2012/12/03 -- EB-5 Conversations with Director Mayorkas

Below are informal (not as complete as I would like) notes I took on the above teleconference. Going into this event, many EB-5 stakeholders were wondering whether an updated or final "overarching" guidance memo will be released in advance of the teleconference. That has not happened. Also, stakeholders were also wondering why so many I-526s have been pending for so long unadjudicated. USCIS cannot keep on delaying any longer; it's not fair to EB-5 investors and Regional Centers. And frankly, USCIS is shirking its duty to review and adjudicate cases. We heard that some RCs are even filing mandamus actions to force USCIS to adjudicate EB-5 cases; that's truly a shame and a waste of taxpayers' money and government resources.

Panel: Director Mayorkas; Mary Hermann; Rob Silvers, Senior Counsel;

Mayorkas' Opening Statement & News: EB-5 issues getting more complex due to growth. Decided to realign EB-5 responsibilities by putting EB-5 responsibilities located in the Wash DC office staffed with legal, economic and adjudicators themselves. Chief of the new EB-5 Program Office will report directly to Deputy Director. [This is a significant change -- actually a huge change, and the implications are huge.] Also, National Security Office will be working with this EB-5 Program Office and the realignment will take place within 4 to 6 months. Goal is 90 to 120 adjudication processing time on the average. This will serve the needs of the EB-5 community better and more effectively.

Q & As:

Q: What is the settlement terms on the Carlsson federal lawsuit?
A: Mayorkas is not familiar with the case. Will make a public statement if USCIS feels it's important enough.

Q: Will we be not submitting EB-5 cases anymore to CSC? How about EB-5 cases already submitted?
A: Must submit to CSC until further notice of formal announcement. 90 to 120 days adjudication time is ambitious. Expertise of the new EB-5 Office will benefit.

Q: Will the Review Board for I-924 be housed in the new EB-5 Office?
A: The EB-5 Office will communicate with the Review Board. Emails rather than RFEs will be used, because RFE takes too long.

Q: Will you consider working closely with the cities which want to set up EB-5 projects regarding their ideas on the economic development.
A: Not sure whether this area falls within USCIS ambit. [Comment: This question was too broad for this teleconference.] This may fall within the authority of Economics Plan and Policy.

Q: Ira Kurzban: Shouldn't an oral argument be made a part of the EB-5 adjudication, because paper presentation may not be efficient. An oral presentation may be more effective. Moving just the location with the same adjudicators may not achieve all the goals.
A: Couldn't agree with you more. May be a good idea. We want to first see what effect the direct communication, i.e., emails would have. The party shall be given an opportunity to respond. May move from emails to telephone calls, eventually.

Q: Will the procedure be bifurcated for I-924s and petitions?
A: No bifurcation. The new EB-5 Office will have the plenary responsibility over I-924s, I-526s and I-829s will be handled by the new EB-5 Office. Just I-485s will be decided at another office. Open to comments.

Q: Is USCIS engaging the Commerce Dept?
A: Yes.

Q: We hope pending I-924s and applications will not be delayed longer due to the New EB-5 Office.
A: Tenant occupancy issue will be addressed quickly.

Q: Morrie Berez: USCIS' level of sophistication is increasing. One thought: NOID for different number of response days may be merited.
A: If USCIS has a series of questions, one RFE should capture all questions, not a series of RFEs.

Q: How about pending cases?
A: Tenant-occupancy related cases is a priority.

Q: Shouldn't sizes of EB-5 projects require different expertises? Shouldn't adjudicators be specialized?
A: Not sure about sizes of the projects, but the specialization of knowledge may be more important.

Q: Will policy related power reside with the new EB-5 Office?
A: No, the Office of Policy & Strategy will make policies.

Q: Will Premium Processing take place, or concurrent filing?
A: No. On concurrent filing, not sure.

Q: RFEs should not ask for all kinds of permits.
A: Will read the Matter of Ho case again.

Comment: Should focus on first reviewing the project qualifications and then individual investors' issues such as the lawful source for predictability and job creation.

Reasonable period of time: [Our viewpoint on this issue is that some projects which may take over 5 years for all jobs to be created may not be the kinds of projects that were envisioned by the Congress. In other words, these types of projects which may not be able to create jobs within 2 years and within the reasonable time period thereafter, should NOT be able to use the EB-5 Program. Besides, if all kinds of projects were allowed to use the EB-5 Program, IV numbers for the EB-5 Program would have too-long priority waiting dates.

USCIS seems to want to decide on a specific period of time, whereas stakeholders want to argue the reasonable period of time should take into all factors. For RC projected which are big projects which often have long construction time frame, I-526 does not require that jobs be created within 2 years.

Q: When can capital be returned after jobs have been created?
A: On-going redeployment may be allowed if the capital is still at risk. If the investor can get back the money, then maybe the "at risk" requirement is not being met.

Q: When will the updated "overarching" guidance memo be published?
A: Still working on it.

Our take/reaction: Aside from the announcement of the new EB-5 Program Office to be located in Wash. D.C. (which announcement is probably 2 years late), this partly explains why I-526 cases have been pending for so long at CSC. CSC may simply be unmotivated to work on pending I-526 cases if their authority to adjudicate will soon be taken away. I will be interesting to see whether CSC is glad or unhappy about this move. USCIS has the right to decide that certain projects which create jobs too far into the future should not try to use the EB-5 Program. I doubt that USCIS is ready to accept the EB-5 projects which will create jobs 5 years into the future. I have a gut feeling that USCIS will just have a very hard time supporting the job-creation at some unknown future time. I rather like Ira Kurzban's proposal (which we proposed long time ago) that EB-5 investors should just be given an extension of CPR status until such time they demonstrate to USCIS that the jobs have been created.

Also, what was the real reason why the adjudication authority for EB-5 cases is being taken away from CSC? Why will the new EB-5 Program Office be able to do a better job in regards to building predictability and a quick turn-around?

Also, RCs are taking a risk filing new I-526s with CSC when this transition has been announced. Who knows how long CSC will take to decide EB-5 cases when the EB-5 review/decision authority will shortly be taken away from them? Also, many of the current CSC EB-5 adjudicators will not want to move to the Washington DC, meaning additional time and staff will be needed to start the EB-5 operation at the planned EB-5 Program Office in Washington DC.

So far, good talk and no action. And the delay keeps on getting longer. It's hard to justify very high filing fees that EB-5 cases are paying to USCIS.