May
    22

    USCIS Announces Continuation of EB-5 Interactive Series: Expenses that are Includable (or Excludable) for Job Creation (6/4, 1-2:15pm est)

    This week, U.S. Citizenship and Immigration Services (USCIS) announced that it will hold its second installment of the “Interactive Series” on Thursday June 4th on the topic of expenses that are includable (or excludable) for purposes of estimating job creation. Below is the full invitation and instructions on how to sign up. To view the PDF invitation, click here.


    Teleconference Invitation 

    EB-5 Interactive Series: Expenses that are Includable (or Excludable) for Job Creation

    Thursday, June 4, 2015 – 1 to 2:15 p.m. (Eastern)

    Dear Stakeholder,

    U.S. Citizenship and Immigration Services (USCIS) invites you to participate in the second engagement of the informational series “EB-5 Interactive” on Thursday, June 4, from 1 to 2:15 p.m. (Eastern). The topic of discussion will be expenses that are includable (or excludable) for purposes of estimating job creation.

    Economists from the Immigrant Investor Program will make a short presentation and answer non-case specific stakeholder questions concerning this topic.

    Why This Is Important

    In the Immigrant Investor Program, regional centers and immigrant investors must submit evidence of job creation as a result of investment in a new commercial enterprise. Immigrant investors must file a Form I-526 petition accompanied by evidence that the investment will directly or indirectly create full-time jobs for at least ten qualifying people.

    Most regional centers and immigrant investors rely on multiplier tables (also known as input-output modeling) to estimate the number of jobs created. To obtain a valid result, the inputs must be eligible expenses for job creation purposes.

    Some types of expenses, such as transfers and transactions costs, are ineligible or limited in their job creation capabilities.

    See 8 C.F.R. sections 204.6(m)(3)(ii), 204.6(j)(4)(iii) and 204.6(m)(3)(v).

    Who Should Participate

    This session is open to the public, but may be most useful to those who have submitted, or will be submitting Form I-924, Application For Regional Center Under the Immigrant Investor Pilot Program and Form I-526, Immigrant Petition by Alien Entrepreneur.

    To register for this session, please follow the steps below:

    •  Visit the USCIS registration page  to confirm your participation
    •  Enter your email address and select “Submit”
    •  Select “Subscriber Preferences”
    •  Select the “Event Registration” tab
    •  Provide your full name and organization
    •  Complete the questions and select “Submit”

    Once we process your registration, you will receive a confirmation email with additional details. If you have any questions regarding the registration process, or if you have not received a confirmation email within two business days, please email USCIS at Public.Engagement@uscis.dhs.gov.

    May
    21

    Register For Next Week’s Webinar – Loan Proceeds as Qualifying Capital for an EB-5 Investment (5/28, 3:00pm EST/12:00pm PST)

    Panelists (Click Photos For Bios):
    Carolyn S. Lee
    Partner, Miller Mayer LLP
    Susan Pilcher  
    Senior Attorney, Stone Grzegorek & Gonzalez LLP
    Cletus M. Weber
    Co-Founder, Senior Attorney, Peng & Webber PLLC

    Loan Proceeds as Qualifying Capital for an EB-5 Investment

    When: Thursday  May 28, 2015

    Time: 3:00 PM EST/ 12:00 PM PST*

                                 Nonmembers $100
     
    *Note: Registration will be cut-off  the day of the webinar at 1:00pm est. 

     

    Topic: On the April 22, 2015 U.S. Citizenship and Immigration Services (USCIS) EB-5 public engagement teleconference, the Immigrant Investor Program Office (“IPO”) articulated a new adjudications standard that precludes the EB-5 investor’s use of loan proceeds as a source of investment capital unless the investor shows that the promise to repay the loan has been secured by assets the investor owns.

    When using loan proceeds as EB-5 capital, a petitioner must demonstrate first that they are personally and primarily liable for the indebtedness. That is, they must demonstrate that they bear primary responsibility under the loan documents for repaying the debt that is being used to satisfy the petitioner’s minimum required investment amount.

    In addition, the petitioner must demonstrate that the indebtedness is secured by assets the petitioner owns and that the value of such collateral is sufficient to secure the amount of indebtedness that is being used to satisfy the petitioner’s minimum required investment amount. Put another way, indebtedness secured by assets owned by the petitioner qualifies as “capital” only up to the value of such collateralized assets.

    Join our expert panel on May 28th for a discussion of the issue of “indebtedness” as “capital” and what this might mean for cases pending before USCIS.

    ALL ACCESS PASS – ALL WEBINARS, VIDEO RECORDINGS, & MORE
    Read more about the All Access Pass here!

