The Latest on EB-5 From USCIS: Summary of the August 13th 2015 Public Engagement -

The Latest on EB-5 From USCIS: Summary of the August 13th 2015 Public Engagement

Lauren A Tetenbaum

On August 13, 2015, USCIS held a stakeholder engagement for individuals interested in the EB-5 program in Los Angeles and via conference call. The engagement was attended by Susan Curda, District Director of the Los Angeles Field Office of USCIS; Nicholas Colucci, Chief of the Immigrant Investor Program (IPO) of USCIS; Julia Harrison, Deputy Chief of the IPO; Danielle Scott, Chief of the Intergovernmental Affairs branch of Public Engagement of USCIS; Lori Melton, Division Chief of the IPO; and John Lyons, Division Chief of the IPO.

Throughout the engagement, participants emphasized USCIS’ prioritization on the integrity of the EB-5 program as well as its potential to create jobs in the United States. In FY 2014, USCIS received nearly 11,000 I-526 petitions, representing $5.5 billion in future potential investment. In order to increase efficiency within the program, the IPO has recently increased its staff members, including adding a permanent Deputy Chief and three Division Chiefs. The IPO is expected to have 121 employees by the fiscal year end (September 30), with an additional 20 employees between then and the end of 2015, as well as supplemental adjudicators and economists. The staff includes experts in law, finance, business, economics, and banking to enhance consistency, timeliness and integrity.

Mr. Colucci began the engagement by explaining that the IPO’s growth is intended to improve the rate of adjudication of I-526 immigrant petitions and I-924 regional center applications, the numbers for both of which have spiked in recent months likely due to the upcoming regional center program September 30, 2015 expiration date. In fact, Mr. Colucci provided the following preliminary statistics on the first three quarters of FY 2015 (October 1, 2014 – June 30, 2015):

  • The IPO received approximately 7,723 I-526 petitions, representing a 5 percent increase from this time period the year prior; they approved 6,498 and denied 663.
  • The IPO received approximately 2,268 I-829 petitions, representing a 47 percent increase from this time period the year prior; they approved 606 and denied 5.
  • The IPO received approximately 252 I-924 applications, representing a 30 percent increase from this time period last year. They approved 187 and denied 31.

The IPO aims to improve its processing times, which has been challenging given the high rate of incoming cases. For example, for the month of July 2015 alone, the IPO received approximately 55 I-924 regional center applications, whereas they usually receive 25 – 35 per month. As a result, current processing times are estimated to be as follows:

  • I-526 petitions: 13.4 months
  • I-829 petitions: 13.6 months
  • I-924 applications: 11.5 months

The IPO strives to lower its processing times, hoping to accomplish this goal with its growing staff. Already, between March and June 2015, the IPO averaged more than 1,000 adjudications per month of I-526 petitions, representing an 80 percent increase in the monthly adjudication rate compared to earlier in the fiscal year.

Other goals of the IPO emphasized during the engagement include improved communication with stakeholders, compliance by regional centers, clarification on issues such as the order of processing petitions, granting deference, job creation, investment sustainment, commercial enterprise entities, and material changes to petitions, and guidance on regional center legislation.

Mr. Colucci also provided the IPO’s general response to the recently released Government Accountability Office (GAO) report. He noted that the IPO agrees to plan and conduct regular fraud risk assessments of the EB-5 program. They will also develop a strategy and upgrade their systems to expand information collection, including collecting additional information on EB-5 forms and conducting interviews at the I-829 stage. Further, the IPO plans to better track and report data received on immigrant investors and verify precise information related to job creation and investment levels. Finally, the IPO agrees to include a discussion of program costs when valuating economic impact. In general, Mr. Colucci noted that the IPO appreciates the work of the GAO. 

Mr. Colucci further discussed the events in which he participated leading up to the August 13th engagement, including California-based site visits as well as a visit to Guangzhou and Beijing. In China, he met with local public officials and ICE, USCIS, and Department of State employees. These meetings provided insight into the various mechanisms IPO can use to augment its procedures verifying supporting documentation and to enhance its on-the-ground due diligence.

Below are some highlights from stakeholder questions, IPO responses, and the remaining portion of the stakeholder engagement event:

Communication with Stakeholders: The IPO strongly welcomed comments from stakeholders on its August 10, 2015 Draft Policy Memo containing Guidance on the Job Creation Requirement and Sustainment of the Investment for EB-5 Adjudication of Form I-526 and Form I-829. Additionally, EB-5 protocols on ethics and integrity regarding how DHS employees and contractors should handle communication with EB-5 petitioners, applicants, elected officials, the White House, and other stakeholders will soon be available. Further, the IPO has now developed a social media presence with Facebook and Twitter accounts. There will be an “EB-5 Interactive” engagement on September 17 covering I-924 applications and the IPO encourages stakeholders to provide topic recommendations for future events. All of these efforts are meant to provide good customer service and transparency.

