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USCIS releases letter and memos

on job creation for EB-5 Program 

By Boyd F. Campbell
Attorney and Civil Law Notary
Published July 9, 2009

    Two memos were released by U.S. Citizenship and Immigration Services (USCIS) and Senator John Cornyn, R-Texas, released a letter that may have a major impact on the EB-5 Program as a whole and on the Immigrant Investor Pilot Program for Regional Centers.  Let's take the Cornyn letter first, because it was dated much earlier:  January 16, 2009.  The letter was about job creation - the number one issue in this EB-5 Program and tough to nail down.  This one addressed construction jobs.

    Senator Cornyn had asked USCIS its opinion about construction job creation where large, multi-year EB-5 investment projects were involved.  We already had USCIS's opinion that although construction jobs did not count toward the 10 direct (or indirect, in the case of a Regional Center) jobs that must be created by each investor, indirect job creation (again, in the case of a Regional Center) did count.  The policy or guidance made no sense, but the stakeholders accepted it because it was a gimme.

    The letter states that USCIS will now recognize the creation of construction jobs and allow an immigrant investor to count them toward the 10 required per investor as long as the jobs last at least two years.  In reality, few construction jobs will last two years, the lone exception being a very large project that may be constructed in phases over several years.

    The January 16, 2009, letter to Senator Cornyn confirmed the infamous “two-year rule.”  The "two-year rule" was literally lifted from the K-1 (fiancee visa) program and the conditional immigrant visa for married couples many years ago when USCIS was trying to figure out how to determine whether a given investor had created the requisite number of jobs and had invested the required minimum amount of money to cause the “conditions” to be lifted. USCIS arbitrarily chose two years as a "conditional" period during which the investment must be fully made and the requisite number of jobs must be created, a period of time wholly unrelated to the creation and establishment of a business that will hire U.S. workers.  Somehow this rule made sense to USCIS and its legal office, but it makes no sense to anyone in the real world.

    The “two-year rule” must go.  It has no basis in reality.

    A quote from the letter indicates how far removed from the real world the writer is: “An example of a project that may employ craftsmen for a full 2 years might be a masonry structure requiring masons in a full time capacity for the duration of the project as well as the architects and engineers while other trades would generally be ineligible short term subcontractors.  Another example might be the construction of a massive suspension bridge such as the Golden Gage Bridge that employed the same people for the long term riveting and stringing cables.”

    What on Earth is the USCIS letter writer talking about?

    Another point, regrettably, is that the “gimme” must go, too.  Temporary construction jobs do not create permanent indirect and induced jobs, but this is current USCIS guidance that, again, does not comport with the real world.  It makes no sense.

    Next, we have the June 12, 2009, memo sent to Richard Flowers, the Acting USCIS Ombudsman, from Michael Aytes, Acting Deputy Director.  The memo addressed the Ombudsman’s recommendations for the EB-5 Program.

    USCIS acknowledged that it was actively working to “finalize and publish” regulations to implement Congress’s 2002 EB-5 legislation.  It also acknowledged a problem with adjudications officers’ re-evaluating Regional Centers’ job-creation methodologies after they had already been approved by USCIS.  One might look upon this as a no-brainer, but the agency had apparently been unaware that this was a problem.  USCIS acknowleged that it will issue more EB-5 policy guidance through rulemaking and policy guidance, a welcome change from requests for additional evidence, which are an inefficient and messy way of doing it.

    The June 12 memo said the agency is exploring the possibility of developing an inter-governmental advisory group to discuss operational and policy issues with respect to domestic business, economic, and labor considerations relevant to EB-5 adjudications.  USCIS has no economic development mission, so the creation of such an advisory group is unlikely, but we should be pleased that the agency is “exploring the possibility.”

    The mention of higher fees for adjudication of I-526 and I-829 petitions obviously got the agency’s attention, as did mention of 15-day premium processing for an additional fee.  Since Congress cut this agency loose in 1998 and made it dependent upon user fees, the higher fee option has become increasingly attractive for USCIS.  USCIS is not ready for premium processing, however, because its processing times for I-526 petitions are far too long to benefit the EB-5 Program.