    IIUSA’s 2015 All Access Pass

    (Members-Only) 
     
    $1,200
    valid through 12/31/15
    • Registration for all IIUSA monthly webinars
    • Access to a growing library of EB-5 content including past webinars (which now total 13 webinars)
    • Conference video (3 conferences from 2013/2014 including 35 panels)
    • Up to date EB-5 Economic Impact Reporting (2010-2011 and 2012 reports)
    • Raw data (FOIA disclosure) including USCIS adjudication data and Department of State visa statistics broken by country of origin.

    Additions in 2015 include:

    • I-829 RFE/Denial spreadsheet
    • Regional center “data tracker” spreadsheet, in which contains data points for all approved Regional Centers including I-526 & I-829 approvals
    • NOITs (Notice of Intent to Terminate) and final termination notices for all terminated regional centers
    • Notices/reports of SEC enforcement actions against USCIS-approved Regional Centers

    UPCOMING WEBINARS – REVIEW THE 2015 WEBINAR SCHEDULE!
    Going Global: The Importance of Diversifying the EB-5 Investor Marketplace
    June 11, 2015 
    When analyzing U.S. Citizenship and Immigration Services (USCIS) adjudication data, and Department of State visa usage by country, there are several growth markets in Asia, Europe and Latin America that are becoming more important for the EB-5 industry.

    This panel, which includes several members of IIUSA’s Investor Markets Committee, will examine several macro-trends affecting global EB-5 investment while also taking a more nuanced look into what motivates potential investment by immigration participants more broadly from other areas of the world.


    Best Practices: Working with Sales Intermediaries in an EB-5 Transaction

    June 25, 2015

    Since 2014, IIUSA’s Best Practices Committee has been hard at work developing recommendations around working with sales intermediaries in an EB-5 transaction due to the essential – and complex – nature of this aspect of marketing an EB-5 offering to investors overseas.

    Whether the intermediary is a foreign migration intermediary, law firm or FINRA-licensed broker-dealer, it is important that the project sponsor conduct proper due diligence on their prospective partners and work constructively with that entity throughout their engagement.

    Banking & EB-5: Understanding the Roles of a Bank in EB-5 Transactions

    July 30, 2015 

    Banking institutions and financial services providers play a pivotal role throughout the EB-5 process in managing risk for the investors and project.

    This webinar will take assess the important role of a bank in EB-5 transactions while also taking reviewing the various escrow arrangements and financing options that developer and regional center entities are utilizing to break ground on EB-5 projects.

    SPONSOR THE 2015 IIUSA WEBINAR SERIES
    Sponsor three webinars (one quarter) in 2015 of IIUSA’s acclaimed webinar series, featuring topics from across the EB-5 Regional Center industry landscape. Sponsorship includes company logo/link featured on the webinar registration page, designation of series title-sponsor in IIUSA member only communications, opportunity to welcome attendees at the beginning of each webinar, additional exposure through IIUSA’s “OnDemand.” Associate your company with IIUSA and industry best practices by sponsoring IIUSA’s 2015 webinar series!
    Quarters three and four are still available!
    This opportunity is available only to IIUSA members. To learn more, click here.
    May
    20

    Newly Adopted Industry Best Practices Provide Guidance for Engaging with Intermediaries in an EB-5 Transaction

    On April 13th, the IIUSA Membership passed the Best Practices Committee (“BPC”) recommendation for the inclusion of a “Best Practices for Engaging With Intermediaries” document to be included in IIUSA’s published industry best practices.

    IIUSA-PIN

    On April 13th, the IIUSA Membership passed the Best Practices Committee (“BPC”) recommendation for the inclusion of a “Best Practices for Engaging With Intermediaries” document to be included in IIUSA’s published industry best practices.

    This document is intended to provide IIUSA members with guidance regarding best practices for engaging with intermediaries who will introduce such members’ EB-5 investment products to individual foreign investors or otherwise assist in the offer and sale of these investment products. Such intermediaries can take many forms. The IIUSA Best Practices Committee (the “Committee”) has divided this document into three sections.

    • Covers general best practices that apply to all intermediaries, be they domestic or foreign, large or small.
    • Covers best practices applicable to U.S. broker-dealers.
    • Covers best practices applicable to foreign migration agents.

    Through its Best Practices Committee, IIUSA continuously explores and publishes industry best practices to further the professional and business goals of the Regional Center industry. By raising the bar at which the EB-5 regional Center Program business is conducted, IIUSA advocates professional integrity by Regional Centers and the industry that serves them. Best practices are vital to the success of the EB-5 industry and they enable organizations to thrive in this growing marketplace.

    IIUSA is proud to continue to lead the EB-5 regional Center industry by setting the bar for industry best practices and will continue to update these guide to ensure the highest standards of professional integrity.

