EB-5 & Other Investor News from the Alliance of Business Immigration Lawyers Vol. 3, No. 2 • July 01, 2013

Headlines:

1. Signaling Flexibility Within Limits, USCIS Releases Final Version of EB-5 Policy Memo – USCIS has released the final version of a long-awaited memorandum on EB-5 adjudications policy that went through four iterations beginning in November 2011.

2. USCIS Holds EB-5 Stakeholder Engagement With SEC on Securities Law Compliance – The SEC provided an overview of registration requirements under federal securities laws, among other topics.3. USCIS ‘Conversation’ on Electronic Immigration System Unveils New Document Library – The new document library will allow I-526 petitioners to share documents related to a new commercial enterprise that were previously submitted with an approved Form I-924, Application for Regional Center, rather than having to submit these same documents with each I-526 petition.4. USCIS Holds EB-5 ‘Town Hall’ on Immigration and Entrepreneurship – USCIS held a “town hall” meeting to discuss the issues at the nexus of immigration law, entrepreneurship, and innovation, including “policies and practices to make the U.S. a welcoming place for innovation-driven entrepreneurs.5. New Publications and Items of Interest – New Publications and Items of Interest6. Member News – Member News7. EB-5 Government Agency Links – EB-5 Government Agency Links

Details:

1. Signaling Flexibility Within Limits, USCIS Releases Final Version of EB-5 Policy Memo

On May 30, 2013, U.S. Citizenship and Immigration Services (USCIS) released the final version of a long-awaited memorandum on EB-5 adjudications policy that went through four iterations beginning in November 2011.

The memo begins by reviewing the purpose and structure of the EB-5 immigrant investor program and reviews terminology and definitions, noting that the program’s purpose is “to promote the immigration of people who can help create jobs for U.S. workers through their investment of capital in the U.S. economy.”

Regarding the “preponderance of the evidence” standard, the memo notes that adjudication of EB-5 petitions and applications must establish each element by showing that what is claimed is “more likely so than not so.” This is a lower standard of proof than the “clear and convincing” or “beyond a reasonable doubt” standards. “The petitioner or applicant does not need to remove all doubt from our adjudication,” the memo states. Even if an adjudicator has some doubt, if the petitioner or applicant submits “relevant, probative, and credible evidence” that leads to the conclusion that the claim is more likely than not, or probably true, the petitioner or applicant has satisfied the standard of proof.

The memo allows a degree of flexibility in certain areas, such as “to account for the realities and unpredictability of starting a business venture.” The memo notes, for example, that the EB-5 program allows an immigrant investor to become a lawful permanent resident, without conditions, if he or she has established a new commercial enterprise, substantially met the capital requirement, and can be expected to create within a reasonable time the required number of jobs. All of the goals of capital investment and job creation need not have been fully realized before the conditions on the immigrant investor’s status have been removed. Rather, the memo states, the regulations require the submission of documentary evidence that establishes that it is more likely than not that the investor is in “substantial” compliance with the capital requirements and that the jobs will be created “within a reasonable time.”

USCIS has some latitude in interpreting what constitutes “within a reasonable time,” the memo notes, adding that the regulations require that the business plan submitted with the Form I-526, Immigrant Petition by Alien Entrepreneur, establish a likelihood of job creation “within the next two years.” Because the law contemplates two years as the baseline expected period in which job creation will take place, the memo explains, jobs that will be created within a year of the two-year anniversary of the immigrant’s admission as a conditional permanent resident or adjustment to conditional permanent resident status may generally be considered to be created within a reasonable period of time. Jobs projected to be created beyond that time horizon “usually will not be considered to be created within a reasonable time, unless extreme circumstances, such as force majeure, are presented,” the memo warns.

Following the theme of flexibility with limits, the memo acknowledges that business strategies “constantly evolve.” Therefore, Form I-924, Application for Regional Center, provides a list of acceptable amendments, including “changes to organizational structure or administration, capital investment projects (including changes in the economic analysis and underlying business plan used to estimate job creation for previously approved investment opportunities), and an affiliated commercial enterprise’s organizational structure, capital investment instruments or offering memoranda.” The memo notes, however, that such formal amendments to the regional center designation are not required when a regional center changes its industries of focus, geographic boundaries, business plans, or economic methodologies, unless the regional center elects to pursue an amendment because it seeks certainty in advance of adjudication.

