Recap of the March 3, 2017 EB-5 Immigrant Investor Program Stakeholder Engagement

On March 3, 2017, the USCIS Immigrant Investor Program Office (IPO) held an EB-5 Stakeholder Engagement in which several important updates to the program were provided.

“Unofficial” Statistics for Fiscal Year 2017

From October to December 2016, USCIS saw a surge in petition filings, likely due to an upcoming sunset in the EB-5 regional center program as well as an increase in USCIS filing fees that took effect on Dec. 23, 2016. Specifically, there were 4,395 I-526 petitions filed; 184 I-924 applications filed; and 752 I-829 petitions filed. During this time, USCIS adjudicated 3,583 I-526 petitions (a 120 percent increase), 88 I-924 applications and 112 I-829 petitions. IPO noted that they are currently receiving petitions and applications at a rate faster than they can adjudicate, but hope that this will change with increased hiring and improved efficiency of processes.

Processing Times

USCIS is authorized to hire up to 247 employees over the fiscal year 2017, which will hopefully have a positive effect on improving processing times. IPO also hopes that the creation of a dedicated I-829 adjudication division will increase output on adjudications of all relevant applications and petitions in the EB-5 category.

In order to improve efficiency of process, the IPO also provided a list of ten filing recommendations to the Stakeholders:

1. Identify dual filings in the cover letter for filings for a project submitted to USCIS on both an I-924 application and an I-526 petition.
2. I-924 applications do not need to include organizational or transactional documents unless associated with an Exemplar I-526 petition.
3. If submitting an interfiling with updated documents, highlight the changes.
4. Do not submit bound petitions or applications to USCIS and do not submit double-sided pages.
5. Submit a cover letter with the I-526 petition that clearly notes whether it is a regional center or direct investment, and include a summary of the evidence provided.
6. Submit a table of contents or index with each filing and include corresponding tabs for each piece of evidence.
7. Provide page numbers for each document.
8. Submit clear and legible copies of the evidence provided.
9. Provide complete English translations for all foreign language documents submitted.
10. Notify USCIS immediately should the applicant or petitioner choose to withdraw the case.

Dedicated I-829 Adjudication Division

In October 2016, the IPO created a division of adjudicators and economists who will focus solely on the adjudication and customer service-related inquiries on Form I-829 Petitions by Entrepreneurs to Remove Conditions on Permanent Resident Status. The I-829 division has 3 teams with 8 adjudicators and economists on each team; a senior member of each team will be tasked with interviewing select I-829 petitioners and most interviews will be conducted remotely. USCIS hopes that the creation of a dedicated I-829 division will speed up the processing times for I-829 adjudications going forward.

Compliance Measures

The IPO is continuing to grow its compliance unit, which currently consists of 3 separate branches, to ensure that regional centers and non-regional center new commercial enterprises with pooled EB-5 investments comply with the applicable laws and policies. One branch will focus on the review of Form I-924A applications through which regional centers demonstrate their continued eligibility for regional center designation. Another branch will be responsible for handling actions such as Notices of Intent to Terminate and Notices of Terminations for regional centers. The third branch will oversee regional center audits, the first of which will be conducted next month.

In a further effort to enhance the integrity of the EB-5 program, the IPO will continue to conduct site visits by its 13 site inspectors, who received comprehensive training on the EB-5 program. Over the fiscal year 2017, the IPO anticipates that it will conduct approximately 250 site visits to both new commercial enterprises (NCE) and job creating entities (JCE). IPO reiterated that there typically is no advance notice for site visits. Rather, the site inspector will visit the premises on a fact-finding mission to evaluate whether the NCE or JCE is operating as expected and will assess the findings of a site visit in the context of the petitioner’s filings with USCIS

Commitment to Transparency

In addition to the updated list of terminated regional centers on the USCIS IPO website, the IPO will soon begin to publish regional center termination notices so that Stakeholders can easily access and review termination notices without making a FOIA request. Termination notices will be published in a USCIS electronic reading room (further details will be provided when the site goes live). IPO feels it is important to publish regional center termination notices so that investors and the general public can better understand why a particular regional center was terminated and know the types of activities that will lead to regional center termination.

Additionally, IPO will soon begin publishing approval and denial statistics for each active regional center.

Policy Change Regarding Regional Center Geographic Area Expansion

On Nov. 30, 2016, USCIS published Part G of its Policy Memo, which superseded the guidance found in the May 30, 2013, Policy Memo with regard to the expansion of the geographic scope of a regional center. Per the May 2013 Policy Memo, a regional center could file an amended I-924 application requesting an expansion of the regional center’s geographic scope, and could concurrently file I-526 petitions relying on the proposed expanded geography during the pendency of the I-924 amendment application. However, with the new Form I-924 which is effective as of Dec. 23, 2016, this is no longer the case.

In what was unquestionably the most controversial update from this Stakeholder Engagement, IPO announced that it would continue to adjudicate all I-526 petitions filed before Dec. 23, 2016 based on the guidance from the May 2013 Policy Memo. However, for all I-526 petitions filed on or after Dec. 23, 2016, the current guidance from the new Policy Memo must be followed: I-526 petitions based on investment in a geographic area not previously approved will be deniable due to ineligibility at the time of filing. In other words, as of Dec. 23, 2016, an I-924 amendment application to expand the geographic scope of a regional center must be approved before investors can file an I-526 petition based on that expanded geographic area. This announcement has serious implications for pending petitions that were filed in reliance on the prior policy and Stakeholders were vigilant in their requests for IPO to reconsider this unexpected change in policy.

Source of Funds Questions

Several questions were asked by Stakeholders regarding source of funds and path of funds issues for I-526 petitions, including inquiries regarding the use of bitcoin and other virtual currencies as the source of funds as well as investments made from joint bank accounts owned by the investor and a family member. As expected, IPO reiterated that any EB-5 investment must meet the relevant regulatory and statutory requirements (i.e., the petition must demonstrate that the funds invested were acquired directly and indirectly by lawful means and that the investor owned and controlled the funds invested). Additionally, IPO confirmed that there is no statutory or regulatory prohibition against minor petitioners, as long as the I-526 petition demonstrates the investor’s ability to contract under the relevant law.

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Mentions

• Jordi S Bayer
• Greenberg Traurig, LLP
• U.S. Citizenship and Immigration Services

States

• New York