By Marta Lillo
The EB-5 agenda in 2024 will be dominated by a range of crucial issues and topics, according to immigration attorneys.
Among pressing matters, there’s the need for the United States Citizenship and Immigration Services (USCIS) to improve its application processing times. It is an issue that has been a source of frustration for applicants, attorneys, and regional centers alike since the EB-5 Reform and Integrity Act of 2022 (RIA). There’s growing consensus that urgent action is needed to address the backlog of cases.
Additionally, attorneys predict that there will be a continued focus on other issues such as EB-5 data requests to the USCIS through Freedom of Information Act (FOA) submissions, uncertainty about the 2-year sustainment period and redeployment fund safety, and the termination of EB-5 players that do not meet the legal requirements, from regional centers (RC) to New Commercial Enterprises (NCE) or Job Creating Entities (JCE).
USCIS must step up to reduce EB-5 application processing times
EB-5 attorneys and investors are frustrated by the immigration agency’s processing delays, particularly for I-526 petitions filed before the changes introduced by RIA. These backlogs and delays have increased litigation since then, especially mandamus claims.
Belma Demirovic Chinchoy, founding partner at Iyer Demirovic Chinchoy LLP, explains that although since RIA Form I-526E processing times have improved to 12 months or less, “EB-5 investors who filed prior to the EB-5 RIA continue to see processing times of 4+ years.”
Delayed response times impact investment plans and immigration goals, explains Isabella Getgey, program manager at the American Immigrant Investor Alliance (AIIA). “Ultimately, slow processing causes the most amount of harm to EB-5 investors, especially pre-RIA investors,” she says.
Getgey cautions that backlogs will increase if the USCIS’s Immigrant Investor Program Office (IPO), responsible for processing the EB-5 applications, fails to step up its game.
“The IPO needs resources, more trained and attentive adjudicators, a standardized balance between pre and post-RIA petition adjudication. Fiscal year 2024 will be the last year with any residual visa carryovers from the program lapse, the COVID pandemic, and the set-aside categories will be available. If USCIS does not make an effort to process and transfer as many I-526/526Es as possible before September, the visa backlogs will increase dramatically,” she adds.
Greg Sheehan from Behring Co. expects the IPO to improve efficiency when reviewing applications in 2024. “I’m looking forward to increased productivity from IPO across I-829, I-526, and I-526E. If I’m correct, we will see USCIS data reflect shorter processing times for pending adjudications. Those numbers were increased because of COVID-related budget issues and the program lapse [in 2021], so the reduction in wait time would naturally be gradual,” he says.
Also, despite advances that have reduced processing times for Form I-526E for investors who file their petitions after Mar. 15, 2022 for investments in rural projects, processing times for investors who filed before RIA remain uncertain. “Such discrepancy in processing is not lost on attorneys or EB-5 investors, and this issue is likely to receive significant attention in 2024,” says Chinchoy.
However, Ronald Klasko, EB-5 immigration attorney and managing partner of Klasko Immigration Law Partners, highlights a vital aspect of the USCIS’s capacity to process applications in time that the agency should focus on solving next year: visa quotes. “For how long do reserved visas remain current, thereby continuing to allow concurrent adjustment of status?” he questions.
Since RIA, the USCIS allocates 32% of the total visas provided to the EB-5 program for projects in Targeted Employment Areas (TEA), classified into three set-aside categories: rural areas, high unemployment areas, and infrastructure projects.
Investors from countries facing EB-5 processing backlogs, mainly China and India, are encouraged to take advantage of reserved visas by investing in projects that meet these categories. For rural projects, in particular, there’s priority processing also; however, attorneys are adamant that there needs to be clarity on the timeline the USCIS follows in this processing.
Many investors waiting for the IPO to review their I-526 for a set-aside category project also file form I-485 for adjustment of status. This concurrent filing benefits from the reserved visas’ current status (not backlogged or delayed processing); however, Klasko’s question addresses the USCIS’s capacity to stay up to date with their processing.