The memo also notes that unless there is reason to believe that a prior adjudication involved an objective mistake of fact or law, USCIS should not reexamine determinations made earlier in the EB-5 process. Absent a material change in facts, fraud, or willful misrepresentation, the memo states, USCIS should not re-adjudicate prior USCIS determinations that are subjective, such as whether the business plan is comprehensive and credible or whether an economic methodology estimating job creation is reasonable.

Other topics the memo discusses include targeted employment areas; new commercial enterprises; purchases of existing businesses that are restructured or reorganized; expansion of existing businesses; pooled investments in non-regional center cases; evidence of the establishment of, or investment in, a new commercial enterprise; job creation; qualifying employees; the sequence of individual investor filings; business plans; and the impact of “material changes” to a project.

27-PAGE MEMO

2. USCIS Holds EB-5 Stakeholder Engagement With SEC on Securities Law Compliance

U.S. Citizenship and Immigration Services held an EB-5-related stakeholder engagement with the Securities and Exchange Commission (SEC) on April 3, 2013, to discuss the EB-5 program. Subject matter experts discussed securities law compliance in the context of EB-5 regional centers and investments.

During the call, the SEC provided an overview of registration requirements under federal securities laws. The SEC noted that these include, for example, an obligation under certain circumstances to register the securities for offer or sale under the Securities Act of 1933 (Securities Act); the broker registration of persons effecting transactions in securities under the Securities Exchange Act of 1934 (Securities Exchange Act); the registration of persons or entities offering investment advice under the Investment Advisers Act of 1940 (Investment Advisers Act); and the registration of persons or entities that offer investment products to the public under the Investment Company Act of 1940 (Investment Company Act).

Throughout the engagement, the SEC indicated that it largely focuses on the anti-fraud provisions within the law. The SEC stated that the definition of a “security” is broad and that EB-5 investments likely include the offering of securities that would require either registration or exemption from the registration requirements under the Securities Act. The SEC stressed that, while registration exemptions may be available to the EB-5 community, all anti-fraud provisions still apply to exempt offerings.

The SEC provided guidance on the definition of a broker-dealer, as well as the types of activities that trigger the broker-dealer registration requirements (including soliciting or advertising investments and receipt of transaction-based compensation). The SEC highlighted the serious consequences of failure to register as a broker-dealer, including civil and criminal liability, bars on future involvement in the securities industry, and possible rescission of the securities sold through the unregistered broker.

EB-5 regional centers and associated entities, as well as their respective principals, may be subject to the requirements of the Investment Advisers Act and Investment Company Act, the SEC noted. The agency said that some individuals or entities may not have to register as either an Investment Adviser or as an Investment Company under these acts if they qualify for certain limited exemptions.

The SEC’s Division of Enforcement emphasized that an EB-5 project may likely include securities offerings that are subject to the various securities laws. As an example of its enforcement action, the SEC referenced a complaint it filed in U.S. District Court in the Northern District of Illinois in February 2013 alleging that an individual and companies participating in the EB-5 program engaged in fraud. USCIS worked closely with the SEC in its investigation of that case.

USCIS’ SUMMARY OF THE SEC TELECONFERENCE

3. USCIS ‘Conversation’ on Electronic Immigration System Unveils New Document Library

On May 23, 2013, USCIS held a “conversation” on USCIS ELIS (Electronic Immigration System) and the EB-5 program. USCIS noted that Form I-526, Immigrant Petition by Alien Entrepreneur, will be the first of the EB-5 forms available for e-filing in ELIS. USCIS said that at a March 28 stakeholder teleconference, the agency heard concerns about multiple investors submitting the same documentation with the I-526. To address this concern, USCIS said it plans to add a “document library” to ELIS later in the year. The document library will allow I-526 petitioners to share documents related to a new commercial enterprise that were previously submitted with an approved Form I-924, Application for Regional Center, rather than submitting these same documents with the I-526.

During this call, USCIS officials gave an overview of the document library concept and solicited feedback on managing access to the document library, uploading and storing documents, and regional center and investor expectations.

ELIS CALL ANNOUNCEMENT

MORE INFORMATION ON ELIS

4. USCIS Holds EB-5 ‘Town Hall’ on Immigration and Entrepreneurship

On May 8, 2013, USCIS held a “town hall” meeting to discuss the issues at the nexus of immigration law, entrepreneurship, and innovation, including “policies and practices to make the U.S. a welcoming place for innovation-driven entrepreneurs.” The program featured a panel from the local entrepreneurial community and Q&A time. Panelists included:

Alejandro Mayorkas, director, USCIS;
Ashish Rangnekar, founder and CEO, Benchprep;
Uzi Shmilovici, founder and CEO, Base;
Ian Wagreich, partner, Latimer, LeVay, Fyock LLC;
Ellen Rudnick, clinical professor, Chicago Booth; executive director, Polsky Center for Entrepreneurship and Innovation; and
Ted Gonder, founder and executive director, Moneythink; entrepreneur in residence, USCIS.

