IIUSA (Washington DC) Drops more bombshells!
Still at the IIUSA EB-5 Advocacy and Leadership Conference in Washington D.C., where the mood continues to be mixed.
Last night, we reported that Charles Oppenheim, Chief of the Visa Control of the U.S. Department of State, announced that the EB-5 China immigrant visa category will retrogress in May 2015 rather than June 2015, as originally predicted. Although expected – when the news was reported, there was some genuine surprise from both agents and EB-5 practitioners, like us who have been predicting an 11th hour “reprieve” from the Obama Administration. We are still hopeful as many hints have been dropped, even today, by the various guest speakers. Incidentally, Mr. Oppenheim yesterday, also mentioned that visa usage is about 45% principals (investors) and 55% derivatives (spouse/children), thus if the derivatives are indeed separated, there will not be a retrogression issue.
Today’s Bombshells!
- Congresswoman Zoe Lofgren, a high ranking democrat and long time champion of immigration reform, expressed her opinion that the minimum investment amount would be raised.
- Lincoln Stone on a panel with other EB-5 lawyers gave an enlightening account of what factors USCIS is presently looking at before terminating a regional center – another bombshell. Many regional centers have become complacent, believing that once regional center designation is awarded, it is permanent even sacrosanct! USCIS have actively begun terminating regional centers who are simply poor document managers, using inconsistent I-924A filings as evidence. Stone also stated that USCIS found it rational to terminate regional centers where there were delays in a project. This seems unpractical as many projects, especially with construction, undergo reasonable delays.
Other Updates:
The USCIS updates came from Maria Odom and Fredrick Troncone from the CIS Ombudsman’s office.
- 329 I-924 Regional Center applications are currently pending at USCIS.
- I-526 investor petition filings showed a 50% increase in 2014 over 2013 (which had about as many receipts as 2012).
- In FY2015, USCIS received over 5,200 I-526 petitions by the end of March.
- As of the end of March, USCIS had 585 I-526 petitions with a Request for Evidence pending, 609 petitions with decision pending after response to RFE, and over 400 I-526 petitions with an outstanding Notice of Intent to Deny.
- USCIS currently averages, per month, about 800 I-526s received and 630 I-526s processed. That means that the backlog of I-526s awaiting adjudication — already at a faint-worthy 13,027 petitions – is growing as receipts regularly exceed decisions.
- USCIS’s plan to address the backlog, as reported to the Ombudsman, involves adding staff and approving overtime. Ms. Odom said that IPO presently has 54 adjudicators, 18 economists and 20 program analysts, and plans to add 25 more staff by the end of the year.
SEC & FINRA:
The broker dealer theme dominated discussions on both days. Interestingly, the issue of whether a Chinese agency, raising capital for a project, and who does not have a US presence, but is receiving equity as part of their payment from the same project does not need to be affiliated with a US broker dealer. The deciding factor was whether or not the agency had a US presence.
On the Legislative Side:
As we all know, the Republican party has taken control of both the House and Senate. Currently, the House has 247 Republicans versus 188 Democrats. The Senate houses 54 Republicans and 46 Democrats, Republicans taking the majority since 2006. Hans Rickhoff noted that at this time, conservatives are more concerned about security and border control. Further, members of Congress are looking to make changes to the EB-5 program, such as: raising the capital (reiterated once again!); oversight of TEA determinations; greater involvement by regulators; and addressing processing time concerns. The panel suggested that the program will receive a long term extension, but not permanency.
Overall, it was a sober meeting. A lot of groundwork needs to be covered if EB-5 is to survive and blossom the latest political and media onslaughts.