Predictions for the Year of the Horse: 5 Reasons Why the EB-5 Program Will Flourish in 2014
This year, the EB-5 Immigrant Visa Category will be 24 years old. 2014 is also the Year of the Horse on the Chinese Zodiac, and the spirit of the horse embodies unremitting efforts to improve. Over the past two years, the EB-5 Program has undergone tremendous change, culminating in the issuance of the May 30, 2013 U.S. Citizenship and Immigration Services (“USCIS”) memorandum. Like the horse, this long-awaited guidance, which provides clarity on many of the most controversial and problematic issues to have plagued EB-5 adjudications in recent history, is energetic, bright, mostly warm-hearted, intelligent and able.
The following are my predictions for how we can expect EB-5 adjudications, policies and processes to manifest these horsey characteristics in 2014:
Prediction #1 – Energetic
USCIS has significantly changed how the EB-5 Program is managed, and these changes will infuse a new energy into the Program sufficient to reduce the lengthy adjudication lines.
I predict we will see adjudication times reduced to six months for most regional center I-526 applications, and as little as three months for direct investment cases. The many I-526 approvals received by our office over the past few weeks were generally processed within six to seven months.
USCIS has struggled to keep processing times reasonable in the face of the Program’s exponential growth in recent years. In Fiscal Year (“FY”) 2010, fewer than 2,000 investor petitions were filed. Only two years later, there have been more than 6,000 petitions filed in both FY2012 and FY 2013.
The issues resulting from this explosive growth have been challenging for USCIS as it sought to acquire the expertise and resources necessary to adjudicate these cases. It is assumed there are more than 7,000 cases presently in the pipeline.
This week most of the EB-5 Program will move to Washington, DC USCIS Headquarters. Only the I-829 petitions to remove conditions will continue to be adjudicated at the California Service Center (“CSC”). Many of the EB-5 Adjudicating Officers are relocating from the CSC to Headquarters to continue adjudicating cases, although the vast majority is new officers who have been trained at the CSC.
Additionally, the EB-5 Program has been transferred from Service Center Operations to Field Operations. Dan Renaud, the Former Director of the Vermont Service Center, is now the Deputy Chief of Field Operations. Nicholas Colucci has taken over as Chief of the EB-5 Program.
The creation and staffing of the Immigrant Investor Program Office at Headquarters in Washington, DC will prove to be a positive step forward. Opened in May 2013, the office already has over 60 full-time employees, including more than 20 economists with diverse backgrounds in academia, public service and the private sector. The staff includes experts in the fields of business, immigration, fraud detection and national security.
Prediction #2 – Bright
The comprehensive May 30, 2013 EB-5 adjudications guidance memorandum, particularly with the adoption of “deference” as a policy pursuant to which previous agency decisions on the business aspects of EB-5 adjudications can be relied upon by Regional Centers, projects and investors, is a sign of substantial progress within USCIS, signaling a future of enhanced predictability in processing times and policy interpretations. The memo clarified and consolidated many outstanding policy issues into one document. While not perfect, the memo comprehensively incorporates the statute, regulation, case law and administrative interpretations, and sheds valuable light on many key areas. USCIS has indicated it will issue new regulations, but expect these regulations to take many months before being published.
Prediction #3 – Warm-hearted
While many I-924 Regional Center applications had languished for two years or more, there has been huge progress on the backlog and I-924 adjudications can be completed within as little as six to 10 months. USCIS is now addressing the backlog of over 7,000 I-526 investor petitions. While this may result in huge quota problems, especially for Chinese investors (see attached article), these petitions represent over $3.5 billion in much needed EB-5 capital and will help create over 70,000 American jobs.
Prediction #4 – Intelligent
USCIS is also moving forward with transitioning EB-5 adjudications to the USCIS Electronic Immigration System (“ELIS”). Perhaps the most important efficiency in the ELIS system is the ability for USCIS to initiate inter-agency reviews of documents without having to circulate entire — or multiple — paper files to different federal agency offices. These should serve to further accelerate adjudications.
Prediction #5 – Able
While the dreaded request for evidence (“RFE”) remains the mainstay of EB-5 practice, the USCIS has also implemented more efficient communication systems to address issues that arise during the adjudication process. Instead of exclusively issuing requests for evidence that require paper-based communications, USCIS now embraces direct communication through emails and in-person or telephonic interviews in a far more efficient and effective manner. The USCIS EB-5 Decision Board has been very helpful in resolving cases and has helped share USCIS thinking on key issues.
The Year of the Horse will therefore see a surge of interest as adjudications become more efficient, but this will likely result in a wait line for Chinese applicants in July or August 2014. In September 2014, the Chinese EB-5 numbers may backlog further, or even become unavailable until October 1, 2014, when the new 10,000 visa quota becomes available at which time the line will start moving again. We can only hope Congress acts to extend the Regional Center program which expires in September 2015, and enacts the proposal passed the Senate last year that removed spouse and child derivatives from the visa quota count. This would effectively raise the number of EB-5 visas to almost 30,000.
Bernard Wolfsdorf is the past President of AILA and Managing Partner of the top-rated Wolfsdorf Immigration Law Group with offices in Los Angeles and New York. With 17 lawyers and about 45 professionals, the firm is known worldwide for its excellence in providing top-quality global immigration representation. The Wolfsdorf Immigration Law Group has been described by Chambers USA as "a force to be reckoned with."