World Events, Not Trade and Commerce, Are Shaping Immigration Policy in The 21st Century

World Events, Not Trade and Commerce, Are Shaping Immigration Policy in The 21st Century

EB-5 Visa, EB5 Visa, EB-5 Investment

About a decade ago Thomas L Friedman, foreign affairs columnist for The New York Times, published The World is Flat: A Brief History of the Twenty-First Century, which described the complexities of 21st century globalisation to demonstrate a growing “levelling” of the global economy. Mr Friedman designated 10 forces that work to “flatten” the global playing field (such as workflow software, outsourcing, supply-chaining and wireless technologies, to name a few) which have caused a significant increase in the number of workers in the global economic labour force and the globalisation of sharing information, news and opinion. While neither global nor country-specific immigration policies are explicitly analysed in The World is Flat, Mr Friedman shows the mobility of international investment, human capital and jobs are essential to ensure the health of the global economy.

There is no doubt economic forces influence decisions on residency and nationality. The number of Americans who renounced their citizenship or long-term residency within the US grew a record 20 per cent from 2014 to 2015, the third record-breaking year in a row. Numerous considerations factor into such decisions, but the burden of complying with US tax policy (including the recently enforced Foreign Account Tax Compliance Act (FATCA)) is often cited as a major reason for expatriation. Likewise, a record number of high-net-worth Chinese investors applied for permanent residency within the US during fiscal year 2015 through the EB-5 Immigrant Investor programme, causing the US to exhaust its allotment of investor visas for the first time in the programme’s history.

In both scenarios, it appears individuals have evaluated economic factors as key when seeking or abandoning citizenship. As the global economy continues to “level,” more individuals will seek to live in a country where both their familial and economic goals can be achieved.

Global Mobility Benefits National Interests

Mr Friedman recognised that human talent is a key economic resource and that international mobility of human talent is a central aspect of globalisation. Fortune 500 companies in the US started by immigrants employ over 3.6 million individuals and are responsible for $1.7 trillion in revenues. According to the Kauffman Foundation, an organisation that promotes education and entrepreneurship, even though only 13 per cent of the US population is foreign-born, 24 per cent of US technology and engineering companies created between 2006 and 2012 had an immigrant founder. In Silicon Valley, that number rises to a staggering 44 per cent. Nevertheless, even though well-educated and talented individuals are often more internationally mobile than unskilled workers and face more favourable immigration consideration in receiving countries, entrepreneurs and highly skilled individuals are unfortunately often stuck in limbo and cannot maximise the potential value of their human capital due to restrictive immigration policies that haven’t caught up to realities of the “flattened” business world.

In the US and elsewhere, employers are facing a growing gap between the skills of domestic workers and the skills sought to meet the business demands of a highly digitalised and interconnected world. The overwhelming demand for technology workers by US employers is shown by the spike in H-1B visa applications over the past five years. During the annual H-1B filing window in April 2016, the US Citizenship and Immigration Service (USCIS) received almost 236,000 visa applications despite a cap of only 85,000 available visas. This is the highest number of H-1B visa applications ever received in one fiscal year, and demand for highly skilled technology workers is constantly increasing. According to a 2015 analysis of numbers from the US Bureau of Labor Statistics by Peninsula Press, a project of the Stanford University journalism programme, more than 209,000 cybersecurity jobs in the US are unfilled, and postings are up 74 per cent over the past five years. A report from Cisco, a global information technology company, puts the global figure at 1 million cybersecurity job openings. Demand is expected to rise to 6 million globally by 2019, with a projected shortfall of 1.5 million, according to Michael Brown, CEO at Symantec, the world’s largest security software vendor.

Likewise, immigrant investment programmes around the world are enjoying new levels of popularity, many of which offer streamlined application processes and fast avenues to permanent residency and/or citizenship. Countries offer these programmes in a bid to receive more foreign direct investment and, with some, to create jobs for domestic workers. These programmes encourage the relocation of high-net-worth investors who not only bring with them the requisite capital investment, but also their families and business activities, which yield a much larger economic impact than simply the required investment amount. In exchange for their investment, foreign nationals are granted the right to work, vote and own property in their adopted country. These individuals are also incentivised by potential visa-free travel, access to financial opportunities and tax havens, and in-state tuition fees at prestigious universities and colleges.