Regional Center Compliance: The IPO is developing a standalone team specifically dedicated to promoting compliance within the regional center industry. This team will monitor application adjudication timeliness, review I-924A applications for accuracy and completeness, pursue appropriate action against fraudulent activities including issuing Notices of Intent to Terminate for non-compliant regional centers, and review naming conventions that falsely imply a special relationship with the U.S. government. The IPO plans to hold additional engagements focused on regional centers in which they will help clarify regulations and other requirements, as well as to conduct site visits domestically and overseas to ensure authenticity.

Petition Processing, including Expedited Requests: As above, efficiency in adjudication remains a top priority of the IPO. In general, its policy is to process petitions on a first in, first out basis. The IPO explained that adjudication times can range from weeks to many months for several reasons. Cases submitted in 2012 or 2013 that have gotten out of order for various reasons are now a priority. Another factor affecting the processing order is the recent end to accepting electronic I-526 petitions. Petitions that are submitted with a request to be expedited move to the front of the queue if the expedite request is approved. (It is worthwhile to note that expedited requests, for which there is no guaranteed processing time, are assessed on a case-by-case basis and the IPO does not provide specific guidance.) The IPO team is working to improve its processing times overall.

Deference re: I-526 Petitions and RFEs: The IPO indicated that linking petitions to the same, approved New Commercial Enterprise (NCE) will create adjudication efficiency. It is recommended to file an I-924 application with an I-526 exemplar petition. Once the exemplar is approved, the IPO will grant deference to the Matter of Ho compliant business plan, economic impact analysis, and organization documents associated with the NCE. (If a hypothetical project was submitted with the I-924 application, the hypothetical documents need not be included when submitting a petition for an actual project.) Even with deference to the NCE documents, it will be incumbent on the individual petitioner to demonstrate he or she is eligible for the immigration benefit. If the NCE’s documents are not provided in advance, its information must be assessed with every petitioner. The IPO also suggested including the additional documents requested in an RFE for subsequent petitions related to the same NCE. The IPO confirmed that at this time it cannot accept documents submitted electronically by DVD or CD.

Job Creation Timing Requirements: In general, USCIS follows the job creation policy as outlined in its December 11, 2009 Memo and still tends to expect job creation within 2.5 years of the Form I-526 adjudication, though it was stated at the engagement that this is not a rule. Demonstrating job creation within this period when filing the I-829 to remove conditions on permanent residence status has proven particularly challenging for investors affected by immigrant visa retrogression. However, the IPO plans to monitor consular processing dates and the time period as to when immigrants may enter the United States, and will provide additional guidance at a later time. The IPO stated that as long as the jobs created were permanent in nature and not temporary or seasonal, they will be considered in the analysis of the I-829 petition even if the jobs are no longer in existence at the time the petition is adjudicated.

Sustainment of Investment: The EB-5 program requires that the investment remains at-risk during the conditional permanent residency period. Given this requirement, there were many questions during the engagement on the effect of a successful project’s ability to repay investors’ loans before their I-829 applications are approved and on the period required for sustainment especially when I-829s can take several months to be adjudicated. The IPO emphasized that each case must be adjudicated individually and that if a loan is repaid in advance of the filing of the I-829, it must be re-deployed into another at-risk activity to be considered remaining at-risk since at the time of filing the I-829, the petitioner must show investment sustainment. If an RFE is issued requesting proof that the investment is still sustained several (e.g. 14) months after filing, it should be raised with IPO’s Customer Service, since there are limits as to the time frame for when USCIS can ask about the investment. The IPO is collaborating with the SEC on the re-deployment topic among others. Comments on this issue in response to the August 10, 2015 Draft Policy Memo were encouraged.

Single New Commercial Enterprise: The investment must be sustained in a single commercial enterprise, a requirement that will be examined at the I-829 stage. In general, change in ownership and absorption of the EB-5 loan should not in and of itself negate compliance with an individual investor’s sustainment into a single commercial enterprise provided all of the other requirements on the investment (including job creation) are met. The NCE may deploy funds to a wholly owned subsidiary, for which the 10 jobs created by either entity can be accredited to the EB-5 investor as long as the funds remain invested in the same NCE enterprise throughout the requisite period.

Material Change: The IPO indicated that the policy on material changes to a Form I-526 petition since the May 30, 2013 Memo has not changed: if there are material changes any time after filing while still pending, the petition cannot be approved. Scenarios are provided in the August 10, 2015 Draft Policy Memo, which states that if the material changes occur after the I-526 is approved but before the petitioner has obtained conditional permanent residence, such changes would constitute good and sufficient cause to issue a notice of intent to revoke (and if not overcome, would constitute good cause to revoke).

Regional Center Program Legislation Expiration: If there is no new legislation passed, the IPO will continue to receive, process, and adjudicate regional center affiliated petitions until the close of business on September 30, 2015. As the status of the legislation becomes clearer, USCIS will provide guidance in the coming weeks.

Overall, the August 13th engagement was very informative, although much remains to be determined, especially in light of the impending regional center program sunset.

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