TOWN HALL ANNOUNCEMENT
MORE INFORAMTION ON USCIS’ “ENTREPRENEUR PATHWAYS” INITIATIVE

5. New Publications and Items of Interest

USCIS Ombudsman report. U.S. Citizenship and Immigration Service Ombudsman Maria M. Odom submitted the 2013 Annual Report to Congress. Among other things, the 2013 report notes that EB-5 stakeholders continued to raise concerns during the reporting period, and that approximately 10 percent of cases received by the Ombudsman pertained to EB-5 cases. The Ombudsman noted that USCIS had issued EB-5 program policy memoranda and that the most recent guidance addressed many longstanding stakeholder concerns.

REPORT

Several ABIL members co-authored and edited the Global Business Immigration Practice Guide, released by LexisNexis. The Practice Guide is a one-stop resource for dealing with questions related to business immigration issues in immigration hotspots around the world.

Latchi Delchev, a global mobility and immigration specialist for Boeing, called the guide “first-rate” and said the key strong point of the book is its “outstanding usability.” She said she highly recommends the book and notes that it “is helpful even to seasoned professionals, as it provides a level of detail which is not easily gained from daily case management.”

This comprehensive guide is designed to be used by:

Human resources professionals and in-house attorneys who need to instruct, understand, and liaise with immigration lawyers licensed in other countries;
Business immigration attorneys who regularly work with multinational corporations and their employees and HR professionals; and
Attorneys interested in expanding their practice to include global business immigration services.

This publication provides:

An overview of the immigration law requirements and procedures for over 20 countries;
Practical information and tips for obtaining visas, work permits, resident status, naturalization, and other nonimmigrant and immigrant pathways to conducting business, investing, and working in those countries;
A general overview of the appropriate options for a particular employee; and
Information on how an employee can obtain and maintain authorization to work in a target country.

Each chapter follows a similar format, making it easy to compare practices and procedures from country to country. Useful links to additional resources and forms are included. Collected in this Practice Guide, the expertise of ABIL’s attorney members across the globe will serve as an ideal starting point in your research into global business immigration issues.

Order HERE. International customers who do not want to order through the bookstore can order through Nicole Hahn at (518) 487-3004 or [email protected].

Green Card Stories. The immigration debate is boiling over. Americans are losing the ability to understand and talk to one another about immigration. We must find a way to connect on a human level. Green Card Stories does just that. The book depicts 50 recent immigrants with permanent residence or citizenship in dramatic narratives, accompanied by artistic photos. If the book’s profilees share a common trait, it’s a mixture of talent and steely determination. Each of them overcame great challenges to come and stay in America. Green Card Stories reminds Americans of who we are: a nation of immigrants, from all walks of life and all corners of the earth, who have fueled America’s success. It tells the true story of our nation: E pluribus unum–out of many, one.

Green Card Stories has won five national awards. It was named a Nautilus book award silver medal winner, and won a silver medal in the Independent Book Publishers Association’s Benjamin Franklin Award in the multicultural category. The book also won a Bronze Medal in the Independent Publisher’s “IPPY” Awards and an honorable mention for the 2012 Eric Hoffer Book Award. Ariana Lindquist, the photographer, won a first-place award in the National Press Photographers Association’s Best of Photojournalism 2012. The writer, Saundra Amrhein, was nominated as a finalist on the short list for the 2011 Santa Fe Writers Project Literary Awards. Green Card Stories is also featured on National Public Radio’s photo blog.

For more information, e-mail Lauren Anderson at [email protected]. See also the Green Card Stories website.

ABIL on Twitter. The Alliance of Business Immigration Lawyers is now available on Twitter: @ABILImmigration. Recent ABIL member blogs are available on the ABIL Blog.

6. Member News

In Who’s Who Legal for Corporate Immigration Law 2013, 11 of the top 15 listings for immigration law are ABIL members. Over 70% of the top immigration lawyers worldwide are members of ABIL, which is the official research partner of the International Bar Association and the strategic research partner of the International Law Section of the American Bar Association.

ABIL members have been appointed to the following American Immigration Lawyers Association committees:

Mark Ivener is on the EB-5 Committee.

H. Ronald Klasko will chair the EB-5 Committee.

Charles Kuck is on the USCIS Field Operations Liaison Committee.

