Material Change Prohibition For Investors Dates At Least To 1977, Not 1998

by Joseph Whalen

Little known to EB-5 practitioner today, the concept of an "investor visa" dates to 1966, through a regulatory interpretation of an obscure reference in the 1965 Act. The former "Special Immigrant" Nonquota/Nonpreference Visa was issued pursuant to former INA § 101(a)(27) [8 USC § 1101(a)(27)] as a Regulatorily Defined Labor Certification Exemption for an "Investor" as an Interpretation of the "Other Qualified Immigrant" found in former INA § 203(a)(8) [8 USC § 1153(a)(8)] (1965). Legacy INS promulgated 8 CFR § 212.8(b)(4) in the Federal Register in 1966. This immigration benefit first appeared in the Code of Federal Regulation in 1967. A preference visa for entrepreneurs/investors was made statutory by Congress in 1990, via IMMACT90 at INA § 203(b)(5) as employment-based 5th preference: EB-5.

Matter of Heidari, 16 I&N Dec. 203 (BIA 1977) was Decided by the Board May 4, 1977. The Board DISMISSED this Motion to Reconsider a dismissal of a prior Motion to Reconsider an even earlier dismissal of a Motion to Reopen a deportation proceeding in order to allow filing for adjustment of status as an investor.

The respondent attempted to submit "newly created" evidence that only came into being after he had already been ordered deported and long after the original application was filed and the prior denials and dismissals. The Board refused to consider the brand new evidence under the prior regulation when a previous case was already denied under the prior regulation.

The revised immigrant investor classification under 8 CFR § 212.8(b)(4) "now" (in 1977) required an alien to invest $40,000 and be the principal manager of the business and employ at least one USC or LPR employee (excluding self, spouse, and children). The latest revision had become effective on Oct. 7, 1976, pursuant to its having been published in final form at 41 FR 37566, Sept. 7, 1976. The older version was "superseded" and the revision was applicable prospectively. The investment which was the underlying basis of the new investor application commenced after the effective date of the new regulation and was therefore subject to it.

Since, in this case, the evidence came into being after the effective date it had to be considered under the newer regulation. The Board found that the respondent had failed to make a prima facie showing of eligibility based on the operative regulation at the time that the evidence came into being. In other words, the BIA would not allow the major material change in the evidence to be considered in connection with the older regulation and also failed to meet the requirements of the newer regulation. The BIA made a policy decision in order to block attempts by unlawfully present aliens to drag things out in the hopes of "getting lucky".

Case found at:

Heidari represents the earlier prohibition against material change for investors but was not cited in Izummi, which instead was based upon Katigbak. Here is a deeper explanation of Izummi and Katigbak.

Matter of Izummi, 22 I&N Dec. 169 (BIA[1] 1998) holds, in pertinent part,

(3) A petitioner may not make material changes to his petition in an effort to make a deficient petition conform to Service requirements.

That same decision goes on to further explain the underlying requirement, thus: "A petitioner must establish eligibility at the time of filing[2]; a petition cannot be approved at a future date after the petitioner becomes eligible under a new set of facts. See Matter of Katigbak, 14 I&N Dec. 45, 49 (Comm. 1971), Therefore, a petitioner may not make material changes to a petition that has already been filed in an effort to make an apparently deficient petition conform to Service requirements."[emphasis added]

Matter of Katigbak, 14 I&N Dec. 45 (Reg, Comm., 1971) is often cited with regard to the general principle as restated in Izummi that one "must establish eligibility at the time of filing2" and as expanded upon in the 3rd prong of the 13 prong holding in Izummi, prohibiting the making of material changes subsequent to filing to remedy deficiencies. This is not to be confused with a mere matter of supplying further evidence in response to a request for evidence. The prohibition is against creating new circumstances for which no evidence previously existed in the absence of a material change made subsequent to filing. It should be remembered that both of these Precedent Decisions involve visa petitions that are tied inextricably to the filing date as the priority date for purposes of obtaining a place in a very long line for an immigrant visa. Such immigrant visa being among the visa preference categories for which there are numerical limitations and country of origin quotas.

The above principles apply to the I-526, which is a visa petition. The filing date of an approved I-526 will transform into a priority date for visa allocation and issuance purposes. To allow major material changes to happen after filing is unfair to those petitioners who wait until they get things in order before filing. The priority date has not been a real consideration for EB-5 until now. It is anticipated that there will be a cut-off date for China this year, probably in the summer.

The I-924 does NOT involve a priority date. It is wide open to material changes in order to make it approvable. The decision must be based upon the entire record as developed during the proceeding and prove to the satisfaction of USCIS that everything is in order at time of the final adjudication. This principle should also apply through the motions and appeal processes. Remember that a Dummy I-526 is actually an I-924 amendment that allows for the advance vetting of the prima facie evidence of eligibility as to the business plan, economic analysis, and transactional documents, exclusive of the individual investors' evidence of lawful source and path of funds. The best one can expect is a Provisional Approval contingent upon successful execution of the planned project/investment.

Knowing all of this, can the pundits and obfuscators who whine about the "big bad" USCIS being unfair really convince anyone that the material change prohibition as applied to an I-526 is so horrible? Ask the well-prepared I-526 petitioner who is in line behind the unprepared I-526 petitioner and let me know! Yes, I am being sarcastic on purpose.

That's my two-cents, for now.

1 Until recently the decision as noted on the EOIR website listed this as a BIA precedent and the actual I&N Decision credits it to what was then INS, Regional Commissioner, it was actually rendered by the AAO which incorrectly called itself AAU, of what was INS (now AAO of USCIS). AAU was renamed AAO in 1994, under Janet Reno. I got EOIR to fix this error online.

2 On April 17, 2007, 72 FR at 19105 added 8 CFR § 103.2 Applications, petitions, and other documents. (b)(1) Demonstrating eligibility at time of filing. An applicant or petitioner must establish that he or she is eligible for the requested benefit at the time of filing the application or petition. All required application or petition forms must be properly completed and filed with any initial evidence required by applicable regulations and/or the form's instructions. Any evidence submitted in connection with the application or petition is incorporated into and considered part of the relating application or petition.

About The Author

Joseph Whalen is not an attorney. He is a former government employee who is familiar with the INA. His education is in Anthroplogy with a concentration in Archaeology and has both a BA (from SUNY Buffalo) and an MA (from San Francisco State University) in Anthroplogogy. He previously worked as an Archaeologist for the U.S. Forest Service before becoming an Adjudicator with INS which became USCIS.

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