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  • Article: EB-5: What to Expect in the Coming Months by H. Ronald Klasko

    EB-5: What to Expect in the Coming Months

    by H. Ronald Klasko

    As discussed in my last blog, the pace of I-924 adjudications for new regional centers has accelerated substantially in the last few months.  Over 40 regional centers have already been approved in 2013.  Despite that, because of the huge backlog created by the lack of adjudications in 2012, many applications still remain pending beyond one year.

    From my perspective, the long-term future looks brighter, although the short to midterm future has a more cloudy forecast.

    Things are clearly changing, hopefully for the better.  The transition of EB-5 adjudications from California to Washington is in progress.  The new facility housing the EB-5 unit in Washington is open.  Adjudicators of I-924s and EB-5 projects will be handled not by traditional CIS adjudicators but rather by newly hired economists.  Some of the economists have already been hired, and some are being actively recruited.  The DC unit, staffed by GS15 economists (very high level government employees) will first handle I-924s, then I-526s and then I-829s.  For some period of time, the DC unit and the California Service Center EB-5 adjudicators will work concurrently.  Eventually, the California Service Center will be phased out, and all of the applications will be handled by the EB-5 unit in Washington.  This unit will be headed by Dan Renaud, Acting EB-5 Program Chief, and Robert Cox, the Acting EB-5 Deputy Chief.

    The new EB-5 office in Washington will be staffed solely or mostly by new hires.  The good news is that adjudications in the new office will be handled by economists rather than USCIS adjudicators and generally higher level economists than those previously hired into the EB-5 program.  The bad news is that these new hires will be new to the EB-5 program, will have to be trained and likely will take some time to be completely up to speed.  In my experience, new hires tend to be slower in making decisions and often wary to issue approvals until they are secure in their positions.  Hopefully, this either will not occur or will be a short transition period.  Also, new economists may have new positions on economic methodologies, which could be good or bad news.

    The decision to run the new unit in Washington and the existing unit in California concurrently appears to be a wise one.  It is illogical to ask the new unit to take a backlog of cases that have been pending 12 to 18 months and somehow expect them to magically bring the backlog down to 4 to 6 months.  Hopefully, running 2 units concurrently will result in the backlogs being at far more manageable levels before the Washington unit takes over completely.

    Several new initiatives will hopefully help with the backlog.  I will name a few.

    Electronic filings are expected to be implemented as soon as this summer on a non-mandatory basis.  The key to the success of this program will be enabling regional centers and project developers to provide one set of documents that are used for the petitions of all of the investors in the project.

    Hopefully, the regional center amendment process will be streamlined.  Presently, regional center amendments often take longer to adjudicate than new regional center applications.  I expect that some guidance will be issued that will limit when amendments will be required.

    Readjudicating decisions that have already been made has been another problem area.  USCIS is serious about its deference policy and has stated that in any situation where deference will not be applied, the project developer or regional center will be provided the opportunity to appear in person to discuss a decision.

    Another area of possible streamlined adjudications involves hypothetical projects.  USCIS has been requesting levels of detail on hypothetical projects that cannot be provided if a project is really hypothetical.  Look for this to change in the near future.

    Another new development expected within the next few months is the publication of the universal EB-5 memo that would incorporate all of the previous EB-5 memos in one document.  A previous blog discussed the latest draft of the EB-5 memo.  Some changes are expected from that draft before the final version is published.  Do not be surprised to see the following additions:

    • Clarification that not every criterion mentioned in Matter of Ho must be in every regional center project business plan.
    • Clarification that EB-5 capital can replace bridge financing either if the deal documents show that EB-5 money was anticipated from the beginning or if capital that was originally expected to be available to replace the bridge financing became unavailable and EB-5 capital is needed to replace the bridge financing.
    • More speculatively, there is at least some hope that the final memo will present an adjudication standard that will clarify the USCIS policies relating to NAICS codes and hopefully alleviate the untenable adjudications that create delays or denials in projects that will attract large sums of money and create large numbers of jobs because of issues regarding industry codes.

    I expect it to be an interesting next few months on the EB-5 front.  Hopefully, most of the changes will be for the better. Originally Published on the Klasko Immigration and Nationality Law Blog on May 8, 2013. Reprinted with Permission.


    About The Author

    H. Ronald Klasko is recognized by businesses, universities, hospitals, scholars, investors and other lawyers as one of the country’s leading immigration lawyers. A founding member of Klasko, Rulon, Stock & Seltzer, LLP and its Managing Partner, he has practiced immigration law exclusively over three decades. Under his leadership, the firm was chosen with five other firms by Chambers Global in 2006, 2007, 2008 and 2009 as the top U.S. business, hospital and university immigration law firm. Ron, himself, was named as the world’s most respected corporate immigration lawyer (The International Who’s Who of Business Lawyers 2007 and 2008) and one of the country’s top immigration lawyers by clients and other immigration lawyers who said he is “revered for coming up with unique arguments that can save a client” (Chambers Global). A former National President of the American Immigration Lawyers Association (AILA), Ron served as General Counsel of that organization for three Presidents and has been a member of its Board of Governors since 1980. He has served as National Chair of AILA’s U.S. Department of Labor Liaison Committee and Business Immigration Committee, and he served as National Chair of that organization’s INS General Counsel Liaison Committee, Department of Labor Liaison Committee, and the National Task Forces on Labor Certifications, H-1 visas, L-1 visas and Employer Sanctions. He presently serves as Chair of the EB-5 Committee.


    The opinions expressed in this article are those of the author(s) alone and should not be imputed to ILW.COM.
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