Updated Information After the Annual IIUSA Meeting Held in Washington, DC May 6 and May 7, 2019

IIUSA hosted a very targeted annual conference in Washington, D.C., to discuss the status of the EB-5 industry and focused on various specific matters of interest to the group.

The major takeaway from the meeting was a speech by Charles Oppenheim, Chief Analyst for USCIS, who provided overall information related to retrogression in various countries, the visa backlog, the utilization of the program among the major countries and the rest of the world as well as the panelists’ general comments related thereto.  In a nutshell, this report can be summarized as follows:

Retrogression Analysis

The retrogression analysis included the major countries as follows:

1. China – mainland born – estimated retrogression for a petitioner that would file an application now is 14 – 16.5 years.
2. China – Taiwan born – approximately 2 years.
3. India – 8.4 years, with retrogression expected to take place sometime in the summer or, at the latest, by the end of the government fiscal year.
4. Vietnam – 7.2 years – no change from prior estimate.
5. South Korea – approximately 2 years.

What is noteworthy from the above-referenced analysis are the following factors:

1. The retrogression time includes the time it takes to obtain the I-526 petition. Therefore, any country that potentially has a delay of less than the two years is really not relevant since the I-526 petition time runs around two years. So, by the time the applicant can be entitled to obtain a visa, the potential delay would have been satisfied.
2. The retrogression analysis does not take into account death or withdrawals of petitions. This is extremely relevant for the country of China, whereby a significant percentage of applicants are electing to receive a return of their funds rather than maintain the program at the earliest point in time and, again, this factor has not been included in the analysis.
3. Derivatives. We believe that there may be an overestimation of derivatives in the process, especially with India based upon current I-526 filings given the fact that the data utilized reflects visas granted for petitions filed two or three years ago.
4. The potential for legislation change is that it may free up more visa petitions and, therefore, reduces the backlog.

Visa backlog totals have been estimated and are included in the chart attached to this blog. Mr. Oppenheim proceeded to analyze the methodology for determining visa backlogs for the major countries and how allotting visas to those countries has been calculated based upon utilization of visas for the rest of the world.  Needless to say, this is a very complicated formula that will change from time to time based upon the status of the visas that are issued by country on a monthly basis. Generally, IIUSA will update it figures either monthly or bi-monthly to indicate to the market any change in retrogression in the applicable country.  Normally, South Korea was 2.4 years and Taiwan was 2 years.

Right now, the retrogression date in China has moved to October 1, 2014, by June or July this year, with the retrogression of Vietnam moving to October 1, 2016, again in June or July. When retrogression comes to India, the retrogression date will be June of 2017 or early July of 2017 when retrogression finally takes place.

Other particular matters discussed at the conference included the following:

1. Some focus on new legislation and the potential for congress to finally come up with a bill which may be acceptable to all parties. Given the history of the Program, it is difficult to predict at all when a final bill will be agreed upon given the head wins for any immigration modification. It is clear that any new legislation will need to factor in changes in the investment amounts as well as a change in the TEA designation. Again, there is a very strong push to increase visa counts based upon various theories. But it is again very difficult to predict same in the near future.
2. Discussions concerning recent cases involving sources of funding and potential resolutions concerning same. USCIS has recently lost a very significant case, called the Zhang case, whereby it took the position that a loan that was unsecured would not qualify as capital. The applicable federal judge lambasted USCIS for its position as being totally unreasonable given the fact that the definition of capital does not include any requirements that a loan be secured.  
3. Continuous focus on the redeployment issues and litigation related thereto.
4. I was on a panel concerning SEC investigations and enforcement and the ways to handle an SEC subpoena. For the last several years, the SEC has taken a formal active role in investigating and potentially bringing actions involving fraud, broker-dealer violations and escrow violations. In many occasions, the SEC will issue a voluntary request for information which is not a form of subpoena. It is generally advisable to cooperate with the SEC requests since, if not complied with, the SEC could then turn around and show a formal subpoena which may take on a more adversary position. It was emphasized by the panel that all communications with the SEC, once an inquiry begins, shall go through counsel to avoid any issues related to proper communications and transmission of documents, including documents that may otherwise be privileged.

Again, the group seemed engaged on attempting to continue to work on legislation to ultimately obtain a final bill that would assist in the marketing of the EB-5 Program on a long term basis.

https://www.jdsupra.com/legalnews/updated-information-after-the-annual-35599/

Mentions

• Ronald R. Fieldstone
• U.S. Citizenship and Immigration Services
• Invest in the USA (IIUSA)

States

• New York