The American Immigration Investor Alliance (AIIA), has written to USCIS in advance of the March 20 engagement. The AIIA, in contrast to IIUSA’s position, says that the sustainment period has changed after the RIA — and should relieve the burden of redeployment for many investors. Further, the investor-advocacy group says that the foundation of redeployment, the “at risk” requirement, has no legal basis.
In response to the Immigration Service’s invitation for public comment for its March 20, 2023, EB-5 engagement, AIIA has taken the opportunity to speak up about the investment-sustainment period. The group declares that “the ‘sustainment period’ has to be changed from what it was before.”
This alludes to the “momentous change” that veteran EB-5 immigration lawyer Robert Divine sees regarding investment sustainment in the EB-5 Reform and Integrity Act of 2022 (RIA). Divine maintains that while pre-RIA investors must keep their capital invested for the entire period of conditional permanent residency, post-RIA investors must only keep their capital invested for two years from the time of investment — it is no longer tied to conditional permanent residency, as it was before the new regulations.
The reason this is “momentous” is because long processing times and wait times for visas can cause many investors, especially those from backlogged countries, to wait several years before conditional permanent residency even begins. For these investors, the pre-RIA rules mean keeping their investment sustained far beyond five years, and thus subject to redeployment, the reinvestment of their capital.
AIIA also refers to the Acting Policy Division Chief of USCIS, Paul Egan, acknowledging this change during the October 2022 public engagement when Egan said that the new sustainment requirements in the RIA “relieve the burden on new investors of maintaining their investment at risk for long timeframes well beyond the scope of the new investment project.”
Between Divine’s interpretation of the RIA and Egan’s statement, the AIIA position, that the sustainment period has changed because of the RIA, appears more defensible than IIUSA’s position regarding sustainment in which it declares, “We see nothing in the 2022 law evidencing Congress' intent to modify its longstanding regulatory policy that might somehow de-couple the capital sustainment period from the conditional residency period.”
‘At risk’ policy has no legal basis and does nothing to fulfill the EB-5 mandate
AIIA exhorts the agency to remember the impetus of the EB-5 program: “The EB in EB-5 stands for “Employment Based,” not “Investment Based.” The founding principle of EB-5 is that it’s about creating jobs for a green card… All policy around the EB-5 investment requirement should keep that core employment-based principle in focus.”
AIIA argues that the “at risk” policy for capital sustainment is simply unnecessary and unsupported by the statue and regulations: “There never actually was a technical requirement to ‘remain at risk; decoupled from job creation and from I-526 eligibility.”
And AIIA acknowledges that while the RIA contains requirements for redeployment, it does not answer the root question of whether or not and why capital must actually remain at risk rather than simply remain invested. The group finds this issue to be “not only lacking in legal authority, but also problematic as a public policy matter.” The problem exists for investors who must redeploy their investment “at risk” long after jobs have been created.
“What’s it all for?” AIIA asks regarding redeployment. The group says that after the initial investment has created the required jobs — the fundamental reason for the EB-5 program — there is simply no good economic reason to redeploy investor capital. And such redeployment, contrary to the requirements for the initial investment, is not reviewed or approved by USCIS. That lack of Immigration Service oversight means “the door is wide open for fraud and abuse.”
And if the RIA’s mandate was to promote economic development and prevent fraud and abuse, isn’t redeployment a practice that is contrary to the this mandate?
It’s a very good question. And the answer may have something to do with the politicaL clout of developers who would prefer to hold on to cheap investor capital as long as possible, even after job creation has been completed.
Questions for USCIS
AIIA asks if investor capital is expected to be sustained for two years, as per the RIA, but is no longer tied to conditional permanent residency, when does sustainment officially begin?
Lawyer Divine pondered this same question when he published his thoughts on the matter months ago: it could begin when capital is given to the new commercial enterprise (NCE), when the NCE gives the capital to the job-creating entity (JCE), or when the capital is actually spent on job-creating activity. USCIS needs to clarify the starting point for this.
“If the sustainment period ends before the I-526E is approved, will the investor be eligible to reclaim their investment funds without affecting their immigrant petition?” asks AIIA.
Is there a limit for how long issuers can keep investor capital?
Can the new sustainment rules be applied to pre-RIA investors? These investors would otherwise be subject to keeping their capital redeployed many years after their initial investment.
What is the Immigration Service doing to reduce the petition backlog that is the underlying cause of redeployment?
Good questions indeed. While USCIS does not have a history of providing timely clarity to important EB-5 questions, thousands of investors, especially from China, India, and Vietnam, must hold onto hope that this time things will be different.
See the AIIA letter to USCIS
