By Robert C. Divine, Baker Donelson Bearman, Caldwell & Berkowitz, PC
On May 15, 2018, USCIS suddenly sent out to stakeholders the email message below, giving immediate notice that in new projects EB-5 investors will not be credited with jobs of tenants of the job creating enterprise, because “the relationship between the investment and the jobs is too tenuous.” While comments are invited, the memo is not stated to be a draft and the Policy Memo has already been changed with immediate but non-retroactive effect.
Which Investors are Blocked by the New Policy?
Through a footnote in the memo, USCIS clarifies that I-526 petitions for investors in projects that already were the subject of approved or pending I-924 exemplar applications by regional centers or I-526 petitions by investors will be adjudicated under prior guidance that gave effect to “tenant occupancy” jobs under limited circumstances that supported causation. So only new projects that had not been the subject of either type of filing yet would be subject to the new policy. This is not ideal, but it reflects a USCIS approach to retroactivity that is respectful of the invested interests of developers and regional centers.
It seems that the following situations would be exempt from the new restrictive policy:
- I-526 petitions already pending
- I-526 petitions that will be filed in the future for projects that already were the subject of one of the following:
- o An approved or pending I-924 exemplar petition
- o An approved or pending I-526 petition by another EB-5 investor
How does a prospective investor confirm that a project claiming credit for tenant occupancy jobs is so “grandfathered” under prior policy? Notices of approval and receipt of I-526 petitions show only a person’s name and case number and cannot be independently verified to be connected to a particular project. Notices of receipt of I-924 exemplar petitions only indicate the name of the regional center filing them and do not identify the project involved. I-924 exemplar approval notices in the past were letters that described the project and listed specific documents and date versions that were approved by USCIS, but approvals in the last year or so have identified the project only quite generally and have not listed approved documents. Therefore, investors would need to trust the offering party that the project is the subject of a grandfathering filing.