Announcement

Collapse
No announcement yet.

Article: The September Foreign Exchange Notice Increases Difficulties for Chinese EB-5 Investors. By Mona Shah, Esq. and Hui Zeng, Esq.

Collapse
X
Collapse

  • Article: The September Foreign Exchange Notice Increases Difficulties for Chinese EB-5 Investors. By Mona Shah, Esq. and Hui Zeng, Esq.

    The September Foreign Exchange Notice Increases Difficulties for Chinese EB-5 Investors

    by


    China employs firm currency regulations that are designed to prevent large amounts of currency moving out of the country. Each Chinese citizen can only exchange an equivalent amount of USD 50,000 within one calendar year,[1] while Chinese companies can exchange yuan for foreign currencies only for approved business purposes, such as paying for imports or approved foreign investments.

    Earlier (May) this year, the news coming out of Beijing[2] was optimistic. A statement from the State Council, China’s cabinet, was expected, which would ease restrictions for overseas investments. This would allow individual Chinese and businesses to directly purchase stocks, bonds and real estate in foreign markets, thus removing limits on such transactions. However, following the devaluation of the yuan on August 11, 2015, rather than ease restrictions, the Chinese government has taken a stricter approach on its foreign exchange policy, making transfers more difficult for EB-5 investors.

    According to an insider, the Shanghai Branch of the State Administration of Foreign Exchange, issued an urgent notice on September 9, 2015 (hereinafter “September Foreign Exchange Notice”), requiring the banks to strengthen the supervision of foreign exchange transactions. Banks have been told to be on alert for individuals attempting to circumvent the quota management, for example remitting funds through the use of 10 friends. Banks are even allowed to reject the foreign exchange application if necessary.

    The following activities are considered suspicious activities by the Chinese government[3]:

    · Five or more individuals separately exchanging foreign currency on the same day, every other day, or in two or more consecutive days. Thereafter depositing the RMB capital into the RMB account of a single individual or institution;

    · An individual withdrawing five times or more foreign currency approximately equivalent to USD10,000, from the same foreign exchange savings account within seven days;

    · Five or more direct relatives of the same individual separately purchasing foreign exchange within the annual quota and then transferring the foreign exchange to the foreign exchange savings account of the individual.

    Pursuant to the September Foreign Exchange Notice, banks are now required to follow these guidelines: (i) enhanced auditing standards are being introduced for temporary, especially non-local clients; to prevent high-frequency foreign exchanges; (ii) in the event of a large foreign exchange, banks will check contracts and invoices to verify the transaction; (iii) The introduction of the “Watch List”. Here, banks are required to audit split settlements every two months. If five or more different individuals separately settle foreign exchange in the total amount of more than $200,000, on a single day, every other day or in two or more consecutive days, for the first 90 trading days, and further deposit the RMB capital into or remit it to the RMB account of a same individual or institution, the individuals shall be included in the watch list.

    “Banks [that] fail to spot those on the list or turn a blind eye on it will be published and fined by the regulator as well”. As cited by an official at Citic Bank.

    The stringent measure outlined in the September Foreign Exchange Notice may be a result of the decline in China’s foreign-currency reserves. The People’s Bank of China, commented on September 7, 2015, that its reserves had fallen by USD93.9 billion at the end of August, the biggest-ever monthly drop in dollar terms and the largest in percentage terms since May 2012. The drop in foreign reserves is primarily due to China’s recent devaluation of the yuan, which resulted in the acceleration of exodus of Chinese investors’ money.

    Undoubtedly, these strict restrictions on foreign exchange, will create headaches for the Chinese EB-5 Investors, attempting to wire the funds out of Mainland China.



    [1] Chapter 1, Article 2 of Detailed Rules for the Implementation of the Measures for the Administration of Individual Foreign Exchange. Please refer to www.fdi.gov.cn/1800000121_39_3577_0_7.html for the full context of the regulation.

