On Tuesday, October 29, 2019 IIUSA was honored to welcome Ms. Sarah M. Kendall, Chief of the Immigrant Investor Program Office (IPO) at U.S. Citizenship & Immigration Services (USCIS) as a keynote speaker for the 9th Annual EB-5 Industry Forum in Seattle, WA. The presentation was an important opportunity for industry stakeholders to receive first-hand updates fromUSCIS on many of the industry’s most pressing issues and concerns. Ms. Kendall’s participation also highlights the agency’s efforts towards facilitating regular stakeholder engagement.
USCIS has now made Ms. Kendalls full remarks available for review. IIUSA was grateful to have an opportunity to submit questions to Ms. Kendall in advance of her address. Working in conjunction with members of the Leadership Circle and the Public Policy Committee IIUSA submitted a host of questions on the most pressing industry concerns and Ms. Kendall provided additional clarity towards a host of the questions during her address.
IIUSA would like to once again thank Ms. Kendall for joining us for this important event. We look forward to continuing to work with USCIS in the years ahead to ensure Program stakeholders are well informed and equipped to continue to drive vital economic development across the country.
A significant item from last year’s remarks was the working process surrounding the development of the proposed modernization rule. The agency had published the proposed rule, EB-5 Immigrant Investor Program Modernization in 2017, and on July 24, 2019, it was published as a Final Rule in the Federal Register. This final rule goes into effect on November 21st. The new regulatory changes under the EB-5 modernization rule are an essential part in improving program integrity. The Rule ensures that the program’s minimum capital investment requirements keep pace with inflation and continue to facilitate the amount of job creation envisioned by Congress. The corresponding update to the USCIS Policy Manual should be posted very shortly. This will ensure that our officers, and the public, have the guidance needed to carry out the changes from the Final Rule.
In preparation for implementing the final rule, USCIS is establishing internal training to assist our adjudicators and economists in applying the new regulations to filings received on or after November 21st. This training involves having adjudicators participate in several scenario-based interactive training sessions. These will allow them to further understand and interpret requirements under the new rule.
Regular Stakeholder Meetings
We have received feedback from EB-5 stakeholders on this question. We understand that there is a desire to have a regular schedule of stakeholder engagements. USCIS had determined that IPO will host two regular public meetings a year to provide a more regular opportunity to engage the EB-5 community.
The increased processing times have been the subject of much comment and understandable concern in the community – especially after the high production rates posted in 2018. IPO had a challenging year in 2019 – we worked diligently to implement the program our leadership and the American people expect while also managing the lapse in authorization of the regional center program.
For example, consistent with former Director Cissna’s remarks to IIUSA’s board and to Congress in 2018, in 2019, IPO focused on enhancing the integrity of the program and working to find ways to protect the program from abusive actors. This has meant greater coordination with agencies in the law enforcement community and with other partners, including at the Securities and Exchange Commission. In the last year, both our FDNS and Compliance teams have presented training to and worked with a larger number of outside agencies than in all years past. The community has likely noted the results of our law enforcement partners’ and other partners’ work in criminal and civil cases, and the SEC enforcement actions in various federal courts. We have also invested in building more robust quality assurance and control programs to ensure consistent adjudication practices. Additionally, in the last year we conducted a training update for all I-526 adjudicators and economists. We anticipate doing the same for adjudicators of the Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status. All of this has some impact on processing times.
Regional Center Oversight
The overall purpose of a regional center is to pool EB-5 investor capital and deploy it into a new commercial enterprise for the purpose of promoting economic growth through investment and job creation. Thus, a regional center is responsible for monitoring capital investment activities and the allocation of the resulting jobs created or maintained under the regional center’s sponsorship. To the extent that a regional center fails to engage in proper monitoring and oversight of the capital investment activities and jobs created under its sponsorship, that regional center may no longer serve the purpose of promoting economic growth in compliance with the program and its authorities.
Fraud or Misappropriation
In cases where investors have been the victim of fraud or misappropriation of funds, USCIS continues to adjudicate those petitions in accordance with applicable legal requirements for EB-5 eligibility. Petitioners must be eligible at the time of filing, continue to be eligible through adjudication and, for purposes of revocation of approved Form I-526 petitions, continue to be eligible through the time they obtain status. In general, they must demonstrate a qualifying investment of the requisite amount of capital and creation of sufficient jobs. This includes a demonstration that their capital has been placed at risk for the purpose of generating a return on such capital and that the full amount of such capital is made available to the relevant job-creating business(es). Form I-829 petitioners must also demonstrate that they sustained their investment for the 2-year period of their conditional residence. USCIS will consider all relevant facts and circumstances surrounding the fraud and/or misappropriation of funds in particular cases, including any corrective actions by the investors, in line with legal requirements.