[HOT] For the EB-5 Program to progress


The following aspects of the EB-5 Program must be changed, either legislatively or via policy memos, in order for the EB-5 Program to progress. Otherwise, the EB-5 Program will again become mired in lawsuits.

In selecting the areas of improvements and keeping intact the integrity of the EB-5 Program, we first have to acknowledge that the primary purpose of the EB-5 Program is to create jobs for American workers (U.S. citizens or green card holders). Therefore, any changes made to the EB-5 Program must be consistent with and/or promote this primary purpose.

1. Where there is a "material" change in the initial I-526 petition or EB-5 project, an amendment to the originally-approved I-526 petition should be allowed. Contrary to what the USCIS has stated, the USCIS has already allowed "amendments" to the already-approved I-140 immigrant petitions and H-1B nonimmigrant petitions in various contexts. Allowing amendment, rather than forcing petitioners to file new I-526 would promote the primary purpose of job-creation; and moreover, prevent dependents from "aging-out". Also, the "material" changes subject to amendments of already-approved I-526 petitions should be clearly and narrowly defined, so that "immaterial" changes can and should be reviewed by the USCIS at I-829 stage. Lastly, where an amendment is needed and filed, only one "master" amendment for the EB-5 project should be allowed to be filed on behalf of each EB-5 project.

One reason why the USCIS may be unwilling to allow any amendment to the already-approved I-526 petition is because they believe -- probably correctly -- that the statutory requirement of creating requisite jobs in two years must be followed. Then, the USCIS should allow amendments to the already-approved I-526s in the event the jobs can be created within the requisite time frame; and if the time frame needs to be extended beyond the "reasonable period of time thereafter" to create the jobs. However, USCIS needs to recognize that projects that create jobs after 5 years are just not the kinds of projects that fall under the EB-5 program.

2. For regional center based cases (or any EB-5 project with multiple investor-petitioners), allow an option of submitting in advance a "master" I-526 (and maybe even a "master" I-829) to be submitted, reviewed in advance, so that issues related to the RC program and the underlying EB-5 project can be approved in advance of individual investor-petitioners submitting their I-526s and I-829s showing how they met respective requirements. Then, each investor can reference and incorporate the already-reviwed "master" file and just review the lawful source issue. Such change in the procedure would recognize the fact that for RC petitioners, RC Program and project related matters are repetitive tasks, and would in fact make the job of examiners easier and lead to a faster review. This requires a change in the attitude on the part of USCIS to "work with" EB-5 project companies, rather than try to find some "faults" with the projects. The fact of the matter is no EB-5 projects want to violate the law, but often USCIS guidances are so unclear and conflicting that it is very hard to know (even for experienced EB-5 practitioners) what is acceptable to the USCIS.

3. Indirect and induced job creations from the "spending" models should NOT be allowed, because this method is not only too complex for USCIS adjudicators to follow (let alone for regional center operators, attorneys and petitioners) but can often lead to inflated job numbers when compared to Direct Jobs Multipliers method which is also allowed by "accepted" methodologies such as RIMS II and IMPLAN. Therefore, a more honest and conservative method of counting only verifiable Direct Jobs (including independent workers) and Multipliers should be followed. And more importantly, the number of requisite job numbers should be lowered to something like 5 per investor. Creating 10 jobs using conservative methodologies is very, very difficult to achieve. Basically, acceptable job methodologies must be simplified, so that all the parties can understand, and this will help make the EB-5 Program more transparent instead of being dependent on "jumbo-mumbo" methodologies. Let's make the required job number more reasonable to fulfill, and then let's make job-calculation methodologies more transparent and accountable. Let's make it so that real business people can follow the EB-5 requirements and then expend their talents and efforts towards creating "real" jobs in a more transparent manner. Government's job should be to set clear rules and let people create jobs, but the current EB-5 law is so complex that many "smart" business people are hesitant to delve into any EB-5 projects.

4. Full-time job should be counted on "equivalent" hours basis, so that two part-time jobs for the same position can be added up to count as ONE full-time position. For example, two waiters -- one working 20 hours and the other working 15 hours per week -- should be allowed to be added up to count as one full-time position. Discriminating against part-time positions simply does not make any sense, especially when any kind of job creation is very much needed in the U.S. right now.

