In one of the most exciting updates in our advocacy since the reinstatement of the EB-5 program, AIIA held a meeting with the Citizenship and Immigrant Services (CIS) Ombudsman to discuss some of the most pressing issues facing EB-5 investors. On October 5th, 2023 our team met directly with these officials, and we can proudly announce that nearly a week later, we are already seeing results based upon our conversation with USCIS updating their policy on sustainment and good faith investor protections. We are floored that the CIS Ombudsman team actively listened to our calls for action and the stories of our community – but our work is far from over. While we celebrate this win, we are keenly aware of the massive work still to come in our fight for EB-5 investors, especially those that invested before March 2022.
The sustainment period, and subsequently, redeployment, are still huge issues, and the majority of EB-5 investors will still be subjected to them until USCIS updates their policy. However, this meeting is a great foundation for us to use for future advocacy, and we are dedicated to an ongoing engagement with USCIS regarding this and other issues prevalent in the program.
Our Meeting with the CIS Ombudsman
The CIS Ombudsman (commonly referred to as the CISOMB) is an officer of the Department of Homeland Security (DHS), who is responsible for acting as a “liaison between the public and USCIS.” This office is unconnected to USCIS besides through oversight over USCIS affairs. The office is primarily tasked with helping individuals resolve casework issues with the agency, but also for holding meetings with the public and special interest groups to learn more about USCIS operations from the public’s perspective and make non-policy orientated recommendations to USCIS officials to improve their operations and efficiency. This makes the CISOMB the perfect team to hear some of the most pressing issues faced by EB-5 investors from across the world.
This is the first time that an EB-5 investor group has met with the CISOMB. Previously, only EB-5 industry stakeholder groups had met with the CISOMB to discuss issues faced by their members in the EB-5 program. Clearly, this approach leaves–all EB-5 investors–the majority of stakeholders impacted by the EB-5 program out of the conversation surrounding the fate of their immigration and investment. The meeting was crucial for this reason, as AIIA would be working alongside all other major stakeholders involved in administering the EB-5 program.
Prior to the call, we asked our community to send us the biggest issues they were facing with their EB-5 process to integrate into our agenda. We received an outpouring number of messages from investors, and we gathered those to focus on the issues we felt were most likely to be addressed by CISOMB.
Issue 1: Lack of Transparency regarding I-526 and I-526E petition inventories
Lack of transparency by USCIS about incoming EB-5 demand has already facilitated devastating backlogs in the legacy 5th Unreserved visa category. For example, the July 2023 Visa Bulletin has a final action date of September 8, 2015 for China mainland-born petitioners in the 5th Unreserved category, meaning that Chinese EB-5 applicants who invested and filed their I-526 before September 2015 are only now receiving conditional green cards, eight years after they invested. These immigrants have now waited nearly a decade to receive their visas. Some risk waiting for many more years. We believe that expectations regarding the visa wait time could be controlled had USCIS published country-specific I-526 receipt data or provided stakeholders an indication of the then-current petition inventory held at IPO.
As a ‘by investor for investor’ organization we do not want history to repeat itself hence we raised the lack of transparency surrounding the petition inventories held at USCIS as a major issue. Without any transparency from USCIS, unreserved EB-5 investors entered a queue of unknown length, received priority dates of unknown value, and are still waiting years later to reach the end of the queue and claim the visas that incentivized their investment.
USCIS risks oversubscription to the new set-aside categories without a public disclosure of the incoming petition count held at IPO. Oversubscription would mean each category accumulating massive wait times due to the small number of visas offered in each, in which case, oversubscribed countries would suffer through the same excruciating backlog endured by the unreserved category’s petitioners.
We stressed the importance of inventory transparency for current and prospective investors who may invest in these categories, and also for professionals who are advising their clients on the path forward. We recently received data from our FOIA request for the number of petitions received by the IPO in the set-aside categories but while it’s helpful, given the fact the data was now a few months old already, it doesn’t allow for investors to have the most up to date information they need to make an informed decision. To their credit CISOMB requested a copy of our FOIA request to understand the precision of data required to see if a regular release of data was a possibility.
