Headlines

1. USCIS Holds Teleconference With EB-5 Stakeholders – Nicholas Colucci, the new director of USCIS’s Immigrant Investor Program Office, led the teleconference.

2. USCIS Releases New EB-5 Statistics; Chinese Petitions Surge – Chinese investors now account for more than 80% of EB-5 visas issued, up from 13% a decade ago.

3. State Dept. Reports EB-5 Category Will Remain ‘Current’ for Foreseeable Future – The Department of State’s Visa Bulletin for March 2014 states that the EB-5 category will remain “Current” for the foreseeable future.

4. SEC Obtains Settlements in $158 Million Fraud – The fraudulent scheme offered the investors a stake in a hotel and conference center in the Chicago, Illinois, area. Investors wired a minimum of $500,000 each plus a $41,500 “administrative fee” to the defendants’ bank accounts.

5. Rep. Polis Introduces EB-5 Reform Bill in House of Representatives – Among other things, the bill would make the EB-5 program, set to expire in September 2015, permanent.

6. Sen. Coburn Queries All Regional Centers – Sen. Coburn explained that the information gathered would help the committee better understand the EB-5 program.

7. DHS OIG Report on EB-5 Regional Center Program Stirs Controversy – The Department of Homeland Security’s Office of Inspector General released a controversial new report on the EB-5 regional center program that includes recommendations.

8. USCIS Warns of Scams Exploiting EB-5 Immigrant Investor Program – In coordination with USCIS, which administers the EB-5 program, the SEC has taken emergency enforcement action to stop allegedly fraudulent securities offerings made through the EB-5 program.

9. New Publications and Items of Interest – New Publications and Items of Interest10. Member News – Member News11. EB-5 Government Agency – EB-5 Government Agency

Details:

1. USCIS Holds Teleconference With EB-5 Stakeholders

U.S. Citizenship and Immigration Services (USCIS) held a teleconference on February 26, 2014, with EB-5 stakeholders. Nicholas Colucci, the new director of USCIS’s Immigrant Investor Program Office, led the teleconference.

Among other things, USCIS said that it is now adjudicating I-924 regional center petitions and I-526 alien entrepreneur petitions in the Washington, DC, field office, but that it continues to adjudicate I-829 removal of conditions and I-485 adjustment of status petitions at the California Service Center for the time being.

USCIS also said it is moving toward greater use of its Electronic Immigration System (ELIS) and has implemented it for intake of I-526 petitions. The agency said it plans to offer webinars on the features of the document library, which allows regional centers to provide electronic versions of certain documents.

USCIS noted that regional center geographic area expansion must be contiguous to approved geographic areas. USCIS said it reviews such expansions on a case-by-case basis to determine whether the expansion will promote economic growth, frequently focusing on the supply chain and labor pool.

Targeted employment areas (TEAs) have been a hot topic for EB-5 stakeholders. USCIS noted that a TEA need not be singular and a new commercial enterprise can be principally located in, doing business in, and creating jobs in a collection of TEAs.

USCIS also confirmed that a high unemployment TEA must be established by a letter from an authorized body of the government of the state in which the new commercial enterprise is located, certifying that the geographic or political subdivision of the metropolitan statistical area, or of the city or town with a population of 20,000 or more in which the enterprise is principally doing business, has been designated a high unemployment area.

As of February 1, 2014, USCIS had approved approximately 440 regional centers. The agency said the average processing time for both regional center cases and direct EB-5 cases is 11 months, but that processing may take longer temporarily due to staffing issues. The agency also said it is planning new EB-5 regulations and a policy guidance manual.

LIST OF EB-5 REGIONAL CENTERS BY STATE

This article is based on multiple reports; USCIS has not yet released a summary of the teleconference.

2. USCIS Releases New EB-5 Statistics; Chinese Petitions Surge

U.S. Citizenship and Immigration Services (USCIS) has released statistics for fiscal years 2008 through 2013 on I-526 immigrant petitions for alien entrepreneurs and I-829 petitions by entrepreneurs to remove conditions.

I-526. The statistics show that at the end of FY 2013 (September 30, 2013), there were 7,131 I-526 petitions pending. By contrast, at the end of FY 2008, there were only 853 petitions pending.

I-829. The statistics show that at the end of FY 2013, there were 1,345 I-829 petitions pending. By contrast, at the end of FY 2008, there were only 454 petitions pending.

Recent reports have noted a surge in petitions by Chinese entrepreneurs. Chinese investors now account for more than 80% of EB-5 visas issued, up from 13% a decade ago.

I-526 STATISTICS

I-829 STATISTICS

3. State Dept. Reports EB-5 Category Will Remain ‘Current’ for Foreseeable Future

The Department of State’s Visa Bulletin for March 2014 states that the EB-5 category will remain “Current” for the “foreseeable future.” This is a relief for many EB-5 immigrant investors and attorneys, because the Department of State had earlier warned that EB-5 visas might hit the 10,000 annual cap some time this fiscal year. If so, the Department of State would have to issue a cutoff date for EB-5 investors, forcing many of them to wait longer for an EB-5 visa.

As stated in the previous article, over 7,000 I-526 EB-5 petitions are pending at U.S. Citizenship and Immigration Services. That does not include spouses and children of principal EB-5 applicants. Thus, it is only a matter of time until the EB-5 category retrogresses. It is unclear when that will happen.

VISA BULLETIN FOR MARCH 2014

4. SEC Obtains Settlements in $158 Million Fraud

On March 17, 2014, the U.S. District Court for the Northern District of Illinois, Eastern Division, entered a consent judgment against defendants Anshoo R. Sethi, A Chicago Convention Center, LLC (ACCC), and Intercontinental Regional Center Trust of Chicago, LLC (IRCTC), for their roles in raising approximately $158 million from over 250 Chinese investors as part of a fraudulent offering that targeted foreign nationals who sought to invest in the United States via the EB-5 program, as alleged in the SEC’s February 2013 complaint.

The fraudulent scheme offered the investors a stake in the “World’s First Zero Carbon Emission Platinum LEED certified” hotel and conference center in the Chicago, Illinois, area. Investors wired a minimum of $500,000 each plus a $41,500 “administrative fee” to the defendants’ bank accounts. False claims made by the defendants to investors included that several major hotel chains had signed on to the project, that the defendants had acquired all the necessary permits and approvals for construction, that they would contribute land valued at over $177 million, and that the project was likely to generate more than 8,000 jobs. The SEC’s complaint also notes that the defendants made false and misleading statements, and provided falsified documents, to U.S. Citizenship and Immigration Services.

The final judgment provides the following relief:

• joint-and-several liability for over $11.5 million in disgorgement and prejudgment interest, subject to offsets for certain amounts refunded or credited to investors;
• permanent injunctions against future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder;
• an order enjoining and restraining defendants for 20 years from offering or selling securities issued by any of the defendants or issued by any entity owned or controlled by Sethi;
• a civil penalty of $1 million against defendant Sethi;
• civil penalties against ACCC and IRCTC;
• ACCC and IRCTC agreeing to wind up and dissolve after satisfying their payment obligations.

The defendants will satisfy their payment obligations, at least in part, by paying over the funds frozen in certain bank accounts pursuant to the court’s asset freeze order in this case and also by selling property held in ACCC’s name.

The SEC filed its case on February 6, 2013, and obtained a temporary restraining order and asset freeze against Sethi, ACCC, and IRCTC. On April 19, 2013, the court granted the SEC’s motion to return to investors the entire $147 million of principal that had been frozen pursuant to the SEC’s motions. The agreed-upon settlement resolves, among other things, the disposition of approximately $11 million in administrative fees paid by investors, which are the only funds remaining to be returned.

Sethi, ACCC, and IRCTC neither admitted nor denied the SEC’s allegations.

SEC’S ANNOUNCEMENT OF THE SETTLEMENTS

SEC’S COMPLAINT DETAILING THE CHARGES

5. Rep. Polis Introduces EB-5 Reform Bill in House of Representatives

Rep. Jared Polis (D-Colo.) recently introduced “The American Entrepreneurship and Investment Act of 2014,” a bill that would make the EB-5 program, set to expire in September 2015, permanent. The bill would also make various changes to the program. “The EB-5 program provides significant injections of capital and talent to our economy and, with the improvements we make in this bill, will ensure that the best and brightest minds from around the world continue to come here with their ideas and business,” Rep. Polis said.

Highlights include, among other things:

• making adjustments to targeted employment area designations;
• tying the minimum investment amount to the Consumer Price Index;
• including part-time employees who work at least 35 hours per week in the definition of “full-time employment”;
• establishing a preapproval procedure for business plans;
• allowing concurrent filings of EB-5 petitions for immediate family members;
• allowing premium processing of EB-5 petitions;
• providing national interest waivers for physicians working in shortage areas of veteran facilities and entrepreneurs and job creators who have been engaged in a new commercial enterprise that has benefited the U.S. economy and satisfied certain employment creation requirements; and
• eliminating per-country quotas for EB-5 immigrant visas, with a goal of alleviating the backlog in the Chinese visa category

MORE INFORMATION

6. Sen. Coburn Queries All Regional Centers

Sen. Tom Coburn (R-Okla.) recently sent a letter to all EB-5 regional centers asking about their participation in the EB-5 immigrant investor program. As the ranking member of the Senate’s Homeland Security and Governmental Affairs Committee, Sen. Coburn explained that the information gathered would help the committee better understand the EB-5 program.

His wide-ranging questions covered such topics as the annual amount of investment and number of individuals by country of origin making investments; the name, address, and description of each business in which the regional center has made an investment and the number of jobs created; a list of current or former corporate officers of the regional center, including titles, positions, and dates of employment; and the name and address of any individual or entity with which the regional center has an agreement to provide legal, accounting, recruiting, or consulting services, along with a description of the services provided.

The letter is dated February 14, 2014. IIUSA, the trade association of EB-5 regional centers, responded with a letter outlining information about the program. IIUSA noted that the EB-5 regional center program is designed as a competitive marketplace, so many of those arrangements and relationships “are considered by our members to be proprietary and confidential.”

IIUSA noted that much of the information being requested is captured on Form I-924A and is therefore on file at U.S. Citizenship and Immigration Services (USCIS). Regional centers must file this form annually. IIUSA added, “It is important to note that our members may consider specific information included on Form I-924A to be proprietary and confidential, and to our knowledge USCIS has treated it so in responding to Freedom of Information Act (FOIA) requests for it.”

IIUSA also noted that a FY 2012 study found that the program’s economic impact increased dramatically over the previous two years by contributing more than $3.39 billion to U.S. GDP, supporting over 42,000 U.S. jobs, and generating over $712 million in federal/state/local tax revenue.

