China EB-5 Visas “Unavailable” for Remainder of FY2014 – What Does This Mean?
Story re-posted from August 27,2014 http://eb5news.com/categories/9-general/posts/305-china-eb-5-visas-unavailable-for-remainder-of-fy2014-what-does-this-mean
On Saturday, August 23, 2014, Charles Oppenheim, Chief of the Department of State Immigrant Visa Control and Reporting Division, announced that, effective immediately, the EB-5 preference category had become “unavailable” for Chinese applicants. This announcement was made at the sold-out AILA EB-5 Conference in Chicago during the “China Issues Panel”. The conference recordings will be available on AILA Agora shortly.
DOS Alert: China EB-5 “Unavailable” for Remainder of FY2014
Effective immediately Saturday, August 23, 2014 the China Employment Fifth (EB-5) preference category has become "Unavailable" for the remainder of the FY-2014. This action is necessary because the maximum level of numbers which may be made available for use by China EB-5 applicants during FY-2014 has been reached.
Department of State Processing: The establishment of a monthly cut-off or "Current" status for a numerically controlled preference category applies to those applicants who were reported documentarily qualified prior to the determination of cut-off dates and allocation of visa numbers for that month. Therefore, all China EB-5 applicants who have been scheduled for interview at an overseas post based on the original establishment of the August and September cut-off dates would have been allotted visa numbers for potential use by their case. Such applicants will not be impacted by the "Unavailability" of the China EB-5 category for the remainder of FY-2014. In this context, "Unavailable" means that no additional numbers are available for "comeback" cases originally scheduled for interview in an earlier month who are just now returning, or for those first requesting an interview. The only exception would be if a post had "otherwise unused" numbers available, because applicants either failed to appear or failed to overcome a refusal during the month (i.e., August or September) of originally scheduled interview.
U.S. Citizenship and Immigration Services (USCIS) Processing: USCIS offices may continue to accept and process China Employment Fifth preference cases and submit them in the normal manner. However, instead of being acted upon immediately, those cases will be held in the Visa Office's "Pending Demand" file until October 1, 2014. At that time, all eligible cases will be automatically authorized from the "Pending Demand" file under the FY-2015 annual numerical limitation. Each USCIS requesting office will receive an e-mail notification of such authorizations, which will be effective immediately.
Charles Oppenheim, U.S. Department of State, Chief, Immigrant Visa Control and Reporting Division
Here is the link to the article- http://www.wsj.com/articles/investor-visas-soaked-up-by-chinese-1409095982 in the Wall St. Journal
This Practice Alert provides further information and discusses some of the practical implications of this recent announcement.
It is important to note that a China EB-5 cut-off date has not been established. Moreover, the Visa Bulletin for September 2015 (which states that China EB-5 is still “Current”) has not been amended. Therefore, this is not a visa retrogression.
“Unavailable” simply means that for the first time since the EB-5 program was created almost 25 years ago, the full quota will be used and the maximum number of EB-5 immigrant visas which could be made available for Chinese applicants had been reached, while still leaving sufficient numbers available for use by all other countries to ensure compliance within the annual Fiscal Year 2014 allocation.
A new allocation of about 10,000 visas will be available on October 1, 2014, the beginning of the Fiscal Year 2015, so there will be virtually no impact on most China EB-5 Category visa applicants who complete processing within the next 6-8 months.
EB-5 visa interviews will proceed as scheduled at the consulates in August and September 2014 since visas have already been allocated for these scheduled interviews and visa issuance will proceed in August and September for qualified applicants. (Technically, an exception is applicants with August or September “comeback” interviews (i.e., after failing to prove themselves documentarily qualified at an earlier interview). If approvable, they will have to wait until at least October 1 to obtain a visa.)
Immigrant visas will continue to be valid for 6 months from the date of issuance, and applicants should be sure to enter the US before the expiration date of the issued immigrant visas, as requests for issuance of replacement visas to accommodate travel to the U.S. outside of that 6-month period may not be possible.