    May
    18

    Executive Director, Members Participate on EB-5 Panel at the National Development Council Academy in Washington D.C.

    ndcacademy

    On Tuesday May 12 at the National Development Council’s 2015 Academy in Washington, D.C., IIUSA Executive Director Peter D. Joseph participated on the panel entitled “EB-5: A New Tool for Job and Real Estate Development” featuring several IIUSA members

    On Tuesday May 12, IIUSA Executive Director Peter D. Joseph participated in the National Development Council’s 2015 Academy in Washington, DC featuring keynote addresses from the CEO of the Business Roundtable John Engler and Jerry Abramson, Deputy Assistant to the President and Director of Intergovernmental Affairs. The event featured fast-paced sessions with an emphasis of getting projects from plan to reality. To view the full agenda, speakers and schedule click here.

    The event also featured the announcement of the NDC Academy 2015 Award Finalists which are projects that represent some of the most innovative and impactful developments changing the lives of underserved communities across the country. Winners will be announced during the NDC Academy 2015 Awards Ceremony on Thursday, May 14th.

    Mr. Joseph participated on the panel entitled “EB-5: A New Tool for Job and Real Estate Development.” The panel also featured IIUSA members Brian Ostar (Director of Global Operations, EB-5 Capital), Gina Nisbeth (Director, EB5 Bridge Loan Program, Citi Community Group) and Stephen Strnisha (CEO, Cleveland International Group).

    The EB-5 panel focused on how EB-5 funding is being utilized to promote economic development, how it is helping communities bring high impact projects to fruition and the increasing interest in the program from investors.

    IIUSA Executive Director Speaks With The National Association of Realtors Commercial Committee

    On Wednesday May 13, IIUSA Executive Director Peter Joseph spoke at the the CCIM Institute of the National Association of REALTORS® Commercial Committee Meeting. Mr. Joseph spoke with a group comprised of real estate professionals about the EB-5 program from an educational perspective to help CCIM members better understand the nuances of the EB-5 industry. Mr. Joseph’s presentation is in line with IIUSA’s mission to educate the public about the benefits derived from the EB-5 investment program.

    The CCIM Institute is administered by CCIM designees who volunteer their time and expertise. These commercial real estate professionals work in conjunction with CCIM’s team of association professionals to carry out the Institute’s mission. The Institute offers commercial real estate practitioners the opportunity to elevate their business practices through focused education and networking.
    May
    14

    RCBJ Retrospective: Regional Center Designation: Refining the Basic Approval

    lincoln stone1Regional Center Designation: Refining the Basic Approval (Volume 3, Issue 1, March 2015, Pages 36-38)

    By Lincoln Stone, Partner, Stone, Grzegorek & Gonzalez, LLP

    The Obama Administration has sought fresh ideas from stakeholders on how to reduce existing burdens and uncertainties on the part of participants in the Immigrant Investor Program and ensure the Program is achieving the greatest impact in terms of job creation, economic growth, and investment in national priority projects that the capital markets would not otherwise competitively finance. Here’s one. In the interests of promoting economic growth, job creation, predictability and efficiency, and with-out compromising program integrity, USCIS should revise its template regional center (RC) approval letter for general proposals to promote economic development.

    USCIS issues a letter of approval, the Charter letter, advising the nature and scope of the new RC authority.  Over time these Charter letters had veered this way and that as Program policy evolved, see L. Stone, Trends in Approvals of Regional Centers in the EB-5 Investor Visa Program (RCBJ, May 2013), and S. Lazicki, 2013 Regional Center Approval Letters (RCBJ, June 2014), but nowadays USCIS has settled on two templates.  Charter letters are of two kinds – a basic RC designation (Basic Approval), or a RC designation coupled with a specific approved project (Project Approval).  This dichotomy follows the “hypothetical project” and “actual project” terminology that first surfaced with the USCIS adjudications memorandum of December 11, 2009 (note, not statutory), and has continued in practice and policy to the EB-5 Adjudications Policy Memorandum of May 30, 2013 (Policy Memo) and ever since.  If the RC proposal merits approval but the proposed plans for EB-5 investment lack the specificity of the EB-5 precedent decision Matter of Ho, then USCIS frames the proposal as “hypothetical” and meriting no more than Basic Approval.  But if the proposed EB-5 investment meets the high level of particularity in documentation required by Matter of Ho then the Project Approval will be given deference in later adjudications.  The overall USCIS effort is laudable; it fosters predictability in adjudications by providing a pathway for the RC to get Project Approval for a specific project that is ready to go, and it allows a different pathway for the RC that is not so far along in its transactions or regional economic development efforts.  Importantly, the Basic Approval pathway adheres to the 2002 statutory directive to facilitate RC designation based on a general proposal and general predictions about the kinds of jobs that will occur.

