USCIS Immigrant Investor Program (EB-5) Stakeholder Engagement
Comments: USCIS Immigrant Investor Program (EB-5) Stakeholder Engagement
Tuesday, April 25, 2023, |1:30 - 3:00 p.m. Eastern
The Investor Program Office (IPO), which is the organ of USCIS that manages and adjudicates the various forms and petitions associated with the EB-5 Program, held its quarterly stakeholder engagement video conference on April 25, 2023. The conference, which was postponed from March, was presumably intended to discuss several changes wrought by the recent Reform and Integrity Act (RIA). After the conference, RIA remains a morass of unintelligible and poorly conceived quasi-regulation certain to encourage litigation in the EB-5 space.
Any “stakeholder,’ such as myself, seeking actual practical hints on how to manage the RIA as part of his/her practice will be disappointed. The IPO once again demonstrated its reticence, fear and apparent inability to take charge of the program in a way that works. The presentation itself was stilted and guarded. Alyssa Emmel, the Director of the IPO, along with a few of her staff, were well prepared with questions that had been submitted by stakeholders in advance, and appeared to read stock responses carefully crafted to evade responsibility and accountability.
During the supposedly “free-form” Q&A that rounded out the 80 minute web conference, they employed guarded responses that said little. For example, when asked the question of whether investor petitions might be denied due to fraudulent activity on behalf of promotors (see I-956k) the representative merely sidestepped the question. When asked when USCIS might post a list of registered promotors, they responded that USCIS might post a list of promotors, because the RIA allows it to do so. The issue of when was ignored. When asked whether the visa availability priority approach to adjudication has been affected by the RIA, they said that such approach has been in process. Really? I suppose the person who asked that question had some doubt, but surely left the conference just as doubtful. When asked whether the number of reserved category visas would be posted, IPO basically said we should ask the Department of State, which publishes the Visa Bulletin.
The majority of the conference was spent discussing the I-956k Registration for Direct and Third Party Promoters. https://www.uscis.gov/i-956k
As the cognoscenti are aware, the I-956k is a new form intended to ensure the integrity of the EB-5 program by requiring the promoters and agents to register. However, the I-956k itself is opaque and confusing, and doesn’t seem to address any issue other than the requirement that promoters and the Regional Centers that pay them to find investors should reveal their secrets. USCIS has not yet been able to issue Receipt Notices (I-797), and instead has issued paper notifications. They haven’t said what they are going to do with the information, and they haven’t issued any RFEs after I-956k filings, as far as I am aware. So what guidance did IPO provide?
When in doubt, file as many I-956k forms as possible. It’s free!
According to IPO, anyone in a position of “substantial authority” - whatever that means - working for a promotor or an agent, should file their own I-956k. Of course, the law and regulations don’t define “substantial authority.” Use the plain language definition, advises USCIS. Reasonable minds may differ. I suggest looking at the authority of a person to contract in the name of the promoter. The receptionist or hospitality manager of an office has no authority to amend the finders agreement, for example, so they are not in a position of “substantial authority.”
But don’t expect to get a filing notice, or to access records.
IPO wa not able to say when the informal receipt letters they have been sending would be replaced by formal I-797 -type notices. IPO notes that the RIA allows and may even require them to create a searchable register of people who have filed, but they have not started it yet. They might, or maybe not… They don’t seem to have a plan.
IPO thinks RIA imposes new obligations on RCs or even investors to vouch for promoters and agents.
One of the participants asked a very interesting question: is it possible that an investor could be held responsible through denial of an I-526 for the promotor’s failure to register, or fraud and misrepresentation? the answer from IPO was not convincing and did not see well thought out. Promotors could be disqualified, said IPO. Even RCs could be disqualified for material and substantive misrepresentation. IPO did not articulate a boundary between the knowing participation by an investor or RC in a promotor’s fraud and the “innocent investor.” This is a substantial expansion of the doctrine of fraud/misrepresentation beyond our current understanding of what one might find supporting a 6c1 ineligibility. As such, if that’s the direction IPO wants to go, they should expect litigation.
They don’t know the difference between “authorized individual” and “certifier.”
This is pretty basic: who signs the I-956k form? IPO doesn’t seem to know, but not a lawyer, in any case, unless that lawyer has personal knowledge of the inner management at the promotor. Maybe IPO should have known what it meant before they published the form.
IPO is expanding its expectation of what information needs to be produced with the I-956k filing.
Although the I-756k form asks for a description of the finder agreements, and doesn’t ask for the agreements themselves, IPO now says that one must produce all agreements in full. They say that the agreement miust be produced even before there is any contact with a proposed investor. That makes little sense, because if one is an agent not already active in the business of EB-5 promotion, how would one know that an inquiry about EB-5 opportunities is coming until a client actually asks? IPO also believes that agreements must be produced even if no substantive work takes place to fulfill the agreement. That makes no sense either, because there can be no harm to a proposed investor in the absence of promotion. IPO says that when an agreement is voided, it should be reported. That makes little sense, because if there is no work, no investor, and no relationship between a promotor and an RC, other than a contract loitering on a file share in someone’s computer, what is there for IPO to regulate?
CONCLUSION - More mess from IPO. More damage to the EB-5 program. More work for lawyers.
The public engagement was I-956k oriented. To that extent, it was a grave disappointment, because IPO didn’t really answer any of the well-founded questions posed by stakeholders. They stiffly avoided anything that might be considered workable advice.
My recommendation is to take reasonable efforts - no more, no less - to comply with the basics of the form. I can provide specific recommendations to promotors and agents on a case-by-case basis. However, the effort by IPO to extend broker-dealer type regulation to foreign promotors and migration agents, where even the SEC does not tread, is probably unsustainable under the law and regulations. In the case of the I-756k form, IPO takes the RIA as an invitation to harass promotors and agents. I don’t see how it protects investors, since there is no oversight, and to the extent that IPO would exercise oversight, such as spending US taxpayer dollars on enforcement overseas against people that are not subject to US jurisdiction, I think it would fail in court.
The key question: what authority does the RIA give IPO to regulate foreign promotors and agents? The answer: whatever the US Constitution would allow. Frankly, IPO doesn’t seem to have thought out a comprehensible, Constitutional, and limited interpretation of what the I-956k is all about. Even the form itself is a mess.