The bipartisan bill, introduced by Senators Grassley and Leahy, has the full support of IIUSA. Key benefits of the bill include a 5-year reauthorization; “reasonable” reform measures and oversight; protections for regional centers, new commercial enterprises, and investors; and “timely processing” measures that would aim for a 120-day average to process an EB-5 investor petition in a Targeted Employment Area. IIUSA states that this bill is “far more in favour of investors and industry than prior bills.” The association sees this bill as a first step before seeking more visas for EB-5.
EB-5 reform has been a long-standing issue for the program with various bills being proposed the last several years. The latest iteration of a reform bill, the EB-5 Reform and Integrity act of 2020, could be the one that actually passes. More than that, it should pass.
The national not-for-profit EB-5 association IIUSA has thrown its full support behind this bill in the hopes that it will silence critics of the program, and protect both regional centers and investors from “bad actors” whose mismanagement and even fraud have tarnished the program’s laudable economic accomplishments.
Too many people have focused on the what’s wrong with the program and not what’s right: incredible economic stimulus with each approved investor creating 10 full-time U.S. jobs and injecting what is now at least $900,000 USD into local economies.
IIUSA president Bob Kraft explains why the association is behind the bill: “A long-term reauthorization can generate more than $9B annually of job-creating investment into our economy, just when our economy needs it most – all at zero cost to the taxpayer.”
He goes on to remind us that support for the bill extends far beyond the walls of the IIUSA Washington headquarters: “Mayors from around the country, including the U.S. Conference of Mayors, trade associations, chambers of commerce, travel organizations, health care organizations, and many others stand with IIUSA to support this reauthorization.”
IIUSA points to many particulars of the EB-5 Reform and Integrity Act of 2020 to show why it merits passage into legislation. Firstly, it gives the program some welcomed stability for everyone from stakeholders to investors: a five-year reauthorization for a program that has been living on short-term reauthorizations and imminent “sunset” dates for years.
The association also lauds the bill for introducing reform measures that are “reasonable.” While many of the program’s critics have falsely portrayed the industry as being riddled with abuse, most industry stakeholders agree that stronger measures are needed to enforce the proper operation of the program and to prevent bad actors from harming investors and the industry itself.
When mismanagement or fraud occurs, sometimes investors aren’t the only victims. IIUSA sees the new proposal as having significant protections for regional centers and NCE’s in the event the job-creating entity (JCE) becomes barred. Further, regional centers would not be strictly liable for third-party acts.
The most outspoken critics of the program seem to imply that waves of fraud-committing investors are taking advantage of EB-5. The truth is diametrically opposed to this misconception: investors are almost always the victims — rather than the perpetrators — of EB-5 fraud and the strict background checks on petitioners and their source of funds makes “slipping into the country”through the EB-5 program, extremely difficult.
IIUSA points out that the new bill allows investors to use recovered funds for a new investment in the case of a debarred project, as well provides “ageing out” protection for children, and priority date retention that would save such victims of wrong-doing from going back to the beginning of the line to file once again.
To maintain fairness and not having all parties scrambling to conform to unforeseen regulations, the measures in the bill would not be applied to current investors.
IIUSA doesn’t shy away from saying this bill is as good as we are likely to get; the trade association has decreed it’s the “most industry-friendly of all the integrity measures in prior bills, including the Flake-Shcumer [bill] from 2015. The industry will not get a better deal in terms of reasonableness of oversight than this bill.”
Beyond the immediate benefits of increased integrity and protections for stakeholders and investors alike, this bill could play a key role in something everyone in EB-5 has wanted for years: more visas each year.
IIUSA states that, “the EB-5 industry suffers from declining support and shrinking leverage because of high-profile fraud and a lack of reform.” The association is confident that increasing integrity and bringing about much-needed reform is the way forward to gain better leverage with legislators when it comes to increasing the number of visas.
Such an increase could be effected either through an increased yearly quota, or amending the current 10,000 yearly quota to only include principal investors and not derivative family member; not counting family members, as Congress first intended, would roughly triple the number of visas available each year.EB-5 needs more visas and reform to silence critics is the first step to that goal.
IIUSA, courtesy of immigration lawyer Caroylyn Lee, has performed a section-by-section summary of the bill. Here are some highlights:
This is where the additions begin (section 1 is merely the title of the bill). This section of the new bill adds onto Section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)).
“Reform and Integrity Act of 2020”
Immigration lawyer Carolyn Lee: “EB-5 Reform and Integrity Act of 2020: Section By Section Summary”
“The Many Benefits of the EB-5 Reform and Integrity Act of 2020”
“IIUSA supports new Grassley-Leahy amendment bolstering EB-5 reform bill”
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