IIUSA VP Robert C. Divine on Saturday’s Announcement of EB-5 Visa Unavailability for China for Remainder of FY-2014

Saturday’s dramatic announcement of EB-5 visa unavailability for China for the remainder the fiscal year provides a low impact “dry run” for a process that will have more “bite” next fiscal year. (For the record, Saturday was August 23, 2014).First, let’s remember what Saturday’s announcement does NOT do: It does not affect any I-526 or I-829 processing at all, does not delay immigrant processing for people not born in mainland China, and does not even affect mainland Chinese after next month. But let’s think about what it portends.

The announcement reflects that for the first time ever the full annual allocation by Congress of almost 10,000 visa numbers will have been given out by the end of next month-the end of the fiscal year. The August 2014 USCIS “performance data” on I-526 petitions reflects that in the first three quarters of this fiscal year USCIS approved about 4,000 petitions. That probably fits pretty well with the demand of up to 10,000 visas including the investors’ family members. That same report reflects that petitions filed have increased to 3,000 per quarter, or 1,000 per month, which is a pace that at least doubles the annual allocation of visa numbers. USCIS reports a whopping 10,375 petitions pending, about 75% of which are likely to be approved, so as USCIS ramps up its capacity to adjudicate I-526 petitions, the State Department will have to take action earlier in each fiscal year to avoid USCIS and consular offices from giving out too many EB-5 visas and green cards. So far the excess demand for EB-5 visa numbers has been “hidden” in the USCIS I-526 adjudication backlog. But as USCIS volume of adjudications increases, it becomes the State Department’s job to stem the tide.

As everyone knows but needs to remember, for the forseeable future the visa number problem only affects investors born in mainland China (and who do not have an immigrating spouse born elsewhere, under special “chargeability” rules). This is because (1) China has been accounting for 80% of the demand and (2) the law limits any one country to 7% of the numbers by right. China’s 7% allocation is already essentially used up by the Chinese Student Protection Act of 1992, which required that visa numbers allocated to Chinese nationals under that law be taken out of future allocations for China EB-5 at 700 per year, so mainland Chinese essentially get only whatever numbers are not used up by people born elsewhere. Last year less than 1,700 visas were used by the rest of the world, leaving lots for mainland China, and that does not seem to be changing fast. So the State Department has to guess how many visa numbers the rest of the world will use in the year and allocate the rest in an orderly way to applicants from mainland China in the order in which the investor filed the Form I-526 that was approved.

This year the phenomenon of using up the world’s EB-5 numbers seems to have sneaked up on the State Department, so that it had to suddenly say “no more for mainland China” for the one month left in the rest of the year. Everything re-sets onOctober 1, when visas may be issued again freely, but maybe as early as January but probably later we can expect the State Department in its monthly “Visa Bulletin” at http://travel.state.gov/content/visas/english/law-and-policy/bulletin.html to post a “cut-off date” for mainland China that essentially says that only those applicants whose approved I-526 was filed before that date may be approved by USCIS for adjustment of status or scheduled by a U.S. consulate for immigrant visa interview. Given that most people with approved I-526 petitions filed more than a year before, reflecting USCIS processing times, we can expect the cut-off date to be more than one year earlier than the Visa Bulletin being published. Here is what we can expect in the Visa Bulletin: