Since the passage of the EB-5 Reform and Integrity Act of 2022 (RIA), there has been substantial commotion over how existing regional centers are regarded under the new guidance. Passage of RIA was intended to revamp and streamline the EB-5 immigration investment program, yet lack of clarity from USCIS coupled with extensive processing times have left regional center operations largely at a standstill.
Following two lawsuits against the Department of Homeland Security, a coalition of EB-5 leaders finally reached a settlement agreement with USCIS two months ago. For more information on the settlement agreement, please read our previous blog post.
Stakeholder Engagement
One of the biggest changes set forth by the settlement is the institution of quarterly meetings between USCIS officials and representatives of the plaintiffs to “engage in good faith discussion.” The EB-5 Industry has been quick to understand that this is a crucial concession as EB-5 is one area fraught with nuances, anomalies and multiple Industry challenges.
The underlying theme throughout the Engagement was a focus on compliance. The multiple forms that projects and regional centers are now compelled to file will bring USCIS a considerable windfall in fees.
Some of the comments made by the IPO Chiefs, such as IPO Chief Alissa Emmel appear to contradict the essence of RIA. Chief Emmel stated that if a previously approved regional center chooses not to file the I-956 by December 29, 2022, although this would result in a termination of that RC, the investors would still be entitled to have their I-526 and I-829 petitions adjudicated. It was previously indicated that in such a situation, investors would have the opportunity to move to a regional center in good standing. Allowing a non-compliant regional center to continue to manage the NCE/ JCE and possible redeployment, does not prima facie appear equitable!
For some years the term Tenant Occupancy signified NOIDS and Denials, calculations, it is almost painful to read that Tenant Occupancy has returned, as long as the jobs created by investment in commercial real estate as long as the jobs are not existing jobs that have been relocated.
Below are some of the key takeaways from the Engagement:
Administration
Finally, USCIS are discontinuing the onslaught of trees! USCIS is in the process of setting up an e-filing system for EB-5 petitions. I-829 petitions will be allowed to be digitally scanned, in an effort to accelerate adjudications. While it is no secret that USCIS is short-staffed, today they offered better insight into their recent employment numbers: USCIS has approximately 100 employees working on EB-5 petitions There are a high number of vacancies in their adjudication department, resulting in long processing times 50 employees work on I-526 adjudication, down from 67 employees a few years ago Approximately 40 employees are working on I-829 adjudications USCIS continues the process of hiring and training new staff members RIA established the Integrity Fund, which USCIS will use to conduct investigations, site visits, audits, and other measures to ensure compliance. USCIS will collect either a $20,000 or $10,000 fee from each designated regional center, depending on the number of investors in the regional center’s new commercial enterprises.USCIS Workflows
USCIS will continue to follow the visa availability approach in managing the I-526 inventory. Based on visa availability, IPO queues up its I-526 inventory into the following three workflows on a monthly basis. The first queue contains I-526 petitions where a visa is not yet available or soon to be available and is ordered first in first out. These cases are added into the second or third queues described below each month if visa availability is established, at the beginning of each month, petitions will be moved into the second queue, if a project review is required, or into the third queue if (i) a project review has been completed, or (ii) if the petition is a non-pooled single investor standalone case, i.e., it is not associated with the regional center. A second queue contains petitions related to projects that IPO has not previously reviewed and have a visa available immediately or soon to be available. This includes pooled direct standalone cases. The second queue is organized by the filing date of the oldest pending petition associated with the project in that queue. After the project review is complete, any petitions from the second queue associated with that same project will be added to the third queue to be assigned out for adjudication so long as the visa is still available or soon to be available. The purpose of reviewing the project is so that USCIS may examine evidence that may apply across multiple I-526 petitions up front, i.e., before the associated petitions are assigned to adjudicators. The third queue contains petitions that have an available or soon to be available visa and are either a reviewed project or non-pooled single investor standalone projects. This queue is organized by receipt date of the I-526 petition from oldest to newest. This is the queue from which I 526 petitions are assigned to officers for adjudication. Petitioners are generally assigned to officers in first in, first out order. Since the statutory authorization related to the Regional Center program was renewed, his division has focused on adjudicating the I-526 petitions that were already in the process of being adjudicated pre sunset. For example, cases where USCIS has already issued an RFP or NOID.Forms
The majority of RFEs issued thus far have been regarding Form I-956H This form must be filled out by any person with substantive authority or a managerial position in the new commercial enterprise, especially any person involved with the investment funds and securities. The person filing Form I-956H must use their personal, physical address to ensure that biometrics appointments are scheduled in the correct jurisdiction. For example, an employee who lives in New York but works for a regional center in California will need their address and biometrics appointment to be in New York. Rescheduling biometrics appointments can further delay the adjudication process. USCIS advises all petitioners to fill out each form completely and to avoid using language such as “Please see attached” where clarification or description is required. USCIS will upload video guidelines on how to fill out the different I-956 forms and urges everyone to follow the form directions in the meantime.Regional Center Designation
As we already know, previously designated regional centers must file Form I-956 to demonstrate their compliance with RIA. They will lose their designation status if this new form is not filed. Both Form I-956 and Form I-956G must be filed by December 29, 2022. Form I-956 is a new form created to ensure that the regional center is operating under regulations set forth by RIA. Form I-956G is a continuation of the previous Form I-924A to ensure annual compliance. Failure to file either of these forms may result in termination of the regional center. Previously approved regional centers who use the Form I-956 filing to increase or modify their geographic scope will not be given deference.Project Filings
The filing order for all EB-5 projects is: 1) regional center designation 2) Form I-956F application 3) Form I-526E application The I-526E application may only be submitted after 10 calendar days of the physical receipt of the filing at USCIS’ office If the construction period for the project is less than two years, only a select proportion of the jobs may derive from construction This proportion is calculated by multiplying the total number of jobs by the fraction of the period spent on construction Investors filing their I-526E petitions will no longer need to submit the project documents along with their Source of Funds petitions. USCIS will refer to the previously submitted project documents with the I-956F filing.Sustainment Period
This subject is quickly becoming one of the “spiciest” RIA topics discussed. At the Engagement, Paul Egan, Acting Policy Division Chief, indicated his understanding that the Integrity Act modifies the sustainment requirement for new investors who file I-526 after the Integrity Act. Stay tuned for considerable further debates!
Form I-829
I-829 petitions associated with I-526 petitions filed before RIA will be evaluated under previous regulations The issue of long delays in Form I-829 processing times coupled with the problems experienced by investors unable to obtain I-829 extensions was raised. This backlog is negatively impacting investors who are left in limbo and have to consistently amend travel plans and other important decisions contingent on their immigration status. USCIS acknowledged the issue, offered their understanding, but did not provide any further concrete response.