To Getgey, adjudication of pre- and post-RIA investor petitions is the most pressing issue. “However, the basis for this is FY2024 is a huge year for visa carryover and one of the last times we may see this many visas available to EB-5 applicants, regardless of set-aside or unreserved category. We need transparency from USCIS on how many investors are filing in each set-aside category and from which country, and reports on their progress in adjudicating the pre-existing inventories. If EB-5 investors don’t know how many others are waiting in line for a visa, how can they make a sound decision in their families’ best interest regarding both their immigration and investment? We believe that they can’t and won’t be able to until USCIS resolves both these issues.”
More FOIA requests expected for USCIS’s EB-5 data
Another issue that immigration attorneys expect will interest the EB-5 industry next year is increased FOIA requests for the USCIS to release data related to visa applications under this program.
Getgey affirms that “lack of data transparency from USCIS on I-526E petitions received and updates on their processing priorities creates uncertainty about potential future visa backlogs. We know there are certain set-aside categories that are likely to have excess demand, yet USCIS had given no indication of such until our last FOIA response. Without this data, it is impossible to estimate the demand for visas for these categories and the potential backlog which may arise in the future,” she says.
Sheehan also expects an increase in successful FOIA activity in 2024. “IPO is providing data as requested, and this seems to be the new normal for getting that data until they set up a public-facing system to relieve stress on the Court system.”
EB-5 sustainment period and fund redeployment continue generating uncertainty
Further clarity about the 2-year sustainment period recently confirmed by the USCIS and what to expect regarding redeployment fund safety are two issues that will also dominate the EB-5 industry in 2024.
In October, the agency updated information about the sustained period for the required investment timeframe for standalone and regional center EB-5 investors who want to remove residence conditions who filed Form I-526 on or after Mar. 15, 2022, as outlined in RIA.
The agency specified the two years start on the date the investor contributed the investment to a new commercial enterprise [NCE] and placed it at risk, including being made available to the JCE. “If invested more than two years before filing the I-526 or I-526E petition, the investment should generally still be maintained at the time the I-526 or I-526E is properly filed so we can appropriately evaluate eligibility,” the agency said.
Klasko questions whether the USCIS update could result in “shorter-term projects being offered? Do investors seek return of their investment money even though the regulation requiring sustainment during conditional residence has not been repealed? Does this issue get litigated?”
Meanwhile, regarding redeployment, under the rules of the EB-5 program, after the initial EB-5 investment is repaid, returned investment funds are generally redeployed into a new “at-risk” investment opportunity.
However, Getgey argues, “USCIS must further clarify the parameters of redeployment (rewritten to be more vague in the RIA), and we hope to work towards auxiliary relief for pre-RIA investors and the sustainment of their investment capital.”
More EB-5 application denials, litigation, and suspension of players
Other topics that immigration attorneys expect to deal with next year involve project and application denials, increased litigation against the USCIS, and the suspension of key players in the EB-5 process.
Chinchoy cautions that EB-5 investors should expect more I-526 and I-829 denials “likely to come to light due to EB-5 projects that were not implemented or where fraud and embezzlement were present. We’ve seen several project-wide I-829 denials (I-829 petitions pending since 2018/2019) this year already, and I expect that more such denials will come in 2024.”
The attorney also states that an increase in legal claims involving applications is to be expected in 2024. “There is limited precedent in immigration courts for EB-5 investors, and 2024 is likely to see new developments for EB-5 investors in immigration courts. Investors need to get up to speed as to what’s going on with their projects and secure proper, impartial immigration counsel to guide them through the complicated post-permanent LPR [Lawful Permanent Resident] denial EB-5 process,” she adds.
In addition, Klasko affirms that the industry needs clarity regarding the steps the USCIS will take when dealing with regional centers, NCEs, and JCEs that don’t meet legal requirements. “Does USCIS seek to terminate many regional centers that do not intend to do business under the RIA, and what is the impact on investors? Does USCIS agree that this is not a material change for investors?” he questions.
The same need for information applies when an NCE or JCE is suspended or debarred. “Does USCIS implement an NCE/JCE debarment procedure, thereby enabling good faith investors in failed projects to obtain CPR/LPR based upon some investment dollars going to other job-creating projects? If not, does the issue get litigated?”
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