For example, in the US, the EB-5 Immigrant Investor programme (EB-5 programme) requires a minimum investment of $500,000 into a US commercial entity which must then create 10 new full-time jobs. The EB-5 programme is completely self-supporting and the economic benefits of the visa programme come at no expense to the US taxpayer. Since 2012, the EB-5 programme has facilitated $8.7 billion in foreign investment and the creation of more than 35,000 jobs for US workers. In fiscal year 2015, the number of I-526 Immigrant Petitions by Alien Entrepreneur (the first step in obtaining permanent residency through the EB-5 programme) received by USCIS continued to break records for the sixth consecutive year, showing that the demand for an EB-5 visa is strong. USCIS approved more than 8,700 Form I-526 Petitions in fiscal year 2015, accounting for over $4.378 billion in foreign direct investment (FDI) in the US. Further, by the end of fiscal year 2015, an additional 17,360 Form I-526 Petitions remain pending and awaiting processing by USCIS, which represents a minimum of $8.68 billion in additional FDI that is waiting to be injected into the US economy.

Immigrant investment programmes are only one manner in which a country receives FDI. In its 2015 World Investment Report, the United Nations Conference on Trade and Development projected a global pattern of improving global FDI flows, which were forecasted to accelerate from $1.2 trillion in 2014 to $1.7 trillion in 2017, as multinationals are expected to shift large cash holdings to new capital investments. In 2014, the US lost its position as the world’s number one investment location of foreign direct investment dollars to China. Nevertheless, foreign companies continue to invest in the US for many reasons, such as a large market, world-class research universities, a stable regulatory regime and a solid infrastructure that allows businesses to easily access the US market.

Immigrants often serve as a bridge over which foreign capital may more easily flow between their native and current countries, since barriers to international investments are often decreased with immigrant ties to native countries and with immigrant influence in local communities. On 24 February 2016, the International Trade Administration (ITA) released a new study that quantifies the employment impact of Foreign Direct Investment (FDI) in the US. The ITA estimates that 12 million jobs, or 8.5 per cent of the entire US labour force, can be attributed to FDI. However, with the global working population getting older, and with fewer individuals earning capital which could be used for FDI, the global trade level could shrink in the future, especially if national governments are resistant to the free trade of goods, services and people.

Rise of Terrorism, Unconstructive Anti-Terrorism Rhetoric and Restrictive Immigration Policies

On the other hand, global terrorism has increased in the past decade and a half, with terrorist groups and their “lone wolf” followers claiming responsibility for attacks in North America, Europe, Africa and Asia. International and domestic terrorism has resulted in a backlash against open immigration policies. The line of thinking is as follows: “If individuals potentially associated with terrorism are not allowed to enter our country, there is less of a chance that terrorist activity will occur here, so immigration restrictions are required to protect our citizens from terrorist threats.”

This mentality is nothing new. Following both world wars, many countries feared that foreign immigrants might threaten national security by introducing alien ideologies. For example, at the beginning of World War Two, the US government imposed stricter visa regulations and refused to allow refugees to escape the Holocaust, fearing that immigrants would take jobs from US workers or place an additional strain on a burdened economy that hadn’t fully recovered from the Great Depression. Further, the day after the Japanese attack on Pearl Harbor, President Roosevelt suspended naturalisation proceedings for Italian, German and Japanese immigrants; restricted their mobility; and prohibited them from owning items that might be used for spying, such as cameras or radios. The US government even extended its scope beyond actual aliens: in 1942, it required every individual with Japanese ancestry living with 100 miles of the Pacific Coast to move into internment camps due to potential espionage and sabotage.

Recent events have undoubtedly fuelled restrictionist views on immigration: the 2013 Boston Marathon terrorist attack; the January 2015 terrorist attack on the offices of French satirical news weekly Charlie Hebdo; the November 2015 terrorist attacks in which over 125 individuals were slaughtered and hundreds more injured in the streets of Paris, France; and the December 2015 shootings in San Bernardino, California by terrorist sympathisers. These events, including the March 2016 terrorist attack in Brussels by the Islamic State of Iraq and the Levant (ISIL), remain in the public’s mind as immigration policy is debated. Anti-immigrant activists have used terrorist threats to inflame xenophobia, racism and the fear of immigrants. National security hawks argue that the combination of terrorism, mass immigration and unprotected borders constitute the country’s principal security threat. The increase in global terrorism has thus resulted in a backlash against immigration policies that lower barriers in the “flattened” world, assist countries in competing for human talent and open borders for refugees.