IIUSA’S RESPONSE

7. DHS OIG Report on EB-5 Regional Center Program Stirs Controversy

The Department of Homeland Security’s Office of Inspector General (OIG) released a controversial new report on the EB-5 regional center program that includes four recommendations.

OIG report highlights. As background, Congress enacted the employment-based fifth preference (EB-5) green card category in 1990 to stimulate the U.S. economy through direct job creation and capital investment by foreign investors. Congress added a regional center pilot program to the EB-5 category in 1992 to pool investor money in a defined industry and geographic area to create both direct and indirect jobs.

An EB-5 investor must invest $500,000 if his or her investment is in a high unemployment area or a rural area. Otherwise the investor must invest $1 million. Each foreign investor must create or preserve at least 10 full-time jobs for qualifying U.S. workers within 2 years.

The OIG report notes several conditions that prevent U.S. Citizenship and Immigration Services (USCIS) from administering and managing the EB-5 regional center program effectively. First, the laws and regulations governing the program do not give USCIS authority to deny or terminate a regional center’s participation based on fraud or national security concerns; the program extends beyond the current USCIS mission. Second, USCIS is unable to demonstrate the benefits of foreign investment in the U.S. economy.

Additionally, the report notes, USCIS has difficulty ensuring the integrity of the regional center program. According to the OIG, USCIS does not always ensure that regional centers meet all program eligibility requirements, and USCIS officials differently interpret and apply regulations and policies. Also, the report claims that USCIS does not always document its decisions and responses to inquiries, making the program vulnerable to perceptions about internal and external influences.

As a result, the report states, USCIS is limited in its ability to prevent fraud and national security threats and cannot demonstrate that the program is improving the U.S. economy and creating jobs for U.S. citizens, as intended by Congress.

OIG recommends that USCIS: (1) update and clarify its regulations; (2) develop memoranda of understanding with the Departments of Commerce and Labor and the Securities and Exchange Commission to provide expertise and involvement in the adjudication of applications and petitions for the EB-5 regional center program; (3) conduct comprehensive reviews to determine how EB-5 funds have actually stimulated growth in the U.S. economy in accordance with the intent of the program; and (4) establish quality assurance steps to promote program integrity and ensure that regional centers comply with regulatory requirements.

Reaction. IIUSA, the industry trade association that represents over 130 EB-5 regional centers that serve over 40 states and territories and account for over 95% of the capital flowing through the EB-5 regional center program, said it was “puzzled” by the OIG’s findings and conclusions. IIUSA said that many of the reforms the OIG identified as necessary were already underway, and that USCIS had refuted other criticisms in its response to the report.

For example, IIUSA noted that USCIS has created a new Immigrant Investor Program Office staffed by trained economists, experts in business and immigration law, and fraud and national security specialists, now led by a former director of the Treasury Department’s Financial Crimes Enforcement Network. All EB-5 related adjudications are being relocated to this office. IIUSA also noted that USCIS has clarified its guidance for adjudicators in a comprehensive May 2013 EB-5 policy memorandum and has strengthened interagency relationships.

IIUSA said these and other rebuttals in the USCIS response “should raise significant questions about the credibility of the report,” which was “further undermined by the recent resignation of [Charles Edwards, DHS’s Acting Inspector General], who himself was under investigation.”

The OIG report notes that USCIS agreed with three of the four OIG recommendations. Details of the OIG’s analysis and USCIS’s response are included in the report, “United States Citizenship and Immigration Services’ Employment-Based Fifth Preference (EB-5) Regional Center Program,” OIG-14-19.

IIUSA’S STATEMENT in response to the report

8. USCIS Warns of Scams Exploiting EB-5 Immigrant Investor Program

The U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy and U.S. Citizenship and Immigration Services (USCIS) have jointly issued a warning to individual investors about fraudulent investment scams that exploit the EB-5 immigrant investor program.

In coordination with USCIS, which administers the EB-5 program, the SEC has taken emergency enforcement action to stop allegedly fraudulent securities offerings made through the EB-5 program. USCIS explained that business owners apply to USCIS to be designated as “regional centers” for the EB-5 program. Regional centers offer investment opportunities in new commercial enterprises that may involve securities offerings. The fact that a business is designated as a regional center by USCIS does not mean that USCIS, the SEC, or any other government agency has approved the investments offered by the business, or has otherwise expressed a view on the quality of the investment. The SEC and USCIS are aware of attempts to misuse the EB-5 program as a means to carry out fraudulent securities offerings. For example, in a recent case, SEC v. Marco A. Ramirez, the SEC and USCIS worked together to stop an alleged investment scam in which the SEC claims that the defendants, including the “USA Now” regional center, falsely promised investors a 5 percent return on their investment and an opportunity to obtain an EB-5 visa. The promoters allegedly started soliciting investors before USCIS had designated the business as a regional center. The SEC alleged that while the defendants told investors their money would be held in escrow until USCIS approved the business as eligible for EB-5, the defendants misused investor funds for personal use, such as funding their Cajun-themed restaurant. According to the SEC’s complaint, the investors did not obtain even conditional visas as a result of their investments through the USA Now regional center.

In another case, SEC v. A Chicago Convention Center, the SEC and USCIS coordinated their efforts to halt an alleged $156 million investment fraud. The SEC alleged that an individual and his companies used false and misleading information to solicit investors in the “World’s First Zero Carbon Emission Platinum LEED certified” hotel and conference center in Chicago, including falsely claiming that the business had acquired all necessary building permits and that the project was backed by several major hotel chains.

According to the SEC’s complaint, the defendants promised investors that they would get back any administrative fees they paid for their investments if their EB-5 visa applications were denied. The defendants allegedly spent more than 90 percent of the administrative fees, including some for personal use, before USCIS adjudicated the visa applications.

USCIS noted that as with any investment, it is important to research thoroughly any offering that purports to be affiliated with EB-5. USCIS recommended the following steps:

• Confirm that USCIS has designated the regional center. If you intend to invest through a regional center, check the list of current regional centers on USCIS’s website. If the regional center is not on the list, exercise extreme caution. Even if it is on the list, understand that USCIS has not endorsed the regional center or any of the investments it offers.
• Obtain copies of documents provided to USCIS. Regional centers must file an initial application (Form I-924) to obtain USCIS approval and designation, and must submit an information collection supplement (Form I-924A) at the end of every calendar year. Ask the regional center for copies of these forms and supporting documentation provided to USCIS.
• Request investment information in writing. Ask for a copy of the investment offering memorandum or private placement memorandum from the issuer. Examine it carefully and research similar projects in evaluating the proposal. Follow up with any questions you may have. If you do not understand the information in the document or the issuer is unwilling or unable to answer your questions to your satisfaction, do not invest.
• Ask if promoters are being paid. If there are supposedly unaffiliated consultants, lawyers, or agencies recommending or endorsing the investment, ask how much money or what type of benefits they expect to receive in connection with recommending the investment. Be skeptical of information from promoters that is inconsistent with the investment offering memorandum or private placement memorandum from the issuer.
• Seek independent verification. Confirm whether claims made about the investment are true. For example, if the investment involves construction of commercial real estate, check county records to see if the issuer has obtained the proper permits and whether state and local property tax assessments correspond with the values the regional center attributes to the property. If other companies have purportedly signed onto the project, go directly to those companies for confirmation.
• Examine structural risk. Understand that you may be investing in a new commercial enterprise that has no assets and has been established to loan funds to a company that will use the funds to develop projects. Carefully examine loan documents and offering statements to determine if the loan is secured by any collateral pledged to investors.
• Consider the developer’s incentives. EB-5 regional center principals and developers often make capital investments in the projects they manage. Recognize that if principals and developers do not make an equity investment in the project, their financial incentives may not be linked to the success of the project.
• Look for warning signs of fraud. Beware if you spot any of these hallmarks of fraud:
• – Promises of a visa or becoming a lawful permanent resident. Investing through EB-5 makes you eligible to apply for a conditional visa, but there is no guarantee that USCIS will grant you a conditional visa or subsequently remove the conditions on your lawful permanent residency. USCIS carefully reviews each case and denies cases where eligibility rules are not met. Guarantees of the receipt or timing of a visa or green card are warning signs of fraud.
• – Guaranteed investment returns or no investment risk. Money invested through EB-5 must be at risk for the purpose of generating a return. If you are guaranteed investment returns or told you will get back a portion of the money you invested, be suspicious.
• – Overly consistent high investment returns. Investments tend to go up and down over time, particularly those that offer high returns. Be suspicious of an investment that claims to provide, or continues to generate, high rates of return regardless of overall market conditions.
• Unregistered investments. Even though a regional center may be designated as a regional center by USCIS, most new commercial enterprise investment opportunities offered through regional centers are not registered with the SEC or any state regulator. When an offering is unregistered, the issuer may not provide investors with access to key information about the company’s management, products, services, and finances that registration requires. In such circumstances, investors should obtain additional information about the company to help ensure that the investment opportunity is bona fide.
• Unlicensed sellers. Federal and state securities laws require investment professionals and their firms who offer and sell investments to be licensed or registered. Designation as a regional center does not satisfy this requirement. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms.
• Layers of companies run by the same individuals. Some EB-5 regional center investments are structured through layers of different companies that are managed by the same individuals. In such circumstances, confirm that conflicts of interest have been fully disclosed and are minimized.

USCIS noted that if an investment through EB-5 turns out to be in a fraudulent securities offering, the investor may lose both his or her money and a path to lawful permanent residence in the United States. USCIS said any EB-5 offering should be carefully vetted before investing money and hope of becoming a lawful permanent resident in the United States.

USCIS ALERT That page also has links to the alert in Chinese, Korean, and Spanish.

9. New Publications and Items of Interest

Improving the EB-5 program. Brookings-Rockefeller’s Project on State and Metropolitan Innovation released a report in February 2014, “Improving the EB-5 Investor Visa Program: International Financing for U.S. Regional Economic Development.” The report notes that although use of EB-5 financing has increased dramatically in recent years as a source of regional economic development, the program faces some major challenges. First, immigrant investors encounter a complicated network of intermediaries with little regulatory oversight, which discourages investment. Immigrants also bear the burden of compliance with program requirements, although they have little control over the investment process. Second, there is generally little coordination between regional centers and local economic development agencies (EDAs), even though these entities often share similar goals and could develop mutually beneficial partnerships. Finally, there is a dearth of reliable and publicly available data that would enable better monitoring and evaluation of the economic effects of regional center investments.