    As reflected in Training Materials used by USCIS to train new EB-5 adjudicators, the Charter letter should outline all RC elements approved in the RC’s initial designation.  The Training Materials (obtained by IIUSA via FOIA) further instruct that the Charter letter should indicate that the following are approved (italics supplied):

    • Geographic area
    • Industry sectors
    • Job creation forecasting tools
    • Amount and source of capital committed to the RC
    • Promotional efforts

    By comparison, here’s the essential content of the Basic Approval — acknowledging the underlying economic impact analysis, and having approved of that analysis, USCIS makes the following statements:

    • The applicant entity is approved as a qualifying participant in the Program
    • A specific geographic area has been approved, in which area the approved RC would focus, promote economic growth, and offer capital investment opportunities
    • A specific set of industry sectors (also identified by NAICS) has been approved, in which sectors the approved RC would focus, promote economic growth, and offer capital investment opportunities
    • Given that the proposed EB-5 capital investments are deemed hypothetical, “USCIS’s approval of the hypothetical job creation estimates presented in the Form I-924” will not be given deference in later adjudications

    Focusing on the final item – “approval of the hypothetical job creation estimates” – it’s clear a more robust statement by USCIS would better comply with the instruction in the Training Materials to indicate the job creation forecasting tools have been approved. It’s not clear why the Basic Approval neglects this duty.  Also, a clearer statement should advance the cause of predictability for stakeholders and thereby advance the mission of economic development and job creation.   Rather than emphasize the negative (i.e., no deference in later adjudications) USCIS should unequivocally state in the Basic Approval that it has approved the job creation methodology proposed in the I-924 filing. In short, USCIS should revise its template language for the Basic Approval to state the following:

    “USCIS approves the job creation methodology presented in the Form I-924 and the economic analysis dated ____, and the approval should be accorded deference in later adjudications.  However, in view of the determination that the business plan for EB-5 investment presented in the Form I-924 lacks the specificity required by Matter of Ho, it is hypothetical.  Therefore USCIS has not approved the application of the approved job creation methodology to a specific business plan for EB-5 investment, and in future adjudications of Form I-526 the business plan and related job creation estimates will receive a de novo review by USCIS.”

    There is no doubt that approval of the job creation methodology is an essential part of the I-924 review process, even in the case of Basic Approval.  For more than 20 years regional centers have received Charter letters advising that the job creation methodology has been approved.  The current Policy Memo acknowledges the applicable regulations:  8 CFR 204.6(m)(3) requires the RC proposal, now the I-924 filing, to include a proposal that “provides in verifiable detail how jobs will be created indirectly… [and that] is supported by economically or statistically valid forecasting tools, including, but not limited to, feasibility studies, analyses of foreign and domestic markets for the goods or services to be exported, and/or multiplier tables.”  This regulatory language mirrors the regulation at 8 CFR 204.6(m)(7)(ii) relating to the EB-5 investor’s obligation to demonstrate that ten or more jobs are created indirectly by the business using “reasonable methodologies” including “multiplier tables, feasibility studies, analyses of foreign and domestic markets for the goods or services to be exported, and other economically or statistically valid forecasting devices which indicate the likelihood that the business will result in increased employment.”  The I-924 Instructions also note that a regional center application “must contain sufficient detail to provide valid and reasoned inputs into the economic forecasting tools.”  In practice, therefore, in order to ensure that the proposed regional center will be using a job creation methodology that would satisfy the regulation for “verifiable detail” and is an economically or statistically valid forecasting device for estimating future job creation, USCIS requires all I-924 filings to include reference to a specific commercial enterprise or project that will receive EB-5 capital.  The proposed EB-5 investment into a specific commercial enterprise or project – whether it leads to a Basic Approval or a Project Approval – provides an illustration of how the job creation will be estimated using the job creation methodology that is advanced in the I-924 filing.   If USCIS disagrees with the proposed job creation methodology it will not approve the I-924 application.  Consequently, in view of the fact that a central aspect of the I-924 review is USCIS consideration of the job creation methodology, the Training Materials require the RC approval letter to state that a particular job creation-forecasting tool has been approved.  It would be utter waste of government resources to do anything less.