    Although USCIS recognized that EB-5 petitions are prioritized according to whether or not they are Regional Center-related, USCIS currently has not way to track these petitions.  Perhaps the mention of this problem will encourage the agency to take some action on this.

    USCIS declined to promote the EB-5 Program through the U.S. Departments of Commerce or State, which was no surprise, considering, as stated above, that the agency has no economic development mission.

    The June 17, 2009, memo was the “big kahuna”.  It reinforced the “two-year rule” and made certain other pronouncements that were not well received by the stakeholders.

    First, it “clarified” the “two-year period” for job creation, including “approximate dates” “when each employee will be hired”.  This is simply more evidence that USCIS has always had a “small ball” view of the EB-5 Program as opposed to a “major league ball” approach.  One looks at how the program through different prisms.  Looking at the EB-5 Program as one that involves only small projects and a few investors, it is easy to see that specifics about such things might be available.  With large projects that is not the case.  No one knows when the jobs will be created because so much depends upon USCIS approving the I-526 petitions so funds can break escrow in a bank and go to work.

    Most EB-5 investment projects can’t give you an approximate date for job creation.  Add to this the requirement as seen in some requests for evidence that investors provide the date that job will be created upon their admittance to the United States, and you begin to understand the imponderables in this visa program that USCIS simply doesn’t understand - yet.

    USCIS seems to acknowledge this disconnect when it states, “Nevertheless, at the time of Form I-526 , the alien entrepeneur will not have attained conditional permanent residence, and the officer adjudicating Form I-526 cannot be certain when the period of conditional residence will in fact commence.”  So much for recognition of reality.

    The most complex process for a Regional Center is the tracking of EB-5 investor cases in order to ascertain the “two-year period” of job creation.  Because this “two-year period” will be different for each investor, the Regional Center must create a reliable database to track each case.

    What if 10 jobs are not created within the “two-year period”?  The June 17 memo gives adjudications officers the power to “explore whether there are reasonable and/or accepted temporal assumptions that can be attributed to the particular economic model and consider such assumptions in determining compliance with the two-year requirement.”

    The declaration that a full-time position refers to the “position”, not the “job”, is welcome.  Some adjudicators had misinterpreted this USCIS position and had required that when a different name was associated with a given “position”, the job was “substituted”, not “created”.

    “Although employment in such industries as construction or tourism can be intermittent, temporary, seasonal or trasient," the memo says, "[adjudication] officers should not exclude jobs simply because they fall into such industries.  Rather, the focus of the adjudication should be on whether the position, as described in the petition, is continuous, full-time rather than intermittent, temporary, seasonal or transient.”

    The best news - if there was any  - was in the comments concerning flexibility in job creation. “USCIS provides that Form I-829 must contain evidence that the petitioning alien ‘has created or can be expected to create within a reasonable time ten full-time jobs for qualifying employees.’ ” 8 C.F.R. section 216.6(a)(4(iv).

    The letter and two memos were not a horrible run at the regulations, but an unsettling one.  Does USCIS - which, again, has no economic development mission - really want the EB-5 Program to succeed?  Maybe.  The jury is still out.  The issue of the Iranian investors is a case in point. USCIS will not approve them, even though the Iranian Transactions Regulations of 1999 clearly show they should be.

    These kinds of disconnects convince those involved in the EB-5 Program to question whether USCIS wants the EB-5 Program to succeed.  Congress clearly does.  On July 8, the Senate passed the Department of Homeland Security appropriations bill, making the Immigrant Investor Pilot Program for Regional Centers permanent authorization.  Enough said for now.

    Boyd F. Campbell has practiced immigration and nationality law in Montgomery since 1988. He is past president of the International Law Section of the Alabama State Bar and a member of the American Immigration Lawyers AssociationCLICK HERE to find out how to get his help with an immigration or visa matter.

Immigration Law Center, L.L.C.
P.O. Box 11032
Montgomery, Alabama  36111-0032  USA

Telephone:  +334.832.9090
Send E-Mail:  usvisa2000@hotmail.com or  CLICK HERE

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