The report recommends designating an oversight role for the Department of Commerce to supervise the adjudication of regional centers, standardize data and methodology, and better monitor program impact; creating incentives for partnerships between regional centers and EDAs, thus aligning similar goals in mutually beneficial arrangements; and generating high-quality, multi-variable public data on regional centers to facilitate better evaluation of the program.

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.

Mireya Serra-Janer, head of European immigration for a multinational IT company, says she particularly likes “the fact that the [guide] focuses not just on each country’s immigration law itself but also addresses related matters such as tax and social security issues.” She noted that the India chapter “is particularly good. The immigration regulations in India have always been hard to understand. Having a clear explanation of the rules there helps us sort out many mobility challenges.’

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 Nicole.hahn@lexisnexis.com.

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.

10. Member News

The following ABIL members and firms are included in the Chambers Global Rankings for Business Immigration:

INDIVIDUALS
Mark Ivener
H. Ronald Klasko
Charles Kuck
Sharon Mehlman
Cyrus Mehta
Angelo Paparelli
Julie Pearl
Bernard Wolfsdorf
Stephen Yale-Loehr

FIRMS
Bener Consultancy
FosterQuan, LLP
Ivener & Fullmer LLP
Klasko, Rulon, Stock & Seltzer, LLP
Laura Devine Solicitors
Pearl Law Group
Seyfarth Shaw, LLP
Veirano Advogados
Wolfsdorf Immigration Law Group

Laura Devine and Nicolas Rollason are listed in the United Kingdom rankings and Isa Soter is listed in the Latin American rankings.

Eugene Chow has published a new article on EB-5 and Hong Kong investment programs.

Steven Clark addressed the Massachusetts Bar Association on February 6, 2014. The CLE topic was the nuts-and-bolts of EB-5 investor petitions for direct investment or regional centers.

H. Ronald Klasko, Bernard Wolfsdorf, and Stephen Yale-Loehr spoke about the EB-5 immigrant investor program at the Invest in America Summit on March 22-23, 2014, at the Jing An Shangri-la Hotel in Shanghai, China.

Mr. Klasko recently published several blog entries. “Chinese EB-5 Quota Retrogression – Part 2” “FAQs on EB-5 Quota Backlog”

Mr. Klasko spoke on “EB-5, Where Are We Now?” at the annual meeting of the Mexico City Chapter of the American Immigration Lawyers Association in Bogota, Colombia. Mr. Klasko gave a legislative update on the EB-5 program and reviewed documenting lawful sources of funding, developments in adjudications, and “musts” when dealing with regional centers.

Angelo Paparelli has published several new blog posts: “EB-5 Immigration Lawyers Wear Too Many Hats” “Senator’s Saucy Request Roils EB-5 Regional Centers”

Mr. Wolfsdorf was recently quoted on CNNMoney in an article on a dramatic surge in Chinese applicants for the EB-5 program. “The program has literally taken off to the point [that] in China, the minute anybody hears I’m an immigration lawyer, the first thing they say is, ‘Can we get an EB-5 visa?’ ” “There is a panic being created in China about the demand [getting] so big that there is going to be a visa waiting line,” he said.

Mr. Wolfsdorf has published a new blog. “Predictions for the Year of the Horse: 5 Reasons Why the EB-5 Program Will Flourish in 2014“

Mr. Wolsforf, founding Partner of Wolfsdorf Rosenthal LLP, has been named Corporate Immigration Lawyer of the Year for 2014 by Who’s Who Legal for the fifth consecutive year. Mr. Wolfsdorf received this distinction after garnering the most votes from over 500 of the top-rated immigration lawyers in the world.

11. EB-5 Government Agency

USCIS Web Page on EB-5 Immigrant Investors

USCIS Policy and Procedural Memoranda on EB-5 Investors

Immigrant Investor Regional Centers List

Form I-526, Immigrant Petition by Alien Entrepreneur

Form I-829, Petition by Entrepreneur to Remove Conditions

Form I-924, Application for Regional Center Under the Immigrant Investor Pilot Program

Form I-924A, Supplement to Form I-924

Headlines:

1. USCIS-SEC Call Highlights Complexities of EB-5 Program – SEC subject matter experts discussed securities law compliance in the context of EB-5 regional centers and investments.

2. USCIS Issues Third Draft of Adjudications Policy Memo – Several commenters recommended revisions.3. USCIS Holds EB-5 Stakeholder Call on E-Filing Initiative – USCIS is considering integrating EB-5 processes into its electronic filing system.4. New Publications and Items of Interest – New Publications and Items of Interest5. Member News – Member News6. EB-5 Government Agency Links – EB-5 Government Agency Links

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Details:

1. USCIS-SEC Call Highlights Complexities of EB-5 Program

U.S. Citizenship and Immigration Services (USCIS) and the Securities and Exchange Commission (SEC) invited interested individuals to participate in a stakeholder teleconference on April 3, 2013, to discuss the EB-5 immigrant investor program. During the call, subject matter experts from the SEC’s Divisions of Corporate Finance, Trading and Markets, Investment Management, and Enforcement discussed securities law compliance in the context of EB-5 regional centers and investments.

Among other things, an SEC representative noted that the definition of a “security” is broad and includes partnership interests. She said it is likely that an EB-5 investment is a security. Offers and sales of securities must be registered unless an exemption applies. Whether registered or not, federal securities law still applies, especially the antifraud provisions, she noted.

Regarding broker-dealer requirements, another SEC representative noted that if a person facilitates EB-5 investments in a U.S. business, he or she is probably engaged in brokerage activities. This means that the person would be subject to the broker-dealer rules, even if the investment is outside the United States. A case-by-case analysis is necessary to determine whether someone needs to register as a broker-dealer. For example, if you solicit the investment or get paid based on the investment, you are a broker-dealer. The same is true for advertising. If you are paid for finding investors, or have a “salesman’s stake,” you might be subject to broker-dealer rules.

If you are not a broker-dealer, you might still be an investment advisor if you are providing investment advice for compensation, another SEC representative noted. Depending on how regional centers are structured, they may have to be registered under the Investment Company Act (ICA), which is very broad. Any issuer that invests or trades in securities through pooled investors may be an investment company and be required to register under the ICA. There are exemptions, so the SEC recommended getting good professional advice from a qualified attorney.

The SEC did not comment on specific scenarios raised by participants or on particular EB-5 practices to avoid. The SEC advised listeners to seek advice from a securities attorney on specific issues.

RECORDING OF CALL (DROPBOX)

USCIS OMBUDSMAN’S EXECUTIVE SUMMARY

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2. USCIS Issues Third Draft of Adjudications Policy Memo

U.S. Citizenship and Immigration Services (USCIS) released the third draft of its foundational EB-5 adjudications policy memorandum in February 2013. USCIS first released the memo in November 2011, and released a second draft in January 2012.

Several commenters recommended revisions. Robert C. Divine, Vice President of IIUSA: Association to Invest in the USA, noted that, among other things, the latest draft of the memo opposes a guaranteed right of an investor’s eventual ownership in a particular asset (to be subtracted from capital at risk). He said that USCIS has said this orally in stakeholder meetings and in some adjudications, but never publicly in writing. He also noted that the latest draft clarifies that payment to an investor of a return on an investment (i.e., profit versus redemption of capital) during or after conditional residency is acceptable. The draft also recognizes risk-spreading by a single investment enterprise among multiple projects, but Mr. Divine noted that USCIS has tended to state that the projects must be identified in the I-526 of each investor relying on them. Mr. Divine lamented that the latest draft “fails to provide desperately needed guidance and clarification on many topics,” which he listed in his comments. He said that USCIS “simply is not keeping up with the number of questions that reasonably arise for well-intentioned developers and investors – questions that need predictable answers for prospective planning of major enterprises and projects.” He said the EB-5 program will not be attractive to developers and investors if they can only find out what the rules might be after they have spent “hundreds of thousands or even millions of dollars in project development and marketing and the investors file their I-526 petitions.”

IIUSA urged USCIS to implement the memo but recommended some revisions before finalizing it. IIUSA advocated:

• Including language from previous agency interpretation on crediting construction jobs and/or the resulting indirect/induced economic impact to EB-5 investors;
• Including language from previous agency interpretation on crediting indirect jobs created outside of a regional center’s boundaries;
• Including language from previous agency interpretation on “tenant occupancy” economic model guidance;
• Including language from previous agency interpretation on “visitors’ spending” economic input;
• Establishing clear and commercially reasonable guidelines on the definition of material change/initial business plans;
• Stating specifically that bridge financing can be an approvable use of EB-5 capital;
• Barring foreign ownership of regional centers;
• Allowing North American Industry Classification System (NAICS) codes of two digits and/or longer to be approved for a regional center’s particular industry sector;
• Specifically stating which existing administrative memoranda will be rescinded after the memo is implemented;
• Limiting the number of requests for evidence issued to one per regional center business plan and/or economic model; and
• Issuing an I-797 approval notice for I-924 amendment applications for “actual” projects seeking pre-approval.

DRAFT USCIS EB-5 MEMO
IIUSA’S COMMENTS
MR. DEVINE’S COMMENTS

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3. USCIS Holds EB-5 Stakeholder Call on E-Filing Initiative

U.S. Citizenship and Immigration Services (USCIS) held a stakeholder teleconference on March 28, 2013, concerning its plans to include filing of Form I-526, Immigrant Petition by Alien Entrepreneur, and other forms used in the EB-5 process in USCIS’s “ELIS” (Electronic Immigration System). The Web-based system allows applicants to create an account and file an application online. At the teleconference, a USCIS representative said the agency is integrating EB-5 processes into its electronic system. The I-526 will be the first of four related forms being moved to ELIS. USCIS said the ability to see the status of a case online will also be provided in the future.

DETAILED NOTES ON THE CALL

MORE INFORMATION ON USCIS ELIS

FAQ ON USCIS ELIS

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4. New Publications and Items of Interest

Investment-for-visa schemes. An article in Forbes notes, among other things, that investors should beware of false claims that an investment in a venture is safer or guaranteed due to an influx of foreign cash.

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.

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 Nicole.hahn@lexisnexis.com.

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 and was a finalist for the International Photography Awards. 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 lauren@greencardstories.com or see 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.

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5. Member News

Several ABIL members and firms were listed in Chambers Global 2013:

FosterQuan, LLP (Robert Loughran)
Ivener & Fullmer LLP (Mark Ivener)
Klasko Rulon Stock & Seltzer (H. Ronald Klasko)
Pearl Law Group (Julie Pearl)
Seyfarth Shaw LLP (Angelo Paparelli)
Wolfsdorf Immigration Law Group (Bernard Wolfsdorf)

Other Notable Practitioners:
Francis Chin
Charles Kuck
Cyrus Mehta
Stephen Yale-Loehr

Mark Ivener gave a presentation on an EB-5 panel on April 19, 2013, at the EB-5 Investment Visa Match-Making Forum in the City of Industry, California. Mr. Ivener’s speech was “EB-5 for Investors.”

