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USCIS EB-5 Meeting
On December 3, 2012, I attended the USCIS “Conversation with Director Mayorkas” meeting in Washington, D.C. on the EB-5 immigrant investor program. Here is a brief summary of the highlights:
Tenant occupancy memo
I asked Director Mayorkas if there had been a recent change in the USCIS policy on accepting tenant job creation in a project. He said, “I think we have articulated the fact that the tenant occupancy methodology is reasonable. This is a fact-specific inquiry. I don’t have any further light on that. We are meeting with the economist and addressing it this week.” Throughout the meeting he stated that a policy memo would soon be issued. We will see if USCIS backs off from its surprise “tenant occupancy” policy.
Proving job creation
I again asked for an answer to my question about what evidence USCIS will accept at the I-829 level for indirect job creation. Director Mayorkas said USCIS will provide an answer. Here is the question I asked at the previous stakeholder engagement:
Q: Assuming that total jobs are calculated with a final demand multiplier but evidence of direct jobs is available at the I-829 level, how will USCIS determine the number of indirect jobs if the evidence shows fewer direct jobs than stated in the business plan? Will direct jobs or expenditures be permitted with the economic model multiplier?
Some economists are assuming that the RIMs II final demand method can no longer be used at all to calculate the jobs where there will be direct evidence of employment at the I-829 level. Would you please shed some light on this?
The definition of “reasonable time” for job creation
Director Mayorkas discussed what a “reasonable time” was for job creation at the I-829 stage, when the jobs have not been created within the conditional residence period. He stated that a reasonable time would presumptively be one year afterwards, but compelling circumstances, such as a hurricane, could extend that time. He also indicated that this may be in his new policy memo. A few in the audience pointed out this was not a good idea and a flexible policy is needed as big projects take longer.
New Washington, D.C. Directorate of EB-5
Director Mayorkas announced that the EB-5 program will be run out of USCIS’s headquarters (as it was 5 years ago). He explained there would be teams of experts in Washington. Many made suggestions about how the new unit should operate, including separate handling for large projects, which did not seem to receive a favorable reception.
USCIS may be deciding or processing some hypothetical projects based on regional center applications and amendments (on form I-924) more quickly than others.
I also learned that an I-526 application can be used as a vehicle to add new industry codes to a regional center (contrary to what was previously stated at stakeholder engagements), but not if one submits a concurrent I-924 amendment and the I-526s were held in abeyance for the I-924 amendment. A question was put to Director Mayorkas whether this procedure was possible. He indicated that an answer would be forthcoming at a later time. As a practical matter, it may be difficult to get an investor to invest in a project where the regional center does not already have the approval codes.
Maintenance of funds
A regional center representative asked Director Mayorkas if a regional center’s limited partnership lends EB-5 funds to Project A, which creates the necessary jobs before the I-829s are granted, can the EB-5 funds go back to the limited partnership and then be reinvested in Project B (assuming the LP is a finance company and the investors’ funds are almost always at risk)? Director Mayorkas said he would look into this, and seemed favorable to the concept.
A number of times Director Mayorkas mentioned the word “fraud” and indicated the SEC and Department of Justice would deter and investigate fraud. He also said the new EB-5 unit would be staffed full-time with USCIS Fraud Detection and National Security Directorate personnel. Someone asked him about premium processing (expediting cases) and he said this was dead because there was so much “fraud.”
I am often asked if the China EB-5 quota will close. It will not. There may be a shortage of visa numbers next year – a backlog – but the backlog will be a number of months, not years.