regional center operations, were struck from the agenda,” says Isabella Getgey, program manager for the American Immigrant Investor Alliance.
Many in the EB-5 community have long waited for clarification on a number of topics, including the investment period, which the EB-5 Reform and Integrity Act of 2022 (RIA) requires capital to stay invested for at least two years.
“New EB-5 investors have a right to know whether their investment funds can be returned to them as early as after two years after investment, as stated in the RIA, or whether they can expect their funds to be at risk and possibly redeployed much longer depending on USCIS processing times and visa availability,” says Dennis Tristani, Esq., Tristani Law, LLC.
Other EB-5 professionals were also disappointed about USCIS’ meeting.
“The big takeaway from this “engagement” is that IPO doesn’t have its act together and is unprepared and unable to have basic engagements with the regulated community,” said Joseph “Joey” Barnett, partner at WR Immigration. “Their scripted answers to selective questions was indicative of their refusal to have any meaningful engagement. They don’t want to listen, they merely want RCs and immigrant investors to obey their “interpretive guidance,” without any public input, even when inconsistent with plain language of the statute.”
He added: “It’s been 13 months since the enactment of the RIA, yet we still don’t know how long a post-RIA EB-5 investor’s funds must be “at risk”. They should be ashamed of themselves and the way they have implemented the RIA.”
Industry reactions from the USCIS EB-5 stakeholder meeting
Getgey says the engagement did not provide answers about the new state of the sustainment period or what USCIS can do to help mitigate redeployment and financial misappropriation.
She notes that Congress designed the RIA to prevent fraud by ensuring the investor provides consent to deploy funds into an investment project and for USCIS to review those projects via form I-956F as well as track the appropriation of funds and development progress via form I-956G.
“All these safeguards are worthless from a fraud/abuse-prevention perspective if they only apply to an initial deployment that will then be followed by an unknown series of further deployments for which Regional Centers do not have USCIS oversight, fund administration requirements, registrations of parties involved, and are not required to disclose the secondary project’s accounting in annual statements to USCIS,” says Getgey.
EB-5 investors remain stuck in a cycle of redeployment, she says, due to USCIS’s own delays.
“Officials had the opportunity to deliver a decision which would place limitations on the ‘at-risk’ period and allow post-RIA investors a fair chance at receiving their investment back,” says Getgey. “USCIS chose not to make any decisions during this meeting, nor clarify when they would finally release the rest of their regulatory interpretation of the RIA.”
The engagement provided no discussion about regional center operations, such as what will happen to those who withdraw from the program ending their status and those who no longer want to solicit investments for new projects.
“The questions pertaining to Regional Center operations are also important as they can affect many previous EB-5 investors whose I-526/I-829 adjudication could hinge on whether their Regional Center decides to remain passive and not raise capital from new investors,” says Tristani.
Attendees were asked to submit questions in February to be addressed during the engagement.
“Instead, the 90-minute session was filled with rehearsed technical clarifications on Form I-956K and answers to pre-screened questions that a simple Google search could resolve such as ‘When does an EB-5 investor have to file Form I-829?’” says Tristani.
Any questions posed about visa availability, USCIS processing and future projections for the set-aside categories, he says, received a response that “was essentially ‘The U.S. Department of State publishes the monthly visa bulletin, and the letter “C” means current.’”
Unlike previous stakeholder events, Tristani says the USCIS provided no updates on IPO processing times, staffing, policy manual update timelines, or planned publications and events.
“Where is the publication of responses to customer service requests? They have fielded and replied to 8,000 in six months. This is herculean – in its inefficiency,” says Greg Sheehan, director of EB-5 Investment Platform and USCIS Compliance, Behring Co. “It speaks to the amount of information that is unavailable, unpublished, and worst of all, implies that only the asker of the question gets the privilege of the answer. That conflicts with the plain language of the RIA.”
Takeaways from the USCIS EB-5 engagement event
Despite criticism of the engagement, attendees were able to glean some information.
“There are so many unanswered questions but we were pleased to get clarification on a few matters,” says Bernie Wolfsdorf, managing partner at WR Immigration and past president of the American Immigration Lawyers Association.
Another takeaway from the engagement is that all Regional Centers must pay the Integrity Fee, even if they have not filed an I-956 or have an I-956 approved.
“We can argue that this is inconsistent with the language of the Behring settlement,” says Sheehan.
Sheehan says attendees expected to get clarity about Pre-Approved Regional Centers based on the announcement in March.
“I think we should take the response at face value and anticipate action when and if Notices of Intent to Terminate are delivered to a Previously Approved Regional Center who fails to pay the Integrity Fund fee,” says Sheehan. “At that time, the context and timing, published policy, will be relevant. I think it makes sense to use the Rule 107 channels of communication to provide helpful feedback in advance.”
The USCIS announced, per attendees, that there would be no available transcript, recording or talking points for the engagement. USCIS was reached out to but provided no comment.
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