    Considerable confusion persists in identifying exactly what is a job creation methodology.  Given that all, or nearly all, EB-5 petitions for RC investors are grounded in input-output (I-O) models as a forecasting tool, limiting the following statement to cases involving I-O models is hardly a limitation.  A job creation methodology for purposes of EB-5 practice is (i) a clear description of a specific process or method for arriving at the specific inputs that are to be used in connection with an I-O model, and (ii) identification of a specific I-O model that would be used to transform the input data into forecasts of job creation.  For item (ii) above, RIMS II multiplier tables and IMPLAN are the most common forms of I-O devices used in EB-5 practice.  They are based on data from the Bureau of Economic Analysis of the US Department of Commerce, and they are routinely if not always accepted by USCIS.  But RIMS II and IMPLAN are not job creation methodologies.  A complete job creation methodology also requires item (i) above, an explanation of the specific inputs that will be used in the I-O process.  For a further explanation of I-O models, see P. Sommers & L. Stone, Regional Economics and Job Creation in EB-5 Practice, Inside Immigration (AILA 2012).

    On the straightforward side of things, specific inputs might include – estimated and validated construction expenditures as input for estimating total job creation in the construction phase of a commercial enterprise; on-site workers as input for estimating total job creation in the operations phase of a commercial enterprise; or estimated and validated annual revenues as input for estimating total job creation in the operations phase of a commercial enterprise.  These forms of input data, if the inputs are validated as commercially reasonable for the particular industry in the particular region, are routinely accepted by USCIS.  There also can be variations or a few more steps in deriving the inputs for the I-O model.  The construction expenditures input could be derived by an estimate grounded in industry data for a particular type and size of construction project, without reference to a specific or actual project.  The number of estimated on-site workers could be derived by reference to studies indicating the number of workers-per-square foot for particular worker classifications.  Or, the estimated future revenues of a particular kind of operating business could be derived by use of a capital-output ratio that effectively translates the amount of investment in hard capital assets into an estimated revenue figure.  All of the above examples for deriving a set of inputs for use with the I-O model are legitimate and have been accepted as reasonable by USCIS in specific cases.  When the process for deriving the input data is combined with a particular I-O model we then have a job creation methodology.

    A comprehensive discussion of “what if” scenarios that USCIS might encounter is beyond the scope of this brief plea.  Suffice to say, to clarify that the Basic Approval includes approval of the job creation methodology is not to green light even a single I-526 petition.  It’s only the methodology that has been approved; the application of the methodology to a particular actual EB-5 investment is a different matter.  Moreover, as in the case of Project Approval, USCIS has retained authority to change course in instances of fraud, mistake, and material change.  For instance where due to passage of time a foundational research source is outdated and is no longer a reliable data set for a particular job creation methodology, there’s no continuing need to defer to the earlier approval of the methodology in the case of the particular commercial enterprise.  If USCIS thinking about a particular methodology has evolved to a point that it has established certain pre-conditions for its use (e.g., as with Tenant Occupancy), it can pronounce its standards to stakeholders and apply those standards proactively in new cases.

    By the time the Charter letter arrives, the newly-minted RC has been at it for about two years, half in preparation with very expensive consultants, advisors, economists, and lawyers of different stripes and half in anxious anticipation for USCIS review.  The Charter letter should state that the job creation methodology has been approved.  Without such clarity, the new RC is incapable of reasonably measuring its immigration risks with future EB-5 offerings.  Inability to calculate immigration risks is a deterrent to RC activity and contributes to stifling inbound EB-5 investment.  A revision to the Basic Approval is an easy step for USCIS to take, it could prove very beneficial for the Program, and it has no downside.

    Lincoln Stone leads the Investor & Entrepreneur Practice Group at Stone Grzegorek & Gonzalez LLP, www.sggimmigration.com

    RCBJ Retrospective articles are reprinted from IIUSA’s Regional Center Business Journal trade magazine. Opinions expressed within these articles do not necessarily represent the views of IIUSA and are provided for educational purposes. 

    May
    13

    RCBJ Retrospective: Regional Center Terminations

    Regional Center Terminations (Volume 3, Issue 1, March 2015, Pages 18-19)

    Divine,Robert_CLRwebBy Robert C. Divine, Vice President, IIUSA, Shareholder,  Baker, Donelson, Bearman, Caldwell, & Berkowitz, P.C.  

    Regional Centers are designated by USCIS to promote economic growth by fostering use of the EB-5 program in creation of direct and indirect jobs.  USCIS has the authority to remove that designation, typically faulting the regional center for a wide range of sins that it categorizes under the broad heading of failing to promote economic growth.  It has used that authority in waves over the years and is actively using it now. The consequences to sponsored investors could be unfairly severe.

    Process

    USCIS first issues a Notice of Intent to Terminate (NOIT), giving the regional center 30 days to respond (well, 33 days from date of the notice if mailed, as they usually are).  It is important to have kept USCIS up to date on the contact information for the principal and the current counsel for the regional center, because USCIS normally sends notices to both people.  In the typical NOIT for lack of activity, 30 days can be plenty of time to respond.  In a complex situation, it can be a very short time.

