Considering the EB-5 Immigration Pilot Program

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Considering the EB-5 Immigration Pilot Program

  1. 1. Considering The EB-5 Immigration Pilot Program By Joseph P. Whalen (June 24, 2012)The words in the three sections below are straight from the statute 1 creating theEB-5 Immigration Pilot Program and the Regional Center. The style andformatting have been changed for specific emphasis. Discussion follows on theseand more points.The establishment of a regional center may be based on • general predictions, contained in the proposal, • concerning  the kinds of commercial enterprises that will receive capital from aliens,  the jobs that will be created directly or indirectly as a result of such capital investments, and  the other positive economic effects such capital investments will have...A regional center shall have • jurisdiction over  a limited geographic area,  which shall be • described in the proposal • and • consistent with the purpose of  concentrating pooled investment  in defined economic zones...The pilot program shall involve aregional center in the United States,designated by the Secretary of Homeland Securityon the basis of a general proposal, • for the promotion of  economic growth,  including increased export sales,  improved regional productivity, This is a critical “or” which supersedes  job creation, or the “and” in the INS/USCIS regulation.  increased domestic capital investment.1 8 USC § 1153 NOTE: Pilot Immigration Program Page 1 of 4
  2. 2. .1. What is the purpose of the EB-5 “Employment Creation Visa” [Pilot] Immigration Program?Congress created this “program” in reaction to the strict interpretation of the EB-5Visa requirements in the initial EB-5 regulations 2 promulgated by INS in 1991.Congress sought to loosen the requirements for eligibility for an EB-5 visa3 byallowing larger projects involving pooled investments to include “indirect jobs” ifthey also demonstrated additional broader regional (and/or national) positiveeconomic effects.2. What types of “other positive economic effects” did Congress specifically identify as contexts for “reasonable methodologies” or “EB-5 nexus”?Congress left the outer limits open-ended but did give clues about some of thegeneral “positive economic effects” that the “program” was expected to encourage.[USCIS] “...shall permit aliens admitted under the pilot program described in thissection to • establish reasonable methodologies for  determining the number of jobs created by the pilot program, including  such jobs which are estimated to have been created indirectly • through  revenues generated from increased exports,  improved regional productivity,  job creation, or This is a critical “or” which supersedes  increased domestic capital investment the “and” in the INS/USCIS regulation. • resulting from the pilot program.”.3. What is meant by “reasonable methodologies”?That is a question that has no single answer. The “reasonableness” of anyparticular methodology is fact dependent. The facts are case specific. Theapplication of the facts to the methodology is similar to the application of facts tolaw. The resolution of adjudication issues involving mixed questions of fact andlaw has long been recognized by the Courts, the BIA, and AAO as being a question2 http://www.slideshare.net/BigJoe5/original-eb5-fr-notice-19913 “What Was The Original INS View of Employment Creation Immigrants” by Joseph P.Whalen, in Immigration Daily (April 13, 2012). Page 2 of 4
  3. 3. of “judgment”. See generally Matter of V-K-, 24 I&N Dec. 500 (BIA 2008) ([any]finding [-of- fact] ... relates to whether the ultimate statutory requirement forestablishing eligibility ... has been met and is therefore a mixed question of lawand fact, or a question of judgment.)4. How should “reasonable methodologies” be examined? What is the standard of proof?USCIS has stated that the basic overall standard of proof in most adjudicationdecisions under the INA is the preponderance of the evidence standard exceptwhere “specific evidence” is otherwise required or a different standard of proof isstated in the statute or regulation. See Matter of Chawathe, 25 I. & N. Dec. 369(AAO 2010); Matter of E-M-, 20 I. & N. Dec. 77, 79-80 (Comm’r 1989); and U.S.v. Cardozo-Fonseca, 480 U.S. 421 (1987) (defining “more likely than not” as agreater than 50 percent probability of something occurring).5. What is the “quality level” expected of the evidence submitted in support of an EB-5 project?The evidence that an applicant/petitioner might present is highly subjective andvery fluid. By “fluid”, I mean that the evidence possibilities are dynamic andsubject to substantial change from project to project and over time. Most of theassumptions, potential outcomes, and data categories for an EB-5 project are drawnfrom the Business Plan. USCIS has referred to the Business Plan, in passing, as the“art of the possible”.In reality, the Business Plan (BP) is a piece of supporting evidence presented forconsideration and is a major source of information for the economist to use inpreparing an Economic Analysis (EA) as an additional piece of supportingevidence. The EA must go beyond mere “possibilities” but need not meet aparticular level of “probability”. Instead, the evidence must show that the BP andEA describe a project and job creation predictions that are “plausible”.Through an Opinion written by Justice David Souter, in Bell Atlantic Corp. v.Twombly, 550 U.S. 544, 555 (2007) 4, the U.S. Supreme Court effectivelyheightened the pleading requirement for Federal civil cases 5. The currentrequirement is for the plaintiffs to include enough facts in a complaint to make itplausible — not merely possible or conceivable — that they will be able to4 http://www.supremecourt.gov/opinions/06pdf/05-1126.pdf (Slip Opinion/Syllabus)5 http://www.slideshare.net/BigJoe5/among-other-things-part-ii-heightened-pleading-standard Page 3 of 4
  4. 4. prove facts to support their claims. That approach is highly valuable to the EB-5 Regional Center (RC) applicant and any non-RC or “stand-alone” I-526petitioner. Predictions of project success must go beyond the mere “wishfulthinking” which may be among mere possibilities. Plausibility6 should therefore besufficient while a demand for any particular level of probability is too much to ask.If the “credible” evidence which would be sufficient to demonstrate the plausibilityof success were static and unchanging then it could be easily spelled out andcodified in a list. However, given the vast number of possibilities as to the “kindsof commercial enterprises” that could serve as the basis for an EB-5 financedproject, it would be impractical to try to create any list. The best one could evenhope to list would be such overly broad categories, which may themselves changeover time and are subject to reinterpretations that they would be rather useless oreven counterproductive if misinterpreted and/or misapplied.6. How do the concepts discussed above relate to each other and influence the various EB-5 adjudication processes?The “standard of proof” for the adjudication of most USCIS Form I-924 (and I-526) is therefore relativistic in part because the preponderance of evidencestandard is ultimately a judgment call. The evidence possibilities are vast. The“reasonable methodologies” are unclear and variable even when based on solideconomic approaches. The judgment call required for Regional Center Designationand the finding-of-fact as to the “plausibility” of any EB-5 project and itsassociated predictions must be in keeping with the spirit of the statute, guided bythe regulations, tempered with wisdom, and made within the proper context.These determinations involve judgment rather than discretion. Sound judgment canbe nurtured but at least a kernel or spark must already exist. By comparison, invarious decisions involving an exercise of discretion, the BIA, AAO, the variouscourts, and agency policy-makers have created a variety of “laundry lists” of“factors” to be “balanced” in order to determine if the good or positive factorsoutweigh the negative or bad factors. The proper execution of this judgment issimilar to the qualitative analysis and evaluation or “Final Merits Determination”in the Ninth Circuit inspired Kazarian 7 analysis used in certain restrictive visapetition adjudications than to the anything else I can think of. The predictionsaccepted up-front will influence if not dictate the evidence required towards theend of the immigrant’s journey in the I-829 lifting of conditions adjudication.6 Plausibility and Credibility are almost equivalent in EB-5 Projects and Predictions.7 Kazarian v. USCIS, 596 F.3d 1115 (9th Cir. 2010) Page 4 of 4

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