For example, due to national security concerns created by terrorism, the US drastically modified its visa-waiver programme (VWP), which allows citizens of 38 participating countries to travel to the US for stays of 90 days or less for tourism or business without undergoing the lengthy process of applying for a visa abroad at a US consular office. The VWP eases travel to the US from citizens of countries who support US security concerns and allows the US to inspect and upgrade security procedures in use in those countries. In addition to the convenience and bureaucratic reduction of visa-free travel, the VWP provides significant economic benefits as a result of less restrictive immigration regulations. Approximately 60 per cent of the visitors to the US arrive through the VWP and generate $190 billion in economic activity, supporting 1 million American jobs and generating tax revenue throughout the US. In December 2015, though, US lawmakers passed a bill declaring anyone travelling to Iran, Iraq, Sudan, or Syria from March 2011 onwards (and nationals of these four countries) ineligible under the VWP. The new visa-waiver restrictions were aimed to ensure that individuals with ties to countries that may pose a terror threat cannot travel to the US without the usual screening that takes place when applying for a visa abroad. However, individuals who have never travelled to these four countries may lose their visa-free travel privileges because Iranian, Sudanese and Syrian nationality is determined by one’s paternal origin, not one’s country of birth. In February 2016, the US Department of Homeland Security (DHS) stated that individuals who had travelled to Libya, Somalia or Yemen in the past five years were also restricted from entering the US without a visa under the VWP. The unintended result of the change to the VWP is that investors, scholars, businessmen, journalists and people trying to visit their families in the US are unable to do so without first obtaining a visa at a US consular office. Further, the new VWP policy seems to be under-inclusive, as nationals of countries with ties to terrorism such as Saudi Arabia, Lebanon, Pakistan and Afghanistan are not included.

Another example relates to the Syrian refugee crisis. Syrians and Iraqis have been fleeing their countries’ respective civil wars for years, especially since the Syrian Civil War started in 2011, and Syrians are now the world’s largest refugee population. More than 250,000 people have died since the violence began in Syria in 2011 and at least 11 million people in the country of 22 million have fled their homes. The United Nations High Commissioner for Refugees (UNHCR) indicates that, as of 7 February 2016, the number of registered Syrian refugees has risen to over 4.5 million individuals. Yet, the refugee debate has only grabbed the mainstream media’s attention due to the rise of ISIL and the potential threat that terrorists or Islamic extremists could be in the mix of, or infiltrate, said refugees. Further exacerbating this fear is the growing occurrence of violence and viciousness against Western society, often perpetrated on civilian populations.

While numerous Syrian refugees have fled to neighbouring Lebanon, Jordan and Iraq, as well as Egypt, some European governments have barred refugees from entering their country due to national security and economic concerns. Others, such as Germany, welcomed 1.1 million asylum seekers in 2015 with open arms – not only for humanitarian reasons, but also for economic purposes. According to a 2011 study conducted by the Nuremburg-based Institute for Employment Research, given the shortage of skilled labour and its shrinking population, Germany’s labour force is expected to drop by almost 7 million by 2025. The study also estimated that Germany would need to add about 400,000 skilled immigrants to its workforce every year to maintain its current economic strength. Notwithstanding the country’s ageing workforce, declining birthrate and need for an influx of human capital, the sexual assaults and robbery of German women in Cologne, Germany on 31 December 2015 by what was reported to be an organised group of men of Arab and North African appearance has prompted criticism of German chancellor Angela Merkel’s policy towards refugees. A February 2016 poll of German citizens found that 81 per cent of the population feels the refugee crisis is “out of control” under Merkel’s government, with most people in favour of more restrictive measures towards asylum seekers. This was confirmed by the election victories of an anti-immigrant political party in March 2016.

The US expects to grant refugee status to 10,000 Syrians over the next few years, and each refugee candidate is required to undergo an in-depth background check, including document reviews and interviews, that can take over a year to complete. Nevertheless, many politicians wish to restrict the number of Syrian refugees allowed to resettle in the US by imposing more burdensome background and security checks than those already in place. Due to the immense sowing of fears surrounding Syrian refugees, the US has accepted less than 2,500 Syrian refugees since 2012.

Finally, US political leaders, when asked to discuss their respective stances of comprehensive immigration reform, have invoked the national security threat of ISIS operatives crossing the US border to support plans to build a wall along the US–Mexico border, or temporarily ban Muslims from entering the US, which would effectively impose a religious test for admission to the US. Others wish to halt increases in legal immigration through employment-based visas (including the EB-5 programme) as long as US unemployment remains high. Senator Marco Rubio has called to tighten immigration laws because “ISIS understands our legal immigration system and is seeking to exploit it”. Prominent US conservatives like Larry Kudlow have even called for a complete moratorium on immigration because of the threat of Islamic terrorism. Marine Le Pen, president of the National Front Party in France, wrote in a New York Times editorial that the “dogma of free movement” has benefited terrorists by offering fertile ground for radical Islam. In a turbulent world where global economies are increasingly interdependent and security concerns extend beyond one country’s borders, proposed solutions that oversimplify the most pressing migration issues are gravely inadequate.

