The USCIS Quarterly EB-5 Stakeholders Meeting took place on June 16, 2010.  Most of the meeting was a review of USCIS policies and procedures on EB-5s. 

Two new interpretations were revealed – one relating to targeted employment area investments and one relating to troubled businesses.  Both are controversial.

USCIS opined that both the new commercial enterprise and the capital investment project (or job-creating enterprise) must be principally doing business in a targeted employment area in order to qualify for the reduced capital investment.  This came as a surprise to many stakeholders who had believed that only the job creating enterprise must be in a TEA. 

USCIS also opined that all of a troubled business’ jobs must be saved in order for any investor to qualify for condition removal.  In other words, if a company has 100 jobs, and the investments of 9 investors saved 90 jobs, none of the 9 investors would get their conditions removed since all 100 jobs were not saved.  Again, this interpretation came as a surprise to most EB-5 representatives.

USCIS did little to clarify what constitutes a “material change” that requires the filing of a new I-526 petition.  USCIS stated:  “When the evidence demonstrating compliance with the capital investment and/or job creation requirements is significantly different than what was proposed in the Form I-526 petition”, the change is material.  This apparently means that even if the capital investment was sustained and the requisite jobs have been created, a new I-526 petition is required despite all of the job creation having occurred if the business plan changed from what had been envisioned when the EB-5 petition was filed.  Again, this position of USCIS is subject to challenge.

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Does the EB-5 program belong at USCIS?  That is a question actively being discussed in meetings I have attended both with Congressional offices and with high-ranking USCIS officials.  Although issues of source and tracing of funds sometimes involve complicated financial documents and transactions, USCIS officials have experience dealing with similar issues in L-1, E-2 and other contexts.  However, USCIS adjudicators have no relevant experience or financial or economic expertise to bring to bear on issues of regional center certifications, evaluation of econometric reports and approval of development projects in the exemplar I-526 procedure. 

If not USCIS, then where?  The most obvious answer is the Department of Commerce, where the Invest in America function resides.  The mission of that unit is to encourage investment in the U.S., including supporting EB-5 regional centers.  Arguably, the Department of Commerce would bring both an appreciation of the importance of the EB-5 program (and especially the regional center EB-5 program, which accounts for more than 95% of the EB-5 petitions), as well as a higher level of financial and economic expertise and training. 

A big question is whether a two agency procedure is advantageous.  Presumably, if such a dichotomy of jurisdiction were to occur, the Department of Commerce would deal with regional center certifications, exemplar I-526 petitions and approval of the investment enterprise in connection with both individual and regional center I-526 filings.  This would leave to USCIS dealing solely with the source of funds and tracing of funds issues in adjudicating the I-526 petition.

There are some obvious analogies.  Perhaps the most obvious one is the labor certification procedure whereby the Department of Labor must issue a labor certification before USCIS can adjudicate an I-140 petition.  USCIS does not re-adjudicate what has already been adjudicated by the Department of Labor.  Another analogy might be the blanket L-1 petition procedure whereby USCIS approves the blanket, and the U.S. Consulate then adjudicates the L-1 visa application and does not revisit the determination of the corporate relationship. 

This two agency solution is not without controversy.  Some believe that any procedure that involves two agencies will likely increase — rather than decrease — processing times.  In any event, as more questions are raised regarding USCIS policies and adjudications in the EB-5 area, it is a topic that may be worthy of — and may get — further attention.

On June 16, 2010 the USCIS Office of Public Engagement held an immigration stakeholders meeting to discuss the latest developments in the EB-5 Immigrant Investor program.  Klasko Law attorneys participated in the call and learned of the newest updates and information directly from USCIS relating to the EB-5 program.  A PowerPoint provided by USCIS listing the latest statistics related to the program is available here.

For more information on the EB-5 program please visit our website http://www.eb5immigration.com/

USCIS announced that on June 13, 2010, it will launch a redesigned E-Verify web interface.  According to USCIS, the new design will have a clean and modern design, easy and intuitive navigation, and clear and simple language.  The agency also stated that the improvements are aimed at enhancing the program’s security, accuracy and efficiency.  The most notable changes are a new home page, case alert functionality, a new verification screen and enhanced case management features. 

For more information on the redesign please visit the new resource we have added to our Worksite Compliance website or contact your Klasko Law attorney.