Issue 2: Processing Delays and Lack of Receipt Issuance
It is clear that USCIS has struggled with its internal efficiency for the past eight years, as EB-5 immigrants have watched their petitions remain stagnant at the IPO. Additionally, the passage of the Reform and Integrity Act (RIA), alongside all new immigration and registration forms, adds heaps of administrative responsibilities on USCIS’s plate. However, this also means there is a backlog of processing delays that have continued to accumulate since the program lapse, and some even prior to the pandemic, that USCIS will have to address in tandem to the administrative workload from the RIA. Here are the main delays we discussed with the CISOMB:
- Delays in issuing of I-526E and I-956F receipt notices
- Approval of I-526s without concurrent approval of I-485s
- Delay in transferring files from IPO to the National Visa Center
- Delays in adjudicating I-131s (application for Advance Parole) and erroneous issuance of I-512L (Advance Parole documents)
- Outstanding delays in I-829 adjudications
- Non issuance of I-956K receipts for foreign intermediaries and immigration agents
Many of these issues were brought to our attention by our industry partners and immigrant investor community. Although we focused on some issues, such as I-829 adjudication, more than others, each one of these delays harms immigrant investors and are likely to cause issues in both their immigration and investment processes.
Issue 3: The Sustainment Period and Redeployment
Up until this month USCIS had refused to clarify the start date of an investor’s sustainment period for immigrants investing after March 2022. As a result, the mystery surrounding the definition of a sustainment period caused EB-5 investors to fear for their investment as the two year anniversary of the RIA rapidly approaches. This issue has become even more contentious between the EB-5 industry, which makes hefty profits off of the cycle of redeployment, and the EB-5 investor community, which bears the entire burden of an extensive sustainment.
At AIIA, we have vehemently stood against the practice of redeployment (and the underlying sustainment period issue) which we believe is unfair to all EB-5 investors. If the definition remained the same as in years past – meaning the investor would only be eligible to be repaid after their conditional green card period – then they are at high risk of having their money redeployed or reinvested into other projects, often without consent.
CISOMB recognized the contentious nature of this issue and was interested in learning more about the real-life implications of the sustainment period. The RIA provided a perfect opportunity to protect EB-5 investors by defining the time period in which sustainment takes place, and the CISOMB team seemed to understand the harm caused by USCIS’s lack of clarity. Additionally, the team understood that USCIS was faced with a time crunch, as the first I-526E was approved by the agency very recently, and it is only a matter of time before that investor receives their conditional green card.
It would seem that all of our work on this matter has paid off, as USCIS’s newest guidance that was released a week after our meeting with them (more on that below) holds promise for eliminating the need for redeployment, for good.
Issue 4: Arbitrary denials on Path of Funds
Sources of funds are routinely being re-examined by IPO adjudicators at the I-829 stage, forgoing deference to I-526 adjudications of the same source of funds. This is particularly true for immigrants from countries with exchange controls, such as Vietnam and China. We find that despite the source of funds being approved on an I-526 petition, the same source of funds is denied after being reexamined by I-829 adjudicators. Much of this is related to the use of “third party exchangers” or “currency swaps”.
There has been 30 years of precedence using third-party exchangers outside of traditional banks for currency swaps by EB-5 petitioners. The agency refers to these exchanges as “informal value transfers” or IVTs. IVTs usually transpire when an individual gives their foreign currency equivalent funds in local currency to a money service business (MSB) through a formal contract. The MSB will usually then wire the EB-5 investment on the investor’s behalf from a U.S. bank account, which is not titled in the investor’s name and is usually held outside the territory of a currency-controlled country.
With no public regulatory or policy changes, USCIS began denying EB-5 petitions with materially identical facts to those adjudicated years prior. Furthermore, denials related to source of funds issues skyrocketed for EB-5 investors without any warning, especially those from exchange controlled countries.
It is not clear how USCIS distinguishes lawful and unlawful exchangers, and there is no public policy regarding the use of IVTs and currency swaps in USCIS’s policy manual. Even in USCIS’s recent FOIA response to us, the definition of licensed and unlicensed exchangers are always redacted. Without USCIS clarity on the distinguishing factors between each type of exchanger, nor a public release regarding the updated policy of currency swap/IVT usage, EB-5 investors continue to use these services without knowing if they are disqualifying themselves from the EB-5 program.
We stressed these issues to the CISOMB team, specifically on USCIS’s lack of transparency regarding its policy change on IVT and currency swaps. We also highlighted a number of recently adjudicated cases that had all used one specific MSB to transfer funds out of Vietnam. All of them had been arbitrarily denied due to path of funds issues for using the same MSB for IVT purposes. Yet, for years, EB-5 stakeholders have used funds arising from that particular IVT to facilitate approvals. We hope that the Ombudsman’s office will encourage the agency to provide clear guidance regarding what evidence is required to demonstrate a lawful transfer of funds.
Issue 5: Child Status Protection Act and “Aging Out”
In USCIS’s policy manual, an applicant’s child can only benefit from the Child Status Protection Act’s (CSPA) age protections when the child’s parents satisfy the “seek to acquire” requirement within one year of a visa becoming available to them.