    [2]http://www.wsj.com/articles/china-to...nts-1432841526

    [3] Notice of the State Administration of Foreign Exchange on Further Improving the Administration of the Business of Individual Foreign Exchange Settlement and Sale (No.56 [2009] of the State Administration of Foreign Exchange). For the full context of the notice, please refer to http://www.safe.gov.cn/wps/

    Reprinted with permission.


    About The Author

    Mona Shah, Esq. Mona Shah, Esq. has over 17 years of legal experience, with more than 13 years concentrated in U.S. immigration and family law and litigation. Mona’s extensive knowledge of all facets of U.S. immigration law, and her practical expertise ranges from specialist business petitions to complicated, multi-issue deportation and removal litigation. Her firm, Mona Shah and Associates, represents individual, high profile and corporate clients from all over the world. Mona is highly proficient and experienced in EB-5 law and practice, and is the author of a published book for investors on the EB-5 laws and procedures (EB5 for the Chinese Investor, available on Amazon). The second updated edition is scheduled to be published shortly. Mona is voted Top 25 EB-5 Attorneys by eb5investors.com and Top 10 EB-5 Attorneys by eb5info.com. She is also an adjunct professor at the Zicklin School of Business at Baruch University

    Hui Zeng, ESQ, is focused primarily on business immigration and corporate law. Hui works on the firm's high profiled business immigration and corporate cases, representing clients with a diverse set of legal issues and concerns. Hui is also experienced in EB-5, having drafted numerous source of funds petitions. She has built a solid set of skills in identifying important issues and delivering positive messages to USCIS' reviewing officers through her composition of the documents. Hui is familiar with various methods of proving EB5 investors' source of funds and can guide the clients accordingly.


    The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.

      Posting comments is disabled.

    Categories

    Collapse

    article_tags

    Collapse

    There are no tags yet.

    Latest Articles

    Collapse

    • Article: The EB-5 Immigration Program and the Investors Process By H. Ronald Klasko
      ImmigrationDaily

      If you are having difficulty viewing this document please click here.

