USCIS Fiddles With Form I-956 While Regional Centers Burn
By Mona Shah, Esq., Aaron Muller and Simon Butler
Is it possible for U.S. Citizenship and Immigration Services (“USCIS”) to be more officiously ambiguous when it comes to regional centers’ need – or lack thereof – to file Form I-956 before December 29 of this year?
Among members of the EB-5 industry, the answer is a resounding no, though there’s little the sector can do to avoid the potential disaster RCs face as a result of this mandate. Revealed by the USCIS via the recent release of the minutes from its EB-5 quarterly meeting on October 14, 2022, the directive imposes an existential crisis on RCs: File the expensive, time-consuming Form I-956 to apply again for regional center designation or be terminated … probably.
As if regional centers needed more headaches.
The fallout from the ongoing controversy regarding RC reauthorization has been a long time coming. Even though the fate of these older RCs is still hanging in the balance with no real answer as to what, if anything, they will have to do to maintain authorization, information is slowly trickling in, thanks in part to USCIS releasing its meeting minutes from October.1 Although many of the issues stemming from the RIA and the Behring litigation have yet to be resolved, progress has at least been made in advancing the discussion. USCIS has agreed to accept input as to whether or not this decision should be deferred for another year (as opposed to December 29, 2022), but has not come to any conclusion about what that decision may ultimately be.2
Although it’s important that USCIS is taking feedback on whether the deadline should be changed3 to a much-more-feasible December 2023, it’s not enough. The agency’s lack of clarity on whether RCs that don’t file the I-956 in time or opt not to file the form will for sure be slated for termination is frustratingly counterproductive. Meanwhile, USCIS – never one for complete transparency – is opaque on whether RCs are obligated to file the I-956 but appears to be frowning upon any decision not to. So is this a choice or not?
The biggest problem for this irresponsible mandate is that it will throw the entire EB-5 industry out of whack under the auspices of the EB-5 Reform and Integrity Act of 2022 (“RIA”), which should be helping, not hindering, the process. RCs for already-completed projects will have to decide between raising new EB-5 capital and shuttering operations. Any RC that closes up shop could have a domino effect on its concomitant EB-5 investors, who depend on the investment viability of their projects to retain their permanent residency status.
Sure, these investors will get another chance, within a time period of 180 days, to invest anew or somehow convince their NCEs to get up and find a viable RC to replace their now-terminated ones. But the prohibitive costs and ridiculously complicated logistics this would entail are deal-breakers for many RCs, which often are unable to afford the exorbitant fees4 USCIS charges to file Form I-956.
Which leaves regional centers in a quandary. If USCIS doesn’t rectify this situation, will the industry see a reluctant exodus of qualified EB-5 investors from the United States along with their investment? This not only will take potential jobs away from U.S. projects, but it also might negatively shape immigrant investors’ opinions of the U.S. investment climate for the future. Does USCIS really want that?
Some attorneys have expressed the view that RCs not choosing to sponsor any new projects or investors “should not legally be subject to termination for failure to file Form I-956.”5 This is doubtless a popular stance among EB-5 experts, as it would result in far fewer urgent filings and a reduction of general panic for all involved.
December 29 is fast-approaching, and as the remainder of the holiday season closes in on USCIS, it feels unlikely that more work will get done in a timely manner. Given that these minutes are from October, however, we cannot know what progress has been made since then, if any.
Regardless of how quickly USCIS is able to reach a resolution, the effects of that resolution will not be immediate. RCs will still have to lie in wait as they file the required paperwork, they will still have to spend exorbitant amounts of money for these filings, and even after all of that there is no guarantee that USCIS will work in their favor. Many of them could have been waiting for answers all this time, and now they are left with only three weeks to prepare for whatever the outcome happens to be. Even if USCIS decides to extend the deliberation into December of next year, that will still mean months of uncertainty and debate.