5. TEA should be defined as any area having unemployment of greater than 7%, and if investor is willing to invest in "rural" area, then he should be allowed to create a reduced number of jobs, let's say 3 full-time jobs instead of 5 jobs.

6. USCIS should realize that EB-5 statute itself is a very broad, so that USCIS can add and amend corresponding regulations in a broad manner without violating the statutory authority. Existing EB-5 regulations interpret EB-5 statutes too narrowly: this is why USCIS is forced to come up with guidance memos that, in effect, act as EB-5 statute or regulations. USCIS should be willing to revise the existing regulations and not use guidance memos in this manner, because these guidance memos have an effect of changing substantive EB-5 law. In this vein, instead of issuing guidance memos which raise more questions, USCIS should use this time to meet together with EB-5 practitioners (including IIUSA and AILA EB-5 Committee) and try to come up with a better solution. Basically, many of EB-5 regulations do not make any sense and are not conducive to the interests of the United States. It seems fixes are needed at the "hardware", i.e., regulatory level; and USCIS should not hide behind their statement "we cannot violate the constraints of EB-5 regulations" when USCIS itself has the power to change the EB-5 regulations in a more investment friendly manner. We are afraid that even if new legislation passes significantly amending the EB-5 Program, USCIS will then issue corresponding regulations "narrowing" the statutory parameters. It may be true that another agency should be in charge of the EB-5 Program in terms of setting the broad EB-5 policies and USCIS should just focus on "pure" adjudicative functions.

All we have to say is that among experienced EB-5 practitioners and regional center programs the "open promise" of EB-5 Program that started off by with Mr. Morrie Berez (no longer involved in EB-5 Unit) being the practical operation head and cheerleader of the EB-5 Program in 2002 has died out and has been replaced with a lot of skepticism for the EB-5 Program. Just take a look at: http://eb5greencard.blogspot.com. The author of this blog is not some "Joe" off the street; he's one of the more experienced EB-5 practitioner and involved with one of the Regional Centers. It seems no one wants to be "responsible" for where the EB-5 Program is headed.

7. Current processing time of 5 to 6 months for I-526 review and adjudication is way too long; in the real world, people cannot wait for 5 to 6 months for the investment to come in without placing their project in jeopardy. At maximum, the I-526 processing has to be reduced to 3 months or less. If USCIS cannot do so, they should tell the Congress that EB-5 Program should be scrapped. As for I-829, USCIS' own I-829 regulations state that I-829 should be adjudicated within 3 months, but USCIS is not following its own regulations.

8. USCIS has to use its website to do a better job of answering some of the policy-related questions and procedures, because there are a myriad of issues that are not adequately answered by the existing EB-5 law or cases. This means USCIS should not penalize cases which proceeded when the EB-5 law was NOT clear on certain issues; rather, USCIS, realizing that the law was and is unclear on many issues, should rule on the issues as they arise, not penalize past cases and state clearly any future cases should comply to their holdings. Even RFEs and RFE responses can be sent by email to the representing attorney who must acknowledge the receipt within let's say 5 days or a hard copy will be sent out. The USCIS really needs to implement technological advances to make the adjudication process faster.

With the above changes, the EB-5 Program will really take off and help the U.S.' floundering economy. But because we do not believe the above changes will take place, we truly believe that the current EB-5 Program should be deleted and have relatively rich investors and business people go to Canada and other countries instead. Folks, if the U.S. does not want them, we hate to tell you, there are many other countries who do. You have to choose between the two attitudes of "No, we don't want these investors and jobs" or "Yes, we want them". You can't have it middle way and say "We want their moneys but don't want to give them green cards."

Really, one of the reasons why we started this www.eb-5center.com site was to help point out the ways the EB-5 Program can be improved because it really holds such "huge" promise if well administered. If successfully implemented, the EB-5 Program should bring in tens or hundreds billions of USD per year into the U.S. and create at hundred thousands jobs per year: folks, this is not peanuts in this environment. It's sad to see that the EB-5 Program has never been given a decent chance to succeed by either the Congress or USCIS.