15 Nov We Spoke, USCIS Listened!
A spirit of collaboration was the order of the day at both the Stakeholder Engagement meeting as well as the EB-5 Conference, as USCIS IPO representatives and EB-5 stakeholders shared their concerns about the real-world application of policy. Today Rebecca Singh and Omar Hakim join Mark and Mona to discuss the key takeaways from both events, covering adjudication times, the newly coined RC Compliance Review, and the continuing uncertainty around potential legislative changes.
The number one takeaway from the November 7th Stakeholder Engagement and the November 10th EB-5 Conference? The USCIS Immigrant Investor Program Office representatives are human, and they are listening. There are limitations around what they can do, as they are bound by the constraints of regulations, but it is not their intention to impeded business. In fact, they are willing to consider changes to the way policy is implemented on several fronts.
Mona Shah and Associates Global team members Omar Hakim and Rebecca Singh led discussions at the EB-5 conference, and today they join Mona and Mark to revisit the key issues raised in ‘The Red Flag’ and ‘Source of Funds’ panels. They also address several key takeaways from the collaborative meetings, including information about bridge financing, redeployment and discretion, protracted adjudication times, and the evolving Regional Center Compliance Review. Listen and learn why the legislative changes currently under consideration may not be implemented right away and how USCIS IPO representatives are making an effort to apply stakeholder feedback and improve the processes of the EB-5 program.
The Spirit of Collaboration Among the EB-5 Community
- At both the Stakeholder Engagement on November 7th and the EB-5 Conference on November 10th, USCIS officials demonstrated a real desire to understand the needs of EB-5 stakeholders. They were there both to provide information and to receive feedback around how their policy impacts people in the real world.
- Because USCIS’s participation in the EB-5 Conference was voluntary, people were politer—and USCIS was less formal and more frank in return. USCIS IPO Acting Chief Julia Harrison, Senior Advisor for Economics Jan Lyons, and Division Chief of Adjudications Richard Murray were all in attendance, and the meeting was broadcast live on YouTube for a global audience.
Takeaways Around Bridge Financing, Redeployment and Discretion
- USCIS has introduced RFEs that would curtail bridge financing. After hearing comments from stakeholders regarding the necessity of bridge financing when investors’ capital is delayed, IPO assured the audience that they would revisit this policy so as not to impede business.
- Julia explained that in other green cards, discretion is baked into the statutes. That is not the case for I-526. John Pratt pointed out that USCIS does have discretion with relation to policy change.
Understanding Adjudication Times
- In September of 2015, USCIS was swamped with ‘garbage petitions’ filed in advance of the first sunset period. Due to the volume and poor quality, USCIS is just now getting through those cases.
- USCIS is not following a strict first-come, first-served policy. If your I-526 petition has been filed and your project is approved, adjudication time will be expedited.
- USCIS is considering the possibility of holding back the adjudication of backlogged cases awaiting visas (i.e.: Mainland China) to assist with age out cases. IPO requested additional feedback on this issue.
- USCIS has found that having an I-829 team (combining economists and adjudicators) has helped accelerate the process. They are planning to implement this idea in I-526 adjudication as well.
- Direct EB-5 petitions are placed in a separate que from Regional Center petitions, and RC petitions represent 98% of all filings. It is faster to file direct, as there is no economic report to review.
The Newly Coined RC Compliance Review
- Moving forward, audits will be referred to as Regional Center Compliance Reviews. (Don’t confuse this with Site Visits, as that is a separate program.)
- Though the SEC is not directly involved with the RC Compliance Reviews, USCIS will be on the lookout for fraud. Compliance with securities laws is of the utmost importance.
The Red Flag Panel
- Omar’s panel highlighted basic issues investors should look out for:
- 1) Ensure that your project meets all EB-5 requirements, and
- 2) Be cautious of the words ‘guarantee’ and ‘redemption.’
- It is also important to be sure that your team has experience with EB-5. Investors in developing markets must be careful of unproven solicitors/developers.
Source of Funds
- Rebecca’s lively panel dealt with concerns around documentation for source of funds. The regulations are vague and broad, thus it’s difficult to know what documents are necessary. Some practitioners submit a paragraph, while others submit several pages.
- USCIS doesn’t always seem to understand where investors are coming from. For example, many countries do not ascribe to the Western banking system, rendering the documentation of taxes unnecessary.
The Legislative Update
- There continues to be a great deal of uncertainty regarding potential legislative changes. The April target date for new regulations may or may not be met. If there is no deal in place by April, we may be facing another year of the current status quo.
- Investors would rather withdraw a case and refile than be denied. USCIS is looking at keeping withdrawals separate from denials.