EB-5 Regional Centers Achieve Settlement with USCIS to Restart the Regional Center Program
The EB-5 regional center program is… finally… back in business…really. The EB-5 Reform and Integrity Act of 2022 (“RIA”), signed into law on March 15, 2022, purported to reauthorize the regional center program. Unfortunately, USCIS thwarted the intention of the law by unilaterally decertifying every previously- approved EB-5 Regional Center and requiring them to refile for designation. This is a process that likely would have taken years before the EB-5 program would be restarted. Our law firm co-counseled on a lawsuit to enjoin USCIS from decertifying all regional centers. Our litigation was successful and resulted in the issuance of a nationwide preliminary injunction against the USCIS action, including a finding by the judge that USCIS’ action was “almost certainly wrong.” Unfortunately, this judicial order did not bring the regional center EB-5 program back to life. USCIS issued a new form I-526E for EB-5 investors, which included a requirement that the form must contain the USCIS-issued receipt notice for the filing of the investment project application (form I-956F). Unfortunately, USCIS delayed for months the issuance of such receipt notices. As a practical matter, this resulted in the continuation of the shutdown of the regional center EB-5 program. Over the past several weeks, we have been negotiating with USCIS counsel to resolve all issues preventing the Regional Center EB-5 Program from moving full speed ahead. These negotiations resulted in a Settlement Agreement that removes all impediments to the rejuvenation of the EB-5 program. The following are the highlights of the Settlement Agreement: All regional centers that were designated regional centers prior to the passage of the RIA remain designated regional centers. This codifies and makes permanent the nationwide preliminary injunction. All designated regional centers must file form I-956 by December 29, 2022, if they want to continue to do business under the RIA. Previously approved regional centers can continue to proceed with filing project applications and having investors file I-526E petitions both before December 29 and while the I-956 application is pending. All designated Regional centers can proceed to file form I-956F for any projects for which they will be seeking investors. Investors do not have to wait for approval of form I-956F before filing their petitions. Form I-526E can be filed by an investor upon the occurrence of the earliest of any of the following: Issuance of a receipt notice for form I-956F from USCIS; Issuance of a lockbox notice for form I-956F from USCIS; or Within 10 calendar days of delivery of form I-956F to USCIS with proof of cashed check or credit card charge for the I-956F. USCIS will undertake “best faith efforts” to allow for lockbox notice receipts to be returned through a pre-paid returned overnight courier envelope. In adjudicating form I-956 applications, USCIS will give deference to its previous approval of the form I-924, regional center designation, under the prior law. If a regional center in its I-956 filing is seeking an expanded or different geographical area, deference will be given to the remainder of the I-956 application. However, the expanded regional center geographic designation will not be effective until it is approved. In adjudicating form I-956F for regional center projects that had previously been approved as exemplars under the prior law, USCIS will give deference to its prior approval. If a regional center chooses not to file form I-956 in order to do business under the RIA, such failure, by itself, will not be a basis to deny the I-526 investor petitions for grandfathered, pre-RIA investors in a project under the jurisdiction of that regional center. USCIS will engage in notice and comment rulemaking for all new EB-5 forms. The new forms and instructions will be available by December 1, 2022. USCIS will update its website regarding the terms of this Settlement Agreement within 21 days. Very importantly, for at least two years following the effective date of the initial Settlement Agreement, USCIS and representatives of the plaintiffs will meet on at least a quarterly basis to discuss the implementation of the Settlement Agreement and any modifications that may be useful to ensure the successful operation of the EB-5 regional center program. In this litigation, we had the privilege of representing IIUSA, the regional center trade group, and five of the largest and most successful EB-5 regional centers – EB5 Capital, CanAm Enterprises, LP, Civitas Capital Management, LLC, Golden Gate Global, and Pine State Regional Center, LLC. We are very appreciative of their willingness to take on this important litigation for the benefit of the entire EB-5 industry.
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