One of the main events that demonstrates “seeking to acquire” for EB-5 immigrants is paying the immigrant fee levied on their adjustment of status or consular processing paperwork. After paying this bill, the child’s age is frozen until a visa is issued to the family. However, if an approved I-526 is not sent to NVC for over a year, the child could age out before the main petitioners can even be issued a fee bill. The delay in sending these documents has huge implications for individual investors who risk family separation and are disincentivized from using the program because of this risk.
Additionally, there is a large debate in the legal community on whether a U.S.-based immigrant petitioner fulfills the “seek to acquire” requirement if they concurrently file an I-485 with their I-526/I-526E. If the filing fee is paid upon filing the I-485 with the I-526/I-526E, are the children included on the petition protected until visa issuance? Is this the case even if a visa is not available when concurrently filing?
Furthermore, the Department of State and USCIS have separate and incompatible interpretations of what constitutes “visa availability”. At AIIA we favor USCIS’s current interpretation of visa availability, because it offers immigrants a greater opportunity to protect their children listed on their immigration petition. We explained to CISOMB how this lack of a uniform definition will cause issues in the EB-5 program later.
Issue 6: Form I-829 delays and stamping
It is common knowledge that USCIS has not been processing the I-829s at an acceptable rate. While Congress has mandated that adjudications of I-829 must take place within 90 days or less, the adjudication often takes several years for most investors. This delay is so long that USCIS now is providing immigrants evidence of an extension of status for 48 months after the expiry of the conditional green card, which is a welcome adjustment for those who are struggling for expired I-829 status, but a temporary and fragile solution at best.
We shared with CISOMB how much of a pain it is for immigrants to be traveling around the world on expired green cards and I-797 notice. On top of that, in order to get that extension an appointment at a local USCIS service center is required for EB-5 investors if they wish to extend their conditional residency even though other immigrant visa petitioners are eligible for such extension stamps to be mailed to their registered address with USCIS.
Action from USCIS
In a welcome surprise, less than a week after our meeting, USCIS released new guidance surrounding the sustainment period and “good faith investor” protections. We were happy to see several concerns that we raised with the CISOMB team reflected in this guidance.
USCIS has now clarified that the Reform and Integrity Act “removed the requirement that the investor must sustain their investment throughout their conditional residence.” Previously, investors had to keep their funds invested until after filing the I-829, so as to comply with the informal interpretation of the sustainment period that coincided with the conditional residence period. Now, post-RIA investors (EB-5 petitioners who filed after March 15th, 2022) only need to keep their investment sustained for at least two years and the job creation requirements have been met for their project. Furthermore, the sustainment period has now been defined as starting on “the date the investment was contributed to the New Commercial Enterprise (NCE) and placed at risk in accordance with applicable requirements, including being made available to the job-creating entity” (JCE). This means that as soon as the investor contributes the total investment amount to the NCE and the money is deployed into the JCE, the two year clock begins before they will be eligible to withdraw their funds.
“Good faith investor” protections, which protect investors associated with terminated regional centers, have been extended to include pre-RIA investors- something the RIA did not do. This is another huge win, but requires further analysis from legal professionals to fully understand how these protections will be implemented in practice.
Our next goal is to convince the USCIS to recommend extending sustainment period regulations to pre-RIA investors, as the majority of investors who are affected by the sustainment period are not affected by the new guidance. Although we are disappointed that the new guidance regarding sustainment does not include pre-RIA investors, the principles USCIS employed to implement these rules are the same for pre-RIA investors. We believe this is a strong foundation for us to push for extension of the two-year sustainment period to pre-RIA investors. We are also grateful that USCIS has demonstrated their willingness towards relieving EB-5 investors of some of the financial and bureaucratic burdens they currently bear.
AIIA will be seeking out further collaboration with the CISOMB office to resolve outstanding issues mentioned on our call and other priorities brought forth by our investor community. As of now, we have provided the CISOMB with copies of our FOIA requests, exemplary cases of denied I-829s, and informal receipt notices issued by USCIS.
We are incredibly grateful for all investors, attorneys, and others who have come forward to support us, tell their stories, and donate towards our cause. We could not have reached this point without the support of our dedicated community, and we are grateful for the growth in our community this past year.
A special thank you to the CISOMB office, especially Gary Merson and Fred Troncone, for their perceptive questions and dedication to seeking a common resolution. The EB-5 investor community is grateful for the relief this guidance has given to immigrant investors from across the globe.
Stay tuned for more updates about our advocacy campaign and our ongoing conversations with the CISOMB and USCIS officials. If you would like to join our community and get involved, consider signing up for our e-list, making a donation to our cause, or becoming a member for exclusive access to our FOIA requests and more.