Klasko, Rulon, Stock & Seltzer, LLP held its Annual Spring Seminar on April 23, 2013, at the Radisson Plaza-Warwick Hotel in Philadelphia, Pennsylvania. Topics will include legislation, USCIS policies and practices, CBP programs, J-1 waivers, university/hospital roundtable, corporate roundtable, employment eligibility verification, travel issues, prevailing wage issues, and more. H. Ronald Klasko spoke at the seminar. MORE INFORMATION

Charles Kuck has published several new blog entries. “Three Ways To Get Ready for Immigration Reform” “USCIS and Why You Need an Immigration Attorney”

Robert Loughran organized and moderated a full-day EB-5 Immigrant Investor Summit for Attorneys and Developers in Dallas, Texas, on March 15, 2013. The event was sponsored by ILW. Mr. Loughran independently presented on “source of funds issues” in Form I-526, Immigrant Petition by Alien Entrepreneur.

Cyrus Mehta has published a new blog entry. “212(k) Waiver Victory Teaches That It’s Not Worth Manipulating the Immigration System To Settle Personal Disputes“.

Angelo Paparelli has published several new blog entries. “The Xenophobes Can’t Kill Immigration Reform – But What Should CIR Supporters Do Now?” “Rethinking Immigration: If America Will Welcome More Entrepreneurs, Why Not More Creatives?” “Will the New Labor-Business Accord Produce an Immigration Death Panel?”

Mr. Paparelli was quoted in Law360 on April 18, 2013, in “Immigration Reform Bill Offers Employers A Mixed Bag.” He said, “I think the fact that the U.S. Chamber [of Commerce] and the AFL-CIO reached a consensus on a lesser-skilled worker visa is wonderful, but the numbers make the program illusory,” and noted that the cap on W visas was too low to fill the positions employers need.

Bernard Wolfsdorf has published a blog entry. “Update on Wait Lines for Chinese EB-5 Investors – Is It Really Good News?”

Stephen Yale-Loehr was quoted on CNN.com on April 18, 2013, in “Immigration Reformers Seek To Avoid Déjà Vu.” Among other things, he noted that “[t]he chances of getting something enacted this year are less than 50% because of the short number of legislative days, and the House Republicans may not feel the same sense of urgency to enact immigration reform legislation.”

Mr. Yale-Loehr was quoted on WBEZ in a transcript of a radio interview. He said he thinks the E-2 visa “is a good example of a true entrepreneurial visa. We should try to make it easier for people who want to do that to come to the United States more easily in the future, and to be able to get a permanent green card.”

Mr. Yale-Loehr was quoted by ABC online on April 16, 2013, in “How Unlimited Visas Could Affect Immigration.” He noted that green cards for spouses and children of permanent residents are in demand and backlogged.

ABIL members participated in the Invest in America Summit in Shanghai. At the Invest in America Summit in Shanghai from March 15-18, 2013, Mr. Klasko, Mr. Wolfsdorf, and Mr. Yale-Loehr were featured as VIP speakers. ABIL also hosted a booth to offer resources to attendees of the summit. Featured in the photo are (left to right) Mr. Wolfsdorf, Mr. Yale-Loehr, and Laura Danielson.

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6. EB-5 Government Agency Links

USCIS Web Page on EB-5 Immigrant InvestorsUSCIS Policy and Procedural Memoranda on EB-5 Investors

Immigrant Investor Regional Centers List

Form I-526, Immigrant Petition by Alien Entrepreneur

Form I-829, Petition by Entrepreneur to Remove Conditions

Form I-924, Application for Regional Center Under the Immigrant Investor Pilot Program

Form I-924A, Supplement to Form I-924

Headlines:

1. Congress Acts to Extend EB-5 Regional Center Program for Three Years – Congress has agreed in principle to extend the EB-5 regional center program for three years, until September 30, 2015.

2. USCIS Announces New EB-5 Program Office – USCIS announced the creation of a new office to oversee administration of the EB-5 immigrant investor visa program.3. USCIS Releases Third-Quarter Statistics on July EB-5 Stakeholders Call – Among other things, USCIS announced that a new version of the draft EB-5 policy memo will be issued soon.4. USCIS’s Summary of May EB-5 Stakeholders Meeting Provides More Info – After USCIS’s EB-5 stakeholders meeting held in May, attendees lamented that the agency provided little substantive information and did not answer many submitted questions. USCIS subsequently released a summary providing additional information.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

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Details:

1. Congress Acts to Extend EB-5 Regional Center Program for Three Years

Congress has agreed in principle to extend the EB-5 regional center program for three years, until September 30, 2015. The Senate has already acted, passing the extension on August 2 by unanimous consent. The House of Representatives is in recess in August, but is expected to pass the extension soon after it reconvenes in September. This is good news for the regional center program, as it alleviates concerns that the program might expire on September 30.

The EB-5 extension is part of S. 3245, which also extends three other immigration programs for three years.

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2. USCIS Announces New EB-5 Program Office

On July 18, 2012, U.S. Citizenship and Immigration Services (USCIS) Director Alejandro Mayorkas announced the creation of a new office to oversee administration of the EB-5 immigrant investor visa program. The office will be led by a new Chief of Immigrant Investor Programs. The position opening was announced the same day.

Director Mayorkas noted that the EB-5 program “has spurred the creation of tens of thousands of new jobs and the injection of billions of dollars into the U.S. economy since Congress created the program in 1990.” Interest in the EB-5 program has grown exponentially in recent years, he noted, both from domestic project developers seeking capital and foreign investors who have the capital that can fuel economic growth.

In fiscal year (FY) 2012 to date, USCIS approved more than 3,000 Form I-526 (Immigrant Petition by Alien Entrepreneur) petitions. Director Mayorkas said this was more than triple the number approved in all of FY 2009. “Since 2009, we have quadrupled the size of the EB-5 adjudications team and brought on board eight expert economists dedicated to the EB-5 program to ensure that EB-5 cases are handled expeditiously and with appropriate expertise.” In the next month, two full-time attorneys with substantial transactional experience will enter on duty as new additions to the USCIS EB-5 program team, he said.

Also, by the end of August, a Review Board consisting of two Supervisory Immigration Services Officers and one economist “will review every pending application for regional center designation for which a denial has been recommended, with applicants receiving the opportunity to discuss their cases in-person before any final adverse decision is rendered,” Director Mayorkas said.

Announcement

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3. USCIS Releases Third-Quarter Statistics on July EB-5 Stakeholders Call

U.S. Citizenship and Immigration Services (USCIS) held an EB-5 stakeholders call on July 26, 2012. USCIS announced the new EB-5 program office at the meeting, and noted that the agency will release a new version of the draft EB-5 policy memo soon. USCIS also plans to release related FAQs, and will incorporate stakeholders’ comments into both documents.

USCIS addressed many issues on the call, including what constitutes a material change in an EB-5 project. Decisions on what constitutes a material change and other issues are often very case- and fact-specific, USCIS noted. That is why general guidance sometimes cannot be provided. USCIS did not discuss the tenant-occupancy methodology issue on the call, noting that the agency plans to release separate guidance on that issue. In a summary of the May 1 stakeholders meeting, USCIS said it will communicate individually with applicants with tenant occupancy requests for evidence via mail and e-mail, and “will look into the lack of response from the regional center direct mailbox.”

USCIS said it has approved over 3,000 I-526 (Immigrant Petition by Alien Entrepreneur) petitions so far this year, and that the number of I-829 (Petition by Entrepreneur to Remove Conditions) filings has decreased. USCIS expects to see more filed in the fourth quarter.

Regarding industry category requests on the I-924 (Application for Regional Center), USCIS said the I-924 must show how jobs will be created, and that a detailed business plan is needed for each industry category.

USCIS noted that a project may use both EB-5 and domestic capital. If so, evidence is necessary to show how domestic financing will be obtained. USCIS said it understands that domestic financing may depend on EB-5 money going into the project first. The regulations do not require any specific evidence, but USCIS looks for loan agreements, letters of commitment, and any other evidence that it is realistic given the business realities of early-stage financing.

USCIS also noted that investors can receive a return on their investment during the two-year conditional resident period as long as the returns are derived from net earnings and do not decrease their capital contribution.

According to the latest EB-5 program statistics based on preliminary data for the third quarter of fiscal year (FY) 2012, USCIS received 4,156 I-526 (Immigrant Petition by Alien Entrepreneur) petitions and had approved 3,002 and denied 775 so far. This was a 79 percent approval rating, compared to an 81 percent approval rating for all of FY 2011 and an 89 percent approval rating for all of FY 2010. As of the third quarter of FY 2012, USCIS had received 546 I-829 (Petition by Entrepreneur to Remove Conditions) petitions and had approved 639 and denied 42 so far. This was a 94 percent approval rating, nearly matching a 96 percent approval rating for all of FY 2011 and exceeding an 83 percent approval rating for FY 2010.

USCIS approved 209 regional centers as of the third quarter. Full List of RCs by State.

The next USCIS stakeholder engagement meeting is scheduled for October 16, 2012, in Washington, DC. See HERE for additional details on the engagement meetings.

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4. USCIS’s Summary of May EB-5 Stakeholders Meeting Provides More Info

After USCIS’s EB-5 stakeholders meeting held on May 1, 2012, attendees lamented that the agency provided little substantive information and did not answer many submitted questions. Over 250 people attended in person, and over 300 listened by phone. USCIS subsequently released a summary of the meeting that provided additional information, presumably based on written questions that were submitted to the agency.

Among other things, USCIS noted that the USCIS Immigrant Investor Mailbox is administered full-time by an EB-5 supervisor. Most inquiries are addressed within two to three days of receipt, USCIS said. Some may take longer if research and coordination are required. USCIS said it notifies inquirers if additional time is needed.

One inquirer noted that USCIS says it takes cases on a first-in, first-out basis, but also that it is considering grouping regional center cases to be adjudicated by teams. The question was whether, if a regional center submits an amendment to an I-924, it would be included with the group or would go into the first-in, first-out process. USCIS answered that immigration services officer (ISO) specialization by regional center efforts are geared toward I-526 and I-829 adjudications, not I-924 adjudications. However, I-924 applications are given to ISOs familiar with the regional center applicant, if possible. USCIS said it still adheres to a first-in, first-out process when adjudicating cases in the I-924 application workflow queue and in the individual petition queues. Under ISO specialization, USCIS noted, when the time comes for adjudication, the application can be sent to an ISO familiar with the regional center and the capital investment project. If cases are pending beyond posted processing times, USCIS suggests contacting the EB-5 mailbox at EB-5ImmigrantInvestor@dhs.gov.

