USCIS Begins Requesting Lawful Source of Funds for Third-Party Capital Exchanges

USCIS Begins Requesting Lawful Source of Funds for Third-Party Capital Exchanges

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

A crucial requirement of the EB-5 Program is that each individual demonstrate by a preponderance of evidence that the monies invested in a new commercial enterprise were derived from a lawful source. Due to currency restrictions in many foreign countries, individuals may swap currency in a private exchange of funds. This type of private currency exchange can be similar to what is known as a “Hawala” system that is popular in the Middle East.

In the typical EB-5 currency swap, an individual will transfer funds in a local currency to a third party (an entity or a natural person). The third party will then transfer to an account of the individual an equivalent amount of funds in U.S. dollars. The individual will then take those U.S. dollars and use them to make an investment in a new commercial enterprise. That individual would properly document this transaction, albeit, typically without any information on the source of the third party’s funds, and file an I-526 Petition.

Until recently, USCIS did not question the source of funds of the third party assisting in the currency swap. However, it appears USCIS has shifted their internal policy and has started issuing requests for evidence for each case where a third party assisted in the exchange. This appears to be the case regardless of whether the third party is an entity or a natural person. Individuals who have previously filed an I-526 Petition without documenting the source of funds for the third-party should consider preparing for the potentially issuance of a request for evidence. Individuals who have not yet filed an I-526 Petition, but intend to use the third-party capital exchange method for transferring funds, should consider collecting documents regarding the source of the third party’s funds, which may help reduce the chances of a request for evidence.


http://www.natlawreview.com/article/uscis-begins-requesting-lawful-source-funds-third-party-capital-exchanges

Mentions

States

  • New York


Securities Disclaimer

This website is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities. Any such offer or solicitation will be made only by means of an investment's confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. This website does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. EB5Projects.com LLC and its affiliates expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in the website, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.