By Hermione Krumm, Esq. and Sami Haidar
USCIS Immigrant Investor Program (IPO) Acting Chief Julia Harrison, Senior Advisor for Economics Jan Lyons and Division Chief of Adjudications Richard Murry met with EB-5 stakeholders twice last week, at an official Stakeholder Engagement on November 7 and at an EB-5 Conference hosted by Mona Shah Global in conjunction with the Steven L. Newman Real Estate Institute at Baruch College on November 10, 2017. The EB-5 conference was the first stakeholder conference of its kind ever organized with USCIS, and also “the FIRST time USCIS is live on YouTube [for a global audience]”, to quote Ms. Harrison, who spoke at the conference.
At the Stakeholder Engagement on November 7, Ms. Harrison spoke at length about processing issues, including divided petition adjudication (direct vs. regional center petitions), cross-training personnel and petition workflow. She explained, in particular, why petitions were not processed in a first-come-first-served order, naming a large volume of grouped petitions by project, and case-specific issues as contributing factors. To tackle this, IPO is working with a two-phase process that separates adjudication of project-specific issues from investor specific issues. Once project have been adjudicated, the first two I-526s for one project are released to the officers for review (unless exemplar approval is in place). However, it might be argued as counterintuitive and perplexing that IPO is offering training to economists and adjudicators that combines project-specific and investor-specific issues, yet in reality, the practice is exactly the opposite – this question was not brought up at the engagement.
Ms. Harrison acknowledged IPO’s lack of an automated system to match an I-924 exemplar request with previously-filed I-526 petitions for the same project. Therefore, she called help in the matching process - a cover letter on the petition indexing it to a related exemplar, or even follow-up emails to the IPO customer service mailbox providing lists of associated petitions, for the IPO’s ease.
Featuring numerous speakers and industry leaders, the November 10 conference (broadcasted live on YouTube where audiences from India, the Middle East, China, Russia, the Latin America and other emerging markets all listened/watched) covered some of the most pressing issues and concerns facing the EB-5 market today over a series of panels, including new legislative changes and their implementation, “red flags” for potential securities violations, rural vs. urban projects and their implications, best practices for source of funds documentation, and issues with bridge financing and the redeployment of investor capital.
USCIS led the final panel beginning with an overview presentation of the EB-5 program. While intended to be a primer for overseas viewers, the introduction actually provided substantive insights useful for both newcomers and industry veterans alike. One particularly salient point was the office’s explanation for the backlog and exceptionally long adjudication times. According to USCIS’ Senior Advisor for Economics, Jan Lyons, there was a surge of applications and petitions filed in advance of the December 2015 sunset date. The combination of the sheer volume and poor quality of petitions filed has delayed processing times for all. Mr. Lyons did say that going forward, adjudications of I-526 and I-924 applications would be completed much more quickly.
In terms of I-924A issues (a hot topic for both the stakeholder engagement and the November 10 conference), Ms. Harrison stated that “we do look at the totality of the evidence you submit,” and would consider evidence that the regional center is “making progress toward a project” or at least “has something on the horizon” (2:44:00).
More significantly, the conference provided USCIS IPO with an opportunity to hear the questions and concerns of EB-5 stakeholders from all perspectives – investor, developer and practitioner. While significant policy changes to the EB-5 program are beyond the purview of USCIS IPO, the office does have the power to review certain interpretations of the law and its application of those statutory requirements. One issue in particular that was brought to the attention of USCIS was the applicability of bridge financing for EB-5 projects. Prior to 2014, USCIS’ stated policy was that there must be a “clear nexus between investment and job creation,” thereby precluding the use of EB-5 funds for repayment of bridge financing. After 2014, they revised this policy to allow for EB-5 funds to be employed as payment for bridge financing provided that bridge financing was contemplated before EB-5 or that the bridge financing was temporary. It was the precise definition of the word “temporary” that has proven to be problematic. USCIS now defines “temporary” as one year, being further confirmed at the stakeholder engagement; but as was discussed during the panels at the conference, with the growing adjudication times and increasing complexity of requirements for investors’ source of funds documentation, one year is an arbitrarily short timeframe to allow for this use of stopgap financing – in direct answer to the request by the IPO during the stakeholder engagement for solid industry feedback on this issue. Bridge financing can be vital for allowing projects to proceed when investors’ capital is delayed. After hearing comments from stakeholders during the conference, IPO affirmed that they would revisit and review their policy on the duration question for bridge financing applicability. Mr. Lyons further assured the audience that the IPO would not stand in the way of good business practice, but rather facilitating it.
Clearly, events like this are beneficial for both USCIS and industry stakeholders: we get direct access to USCIS’ perspective on adjudication decisions, and they have an opportunity to hear our thoughts and concerns about the process. Going forward, it is important that we continue to maintain this high level of dialogue.
You can watch the morning and afternoon sessions of the November 10 conference on YouTube here (advance the video to time 1:58:24 for the IPO panel). Official remarks from the stakeholder engagement will eventually be posted on the invitation page, but are not there yet.
About the Author:
Hermione Krumm, Esq.
Hermione Krumm, Esq. is an associate attorney with Mona Shah Global. Hermione works with EB-5, corporate, merger and acquisition (M&A), intellectual property and foreign direct investment (FDI) matters involving China, the UK and the US. Hermione writes and comments frequently on current business and immigration issues. Her articles have been published by LexisNexis, ILW, EB-5info, EB-5 Supermarket, etc. Hermione received her LL.B. (Hons) from the University of Manchester School of Law (UK), and obtained her LL.M. from Cornell Law School. Hermione speaks fluent English, Mandarin and Cantonese.
Sami Haidar
Sami Haidar has gained extensive experience with the entire EB-5 process. Sami has worked with SelectUSA, and the Chamber of Commerce; Sami has conducted research on EB-5 and its potential for use in infrastructure projects, with Professors Jeanne Calderon and Gary Friedland, two esteemed experts in the field. Sami is a graduate of the Leonard N. Stern School of Business at New York University, with a Bachelor of Science in Business and Political Economy, with a Minor in History with Honors.