Robert Loughran is serving on the Business Committee.

Sharon Mehlman will serve on the AILA Annual Conference Committee and the DMV/SSA. She is the Vice Chair of the Verification and Worksite Enforcement Committee.

Cyrus Mehta is chair of the Ethics Committee. He has also been appointed to the Access to Counsel Committee.

Angelo Paparelli is on the Access to Counsel Committee.

Bernard Wolfsdorf will serve on the EB-5 Committee and will chair the AILA Midyear Conference to be held January 24, 2014, in the Cayman Islands.

Stephen Yale-Loehr is serving on the AILA Business Committee again this year.

Several ABIL members spoke at the upcoming American Immigration Lawyers Association conference held June 26-29, 2013, in San Francisco, California:

Steve Clark spoke on “Labor Certification: The Basics of Audits, Supervised Recruitment & Denials”
Bryan Funai spoke on “Advanced E-1/E-2 Visa Issues”
Kehrela Hodkinson spoke on “Basics of Consular Processing in Family Cases”
H. Ronald Klasko spoke on “Hot Topics With EB-5 Regional Centers”
Charles Kuck spoke on “How to Handle DOL and USCIS Investigations”
Sharon Mehlman spoke on “Things I Hate About PERM”
Cyrus Mehta spoke on “EB-1 in the Age of Kazarian”
Angelo Paparelli spoke on “Globalization, Technology, and Telecommuting: Does Where You Are Mean Anything Anymore?”
Julie Pearl spoke at the AILA “Global Forum on the Role of Technology in Global Immigration”
Bernard Wolfsdorf spoke on “Essentials of EB-5 and Other Investor Visa Options at the Urban Tavern for New Members Division”
Mr. Wolfsdorf and Stephen Yale-Loehr spoke on “EB-5: The Essentials of Investment”

AILA CONFERENCE PROGRAM

Mr. Loughran spoke on June 20, 2013, on recent EB-5 Regional Center Revocations at the IIUSA (Invest In USA) Conference in Las Vegas, Nevada.

Mr. Mehta authored a new blog entry. ” How Extraordinary Does One Need To Be To Qualify As A Person of Extraordinary Ability?“ He also co-authored “Meet Our New Friend: Who Is An ‘H-1B Skilled Dependent Employer’ in Senate Immigration Bill, S. 744?”

Mr. Paparelli has posted several new blog entries. “Give Peace a Chance: End the U.S.-India Immigration and Trade War Now” “A Swimmingly Good Immigration Solution to Border Security”

Mr. Wolfsdorf received Who’s Who Legal‘s 2013 Lawyer of the Year award for Corporate Immigration, for the fourth consecutive year.

Mr. Yale-Loehr wrote an op-ed about the Senate immigration bill that was published in El Norte, a Mexican newspaper, on July 4, 2013. He summarized what the Senate bill would do. He said, among other things, that the bill would both benefit and hurt Mexicans: “The Senate bill contains a legalization program, but it requires a long wait and many requirements, so many people may not end up being able to legalize their status. Also, the border security provisions in the Senate bill are too tough. They unnecessarily militarize the border and would harm U.S.-Mexican relations.”

SPANISH VERSION OF MR. YALE-LOEHR’S OP-ED

Mr. Yale-Loehr was featured in several recent LexisNexis PODCASTS and ARTICLES.

Mr. Yale-Loehr was quoted:

In the Wall Street Journal on July 2, 2013, in “Snowden’s Asylum Effort Hits Roadblocks.” He said Mr. Snowden could ask Russia to issue him a refugee travel document under the United Nations convention on refugees.
In Time.com on July 2, 2013, in “Snowden’s Worst-Case Scenario: What If No Countries Take Him?” He said he thought Mr. Snowden could be in Moscow for a long time, but that he could be helped by Article 28 of the United Nations convention on refugees, which asks member states to give “sympathetic consideration” to those who can’t obtain the necessary documents from their home countries.
In the Gannett newspaper chain, in articles about the Senate immigration bill. Commenting on the estimated 11 million people who entered the United States without authorization or overstayed their legal visits before December 31, 2011, who would be offered a 13-year path to citizenship beginning with their application for registered provisional immigrant status, Mr. Yale-Loehr noted that requirements under the Senate bill would exclude some.
In TribLIVE/USWorld on June 27, 2013. In “Immigration Bill Unlikely To Pass House,” he noted, “The Senate’s passage of a major immigration reform bill is a milestone, but it is only half the battle. A tougher battle lies ahead in the House.”