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The EB-5 ‘engagement’ that wasn’t: ignoring sustainment question is a ‘failure by USCIS’

The USCIS “engagement” was a communication failure as it ignored two of the three agenda topics — investment sustainment and regional center operations — and instead looked scripted and only answered minor questions on promoters and the Integrity Fund fee

Immigration lawyer Dennis Tristani says, “USCIS’ refusal to address pressing issues such as the sustainment period more than a year after the enactment of the RIA is nothing short of failure by USCIS and puts their lack of leadership on full display.”

What the industry expected to discuss

The 90-minute “engagement,” originally scheduled by USCIS for March 20, 2023, was deferred, for unknown reasons, to April 24. The delay, one could reasonably expect, meant the Immigration Service was hard at work coming up with industry answers to vital questions.

The agenda was to address three critical program aspects that the EB-5 Reform and Integrity Act of 2023 (RIA) has seemingly changed but that are still in need of policy clarification: direct and third-party promoters, the investment-sustainment period, and regional center operations. 

USCIS representatives at the event included Alissa Emmel, Chief of the Immigrant Investor Program ("IPO"); Nadine Tushe, Compliance Division, IPO; and Kevin Muck, Division Chief of IPO Division 2.

At the start of the event, Alissa Emmel stated that two of the three agenda subjects would not be discussed: the investment period; and regional center operations, specifically, those who choose to exit the program and terminate their status, as well as those who do not intend to solicit investments for new projects under the RIA.

Why ignoring sustainment and regional center operations is a mistake

The two ignored topics hold immense significance for EB-5 stakeholders and investors, especially given the fact that the RIA was enacted over one year ago.

USCIS policy on the investment-sustainment period impacts post-RIA investors from China, India, and Vietnam. The RIA suggests that the sustainment period only lasts two years from the time of investment and is decoupled from conditional permanent residency. 

This is of vital significance as it seems to decouple sustainment from conditional permanent residency and allows most investors to avoid the onerous burden of redeployment. However, while the RIA references this new policy it does not fully clarify the details: the question remains of when the two-year investment period actually starts.

If sustainment is not actually decoupled from conditional permanent residency, for investors from retrogressed countries, this could mean a wait of a decade or more (based on an investment in the non-reserved category; investors in reserved categories are “current” on the Visa Bulletin but in coming years may also see lineups for the set-asides).  

EB-5 business plan writer Suzanne Lazicki wonders if USCIS avoided the question of sustainment because of a fear that their answer could spur litigation. Regardless of whether this would be the case, and Lazicki thinks it's a possibility, the Immigration Service cannot stick its head in the sand and not offer clear policy on a matter with such onerous impact.

Questions about regional center operations are of vital importance to not only regional centers but also any investors who are associated with a regional center that is no longer soliciting new projects and investors; an unwitting breach of USCIS protocol by the regional center, due to lack of clear policy, could result in investor I-526 and I-829 denials, even if requirements like job creation are satisfied. A lack of clear direction from USCIS here is simply unsatisfactory.

Stakeholder reactions: the event seemed ‘scripted’, USCIS looks ‘clueless’

An "engagement" implies a conversation or discussion. USCIS did not deliver this. What the agency did offer appeared scripted, with no intent to have an open-ended discussion with stakeholders. Immigration lawyer Andy Semotiuk believes that the little information offered by USCIS would have been better offered up as a release: "As far as I can tell, most of us can read, and therefore, such presentations were of little benefit," he says.

In an EB5 Investors Magazine article, immigration lawyer Joey Barnett delivers a scathing review of the USCIS event: “Their scripted answers to selective questions were indicative of their refusal to have any meaningful engagement. They don’t want to listen, they merely want RCs and immigrant investors to obey their ‘interpretive guidance’, without any public input, even when inconsistent with plain language of the statute." 

A representative from the American Immigrant Investor Alliance (AIIA), Isabella Getgey, was similarly frustrated at the agency refusal to shed light on the sustainment question. 