With regard to I-526 petitions, an inquirer asked USCIS to confirm whether, after the formulas and multipliers in an economic analysis have been approved by the agency as part of a regional center’s initial application, those approved formulas and multipliers may be updated with more current data (for example, updated RIMS II [Regional Input-Output Modeling System] multipliers of the most current year versus multipliers of a few years back when the regional center was approved) at the time of the actual I-526 or I-829 filing, as long as the methodology used is otherwise the same as what was approved by USCIS. The agency said this is acceptable as long as the applicants are consistent and don’t “cherry-pick” across a range of years. It is not acceptable to selectively use the highest multipliers available for each approved industry since the date the approval was issued.

For example, USCIS noted:

[I]f the applicant was approved in 2008 to use appropriately specified 2006 RIMS II …final demand multipliers for the construction and operation of an assisted living facility, then the applicant must use 2006 RIMS II final demand multipliers for both construction and operation of the facility, or 2007 RIMS II final demand multipliers for both the construction and operation of the facility, or 2008 RIMS II final demand multipliers for both the construction and operation of the facility, and so on. The petitioner may not use a 2006 RIMS II final demand multiplier for construction and a 2009 RIMS II final demand multiplier for operations simply because the RIMS II final demand multipliers for those two industries in those two years happen to be the highest multipliers published since the approval of the I-924.

Regarding avoidance of requests for evidence (RFEs), one inquirer asked whether USCIS will provide filing hints to assist in lowering RFE and denial rates. USCIS said it “has discussed developing filing hints and is looking at ways to be more proactive” in communicating with stakeholders. “Submitting the most detailed and comprehensive evidence of investment and job creation possible is the primary way to avoid receiving an RFE,” USCIS said.

USCIS noted that although it does not require applicants to use attorneys or economists in filing for any immigration benefits, a regional center application has a “robust evidentiary requirement.” It is possible to provide a simplified model, USCIS said, but “[i]n every case, the applicant must show a reasonable economic methodology to prove direct or indirect job creation.”

USCIS also noted that case status availability online is tied to CLAIMS 3. I-924 and I-829 processing times do not reside in CLAIMS 3. USCIS plans to have a common platform for all applications, petitions, and case status online in “a few years.” If stakeholders seek case status information because the case is exceeding posted processing times, USCIS said they should use direct e-mail or the EB-5 mailbox.

An inquirer asked about bridge financing, noting that this issue did not appear to be covered with specificity in the last draft of the policy memo. USCIS noted that the new commercial enterprise, not the EB-5 investors, must create the requisite employment. As such, USCIS said, it is acceptable for the developer or principal of a new commercial enterprise, either directly or through a separate job-creating entity, to use interim, temporary or bridge financing in the form of either debt or equity before receipt of EB-5 capital. If the project starts based on the bridge financing before receipt of the EB-5 capital and subsequently replaces it with EB-5 capital, the new commercial enterprise still gets credit for the job creation, USCIS said.

USCIS said that the following policy will be issued in the forthcoming EB-5 policy memo under Section C, Creation of Jobs:

It is important to recognize that while the immigrant’s investment must result in the creation of jobs for qualifying employees, it is the new commercial enterprise that creates the jobs. This distinction is best illustrated by an example:

Ten immigrant investors seek to establish a hotel as their new commercial enterprise. The establishment of the new hotel requires capital to pay financing costs, purchasing the land, developing the plans, obtaining the licenses, building the structure, taking care of the grounds, staffing the hotel, and the many other types of expenses involved in the development and operation of a new hotel. The immigrant’s investments can go to pay part or all of any of these expenses.

Summary of the May Stakeholder Engagement Meeting.

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5. New Publications and Items of Interest

Several ABIL members co-authored and edited the new publication, Global Business Immigration Practice Guide, released on May 31, 2012, 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.

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 issue.

ORDER HERE. International customers who do not want to order through the bookstore can order through Nicole Hahn at (518) 487-3004 or Nicole.hahn@lexisnexis.com.

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. Green Card Stories is also featured on National Public Radio’s photo blog.

For more information or to order, visit Green Card Stories.

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

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6. Member News

Stephen Yale-Loehr was quoted in the Atlanta Journal-Constitution on July 26, 2012, in the article, “Investors Can Earn Shot at Green Card.” Mr. Yale-Loehr said the EB-5 investor program “creates jobs for U.S. workers at no expense to the taxpayer, so it will be renewed.” He founded the Association to Invest in the USA, which represents regional centers that organize EB-5 investment projects.
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7. EB-5 Government Agency Links

USCIS Web Page on EB-5 Immigrant InvestorsUSCIS Policy and Procedural Memoranda on EB-5 Investors

Immigrant Investor Regional Centers List

Form I-526, Immigrant Petition by Alien Entrepreneur

Form I-829, Petition by Entrepreneur to Remove Conditions

Form I-924, Application for Regional Center Under the Immigrant Investor Pilot Program

Form I-924A, Supplement to Form I-924

Headlines:

1. USCIS Announces Several Thousand EB-5 Green Cards Issued So Far in First Quarter of FY 2012, Releases Latest Stats – Between October and mid-January, 2,364 EB-5 green cards were issued. At that rate, over 9,000 EB-5 visas might be issued this fiscal year, which is very close to the statutory cap of 10,000.

2. USCIS Announces ‘Entrepreneurs in Residence’ Initiative, Summit; Discusses EB-5 Enhancements – The initiative builds upon USCIS’s recent efforts to promote startup enterprises and spur job creation, including enhancements to the EB-5 immigrant investor visa program.3. USCIS Issues Draft EB-5 Memo – USCIS sought stakeholder input on “foundational issues” before providing greater detail.4. USCIS Proposes EB-5 Immigrant Investor Rule – The processes outlined in the proposed rule would provide an additional two-year period for certain immigrant investors to meet the EB-5 investment and job-creation requirements.5. Senate Judiciary Committee Holds Hearing on EB-5 Regional Center Program – Sen. Patrick Leahy, noting that current authorization for the program expires at the end of September 2012, advocated a permanent authorization.6. AAO Denies RC Application to Build Resort Suites – The AAO found that the applicant’s proposal was a marketing strategy to attract buyers for vacation suites rather than investors of capital in a new commercial enterprise.7. New Publications and Items of Interest – New Publications and Items of Interest8. Member News – Member News9. EB-5 Government Agency Links – EB-5 Government Agency Links

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Details:

1. USCIS Announces Several Thousand EB-5 Green Cards Issued So Far in First Quarter of FY 2012, Releases Latest Stats

The Department of State issued 2,364 EB-5 green cards between October 1, 2011, and mid-January 2012, U.S. Citizenship and Immigration Services (USCIS) announced at its quarterly EB-5 stakeholders meeting on January 23, 2012. At that rate, over 9,000 EB-5 visas might be issued this federal fiscal year, which is very close to the statutory cap of 10,000.

USCIS refused to discuss what it would do about pending EB-5 petitions if Congress fails to renew the regional center pilot program by September 30, 2012. Approximately 92 percent of I-526 petitions (Immigrant Petition by Alien Entrepreneur) filed each year are filed by investors in regional centers. Historically, about 80 to 85 percent of I-526 and I-829 EB-5 petitions are approved each year. The California Service Center (CSC) now has four teams of EB-5 adjudicators, an increase from one team a year ago. Despite the increased staffing, case adjudication times have not improved because of the increase in case filings.

USCIS also announced that it would defer to state determinations on what constitutes a targeted employment area (TEA) for EB-5 purposes. The agency will check the data behind states’ methodology, however. USCIS did not say whether a single census tract may qualify as a geographic area. USCIS said that would be covered in written materials not yet available publicly, and referred stakeholders to its December 2009 memorandum for further details (available at http://www.uscis.gov/USCIS/Laws/Memoranda/Static%20Files%20Memoranda/Adjudicating%20of%20EB-5_121109.pdf).

USCIS acknowledged that many regional center applications are being held up at headquarters pending resolution of economic methodology issues. The USCIS hopes to resolve those issues soon. USCIS is analyzing all the I-924A forms submitted by regional centers and will draft a report that includes regional center-specific information sometime this year. The USCIS acknowledged growing pains in determining what constitutes a “shovel-ready” project for EB-5 purposes. It hopes to address this issue later this year when it revises the I-924 form to provide greater consistency.

USCIS also released its latest data on EB-5 filings and regional centers (RCs):

• RC approvals continue to increase. As of January 28, 2012, there are 217 approved RCs operating in 40 states, including the District of Columbia and Guam.
• The agency reported 41 initial RC proposal filings in the first quarter of fiscal year (FY) 2012, compared to 192 initial filings in all of FY 2011 and 110 initial filings in all of FY 2010. The number of amended RC proposal filings was 17 by the end of the first quarter; there were 86 filings received for all of FY 2011 and 42 filings received for all of FY 2010.
• In the first quarter of FY 2012, the agency approved 14 of the 41 initial RC proposals and denied 22, an approval rate of 39 percent. In FY 2011, when USCIS approved 80 and denied 51, an approval rate of 61 percent. The approval rate of amended RC proposals in the first quarter of FY 2012 was 57 percent, with 4 approvals and 3 denials. By comparison, in FY 2011 USCIS approved 43 amended RC proposals and denied 7, an approval rate of 86 percent.
• USCIS also reported significant increases in individual I-526s and I-829s (Petition by Entrepreneur to Remove Conditions). In the first quarter of FY 2012, USCIS received 1,293 I-526 petitions, compared to 3,805 for all of FY 2011. USCIS received 250 I-829 petitions in the first quarter of 2012. By comparison, USCIS received 2,345 I-829 petitions in all of FY 2011.
• In the first quarter of FY 2012, the agency approved 1,076 I-526 petitions and denied 222, an approval rate of 83 percent, while in all of FY 2011 USCIS approved 1,563 and denied 11, an approval rate of 93 percent. USCIS approved 1,067 I-829 petitions and denied 46 in all of FY 2011, an approval rate of 96 percent.

The full list of RCs by state is available at http://www.uscis.gov/eb-5centers/.

The next USCIS stakeholder engagement meetings are scheduled for May 1, 2012 (general EB-5 discussion); July 26, 2012 (regional center discussion); and October 18, 2012 (general EB-5 discussion). See http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=e0138e0732344310VgnVCM100000082ca60aRCRD&vgnextchannel=e0b081c52aa38210VgnVCM100000082ca60aRCRD for additional details on the engagement meetings.