Backlash to the Backlash

While immigration policy does not operate in a vacuum and is subject to the ever-changing and complex realities, it is incumbent on our politicians and government officials to ensure that terrorism, and anti-terrorism rhetoric, do not dictate immigration policy. As Mr Friedman noted 10 years ago, the “flattening” of the global economy will continue during the 21st century, notwithstanding the existence and persistence of terrorism. Some politicians have taken this task to heart. In December 2014, during his first major speech on the topic of immigration, French president François Hollande indicated that the French should not “leave an empty space for discourse” that manipulates or “exploits the fear of dissolution, disintegration, and disappearance” of France. President Hollande went on to say that “foreigners are always accused of every ill, of taking French people’s jobs or unduly benefiting from social welfare even though studies show that they contribute more to social accounts than they take from them”. US president Barack Obama has gone further and stated, “When people spew hatred towards others, because of their faith or because they’re immigrants, it feeds into terrorist narratives.” President Obama argued that the US needs to “reject the terrorist narrative that the West and Islam are in conflict” to succeed in defeating terrorism. Anti-immigrant rhetoric not only creates hatred and bigotry abroad, but also unnecessarily heightens tensions among potential economic partners that restrict trade. As Mr Friedman noted in The World is Flat, the “job of the politician in America, whether at the local, state, or national level, should be, in good part, to help educate and explain to people what world they are living in and what they need to do if they want to thrive within it.”

United Nations High Commissioner for Refugees

Unfortunately, security concerns are only one source of restrictive immigration policies, despite its overemphasised coverage in the media. US immigration policies have also struggled to adapt to a changing global workforce, resulting in long waiting lines and foreign demand for employment-based residency options that far exceed the statutory supply. Although the demographic makeup of the US continues to evolve, the numerical assumptions of migration trends that form the basis of the country’s immigration policies have not been updated in decades.

For example, skilled workers from India will wait as long as 10 years for permanent residency due to the limited supply of immigrant visas and the statutory country quotas in place. Similarly, the EB-5 programme is only allocated 10,000 immigrant visas each year – far less than the number of petitions filed with USCIS over the last few years. However, the statutory framework controlling how immigrant visas are allocated to immigrant investors further restricts the flow of investors into the US. Although 10,000 immigrant visas are available each fiscal year, the visas are used by both the principal investor and his or her immediate family members. As a result, assuming an average family size of 3 individuals, the EB-5 programme only grants permanent residency based on 3,333 qualifying investments each fiscal year.

Moreover, the US presently has very few immigration options for entrepreneurs and innovators. In November 2014 the Obama administration launched a visa-modernisation initiative and directed USCIS to create a series of new policies and regulations to support high-skilled businesses and workers; promote research and development in the US; and create US jobs. One of the proposals involves a “significant public benefit” parole programme for entrepreneurs, inventors and researchers who may not quality for a national interest waiver, but who either have been awarded substantial US investor financing or otherwise hold the promise of innovation and job creation through the development of new technologies or the pursuit of cutting-edge research. As Department of Homeland Security (DHS) Secretary Jeh Johnson stated, policies are needed to support high-skilled businesses and workers “by better enabling US businesses to hire and retain highly skilled foreign-born workers while providing these workers with increased flexibility to make natural advancements with the current employers or seek similar opportunities elsewhere.” Unfortunately, despite recognising the need for more flexible immigration options for entrepreneurs and innovators, no one at the DHS, USCIS or the Executive Branch has taken any meaningful steps toward implementing these ideas. It is incumbent on US politicians and immigration policy makers to enact commonsense solutions aimed at generating economic growth, job creation and innovation in the US. Otherwise, countries with more open borders and stronger incentives will be the beneficiaries of the world’s top talent and capital.

Immigration Lawyers are the Key to Rational Immigration Reform

The US must not let fearmongering politicians and citizens impede the beneficial immigration of investors, entrepreneurs and skilled talent that is vital for a successful global economy. Rather than restrict the movement of highly skilled workers or investment capital to combat terrorism or to accommodate refugees fleeing civil war, there should be an emphasis on ensuring the loopholes and weaknesses in current immigration controls (such as the use of false identity documents, asylum fraud or inadequate inspections at ports-of-entry) are closed or removed. Countries must welcome talent and investments of those from around the world to remain ahead in the globalised economy, and a pro-growth immigration system which creates policies and incentives to attract a highly educated workforce is essential. Rather than conflating terrorist threats with immigration policy, government officials should counter both acts of terrorism and the hate-filled philosophy that inspires them with commonsense, inclusive policies that drive the mobility of trade, investment, individuals, technology and knowledge. Equally important, immigration policies must offer the flexibility and incentives geared towards supporting our global economy, which first requires political leaders to understand the true benefits of unrestricted global mobility.

Many of the day-to-day responsibilities of immigration lawyers may appear mundane. However, our vast collective experience gives us the knowledge and ability to challenge irrational immigration restrictions wherever they arise. Immigration lawyers have a key role to play in resolving the conflict between narrow-minded territorialism and a global world of ideas advancing at lightning speed, and therefore have an indelible responsibility to bring their unique knowledge and ability to action.



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