The February 3, 2016 United States Citizenship and Immigration Services (USCIS) was mostly bereft of new information, new policies or new developments. However USCIS confirmed:
- It accepts investors using private currency exchange;
- In order for users to accept a gift as a source of funds, there must be no expectation of repayment of the gift;
- Users does not require authenticated evidence of source of funds;
- There was a significant increase in issuance of Notices of Intent to Terminate regional centers for failure to submit required information or failure to promote economic growth; and
- USCIS has added I.D. numbers to its webpage listings of approved and terminated regional centers.
Only a few issues raised during the stakeholders’ call merit further discussion: First, IPO Director, Nicholas Colucci, made very clear that USCIS will not wait for new legislation to implement various compliance and integrity measures that have been included in bills introduced in both the Senate and the House. This is significant for regional centers and project developers that thought they had averted the need to develop compliance procedures until Congress passes the integrity measures. Significantly, he announced that the Fraud Detection and National Security Unit, which has long conducted site visits for H-1 B and L-1 petitioners, will commence unannounced site visits to regional centers and/or projects. Every regional center and project developer should have documentation systems in place to be able to present to FDNS officers regarding EB-5 compliance, such as records of infusion of capital, use of capital, progress of the project, expenditures, job creation, etc.
Mr. Colucci previously announced the creation of a Compliance Unit within IPO. During the stakeholder’s call, he also announced that users is developing a program to audit regional centers to promote compliance with EB-5 program requirements.
Significantly, Mr. Colucci advised that many 1-829 petitioners will soon be subject to an interview at USCIS. Since the information to be discussed during the interview is generally not accessible to the investor, presumably regional centers will want to have a system in place to make updated information available to the investor for the interview and possibly to have a regional center representative present at the interview.
In addition to compliance issues, USCIS clarified procedures to be followed in the event of a change of ownership or management of a regional center. As Julia Harrison stated, the instructions to Form I-924 require a regional center to notify users within 30 days of changes in the operation or administration of the regional center. The instructions further provide that such notification can be made via email. A regional center may be required or choose to file an I-924 amendment.
In the Q& A for the February 26, 2014 Stakeholder Engagement Call, USCIS provided, in keeping with the May 30th Memo and the 1-924 instructions, that filing an I-924 amendment following a change in ownership or administration may be required. In her remarks for the February 3rd call, Ms. Harrison stated that it would be ideal if a regional center filed a formal amendment, allowing USCIS to review the change and its impact on the regional center’s designation. As there has been no indication that such amendments would be entitled to a separate queue or reduced processing times, receiving approval for a change in ownership could take over a year. On the February 3rd call, USCIS did provide, however, that an ownership or management change at the regional center would not affect an investor’s ability to file an I-526 petition.
Finally, USCIS discussed the impact of termination of a regional center and termination of an investor’s conditional residence status.
USIS clarified, perhaps more than on any previous occasion that an EB-5 investor’s conditional permanent residence status is not automatically terminated if the regional center is terminated. However, USCIS provided no guidance on what needs to be done to demonstrate continuing compliance with EB-5 program requirements. USCIS did not address the more difficult question of what happens in the event that a regional center is terminated before an investor obtains conditional residence status. If USCIS considers a change of regional center sponsorship to be a material change, users policy on material change would require the blameless investor to refile a new I-526 petition. This remains an issue requiring clarification.
The USCIS’ response regarding action to be taken if an investor’s 1-829 is denied is more problematic. USCIS stated that, in that event, the individual’s conditional residence status is terminated. For the reasons that follow, that statement is inconsistent with USCIS policy and practice, as well as a precedent decision. Hopefully, USTS will issue a retraction or at least a clarification.
The law is set forth in the precedent decision, Matter of Lok, 18 I&N Dec. 101 (BIA 1981). That precedent decision states that the permanent resident status of an alien can only be terminated upon the entry of a final administrative order of deportation. This means that USCIS must place the investor in removal proceedings, and continue to provide evidence of conditional residence status through the conclusion of removal proceedings and until the decision on any administrative appeal. This is also consistent with the regulation (8 CPR § 1.2), which states that permanent residence status “terminates upon entry of a final administrative order of exclusion, deportation or removal.” Likewise, the Adjudicators Field Manual stales that “documentation of conditional resident status must be issued until a final order of removal is issued,” including dismissal of any appeal.
Since an immigration judge does not have the authority or jurisdiction to restore residence if it has already been terminated, the statement by USCIS on the stakeholders’ call would render nugatory the ability of an investor to challenge the I-829 denial in removal proceedings. Interestingly, USCIS is taking the opposite position for conditional residence on the basis of marriage, asserting that it has no authority to terminate conditional residence status because only the immigration court can do so.
For all of these reasons, in practice, users regularly issues continuing proof of conditional residence status to investors with denied 1-829 petitions until conclusion of removal proceedings and any administrative appeal.