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2. USCIS Announces ‘Entrepreneurs in Residence’ Initiative, Summit; Discusses EB-5 Enhancements

As part of the Obama administration’s “Startup America” efforts to encourage high-skilled immigration into the U.S. under existing laws, U.S. Citizenship and Immigration Services (USCIS) Director Alejandro Mayorkas announced the “Entrepreneurs in Residence” initiative to use “industry expertise to strengthen USCIS policies and practices surrounding immigrant investors, entrepreneurs and workers with specialized skills, knowledge, or abilities.”

Director Mayorkas announced the initiative in October at the High Growth Entrepreneurship Listening and Action Session at AlphaLab in Pittsburgh, before the quarterly meeting of the President’s Council on Jobs and Competitiveness with President Obama. Director Mayorkas said the introduction of expert views from the private and public sectors “will help us to ensure that our policies and processes fully realize the immigration law’s potential to create and protect American jobs.”

USCIS will launch the “Entrepreneurs in Residence” initiative with a series of informational summits with industry leaders to gather strategic input. Informed by the summits, the agency will create a tactical team including entrepreneurs and experts, working with USCIS personnel, “to design and implement effective solutions.” Director Mayorkas said the initiative “will strengthen USCIS’s collaboration with industries at the policy, training, and officer level[s], while complying with all current Federal statutes and regulations.”

The first information summit is planned for February 22, 2012, in Silicon Valley, California, from 8:30 a.m. to 5:30 p.m. Those interested should e-mail public.engagement@dhs.gov by February 3, 2012. Include your full name and the organization you represent, if any, in the body of the e-mail and reference “Entrepreneurs in Residence” in the subject line of the e-mail.

The initiative builds upon USCIS’s recent efforts to promote startup enterprises and spur job creation, including enhancements to the EB-5 immigrant investor visa program. USCIS said that since August, it has been conducting a review of the EB-5 process, working with business analysts to enhance related adjudications, implementing direct access to adjudicators for EB-5 regional center applicants, and launching new specialized training modules for USCIS officers.

At a related press conference, Director Mayorkas explained that “[w]e as an agency have been focused in the absence of legislative action to create newer broader pathways for the best and brightest from around the world to come to the United States and really take advantage of the opportunities here to enable our economy to grow and to create jobs for American workers.” He said that the administration is “reviewing our policies and our processes to ensure that we are capturing the existing laws and the legislative intent behind those laws.”

Director Mayorkas said that “Entrepreneurs in Residence” and what it represents “cuts across all visa lines and is not limited to the EB-5 program by any measure.” He said that DHS will be looking at the initiative’s applicability in the arts and entertainment arenas, the O and P visa lines, and the H-1 categories.

He also noted that DHS does not plan to bring in a large cadre of experts, but rather “to start tactically and surgically” with a small group of people, some working on strategy and some on tactics. He said that DHS is still working out the details and will release more information on next steps later.

USCIS’s statement on “Entrepreneurs in Residence” is available at http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=bd537158910e2310VgnVCM100000082ca60aRCRD&vgnextchannel=68439c7755cb9010VgnVCM10000045f3d6a1RCRD. A transcript of a related press conference held in October 2011 is available at http://www.uscis.gov/USCIS/News/2011/October%202011/transcript_eir_11Oct11.pdf. Information about the Entrepreneurs in Residence Summit that will be held on February 22, 2012, is available at http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=180cfac2f5825310VgnVCM100000082ca60aRCRD&vgnextchannel=e0b081c52aa38210VgnVCM100000082ca60aRCRD.

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3. USCIS Issues Draft EB-5 Memo

U.S. Citizenship and Immigration Services (USCIS) released a draft memorandum to address “certain foundational issues” in the EB-5 immigrant investor program. USCIS seeks stakeholder input on these foundational issues before providing greater detail and addressing additional issues.

On a conference call held on November 9, 2011, to discuss the draft memo, Mr. Mayorkas said that it differs from other policy memos in that it gives adjudicators the context of the EB-5 program: that it is important because it creates jobs for U.S. workers. Mr. Mayorkas said that this context should guide adjudicators. USCIS subsequently released a revised memo on January 11, 2012, and held a related stakeholder meeting the next day.

Among other things, the memo lays out the preponderance of evidence standard: “[T]he petitioner must establish each element by a preponderance of the evidence. That means that the petitioner must prove to us that what he or she claims is more likely so than not so. This is a lower standard of proof than the standard of ‘clear and convincing,’ and even lower than the standard ‘beyond a reasonable doubt’ that applies only to criminal cases. The petitioner does not need to remove all doubt from our adjudication, but must instead show that what he or she presents is more probable than not.”

In general, the memo will only take effect when USCIS finalizes it. However, effective immediately, USCIS generally will defer to a state’s targeted employment area (TEA) designation. The memo notes: “USCIS is to give deference to the state’s designation of the physical boundaries of the geographic or political subdivision that will be the targeted employment area.” It adds, however, that “USCIS must ensure compliance with the statutory requirement that the proposed area designated by the state in fact has an unemployment rate of at least 150 percent of the national average rate. For this purpose, USCIS will review state determinations of the unemployment rate and, in doing so, USCIS can assess the method or methods by which the state authority obtained the unemployment statistics.”

The memo states that acceptable data sources for purposes of calculating unemployment include “Local Area Unemployment Statistics produced by a government agency, U.S. Census Bureau data, and data from the American Community Survey. State unemployment determinations should be based on the most recent publicly available data from the source relied upon.”

The memo also clarifies that while the immigrant’s investment must result in the creation of jobs for qualifying employees, it is the new commercial enterprise that creates the jobs. An investor’s money that goes into a new commercial enterprise can be used in a variety of ways, including bridge financing, hiring personnel, or operating the company.

USCIS Director Alejandro Mayorkas said the draft memorandum is a “work in progress,” and that the agency is sharing it now “to obtain valuable real-time input and to define a collaborative approach with the stakeholder community.” He noted that the draft memorandum “is not operative and will not guide adjudication decisions until it is published in complete and final form. Current policy memoranda continue to guide our adjudications.” Mr. Mayorkas said that USCIS plans to consolidate all existing EB-5 memos into one. The second draft released on January 11 incorporated comments received from stakeholders.

Initial comments were taken until December 9, 2011. Additional opportunity to comment is available now that the second draft has been released.

The revised draft memorandum released on January 11, 2012, and a cover message are available at http://www.uscis.gov/USCIS/Outreach/Feedback%20Opportunities/Draft%20Memorandum%20for%20Comment/EB5_coverandmemo_2ndpost.pdf. The original draft memo and a statement from Mr. Mayorkas are available at http://www.uscis.gov/USCIS/Outreach/Feedback%20Opportunities/Draft%20Memorandum%20for%20Comment/EB_5_Adjudications_Policy3.pdf.

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4. USCIS Proposes EB-5 Immigrant Investor Rule

U.S. Citizenship and Immigration Services (USCIS) published a proposed rule on September 28, 2011, that would enable the agency to process certain EB-5 immigrant investor applications approved between 1995 and 1998.

The proposed rule would implement provisions of the 21st Century Department of Justice Appropriations Authorization Act that apply to a group of immigrant investors who had a Form I-526, Immigrant Petition by Alien Entrepreneur, approved between January 1, 1995, and August 31, 1998. Specifically, the rule would enable USCIS to process cases for approximately 580 principal immigrant investors and their dependents whose I-526 petitions were approved during that period and who, before November 2, 2002, sought to:

• Register for permanent residence or adjust their status (using Form I-485); or
• Remove conditions on permanent residence obtained as an entrepreneur (using Form I-829).

The processes outlined in the proposed rule would provide an additional two-year period for most of these immigrant investors to meet the EB-5 investment and job-creation requirements. This rule would not impact any other applications or petitions filed under the EB-5 program.

Comments were accepted until November 28, 2011. The proposed rule is available at http://www.gpo.gov/fdsys/pkg/FR-2011-09-28/pdf/2011-24619.pdf. USCIS corrected the docket number for the proposed rule on October 4, 2011; see http://www.gpo.gov/fdsys/pkg/FR-2011-10-04/pdf/2011-25463.pdf.

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5. Senate Judiciary Committee Holds Hearing on EB-5 Regional Center Program

The Senate Judiciary Committee held a hearing on December 7, 2011, on “Reauthorizing the EB-5 Regional Center Program: Promoting Job Creation and Economic Development in American Communities.” Witnesses included Bill Stenger, President and CEO, Jay Peak Resort; David North, Fellow, Center for Immigration Studies; and Robert C. Divine, Shareholder, Baker, Donelson, Bearman Caldwell & Berkowitz, P.C. Sens. Patrick Leahy (D-VT) and Charles Schumer (D-NY) issued related statements.

Sen. Leahy noted that current authorization for the EB-5 regional center pilot program, which has been in existence for 18 years, expires at the end of September 2012. He advocated enactment of permanent authorization legislation that he introduced in March 2011 (S. 642). Sen. Leahy noted that in 2011, the EB-5 program is expected to have created an estimated 25,000 jobs and provided direct investments in U.S. communities of $1.25 billion. He said that if the full number of visas allocated to the program are used, based on investment and job creation requirements, the program “has the potential to create or preserve 100,000 jobs per year, with contributions of $5 billion in foreign capital investment. And these benefits come at no cost to American taxpayers.”

Sen. Leahy noted that in addition to administrative efforts by U.S. Citizenship and Immigration Services (USCIS), he has been working for months with interested parties and USCIS “to put together a legislative framework to make significant improvements to the overall program.” He said the framework would “provide USCIS with additional authorities to ensure that this important program maintains the highest level of integrity and efficiency.” He added, “It is time for a permanent authorization to provide investors with the certainty and predictability they need to invest and conduct business with confidence.”

Sen. Schumer outlined several examples of USCIS-approved “job-creating” regional center projects in New York:

• Steiner Studios, a film production studio in Brooklyn, which received $65 million in EB-5 funding to assist with expansion;
• Global Vascular Institute, on the Buffalo Niagara Medical Campus, where EB-5 funding helped support development of the new institute, creating jobs and improving health care access for the people of Buffalo;
• Acadia Realty Trust, which received $200 million in EB-5 funding to assist with the construction of the City Point project in downtown Brooklyn;
• SJM Company, which received $72 million in EB-5 funding to assist with the redevelopment of the George Washington Bridge Bus Station; and
• Dermot Company and Harry’s Restaurant, which received $96 million in EB-5 funding to assist with the redevelopment of the Battery Maritime Building and Pier A in Lower Manhattan.

Sen. Schumer said he was proud to co-sponsor S. 642 with Sen. Leahy to permanently authorize the program.