USCIS does not request immigrant visa numbers from State for I-485 adjustment of status applications until the time of adjudication. If visa numbers are unavailable at the time of review USCIS will hold the application in abeyance pending availability of visa numbers.
EB-5 adjustment of status processing by USCIS will proceed; however, issuance of immigrant visas to China EB-5 category applicants will be authorized effective October 1, 2014, when the new Fiscal Year 2015 allocation is available.
Applicants chargeable to China who are cross-chargeable to another “Foreign State” (e.g., Hong Kong, Macau, Canada, France, etc.) based on marriage or other claim1 may request alternate chargeability for August or September visa issuance, but this is not assured as the annual allocation for all Foreign States is almost depleted.
Since the Visa Bulletin has not been amended (i.e., visa numbers are still listed as “available”), eligible China EB-5 category applicants may continue to file for adjustment of status in August and September 2014.
Since other employment and family visa numbers already have wait lines, why is this announcement significant? The reason is this is the first time the EB-5 category has reached the annual limit and the State Department appears to be providing a warning that the China EB-5 category will become oversubscribed and require the establishment of a cut-off date, possibly as early as May 2015, near the end of the third quarter of Fiscal Year 2015.
The announcement is important because it is clear evidence that the increasing EB-5 demand of 700% since 2007, mentioned by new USCIS Director Leon Rodriguez, will certainly result in the establishment of a China cut-off date in Fiscal Year 2015.
It is impossible to determine what the “date gap” will be when it is announced, most likely in May 2015. There are estimates the wait line will be approximately 2 years. Since most I-526 petitions are presently taking 15-16 months (Requests for Evidence are commonplace), the additional wait of about 6 months does not appear unduly worrisome, yet. The concern is that once a China EB-5 cut-off date is established, the Department of State may have to retrogress that cut-off date, depending on the number of petitions approved, and, the cut-off date may not move forward every month. With over 10,000 petitions currently pending with USCIS and about 3,000 filed in the last quarter ending June 30, 2014, this wait line is likely to increase.
Consequences may include possible age-out of derivatives, and complex issues regarding the timing of the job creation, the requirement for which is currently set artificially at 30 months from approval of the I-526 petition (at the I-526 stage), and 36 months from the time of acquisition of conditional permanent residence (at the I-829 stage). There may be necessary material changes in business plans as a result of delays in issuance of immigrant visas to EB-5 applicants chargeable to China.
In summary, there is no significant concern for Chinese applicants who are already far enough along in the pipeline this year, but this State Department announcement, along with Mr. Oppenheim’s spoken comments at AILA’s EB-5 Conference in Chicago, appears to be an indication that once established, the cut-off date for the Fiscal Year 2015 may significantly impact EB-5 immigrant applicants chargeable to China from that point forward.
At the AILA EB-5 Conference in Chicago and in subsequent informal discussions, Mr. Oppenheim also noted that many references he encounters regarding the visa allocation system use incorrect technical terminology, so he provided the following guidance and examples regarding the difference between “oversubscription” and “retrogression,” not only with respect to EB-5, but also with respect to other categories as well:
- Oversubscribed/Oversubscription: The category had been "Current", but the level of demand will require the establishment of an initial cut-off date. This could be on a Worldwide, individual Country/Preference basis.
- Retrogress/Retrogression: There is currently an established cut-off date, but the level of demand will require the next month's cut-off date to be even earlier than the current one.
- Oversubscribed/oversubscription: A particular immigrant visa category was previously "Current", but at some point during Fiscal Year 2015 the level of demand will require the establishment of a cut-off date for month X, in an effort to hold number use within the allowable limit which can be made available.
- Retrogress/Retrogression: The current month's Visa Bulletin shows a cut-off date of January 1, 2012, but the level of demand within that date will exceed the number of visa slots available for use during the next month, requiring the establishment of a July 1, 2011 cut-off date for the next month.
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