The new EB-5 Program office in Washington, DC, went “live” on Monday, May 6, 2013, and stakeholders are waiting anxiously to determine if the centralization of the EB-5 program will improve service, reduce processing times and further the dialogue promised by U.S. Citizenship and Immigration Service (USCIS) leadership. In the week before the office opened, USCIS Senior Counsel to Director Mayorkas, Robert  Silvers, served as the keynote speaker at the Mexico Chapter of the American Immigration Lawyers Association (AILA) annual EB-5 conference held in Miami on May 2, 2013. His appearance at the AILA conference was welcomed and considered to be another indication of the Service’s serious commitment to improving the EB-5 program.  Mr. Silvers offered that an increasing level of sophistication would be finding its way into the adjudication of EB-5 applications.  During his address, Mr. Silvers discussed anticipated changes for the program, changes in policies and also identified areas where the Service is looking to the EB-5 community for feedback as USCIS considers policies and expectations.

Highlights of Mr. Silvers’ speech included:

Updates on the move to D.C.

• The new EB-5 Program office in Washington DC went “live” on Monday, May 6, 2013, and will phase in adjudications of work currently being handled at the California Service Center in the coming months. Initially, the office will start with adjudications of I-924 applications.

• New office space has been identified and allocated for the realignment of the EB-5 program to USCIS headquarters in DC.

• Dan Renaud was named Acting Chief of Immigrant Investor Program.  Mr. Renaud is the Director of the USCIS Vermont Service Center and most recently served as the Acting  Director of the California Service Center before being brought to DC to oversee the transition of the EB-5 program.

• The new EB-5 Program office is in full recruitment mode to hire new adjudicators who will have the credentials, Mr. Silvers and USCIS Director Mayorkas believe, necessary to properly review and analyze Regional Center and investor EB-5 filings.  In his recap, Mr. Silvers noted that new adjudicators will be actual economists.

Policies and Streamlined Procedures

• Bridge financing has been a hot topic for EB-5 projects, as developers seek ways to ensure their job creation timelines are not delayed due to the lengthy processing times in I-526 adjudications.  When EB-5 investments are held in escrow accounts, such delays impact not only the overall project timeline, but also the availability of EB-5 capital.  In turn the timing of the release of capital into the project can actually call into question whether or not EB-5 funds directly created jobs.  On the subject of bridge financing, Mr. Silvers confirmed that USCIS is amenable to its use provided there is a nexus.  This position is very much aligned with statements made by Director Mayorkas in the past.  Mr. Silvers also relayed in interesting scenario that provided a very business-friendly understanding of what would constitute a nexus.  In the EB-5 context, when we talk about bridge financing we mostly consider financing obtained with the understanding and expectation of EB-5 funds replacing the funding at the outset.  Mr. Silvers took this a step further, stating that the nexus can include replacing other capital that fell through on which the bridge financing was originally based.  This flexibility may provide developers with a new option and expanded use of EB-5 funds.

• The importance of a Business Plan cannot be overstated in the world of EB-5. As EB-5 professionals we spend a good deal of time with our clients explaining the disconnect between the USCIS expectation of what constitutes an acceptable business plan for EB-5 purposes  and the a “real world” business plan.  The specific issue discussed at the AILA conference was whether or not a business plan is acceptable when it may not exactly follow the checklist of items listed in the precedent decision, Matter of Ho.   According to Mr. Silvers, USCIS adjudicators should be looking at the totality of the circumstances presented; he offered that a business plan should not be deemed insufficient solely based on the fact it may not contain each and every item on the Matter of Ho checklist.  The statement indicates that we may see a shift away from the Requests for Evidence (RFEs) from USCIS requesting a plan identical to components included in the precedent decision. This will be an area the Sheppard Mullin EB-5 team will be monitoring carefully as we determine if the EB-5 Program Office can actually introduce true business sense into the adjudication process.

• Regional Center approved industry codes, i.e. NAICS codes, have more recently become an issue of concern as well.  While not required by the regulations, USCIS adjudicators are drilling down on the NAICS codes and expecting/requiring the Regional Center to be approved for the NAICS code(s) that correspond to the actual job creation identified in the economic report in addition to the coding of the nature of the project. We are seeing this issue on I-526, I-829, and I-924 petitions   Mr. Silvers noted that the EB-5 team is actively looking at this cumbersome and chilling EB-5 development.

• What was originally slated to be mandatory, the filing of the I-526 investor petitions using the ELIS (Electronic Immigration System) stirred up a large amount of controversy by EB-5 stakeholders.   Following the numerous concerns raised, at this time, USCIS has decided to roll out a voluntary electronic I-526 process as a pilot program instead.  Many are concerned and weary of ELIS being able to handle the volume of documents generally submitted with an investor’s I-526. There were also a lot of questions about how the supporting documents would fit in the ELIS “categories.”  Given the unknown, a voluntary pilot program is a good way to begin and test the waters.

• Repository for common I-526 Investor petitions.  Mr. Silvers also confirmed that USCIS is continuing discussions and hopes to develop a system allowing for a central repository of common project and regional center based documents that are required with the filing of an investors I-526.  This would not only cut down on the volume of paper submitted and duplication, but it will hopefully also streamline I-526 petition adjudications as the USCIS adjudicator would be able to concentrate on investor specific issues and documents when reviewing petitions.

Feedback from stakeholders solicited

• There was discussion about creating a project based customer service agent, or something similar.  While Mr. Silvers did not have a title or specific role in mind, he identified this concept as one the EB-5 Program Office is considering and hoping to implement.  In effect, there would be one individual assigned for the entire lifecycle of an EB-5 project and/or regional center.  The thought appears to be to have one person serve as the central point of contact and would carry with them historical knowledge from investor to investor, regional center designation to amendments, I-526 filing to I-829 removal of conditions and everything in between.

• Hypothetical project filings appear to be an ever changing concept with the filing of an I‑924 application for regional center designation.  Mr. Silvers noted that the team is looking at what should be required in the filing.  How much detail is enough and what is too much?  Mr. Silvers did not have the answer and asked stakeholders to comment on what they believe should be expected and required in a business plan of a hypothetical project.

The EB-5 visa program appears to be on the road to recovery, with dedicated and qualified resources being set aside to service an area of immigration law that is still clearly evolving.  Where that evolution will lead depends just as much on the stakeholder’s commitment to advocate and self-regulate, as it does on the government’s commitment to improve service, communications and predictability in the program.