Mr. Stenger testified that the region where Jay Peak Resort is located has the most significant unemployment and economic challenge of any region in Vermont. He said that since 2005, Jay Peak has developed several EB-5 projects, creating over 2,000 jobs in the region, and that the EB-5 investments are expected to create that many jobs again over the next two years. “We are seeing this employment creation at Jay Peak and our surrounding communities in this terribly troubled economy solely because of the EB-5 foreign investor program,” he said.

The statements of Sens. Leahy and Schumer, along with the witnesses’ written testimony, are available at http://www.judiciary.senate.gov/hearings/testimony.cfm?id=9b6937d5e931a0b792d258d9b365f21d&wit_id=9b6937d5e931a0b792d258d9b365f21d-0-5.

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6. AAO Denies RC Application to Build Resort Suites

U.S. Citizenship and Immigration Services (USCIS) recently published an Administrative Appeals Office (AAO) decision affirming denial of a proposal for a regional center designation. The AAO found that the applicant’s proposal was a “marketing strategy to attract buyers for vacation suites rather than investors of capital in a new commercial enterprise.”

Specifically, the AAO said that the evidence incontrovertibly established that the applicant proposed that “investors” would purchase a vacation suite as either a “primary residence,” “second home,” or “investment property.” The AAO affirmed the California Service Center director’s determination that such a real estate purchase of a private residence, even if still under construction, “is not an at-risk investment of capital that can be credited with direct or indirect job creation.” The purchase of individual residential suites by alien “investors,” even if concentrated in one resort complex, is also not the type of “pooled investment” concept Congress envisioned for the regional center program, the AAO noted. In summary, the AAO said:

[T]he applicant has proposed an investment plan whereby alien investors would make independent, passive, personal real estate investments that garner them no equity ownership in a new commercial enterprise. Instead of presenting a plan for a pooled equity investment of capital into a new commercial enterprise, the applicant has merely put forth a marketing strategy to attract sufficient buyers to fund later phases of development. This plan does not meet the letter or spirit of [the law and regulations] designed to encourage pooled investments in a new commercial enterprise benefitting a geographic region.

The April 26, 2011, decision is available at http://www.uscis.gov/err/K1%20-%20Request%20for%20Participation%20as%20Regional%20Center/Decisions_Issued_in_2011/Apr262011_01K1610.pdf.

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7. New Publications and Items of Interest

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.

For more information or to order, visit http://www.greencardstories.com/.

ABIL on Twitter. The Alliance of Business Immigration Lawyers is now available on Twitter: @ABILImmigration. Recent ABIL member blogs are available at http://www.abilblog.com/.

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8. Member News

Laura Danielson was quoted on November 3, 2011, in Dolan Media Newswires Finance & Commerce (Minneapolis, MN) in an article on the EB-5 category for foreign investors. She noted that many designated regional centers don’t produce a lot of deals, but the small number of centers that do can often assemble $150 million at one time, with 100 or so foreign investors contributing $500,000 to $1 million each. Ms. Danielson also noted that “[t]he University of Minnesota has one of the largest (if not the largest) Chinese student populations in the country. I think that there are great synergies between these students, their families and Minnesota that would make Minnesota a popular regional center.” She also said she sees significant potential in a Minnesota-based EB-5 regional center helping to bring foreign investment into economically depressed urban areas such as north Minneapolis.

H. Ronald Klasko and Stephen Yale-Loehr spoke at an American Immigration Lawyers Association EB-5 conference on October 21, 2011, in San Antonio, Texas. Mr. Klasko spoke on a panel, “Winning the End Game: Removal of Conditions,” and Mr. Yale-Loehr spoke on a panel, “Concentrating EB-5 Investment Impact—Creating and Representing Regional Centers.”

Mr. Yale-Loehr was quoted in Crain’s New York Business online on January 8, 2012, and in the print edition on January 9. Mr. Yale-Loehr noted that potential EB-5 investors are getting skittish because the EB-5 program’s reauthorization depends on a dysfunctional Congress. “It behooves Congress to reauthorize this program. Whether they can do it in a timely manner, that’s a political crapshoot.”

Mr. Yale-Loehr also was quoted in the Puget Sound Business Journal on December 2, 2011. He noted that “the biggest thing fueling the growth of the [EB-5 investor] program has been the capital crisis in the United States.”

Mr. Yale-Loehr was featured on a one-hour radio talk show on WAMU on September 28, 2011, about the EB-5 program. (Click on “Listen.”)

Mr. Yale-Loehr spoke on EB-5 immigrant investor issues at a conference sponsored by the New York City chapter of the American Immigration Lawyers Association on December 1, 2011, at the Marriott Marquis hotel in New York City.

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9. EB-5 Government Agency Links

USCIS Web Page on EB-5 Immigrant Investors

USCIS Policy and Procedural Memoranda on EB-5 Investors

Immigrant Investor Regional Centers List

Form I-526, Immigrant Petition by Alien Entrepreneur

Form I-829, Petition by Entrepreneur to Remove Conditions

Form I-924, Application for Regional Center Under the Immigrant Investor Pilot Program

Form I-924A, Supplement to Form I-924

Headlines:

1. USCIS Holds Immigrant Investor Quarterly Meeting – USCIS discussed case processing times and statistics, visa usage, and use of the governmental logo; regional center economic analysis; and stakeholder suggested topics and questions, including targeted employment areas, solicitation of funds before official RC designation; the use of multiple legal organization plans, and reorganized and restructured businesses versus troubled businesses.

2. USCIS Proposes EB-5 Changes; Comment Period Closed – USCIS has proposed significant changes to the administration of the EB-5 immigrant investor program’s intake and review process.3. ABIL Webinar Series: U.S. Investment Visas and Green Cards for Foreign Nationals – ABIL Webinar Series: U.S. Investment Visas and Green Cards for Foreign Nationals4. Member News – Member News5. EB-5 Government Agency Links – EB-5 Government Agency Links

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Details:

1. USCIS Holds Immigrant Investor Quarterly Meeting

U.S. Citizenship and Immigration Services (UCSIS) released its latest data on EB-5 filings and regional centers (RCs) at its June 30, 2011, “EB-5 Immigrant Investor Quarterly Engagement” stakeholders meeting. USCIS presented updates on case processing times and statistics, visa usage, guidance for annual reporting filings, and use of the governmental logo; RC economic analysis, including methodology and simple multiplier examples; and stakeholder suggested topics and questions, including targeted employment areas (TEAs), solicitation of funds before official RC designation; the use of multiple legal organization plans, and reorganized and restructured businesses versus troubled businesses. There was also an open forum Q&A.

The following is a summary of selected points from USCIS’s presentation:

RC data. USCIS noted that there are currently 147 approved regional centers (RCs) operating in 39 states, including the District of Columbia and Guam. Most (90 to 95 percent) of the individual Form I-526 (Immigrant Petition by Alien Entrepreneur) petitions filed each year are filed by those who are investing in RC-affiliated commercial enterprises. There are 83 initial RC proposals pending at USCIS, and nine RC proposals seeking to amend approved RCs.

USCIS figures continue to show a steep increase in the number of RC filings and EB-5 visa approvals. The agency reported 146 initial RC proposal filings in the first and second quarters of FY 2011, compared to 110 initial filings in all of FY 2010. The number of amended RC proposal filings also increased by the end of the second quarter to 55, an amount equal to 131 percent of the 42 filings received for all of FY 2010.

The agency also reported that it has issued a higher percentage of approvals of RC filings. In the first and second quarters of FY 2011, the agency approved 25 initial RC proposals and denied 11, an approval rate of 69 percent. This was a big increase from FY 2010, when USCIS approved 36 and denied 30, an approval rate of 55 percent. The approval rate of amended RC proposals in the first and second quarters also rose to 78 percent, with 21 approvals and 6 denials. By comparison, in FY 2010 USCIS approved 42 amended RC proposals and denied 11, an approval rate of 71 percent.

USCIS also reported significant increases in individual I-526s and I-829s (Petition by Entrepreneur to Remove Conditions). In the first and second quarters of FY 2011, USCIS received 1,601 I-526 petitions, compared to 1,955 for all of FY 2010. The increase in the number of I-829 petitions was even more dramatic, with 1,150 received in the first and second quarters. By comparison, USCIS received 768 I-829 petitions in all of FY 2010.

In the first and second quarters of FY 2011, the agency approved 407 I-526 petitions and denied 96, while in all of FY 2010 USCIS approved 1369 and denied 165. USCIS approved 166 I-829 petitions and denied 26 in the first and second quarters, compared to approving 274 and denying 56 for all of FY 2010.

USCIS also reported that although the target processing time for I-526 petitions is 5 months, actual processing times are reaching 5.5 months; however, some in the field have said it is closer to 7 months. USCIS’s target processing time for both initial and amended RC proposals is 4 months; the agency reported current processing times of 4.5 months for initial RC filings but only 1 month for amended filings. For I-829 filings, the agency reports that it is beating its target processing time of 6 months; USCIS said current processing time for I-829 filings is 1 month. USCIS said it strives to finalize EB-5 cases within 30 days after responses to requests for evidence (RFEs) are received.

USCIS is on track to approve a record number of EB-5 visas. Its preliminary estimate is that 2,129 EB-5 visas were issued in the first and second quarters of 2011, compared to 1,885 in all of FY 2010. The previous record was 4,218 EB-5 visas issued in FY 2009.

TEA designations. USCIS said it is reviewing policy on TEA designations, keeping in mind that it must fulfill its responsibility to ensure statutory and regulatory compliance while not rendering a state’s TEA designation immaterial.

Soliciting EB-5 funds before designation approval. One questioner asked whether there is any restriction on an RC soliciting EB-5 funds before it receives its approved designation as an RC. USCIS said there is no specific prohibition on a proposed RC soliciting EB-5 funds before it receives its approved designation, but noted that the agency is aware that some prospective RCs have inappropriately represented on websites and in promotional literature that the entities have already received the RC designation. “Prospective regional centers may not make any representations that could potentially mislead an investor into believing that the entity has been approved for the regional center designation prior to the actual regional center approval by USCIS,” the agency noted.

Legal organization plans. Another questioner asked, when a U.S. business is unsure what legal organization would be best, may it submit several options with an RC petition or amendment? Will USCIS approve the ones that are acceptable and reject the ones that are not, without denying the entire petition? USCIS responded that an RC application may contain more than one legal organization plan. If upon review one or more of the legal organization plans do not appear to be EB-5 compliant, then USCIS will issue an RFE. If upon final adjudication USCIS determines that one or more legal organization plans are qualifying, USCIS would approve the RC application, and the legal organization plans that were deemed acceptable would be specified in the RC approval notice.