“All these safeguards are worthless from a fraud/abuse-prevention perspective if they only apply to an initial deployment that will then be followed by an unknown series of further deployments for which Regional Centers do not have USCIS oversight, fund administration requirements, registrations of parties involved, and are not required to disclose the secondary project's accounting in annual statements to USCIS,” Getgey laments. 

Lazicki goes even further to say that it's possible the event was pre-recorded —making any notion of USCIS engaging with the EB-5 community look even more farcical.

“The engagement managed to fill 1.5 hours with exactly no significant content,” Lazicki says. "The speakers all put on a good face, as if they believed they were doing a good job, engaging substantively, and answering questions. Surely it’s not possible to be that clueless and incompetent?”

Semotiuk observes that the quality of USCIS engagements is significantly declining: “USCIS engagements are nowhere near as useful now as they were in the old days where questions and answers were used to clarify what was going on and written summaries helped attorneys understand what was required.” 

What policy direction was actually shared? 

While the event seemed like an epic failure by USCIS to answer long-awaited questions — again, the RIA was signed into law over 13 months ago — a few minor issues were clarified. 

USCIS did confirm that the RIA’s new two-year sustainment requirement applies only to investors who file their I-526 after the enactment of the RIA; for all other pre-RIA investors the sustainment period is still the investor’s two-year conditional Green Card period. 

Lazicki observes that "the meeting was 95% technical clarifications on Form I-956K,” referencing the new RIA promoter-registration form.

USCIS stated that regional centers, new commercial enterprises (NCEs), and job-creation entities (JCEs) are all considered EB-5 “promoters” as per the RIA; but as these entities are all documented in Form I-956, the regional center application, as well as Form I-956F, the project application, there is no need for them to register as a promoter with a Form I-956K.

Additionally, USCIS stated that all regional centers must pay the Integrity Fee, regardless of whether they have filed an I-956 or have I-956 approval. 

Where are we now? 

Regarding sustainment, immigration lawyer and former USCIS Acting Director Robert Divine has said in the past that there exist three possibilities for when the two-year investment period may begin: when investor capital is given to the NCE; when the investor capital is given by the NCE to the JCE; and when the JCE spends the capital on job-creating activity. 

Given the lack of USCIS guidance, Tristani offers investors the following advice: “For post-RIA investors, at a bare-minimum, one approach would be to keep your EB-5 investment sustained for at least two years after filing your I-526 petition and until all job-creation requirements are satisfied. A more conservative approach would be to keep your investment sustained through the end of the two-year conditional Green Card period or until USCIS provides guidance on the definition of the new two-year sustainment period under the RIA.”

WIth regards to regional center operations, one can also surmise that erring on the side of caution is the safest bet, especially as all regional centers, even those no longer soliciting new investors, are beholden to pay the Integrity Fund fee.

Still, we are left with best practices based on conjecture; it’s not a way to run an immigration program that has contributed tens of billions of dollars to the U.S. economy and created hundreds of thousands of jobs. And it’s no way to treat good-faith investors who are willing to uproot their families lives and place what is often their life savings at risk with no guarantees.

Accusations of incompetence are being hurled at the USCIS by those who depend on the agency’s favor for their clients. But Lazicki offers a sobering possibility of what’s behind the engagement that wasn’t: “IPO speakers on today’s call are equally victims of a system that paralyzes communication by subjecting every decision and talking point to a thousand steps and checks.”

Semotiuk agrees: “The pervasiveness of fear of USCIS officials about something going wrong destroyed the benefit of the process.” 

We can only hope that the outpouring of anger and frustration will be a wake-up call for USCIS. Two-way communication and clarity are needed. Not fear and broken promises.

Read the Suzanne Lazicki blog “April 25, 2023 Stakeholder Engagement"

Read the EB5 Investors Magazine article “Mixed reactions to USCIS EB-5 engagement meeting”

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