    If the NOIT generates no response, USCIS typically issues a Notice of Termination quickly.  If the regional center files a response, USCIS can take more time, and sometimes much more time.  If USCIS is persuaded not to terminate, it issues a notice of “Reaffirmation of Designation.”  If USCIS terminates, it gives notice of the right to appeal to the Administrative Appeals Office.  Because of the absence of a regulation requiring exhaustion of administrative remedies, a terminated regional center could choose to go straight to court with claims of “arbitrary and capricious” decision or other reasons, but administrative appeal and supplementation of the record in the process might be wise.

    Reasons for Termination

    Most terminations have been for lack of activity.  I know from experience that several regional centers have responded successfully to NOITs about inactivity.  Even when no I-526 petitions have been filed or sponsored by the regional center, USCIS has been reasonable in accepting evidence of good faith activity seeking to develop viable projects.

    Some NOITs have been for failure to file form I-924A (sometimes combined with inactivity).  Again, USCIS has accepted some reasonable excuses for failure to file, especially if the failures have been cured with interim filings.

    Some terminations have been based on USCIS rejection of the model used for project development, particularly Victorville and Lake Buena Vista.  Other terminations have followed revelations of blatant securities violations associated with symbiotic developments, including Intercontinental Regional Center Trust of Chicago (Sethi), El Monte (California), Mamtek (Missouri), and USA Now (Texas).  For a review of terminations, see R. Loughran, History of Risk in the EB-5 Regional Center Context, Regional Center Business Journal, Issue #4, Dec. 2013.  A very recent termination against Midwest EB-5 Regional Center has reflected a more aggressive approach when USCIS cited accusations of mis-reporting and mis-management of the regional center and its related projects, and if not successfully appealed this termination could have effects on pending or approved petitions.

    Consequences of Termination

    The consequences of termination of a regional center could be brutal for an investor who was sponsored by that regional center.  The regulations do not say what happens to investors who have not yet immigrated, but it appears that USCIS would deny or revoke an I-526 petition that depended on the regional center’s sponsorship.  A USCIS representative stated in a recent stakeholder meeting that USCIS would find a change of regional center to be a material change requiring denial and re-filing to use a new regional center’s sponsorship.

    8 CFR 204.6(m)(9) states that where there has been termination of a regional center, USCIS will send notice of termination of status to a conditional resident “within the regional center” (sponsored by the terminated center) who has not obtained I-829 petition approval unless the alien “can establish continued eligibility” under INA 203(b)(5). It is not clear whether USCIS would find an investor capable of eligibility to use indirect arrangements (i.e., investment in a single purpose financing entity rather than into the job creating enterprise) or to count indirect jobs without the original regional center’s sponsorship.  USCIS’ relaxed approach to material change for investors filing I-829s could be argued to apply also to change of a regional center sponsorship.  So far, USCIS terminations have been for inactivity or for problems integrally related to the sponsored projects, but if a regional center were terminated for wrongdoing or reporting failures unrelated to a viable project, it would seem quite unfair for the investors to lose status on that account alone.

    Legislative proposals to change the EB-5 program have included giving USCIS broader authority to terminate regional centers for reasons not limited to failure to promote the regional economy.  USCIS already interprets that concept broadly when it wants to terminate.  But regulations should be revised to provide an opportunity for investors in good projects to cure the termination of a regional center that happened to be the sponsor the project, and any legislation should do the same.

    RCBJ Retrospective articles are reprinted from IIUSA’s Regional Center Business Journal trade magazine. Opinions expressed within these articles do not necessarily represent the views of IIUSA and are provided for educational purposes.

    May
    11

    “Opt-In” for Next Week’s Free IIUSA Member-Only Advocacy Webinar (Friday 5/15, 3pm EST)

    IIUSA welcomes its Members to attend the next member-only webinar of 2015 titled, “EB-5 Industry Advocacy: Post-Conference Review” onFriday May 15th at 3pm EST (12pm PST). This webinar will re-visit what was said at IIUSA’s 8th Annual EB-5 Advocacy Conference held last month in Washington D.C. as well as inform members about the current efforts to reauthorize the EB-5 Program ahead of theSeptember 30th sunset date.

    There is no cost to attend this webinar. However, you must “opt-in”. If you would like to attend, please email us at info@iiusa.org.
    This webinar is a continuation of a quarterly series to keep our members abreast of IIUSA’s government and public affairs. In February, we covered the various opportunities and challenges of reauthorization in the 114th Congress. In September, we will discuss the prospects for EB-5 Program reauthorization and highlight the grassroots efforts needed for a final advocacy push.

