Numerous EB-5 legislation has been introduced with the intention of curbing some of the EB-5 program’s issues and problems. S.1501, the American Job Creation and Investment Promotion Reform Act of 2015, introduced by Sen. Grassley and Sen. Leahy, included a laundry list of EB-5 “integrity” measures. Sen. Charles Grassley and Sen. Dianne Feinstein, have proposed legislation to eliminate the EB-5 program.
In order to attempt to under the EB-5 landscape as it stands in the current political climate, we must understand the players:
Stephen Miller, Senior Advisor to the President for Policy, is a Former Senator Jeff Sessions alum who is well known for his opposition to legal immigration.
Gene Hamilton, Deputy Chief of Staff at the Department of Homeland Security (DHS) for Policy and Senior Counselor, is also a Sessions alum.
Lee Francis Cissna, nominee for Director of U.S. Citizenship and Immigration Services (USCIS), most recently assisted Sen. Grassley to write the H-1B and L-1 Visa Reform Act of 2015, a bill that would have dramatically enlarged the enforcement authority of the U.S. Department of Labor and restricted H-1B and L-1 visa requirements and benefits as well as S.1501.
Kathy Nueble Kovarik, Chief of the USCIS Office of Policy and Strategy, is also a Grassley alum.
Julie Kirchner is the USCIS Ombudsman. Ms. Kirchner served as Executive Director of FAIR, an organization actively opposed to the EB-5 program.
The USCIS Ombudsman is responsible for assisting “individuals and employers in resolving problems with” USCIS and due to limits recently placed by way of EB-5 protocols, is the only way for EB-5 stakeholders to escalate issues for EB-5 cases.
Ms. Kirchner, in her Ombudsman’s 2017 Report to Congress, acknowledged that lack of anti-fraud and national security protections, and failure to agree on a permanent or multi-year reauthorization of the Regional Center program, have resulted in adverse consequences. In addition, legislative efforts have stalled over the methodology for determining TEAs, the two-tiered investment framework and effective dates for new provisions. We are also seeing increased USCIS adjudications times and longer waits for Chinese nationals due to visa backlogs.
Most recently, on November 30, 2016, the Department of Homeland Security (DHS) announced the expansion of the USCIS Policy Manual which introduced a new section, Volume 6: Part G, Investors. Part G consolidates and replaces policy guidance found in the Adjudicator’s Field Manual (AFM) Chapters 22.4, Employment Creation Entrepreneur Cases, and 25.2, Entrepreneurs (Form I-829), as well as related AFM appendices and policy memoranda.
While comprehensive guidance is good, the new section of the USCIS Policy Manual is often unclear; provides little in the way of examples and definitions; ignores common and acceptable practices, definitions, and methodologies; and misstates or misinterprets the regulations.
Some of chapters with problems of note for the direct investor include the following:
Chapter 2.A.5 – Targeted Employment Area
• Confirms that a TEA will cease to qualify as a TEA over time if unemployment decreases or population increases. This text is problematic because of the uncertainty it introduces into the planning of EB-5 projects as the USCIS will continue to evaluate and re-evaluate TEA designation.
• Does not mention current USCIS practice granting state TEA designations a validity period of 12 months.
• Not clear as to when an area must qualify as a TEA.
Chapter 2.D.3 – Full-Time Positions for Qualifying Employees
• Refers to the job creation requirement to be “full-time and permanent” when both the INA and the CFR refer to the term “full-time.”
Chapter 4.C – Form I-526/Material Change
• Provides that a “change is material if the changed circumstances would have a natural tendency to influence or are predictably capable of affecting the decision” without providing examples to clarify what would be considered a “material change.”
Chapter 5.C – Removal of Conditions/Material Change/At Risk
• Misstates the plain language of the regulation by requiring evidence that the “at risk investment was sustained throughout the period of the petitioner’s conditional permanent residence in the United States.” The regulations only require investment be sustained “over the two years of conditional residence.”
• Excludes language confirming that an investor maintains his or her conditional permanent residence status even after the denial of the I-829 until a final administrative appeal is complete.
It is unknown if Ms. Kirchner and Mr. Cissna will be able to together resolve the issues and problem plaguing the EB-5 program. For the time being, we must utilize any and all means available to seek results for worthy cases. We should and must continue to submit well-document cases, participate in stakeholder meetings, advocate strenuously, and litigate if appropriate.
Should you have any questions about the future of the EB-5 program, please contact your HLG attorney.