Settlement Agreement Brings Clarity and Stability to Recently Reauthorized EB-5 Regional Center Program

Key points:

  • The revocation of USCIS authorization of previously approved EB-5 Regional Centers has been revoked, and the EB-5 program is once again active.
  • EB-5 investors will no longer be required to wait several months for USCIS to issue Notice of Receipt for Project Filing (Form I-956F) before filing their Immigrant Investor Petition (Form I-526E).
  • USCIS will consider newly released EB-5 program forms “interim” until the agency begins the notice and comment process and finalizes the forms.

Background

The EB-5 visa classification is a separate type of permanent residence in the United States (a “green card”) issued through the Immigrant Investor program. In order to qualify for an EB-5 visa, immigrant applicants must “make the necessary investment in a business enterprise in the United States; and plan to create or preserve 10 full-time permanent jobs for skilled American workers.1

Congress established the EB-5 visa program in 1990 as a strategy to revitalize the US economy. In 1992, the Regional Centers Program began issuing EB-5 visas to participants who invested through Regional Centers approved by United States Citizenship and Immigration Services (USCIS) based on proposals to promote economic growth.2 Since the program’s inception and through the end of 2020, Congress has continued to reauthorize the EB-5 Regional Center program—sometimes one year at a time—as part of the appropriations process.

In December 2020, the program was severed from the appropriations process and was only authorized until June 30, 2021. Over the years, there have been allegations of instances of fraud and abuse by regional centers, and following multiple failed efforts to reform and implement program integrity and monitoring measures, it finally expired on June 30, 2021.

After a lapse of approximately eight months, Congress was finally able to reach agreement on legislation that would provide stability with a long-term reauthorization of the regional center program and implement significant integrity measures and a increased monitoring. On March 15, 2022, President Biden signed into law Reform and Integrity Act EB-5 (“Integrity Act”) as part of the Consolidated Appropriations Act of 2022 (Public Law 117-103) .

Dispute

The law provided a 60-day implementation period to allow USCIS to begin processing EB-5 cases that had been pending since the forfeiture period began. Inexplicably, however, during the 60-day period, USCIS said “all previously approved regional centers” (those authorized by USCIS prior to the enactment of the Integrity Act), were categorically disapproved. .3 The agency’s sudden decision to revoke authorization from all existing regional centers has led to a legal challenge. Behring Regional Center sued, claiming “the agency misinterpreted the Integrity Act as nullifying the authorization of existing regional centers and that the agency’s announcement was arbitrary and capricious. within the meaning of the Administrative Procedure Act”.

On June 25, 2022, Judge Vince Chhabria granted the plaintiff’s motion for a temporary injunction restraining USCIS “from treating previously designated regional centers as unauthorized.” In his order granting the temporary injunction, Judge Chhabria suggested that the plaintiff was “extremely likely (if not certain) to prevail on the merits of his allegation that the agency’s decision is arbitrary and capricious under Administrative Procedure Act”.

USCIS attorneys did not appeal to have the temporary injunction lifted, and documents filed later in the case indicated that the parties were in negotiations to settle the case.

Terms of payment

A settlement agreement was filed with the court on August 24, 2022 and is pending final approval. The settlement agreement confirms that the previously approved regional centers remain allowed to operate. However, to maintain authorization in the future, all previously approved Regional Centers that have not yet done so must submit Form I-956, Request for Regional Center Designation (as an Amendment) and application fees by December 29, 2022. Previously authorized regional centers do not need to approve their Form I-956 before filing a Form I-956F, Request for Approval of Investment in a Business Enterprise.

Additionally, in light of the USCIS’s continued delays in issuing Notices of Receipt, but requiring a Notice of Receipt for a Form I-956F before an investor can file their Form I-526E, Immigrant Petition by Regional Investor Center, the matter was raised in court and addressed in the settlement agreement. If notice of receipt is not issued within 10 calendar days of filing a Form I-956F, an immigrant investor may file their Form I-526E with other proof that Form I-956F was filed. , for example, proof that the USCIS collected the check filing fee.

The settlement agreement also confirms that previously approved Regional Centers will be governed by the terms of the Integrity Act and are required to file Form I-956F for previously approved projects (for which they had previously filed Form I -924, Application for Regional Center Designation under the Immigrant Investor Program, also referred to as “one copy”). However, the regulations explicitly note that the purpose “is to assimilate project information and materials in accordance with the Integrity Act” and not to reassess any aspect of a previously approved project in the copy.

Finally, new forms released by USCIS as part of the implementation of the Integrity Act will now be considered “interim” until USCIS begins developing notice rules and comment. This will allow for genuine input from stakeholders and interested parties.

Conclusion

The EB-5 program has been an important source of private investment in the United States for many years. According to an analysis conducted by Invest in the USA (IIUSA), the national trade association whose members are the regional EB-5 centers, “between 2008 and 2021, the EB-5 program generated $37.4 billion of foreign direct investment to create and retain jobs in the United States for Americans, all at no cost to the taxpayer.4 Judge Chhabria noted that, in its original interpretation of the new law, “USCIS believed it was obligated by the Integrity Act to treat existing regional centers as unauthorized, even though the law does not require that result. “, but this settlement restores the program and allows regional centers to continue to facilitate investment in the United States with the goal of creating more American jobs.

Contact information

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1 https://www.uscis.gov/working-in-the-united-states/permanent-workers/eb-5-immigrant-investor-program#:~:text=This%20program%20is%20known%20as,capital %20investment%20by%20foreign%20investors

2 https://www.uscis.gov/working-in-the-united-states/permanent-workers/eb-5-immigrant-investor-program#:~:text=This%20program%20is%20known%20as,capital %20investments%20by%20foreign%20investors.

3 https://behringeb5.com/wp-content/uploads/2022/08/Signed-SETTLEMENT-AGREEMENT-DOJ-Signed.pdf

4 https://iiusa.org/blog/iiusa-and-5-regional-center-members-file-a-lawsuit-against-uscis-regarding-regional-center-re-designation/

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