     

    May
    08

    Advertise in the Q2 Issue of the Regional Center Business Journal, the EB-5 Industry Trade Association’s Premier Publication

    rcbjd

    Next month, IIUSA will publish its 10th issue of the Regional Center Business Journal (“the RCBJ”), a quarterly magazine designed to keep IIUSA members and other key EB-5 Regional Center program stakeholders “in the know” on the latest industry developments and provide in-depth analysis of industry trends.

    IIUSA welcomes IIUSA to advertise in the June 2015 (Q2) issue of the Regional Center Business JournalPlease note that all artwork must be submitted by Friday June 12th for inclusion in Q2 issue. 

    You can have your company represented in the industry’s premier publication for as little as $375 per issue. Special pricing exists for purchasing a “bundle” or ad space in four consecutive issues. To view the IIUSA’s 2015 Media Kit (PDF), click here. To purchase an ad today, click here.


    The RCBJ has an international distribution list with of over 2,700 participants across the EB-5 Regional Center Industry. The RCBJ is distributed to all our 260+ Regional Center Members nationally as well as our 250+ Associate Members worldwide in addition to being featured on our website which receives thousands of unique page views per month. The journal is also sent to our strategic partners and interests groups as well as to Congressional offices and federal, state and local government stakeholders. To view all previous issues of the RCBJ click here .




     

    May
    07

    RCBJ Retrospective: Form I-924A as a National Security and Fraud Detection Tool

    form I-924AForm I-924A as a National Security and Fraud Detection Tool ( (Volume 3, Issue 1, March 2015, Pages 21-22)

    By K. David Andersson, IIUSA President; President, Whatcom Opportunities Regional Center and Diane Butler, Shareholder, Lane Powell

    David Andersson

    The results of the December 2014 FOIA inquiry into Form I-924A filings provide a fascinating glimpse into the anti-fraud and national security toolbox of the Department of Homeland Security (DHS) as specifically applied to the EB 5 Regional Center Program (the “Program”). The annual rigorous screening of designated Regional Centers is in addition to the comprehensive USCIS, Department of State, CIA and FBI security and risk analysis of individual investors seeking immigration benefits through the Program and SEC oversight of investment offerings.

    Contrary to the often unsubstantiated media speculation, an honest observer of the Program and its management cannot help but be impressed with the significant ability and commitment of USCIS to ensure that the Program is free of fraud and national security threats. Of course, there is always room for improvement, and therefore IIUSA is committed to legislative reform and continued productive cooperation with regulatory agencies and authorities to protect and maintain the integrity and effectiveness of the Program.

    DHS uses the I-924A data to screen all participants in the Program, focusing primarily on Regional Center principals and the new commercial entities used for pooling funds. Inter-departmental cooperation, resources, and technology all work to carry out this mission. Based on information gathered through IIUSA FOIA requests and DHS published reports.[1]

    Each Regional Center must file an annual I-924A form. Failure to timely file will result in the issuance of a Notice of Intent to Terminate and possibly cause the revocation of the Regional Center designation. No immigration benefits can flow to petitioners filing affiliated I-526 or I-829 petitions through a terminated Regional Center. The I-924A form, as explained in pre-implementation industry stakeholder meetings and rulemaking publications [2], was developed to gather data to enable USCIS to manage three important Program functions:

    1. Provide regular screening of principals and investment programs to detect and deter fraud;
    2. Record and report job creation resulting from the Program; and
    3. Ensure that the regional center is operated in furtherance of the economic development and job creation objectives of the Immigration and Naturalization Act, regulations and current Program policies.

    USCIS use of Form I–924A as a tool for weighing fraud and national security concerns in the Program begins with the screening of program principals and investment entities through TECS.

    What is TECS?

    “The TECS system (not an acronym) is the updated and modified version of the former Treasury Enforcement Communications System. TECS is owned and managed by DHS component US Customs and Border Protection (CBP). TECS is both an information–sharing platform, which allows users to access different databases that may be maintained on the platform or assessed through the platform, and the name of a system of records that indicate the temporary and permanent enforcement, inspection and operational records relevant to the anti-terrorism and law enforcement mission of CBP and numerous other federal agencies that it supports.”[3]

    The table below illustrates some of the databases that reside on the TECS platform or are otherwise available for subject screening.[4]

    Treasury Enforcement Communications System

    Any information or “hits” detected on any of the TECS databases, based on the investment entity name and/or name and date of birth of a principal supplied on the I-924A, is recorded on a Record Of Inquiry TECS (ROIT) worksheet. These worksheets are classified Law Enforcement Sensitive and distributed internally on a “need-to-know” basis.