“Reorganized or restructured” versus “troubled.” The agency noted that there appears to be some confusion regarding the difference between a “reorganized or restructured business” and a “troubled business” for EB-5 purposes. USCIS explained that the “reorganized or restructured business” concept relates to the requirement that the commercial enterprise in which the EB-5 investor will invest must be “new,” which is defined in 8 CFR § 204.6(e) as “a commercial enterprise established after November 29, 1990.” USCIS also noted that 8 CFR § 204.6(h)(2) provided that a “new” commercial enterprise may consist of the “purchase of an existing business and simultaneous or subsequent restructuring or reorganization such that a new commercial enterprise results.” USCIS pointed out, however, that 8 CFR § 204.6(h) has been superseded by a subsequent statutory amendment (§ 11036 of Public Law 107-273) that eliminated the requirement that the investor had to establish the new commercial enterprise. Presently, an investor only has to invest in a new commercial enterprise.

USCIS noted that Matter of Soffici, 22 I&N Dec. 158 (INS Assoc. Comm’r 1998), is a binding precedent decision that provides a detailed discussion regarding the factors that must be established to demonstrate that a commercial enterprise is new by virtue of being reorganized or restructured.

USCIS noted that if an immigrant investor makes an investment in a business that is already operating and does not meet the “troubled business” requirements, he or she may only be credited with jobs created as a result of the investment. Under Soffici, a petitioner who acquires a pre-existing business must show that the investment has created, or at least has a reasonable prospect of creating, 10 full-time positions in addition to those existing before acquisition. The petitioner must, therefore, present evidence concerning the pre-acquisition level of employment. Simply maintaining the pre-acquisition level of employment is not sufficient unless the petitioner shows that the pre-existing business qualifies as a “troubled business.”

USCIS noted that the “troubled business” concept relates to the crediting of job creation through the preservation of jobs in an existing business that has incurred substantial net losses. The regulations define “troubled business” as a business that has been in existence for at least two years, has incurred a net loss during the 12- or 24-month period before the priority date on the entrepreneur’s I-526, and the loss for such period is at least equal to 20 percent of the troubled business’s net worth before the loss. For purposes of determining whether the troubled business has been in existence for two years, USCIS noted that successors in interest to the troubled business will be deemed to have been in existence for the same period of time as the business they succeeded.

In the context of an RC investment project, USCIS said, “an acceptable economic analysis may demonstrate the preservation of indirect as well as direct jobs in a ‘troubled business’ through the EB-5 investment activity.”

In summary, the agency noted that issue of whether a business has been “restructured or reorganized” is related to establishing whether a business can be considered a new commercial enterprise. A “troubled business” must only be shown to have been “reorganized or restructured” if the commercial enterprise was established by November 29, 1990.

Use of governmental logos. USCIS said that it will be reviewing RC websites and promotional material as part of the I-924A review for inappropriate use of Department of Homeland Security and USCIS branding as well as material that is non-EB-5 compliant. The agency emphasized that it is illegal to use a governmental logo on nongovernmental EB-5 materials or websites.

Guidance on annual report filings. USCIS said it plans to devote a substantial portion of its September EB-5 stakeholder meeting to guidance on annual report filings for Forms I-924A that are due at the end of the year. USCIS said it has developed queries to generate RC-associated individual petition statistics. The data generated through these queries are still being validated but should be available at the September EB-5 stakeholder meeting.

USCIS also discussed RC economic analysis, including methodology and simple multiplier examples. USCIS’s agenda and full presentation are available at http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=948723cbea6bf210VgnVCM100000082ca60aRCRD&vgnextchannel=61ca6ec2ac3ee210VgnVCM100000082ca60aRCRD.

The full list of RCs by state is available at http://www.uscis.gov/eb-5centers/.

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2. USCIS Proposes EB-5 Changes; Comment Period Closed

U.S. Citizenship and Immigration Services (USCIS) has proposed significant changes to the administration of the EB-5 immigrant investor program’s intake and review process. The deadline for comments was June 17, 2011.

USCIS is proposing three fundamental changes to the way it processes certain regional center (RC) filings. First, USCIS proposes to accelerate its processing of applications for “job-creating projects that are fully developed and ready to be implemented.” USCIS will also give these EB-5 applicants and petitioners the option to request Premium Processing Service, which guarantees processing within 15 calendar days for an additional fee.

Second, USCIS proposes the creation of new specialized intake teams with expertise in economic analysis and the EB-5 program requirements. EB-5 RC applicants will be able to communicate directly with the specialized intake teams via e-mail to streamline the resolution of issues and address questions or needs related to their applications.

Third, USCIS proposes to convene an expert Decision Board to render decisions regarding EB-5 RC applications. The Decision Board will be composed of an economist and adjudicators and will be supported by legal counsel.

USCIS’s announcement is available at http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=a4b57b52e5800310VgnVCM100000082ca60aRCRD&vgnextchannel=68439c7755cb9010VgnVCM10000045f3d6a1RCRD. The proposal is available at http://www.uscis.gov/USCIS/Outreach/Feedback%20Opportunities/Operartional%20Proposals%20for%20Comment/EB-5-Proposal-18May11.pdf.

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3. ABIL Webinar Series: U.S. Investment Visas and Green Cards for Foreign Nationals

Many foreign entrepreneurs want to start businesses or invest in the United States. Other wealthy individuals want green cards to live in the United States, but may be hesitant because of real or perceived immigration obstacles. Real estate developers and companies seeking capital for development projects are increasingly looking for EB-5 capital from foreign investors. Several visa options exist, and each has advantages, disadvantages, and limits.

A three-part webinar series, presented by the Alliance of Business Immigration Lawyers (ABIL) and co-sponsored by Invest In the USA, the association of EB-5 regional centers, helps guide individual investors and others, as well as U.S. companies that want to attract foreign investors and wealthy individuals. The intended audience includes individual investors; potential and actual EB-5 regional centers; attorneys and advisors; real estate developers; and companies seeking capital for development projects. Each 90-minute webinar in the series explains immigration options and offers practical real-world strategies:

• Session 1: Visa options for individual investors: E and L nonimmigrant visas; EB-5 green cards through direct investments or regional centers, was held on April 13. (A recording of the webinar is available for purchase.) Moderated by Bernard P. Wolfsdorf. Presenters: Kehrela Hodkinson, Mark Ivener, and Stephen Yale-Loehr.
• Session 2: EB-5 regional center applications and project pre-approval petitions, was July 6 at 3 p.m. (ET). Moderated by Laura Danielson. Presenters: Bryan Funai, H. Ronald Klasko, and Steve Trow.
• Session 3: How to successfully navigate the back end of the EB-5 process for both individual investors and regional centers, to be held August 16 at 3 p.m. (ET). Moderated by Steve Clark. Presenters: H. Ronald Klasko, Robert Loughran, and Stephen Yale-Loehr.

All participants will receive a file with the PowerPoint presentation, relevant articles, and resources before each session, as well as a recording of the webinar. The cost is $89 for an individual session or $249 for all three sessions, live or recorded. To register, go to: https://securec9.ezhostingserver.com/abil-com/abil_webinar_signup.cfm. For more information, contact Lauren Anderson at lauren@abil.com or visit https://abil.com.

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4. Member News

The new Chambers Global 2011 lists various ABIL members in its North America section, including Mark Ivener, H. Ronald Klasko, Charles Kuck, Sharon Mehlman, Angelo Paparelli, Bernard Wolfsdorf, and Stephen Yale-Loehr. Go to Chambers Global to search for a particular lawyer. Chambers USA 2011 is now also online; go to Chambers USA to search for a particular lawyer.

Many members of the Alliance of Business Immigration Lawyers (ABIL) (both U.S. and Global) were named in the “International Who’s Who of Corporate Immigration Lawyers 2011,” including:Eugene Chow

Laura Devine

Kehrela Hodkinson

H. Ronald Klasko

Marco Mazzeschi

Sharon Mehlman

Cyrus Mehta

Angelo Paparelli

Bernard Wolfsdorf

Stephen Yale-Loehr

Robert Loughran was quoted in a cover story on Mexican immigrant investors in the Austin American Statesman in June 2011 in an article entitled, “Austin Beginning to Compete with Other Texas Cities for Wealthy Immigrants from Mexico.” Mr. Loughran highlighted how the quality of life in Austin has contributed to an influx of wealthy Mexican investors.

Mr. Wolfsdorf was also named corporate immigration lawyer of the year, for the second year in a row, by Who’s Who Legal. For more information, see http://www.whoswholegal.com/news/features/article/29126/an-interview-bernie-wolfsdorf-corporate-immigration-award-winner-2011/.

Mr. Yale-Loehr spoke on a panel regarding advanced EB-5 immigrant investor issues at the American Immigration Lawyers Association annual conference in San Diego in June 2011.

Mr. Klasko and Mr. Yale-Loehr will speak at the Invest In the USA association meeting in Washington, DC, on September 15, 2011. Mr. Klasko will speak on current EB-5 policy and administrative issues; Mr. Yale-Loehr will speak on legislative strategy to renew the EB-5 regional center program through Congress. For more information, go to http://iiusadc915.eventbrite.com/.

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5. EB-5 Government Agency Links

USCIS Web Page on EB-5 Immigrant Investors: http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextchannel=facb83453d4a3210VgnVCM100000b92ca60aRCRD&vgnextoid=facb83453d4a3210VgnVCM100000b92ca60aRCRD

USCIS Policy and Procedural Memoranda on EB-5 Investors: http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextchannel=f1f051b4b1af3110VgnVCM1000004718190aRCRD&vgnextoid=f1f051b4b1af3110VgnVCM1000004718190aRCRD

Immigrant Investor Regional Centers List: http://www.uscis.gov/eb-5centers

Form I-526, Immigrant Petition by Alien Entrepreneur: http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=79a7105b5904d010VgnVCM10000048f3d6a1RCRD&vgnextchannel=7d316c0b4c3bf110VgnVCM1000004718190aRCRD

Form I-829, Petition by Entrepreneur to Remove Conditions: http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=d4f63591ec04d010VgnVCM10000048f3d6a1RCRD&vgnextchannel=7d316c0b4c3bf110VgnVCM1000004718190aRCRD

Form I-924, Application for Regional Center Under the Immigrant Investor Pilot Program: http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=7387e6b2fc57c210VgnVCM100000082ca60aRCRD&vgnextchannel=7d316c0b4c3bf110VgnVCM1000004718190aRCRD

Form I-924A, Supplement to Form I-924: http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=256866fcd667c210VgnVCM100000082ca60aRCRD&vgnextchannel=7d316c0b4c3bf110VgnVCM1000004718190aRCRD