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[HOT] Reviewing the Dec. 11, 2009 Neufeld EB-5 guidance memo from a judge's perspective


From a judge's perspective or from a perspective of a law professor, the December 11, 2009 Neufeld Guidance Memo (the "Memo") is an attempt to change EB-5 statutes, regulations and/or precedent EB-5 cases without going through proper procedure of amending USCIS' own regulations. It's a basic legal principle that the regulations should be promulgated consistent with federal statutes, and guidance memos should only clarify regulations, not change them. However, this Memo changes for example the definition of "full time" jobs which had already been decided by a federal court case. As much as I like the fact that the USCIS has changed its mind and is now allowing some of direct construction jobs, I don't think this is lawful. If USCIS wants to change the definition, it should have amended the EB-5 regulations, especially because the EB-5 statutes are -- believe me -- very broad.

The Memo uses new terms I never heard of such as "new capital investment project", when there is already a clearly defined term of the "new commercial enterprise" in the statutes and regulations. It's very hard to know whether the term "new capital investment project" is referring to the job-creating entity or the "new commercial enterprise" entity in the Izummi context. Also, the Memo suddenly invokes the concept of "material change" without defining clearly what kinds of changes are deemed to be "material changes". Without clear definitions, any changes arising under the real-world commercial settings can be considered a "material change"; and whether something is a material change or not will be decided by USCIS, almost at its sole discretion. There appears to be missing in this scheme any concept of "good faith" compliance. This kind of vague standards will have a chilling effect on the EB-5 Program, by making regional centers feel very confused as to what is and is not "material changes". Also, the Memo ignores the fact that the concept of "material change" although relevant in adjudicating I-526 petitions, may not be applicable to adjudicating I-829s, because if Petitioner did something that he or she was not allowed to do in I-526, the USCIS has the right to deny I-829s under the stated ground of "misrepresentation".

The Memo also cites Izummi and Katigbak decisions in footnote 3 to state that there cannot be changes to projects AFTER I-526 petition approval, but those two cases dealt with a situation where an immigrant petition was filed and pending when certain changes occurred in an effort to make an apparently deficient I-526 petition conform to USCIS requirements, not AFTER I-526 petition had been approved. I-526 petition in itself gives a specific right, which is to acquire Conditional Permanent status, and then I-829 offers another related but distinct right which is to acquire Permanent Residence Status. Therefore, there are distinct and separate EB-5 statutes and regulations dealing with adjudications of I-526 immigrant petitions and I-829 conditions removal petition, and if there has been any material change AFTER I-526 petition approval, such changes must be viewed in light of whether I-829 requirements have been still met. It should be a very simple exercise in case interpretations, but the Memo mixes up these concepts.

Also, read http://eb-5center.com/node/708 for an explanation of how the outlined procedure for filing I-407 concurrently with another I-485 to reacquire new CPR status lacks legal support under the U.S. immigration law.

To start off, I would argue that many of EB-5 regulations are ultra vires, not consistent with the governing EB-5 statutes. Many attorneys recognize this. Therefore, USCIS' attempt to change EB-5 law through guidance memos is a very troubling trend showing that USCIS can change any aspects of EB-5 law at any time: that is not the kind of EB-5 system that I feel comfortable with. I just want the USCIS to follow and administer the will of the Congress reflected in the EB-5 statutes and promulgate and enforce corresponding regulations in a fair manner; I don't want them to be the Congress or federal court judge and try to create a new law and override precedent cases through guidance memos.

I strongly believe the USCIS should also follow the above basic principle and not try to change the EB-5 law, regulations or precedent decisions through issuance of guidance memos. Honestly, the Dec 11, 2009 Guidance Memo completely changes the EB-5 law in many aspects.

As for myself, I don't want the USCIS to change its positions, even if the USCIS' new, changed position favors me; I just want the USCIS to uphold and follow the law, and draft its regulations and administer them in a fair and practical manner. If the EB-5 statutes is the problem, the Congress has to change that, because that's not the responsibility of the USCIS. However, as we stated before, EB-5 statutes are very, very broad; therefore, USCIS can change many aspects of the EB-5 Program by simply amending its regulations. But they shouldn't go around changing the law through issuance of guidance memos. [Yet, ironically, I heard time and time again USCIS officials stating "we cannot make that kind of change because we are constrained by parameters of statutes or regulations."] For this reason, whenever USCIS issues what it calls guidance memos, most EB-5 practitioners get very afraid. And I don't blame them.