    Any hit requires a “resolution memo” in order to be cleared. Resolution memos are prepared by USCS Fraud Detection and National Security (FDNS) officers for each hit generated by an I-924A filing. The FDNS officer reviews the databases and related records and must determine that the “case has no nexus to terrorism or national security”.

    When the TECS screening is complete the Form I-924A Review Worksheet then mandates the following inquiries:

    1. Does the RC website promise repayment of EB-5 investment?
    2. Does the RC website display the USCIS logo or suggest that USCIS has endorsed the RC or any of its investments?

    USCIS also uses its internal iCLAIMS database to ensure consideration of the following questions:

    1. If there is a website, is it promoting the RC?
    2. Any derogatory information found on internet search?
    3. Financial Documents Review?
    4. Operational Structure Change?
    5. FDNS Search Fraud concerns found?
    6. Foreign ownership information or evidence?

    The annual analysis of data obtained from I-924A form is but one of the many tools DHS has at its disposal to help protect the integrity of the Program.  In addition, the Immigrant Investor Program Office has skilled adjudicators and subject matter experts in economics, financial crimes, and corporate law who closely scrutinize investment offerings for compliance with Program objectives.  Instances of fraud or misrepresentation are referred to the SEC for prosecution. Once a petitioner is classified as an EB5 Alien Entrepreneur he/she is then subject to security clearances, criminal and military background checks and medical examinations plus interviews by Department of State consular officers with knowledge of local country conditions.    In short, the U.S. government’s capability to detect fraud and national security concerns is both significant and robust.   Last but not least, all IIUSA members are encouraged to comply with industry best practices and to immediately report any instances of fraud or abuse.

    K. David Andersson is the President of IIUSA and Diane Butler is the former Chair of AILA National Customs and Border Protection Committee. The USCIS information was obtained in December 2014 via Freedom of Information Requests by IIUSA. IIUSA is the national membership-based industry trade association for the EB-5 Regional Center Program and currently has 260 Regional Center members, 23 interim associate members, and 228 associate members.

    [1] February 2012 DHS Office of Inspector General “Information Sharing on Foreign Nationals: Border Security” and December 2010 Privacy Impact Assessment for the TECS System.

    [2] The I-924 form was first proposed in a fee rule in 2010, and USCIS then first discussed it in stakeholder meetings.  The formal public comment process for the I-924 and A Supplement occurred throughout 2012.

    [3] Page 2 December 2010 Privacy Impact Assessment for the TECS System

    [4] Appendix at pages 25-28 December 2010 Privacy Impact Assessment for the TECS System

    RCBJ Retrospective articles are reprinted from IIUSA’s Regional Center Business Journal trade magazine. Opinions expressed within these articles do not necessarily represent the views of IIUSA and are provided for educational purposes.

    May
    06

    AT Kearney ranks US #1 in 2015 FDI Confidence Index for Third Year in a Row

    This week, A.T. Kearney released its 15th annual Foreign Direct Investment Confidence Index (view PDF), which ranks countries based on how changes in their political, economic, and regulatory systems are likely to affect foreign direct investment inflows in the coming years. For the third consecutive year, the United States took first place as it leads all countries in terms of macroeconomic outlook. Among surveyed business executives, 46% say they are more optimistic about the U.S. economy’s outlook than they were a year ago.

    The top five countries in order of confidence index ranking are:

    1. United States
    2. China
    3. United Kingdom
    4. Canada
    5. Germany
     
    About the Study

    Over its 17-year history, there has been a strong correlation between the rankings and global FDI flows. Since its inception, countries ranked in the Index have consistently received at least half of global FDI inflows roughly one year after the survey.

    The 2015 A.T. Kearney Foreign Direct Investment (FDI) Confidence Index® is constructed using primary data from a proprietary survey administered to senior executives of the world’s leading corporations. Respondents include C-level executives and regional and business heads. The participating companies represent 27 countries and span all sectors. To reflect the increasing influence of developing markets in FDI, this year more than one-third of respondent companies were headquartered in developing countries. The survey was conducted in January 2015.

    The Index is calculated as a weighted average of the number of high, medium, and low responses to questions of direct investment in a market over the next three years. Index values are based on non-source-country responses. For example, the Index value for the United States was calculated without responses from U.S.-headquartered investors. Higher Index values indicate more attractive investment targets. The sample of countries included in the survey accounts for approximately 90 percent of FDI inflows.

    DI flow figures are the latest statistics available from the United Nations Conference on Trade and Development (UNCTAD), and all 2014 FDI figures quoted are estimates. Other secondary sources include investment promotion agencies, central banks, ministries of finance and trade, and other major data sources.

    For past editions of the FDI Confidence Index, please go to www.atkearney.com/gbpc/foreign-direct-investment­confidence-index.