      08-20-2018, 08:15 AM
    • Article: Immigration Judges’ Union Fights for Judicial Independence By Karolina Walters
      ImmigrationDaily
      Immigration Judges’ Union Fights for Judicial Independence by Karolina Walters The National Association of Immigration Judges (NAIJ), the union that represents the nation’s immigration judges, is challenging the government’s decision to remove an immigration judge from a well-known case and replace him with a judge who immediately ordered the immigrant in the case deported. NAIJ’s grievance addresses the treatment of one immigration judge, but its resolution will have implications for judicial independence throughout the entire immigration court system. The grievance was filed on behalf of Philadelphia-based immigration judge Steven A. Morley, who was presiding over the case of Mr. Reynaldo Castro-Tum. Castro-Tum’s case rose to national importance earlier this year when Attorney General Jeff Sessions chose to refer the case to himself to reconsider the Board of Immigration Appeals’ previous decision in the case. In reconsidering the decision, Sessions effectively eliminated judges’ use of administrative closure, a docket management tool. Sessions sent Castro-Tum’s case back to Judge Morley, noting that the immigration court order Castro-Tum removed if he did not appear at his next hearing. Castro-Tum did not appear at the next hearing. However, Judge Morley continued the case to resolve whether Castro-Tum received adequate notice of the hearing. Due process requires, at a minimum, that an individual be given notice of proceedings and an opportunity to be heard by a judge. But before the next hearing could take place, the Executive Office for Immigration Review (EOIR) replaced Judge Morley with an Assistant Chief Immigration Judge who ordered Castro-Tum removed when he did not appear at court again. In their grievance, NAIJ asserts that the decision to remove Judge Morley from Castro-Tum’s case and reassign many other cases from his docket resulted in unacceptable interference with judicial independence. The grievance specifically claims that EOIR’s actions violate immigration judges’ authority under the regulations to exerci...
      08-17-2018, 11:12 AM
    • Article: Indirect Refoulement: Why the US Cannot Create a Safe Third Country Agreement with Mexico By Sophia Genovese
      ImmigrationDaily
      Indirect Refoulement: Why the US Cannot Create a Safe Third Country Agreement with Mexico by Sophia Genovese The Trump Administration is seeking to create and implement a safe third country agreement with Mexico . Under this agreement, asylum seekers arriving at the US border who have travelled through Mexico would be denied the ability to file their asylum claims in the US. Such an agreement would trample on the rights of asylum-seekers, violating both international and US asylum law. In particular, the US would be violating the international principle of non-refoulement , which provides that no State “shall expel or return (“refouler”) a refugee in any manner whatsoever to the frontiers of territories where his [or her] life or freedom would be threatened,” where Mexico has a proven track record of being anything but safe for asylum seekers . The US has also codified Article 33(1) of the Refugee Convention into Section 208(a)(2)(A) of the Immigration and Nationality Act (INA) which provides that it will not return an asylum seeker to his or her country of origin, but may, at the determination of the Attorney General, remove the asylum seeker to a “safe third country… where the [asylum seeker] would have access to a full and fair procedure for determining a claim to asylum or equivalent temporary protection.” Although Mexican officials have not yet indicated whether they would sign a safe third country agreement with the US, asylum advocates should proactively seek to prevent such a devastating policy with a country that lacks adequate asylum protections. As reported by Human Rights First and Amnesty International , 75 percent of asylum seekers apprehended and detained by the National Institute of Migration (INM), the Mexican immigration enforcement agency, were not informed of their right to seek asylum. Even if asylum seekers are able to make their claims, only 30% of the asylum proceedings are ever concluded , and even fewer are granted, leaving many bona fide asylum seekers stranded without a resolution. The treatment of unaccompanied minors’ asylum claims in Mexico are even more dismal. Of the 35,000 minors apprehended by the INM in the first half of 2016, only 138 were able to apply for asylum , of which only 77 were granted protection. Beyond the failing asylum system in Mexico, asylum seekers are also in extreme danger of kidnapping, murder, rape, trafficking, and other crimes by INM officers and civilians. A safe third country agreement with Mexico would violate the United States’ international obligations under the 1967 Optional Protocol to the Refugee Convention, to which we are a signatory, which adopts by incorporation the obligations outlined in the 1951 Refugee Convention, to which the US is not a signatory. Take the example of an asylum-seeker, Mrs. H, who is fleeing politically-motivated violence in Honduras. Her husband, Mr. H, was a vocal political activist who opposed the National Party and members of the Honduran government. Mr. H began to receive death threats due to his political beliefs and reported such threats to the authorities. The authorities, however, di...
      08-16-2018, 02:32 PM
    • Article: Flawed Statistics Undermine USCIS/ICE/SEVP’s Restriction of D/S for Unlawful Presence By Eugene Goldstein, Esq.
      ImmigrationDaily

      Flawed Statistics Undermine USCIS/ICE/SEVP’s Restriction of D/S for Unlawful Presence

      by


      On August 9, 2018 USCIS published a “Policy Memorandum” restricting the 20-year-old calculation of Duration of Status (D/S) for F-1, J-1 and M-1 entrants (and their derivative families). https://www.uscis.gov/sites/default/...immigrants.pdf

      USCIS also published an announcement (hereinafter “announcement”) “USCIS Issues Revised Guidance on Unlawful Presence for Students and Exchange Visitors https://www.uscis.gov/news/uscis-iss...hange-visitors , and a general discussion “Unlawful Presence and Bars to Admissibility” ...

