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[HOT] My personal perspectives and comments on the current state of the EB-5 Program

No, no one specifically asked me for my personal perspective on the EB-5 Program, but when you have your own website, one of the benefits is you can write down your viewpoints, so here it goes.

  • If I were in charge of the USCIS EB-5 unit, I would set up a team composed of experienced economists, so that proposed job-calculation study would have to be first cleared by this economist group which would "pre-approve" the proposed job-calculation study and then USCIS adjudicators can review and approve other aspects of the EB-5 project, so that the adjudication process would be streamlined and be more logical. Unless this approach is taken, you will continue to see unclear and inconsistent adjudication.
  • Have to revise the Neufeld December 2009 EB-5 Guidance Memo to first get rid of the concept of "material change", because the specific I-829 regulatory requirements do not mention "material change" anywhere, and second, to provide for an amendment procedure, rather than forcing petitioners to file 2nd I-526 petition and then adjust again. The current procedure is highly inefficient and the legality is questionable because applicants who proceeded under CPR system cannot adjust under 245. If the petitioner still meets the specific regulatory I-829 requirements and will create requisite jobs and still complies with the specific regional center designation parameters, who the heck cares what kind of changes the project underwent? Does USCIS honestly believe that in the real world, projects will not go through certain changes due to changes in market conditions and economy?
  • USCIS should follow EB-5 statutes and regulations when the statutes and regulations are clear. As an example, when the regulations say USCIS shall adjudicate I-829s within 90 days, USCIS should do so, or change the regulation.
  • When the EB-5 statutes and regulations are not clear, and there can be several reasonable interpretations, USCIS should come out and say "We believe the law is unclear on this point, and therefore, we choose to interpret it this way" and issue a clear guidance. Now, when USCIS does issue such guidance, such as the December 2009 Neufeld Guidance Memo, USCIS should not apply their newly-stated position to the cases which began before they decided on their position. In other words, don't fudge the history and say "this always had been our position" when in reality, USCIS did not even have an opportunity to address some of the issues because the issues have never been raised before. For example, currently, there are many job-creation related issues which are unclear under the EB-5 statutes and regulations AND which were never addressed before by USCIS.
  • Implement a strong supervisory system in place so that CSC examiners will adjudicate consistently. Many of what USCIS representatives say during the public EB-5 meetings differ significantly from how CSC examiners actually adjudicate I-526 and I-829 petitions, as if CSC examiners either do not know or follow what was said by supposedly "higher" officials. The consensus is that there is a real disconnect between what USCIS officials say during public EB-5 meetings and how the cases are actually adjudicated by CSC examiners, period. These days, you can have a "pre-approval" on the underlying EB-5 project, and CSC examiners can still issue RFEs on the project where there has been no changes to the project: What good is the "pre-approval" process! USCIS should either follow the "pre-approval" process, or do away with it.
  • Realize that EB-5 statutes and regulations discuss only "a new commercial enterprise", and does not discuss job-creating entity. However, when Izumii precedent AAO case allowed a new commercial enterprise entity to make loans to job-creating entity, it unwittingly created a myriad of new issues which the EB-5 statutes and regulations cannot govern. For example, there is no concept of "material change" after I-526 approval mentioned anywhere in the EB-5 statutes and regulations governing I-829 adjudication.
  • Be willing to approve those I-829 cases which have "substantially and in good faith" complied with I-829 requirements.
  • CSC examiners should be willing to communicate with the regional center general partner directly on issues involving the underlying EB-5 project; and moreover, CSC examiners should be willing to communicate expeditiously via email or telephone. It doesn't make sense to take more than 3 to 4 months to resolve often very simple RFE issues. Does CSC really want to issue 100 RFEs when the RFE issue is the same for all RC based petitioners? Yes, they do!
  • EB-5 training manual used to train EB-5 adjudicators is full of contradictions -- no wonder CSC examiners are so confused and adjudication is so inconsistent! If USCIS asks us to list the contradictions, we would be glad to do so, but they never ask. In fact, when you try to contact the CSC management and offer ways to improve, they just tell you to contact the SCOPS Headquarter in Washington, DC. And the head people in Washington, DC don't want to get involved in making field decisions.
  • Select one job-estimating methodology as the "reasonable" methodology that will be accepted by USCIS. It makes no sense to allow all kinds of methodologies when USCIS is not equipped to handle various methodologies. As we suspected from the beginning of the EB-5 Program, there are too many assumptions in these methodologies to check at the I-829 stage. This is all the more reason why one methodology should be selected as the acceptable methodology that USCIS will accept.
  • Lastly, the "preponderance of evidence" standard, not the "clear evidence" or "beyond reasonable doubt" standard, should be followed. Recognize that the Matter of Ho holding on the necessity of detailed business plan should be viewed flexibly in that the level of details required in the business plan depends on the type of business and the context.

In short, confusion and inconsistency appear to reign over the EB-5 Program, and in practice, the EB-5 law tend to vary among CSC examiners. And much of it is created by USCIS itself.