      08-15-2018, 12:57 PM
    • Article: Update On Express Entry Immigration To Canada By Edward C. Corrigan and Selvin Mejia
      ImmigrationDaily
      Update On Express Entry Immigration To Canada by Edward C. Corrigan and Selvin Mejia On January 1, 2015 the Federal Conservatives introduced significant changes to Canada’s economic immigration program. Formerly called the Skilled Worker program the new program was re-branded as Express Entry which included Skilled Workers, the Federal Skilled Trades program, and the In-Canada Experience Program. Canada modelled its revamped economic immigration program on New Zealand’s. There is also an Atlantic Immigration program. In addition there is a separate Live-In Caregiver program where individuals can apply for Permanent Residence after two years employment in this category. EXPRESS ENTRY The initial object of the changes was to create a list of Applicants where the Federal Government could select the best and the brightest from the list of Applicants. The Express Entry was supposed have applicants who had an approved Labour Market Impact Assessment (LMIA) and a valid job offer from an approved Canadian Employer. Under the Comprehensive Ranking System (CRS) candidates were award 600 points for having an approved job offer. Applicants would have achieved a point score of around 1,000 with the 600 points for having a valid offer of employment under the CRS. The provinces in Canada were also allowed to select Applicants according to their economic needs and these applicants that were selected through the respective provincial nominee programs by a province were awarded 600 points to be added to their score. Ontario also has a program where graduates from an Ontario University with a Master’s or who were in a PhD. program would be approved and awarded 600 points which virtually assured that they would be approved and provided with an invitation to apply. There is a quota that governs this graduate program. LABOUR MARKET IMPACT ASSESSMENTS Things did not go according to plan with Federal Express Entry. Very few Applicants were able to attai...
      08-14-2018, 12:50 PM
    • Article: USCIS Finalizes Unlawful Presence Policy Putting F, J and M Nonimmigrants In Great Jeopardy By Cyrus D. Mehta
      ImmigrationDaily
      USCIS Finalizes Unlawful Presence Policy Putting F, J and M Nonimmigrants In Great Jeopardy by Cyrus D. Mehta The USCIS finalized its unlawful presence policy for F, J and M nonimmigrants on August 9, 2018. The final policy makes no significant changes from the draft policy of May 10, 2018. My earlier blog noted the flaws in the draft policy, which persist in the final policy. The final policy incorrectly breaks down the distinction between violating status and being unlawfully present in the US. As of August 9, 2018, F, J and M nonimmigrants who have failed to maintain nonimmigrant status will start accruing unlawful presence. Individuals who have accrued more than 180 days of unlawful presence during a single stay, and then depart, may be subject to 3-year or 10-year bars to admission, depending on how much unlawful presence they accrued before they departed the United States. See INA § 212(a)(9)(B)(i)(I) & (II) . Individuals who have accrued a total period of more than one year of unlawful presence, whether in a single stay or during multiple stays in the United States, and who then reenter or attempt to reenter the United States without being admitted or paroled, are permanently inadmissible. See INA § 212(a)(9)(C)(i)(1). Prior to August 9, 2018, foreign students (F nonimmigrants) and exchange visitors (J nonimmigrants) who were admitted for, or present in the United States in, Duration of Status started accruing unlawful presence on the day after USCIS formally found a nonimmigrant status violation while adjudicating a request for another immigrant benefit or on the day after an immigration judge ordered the applicant excluded, deported, or removed (whether or not the decision was appealed), whichever came first. F and J nonimmigrants, and foreign vocational students (M nonimmigrants), who were admitted until a specific date certain accrued unlawful presence on the day after their Form I-94 expired, on the day after USCIS formally found a nonimmigrant status violation while adjudicating a request for another immigration benefit, or on the day after an immigration judge ordered the applicant excluded, deported, or removed (whether or not the decision was appealed), whichever came first. This will no longer be the case. Under the new policy effective August 9, 2018, any status violation will start the accrual of unlawful presence. The nonimmigrant will not be provided with any formal notice of a status violation, and any violation from the past that has been discovered would have already started the accrual of unlawful presence. According to the pol...
      08-14-2018, 10:51 AM
    Working...
    X