EB-5 Policy Cautions--Part III: Commitment toInvest Rather Than Mere Intent to Invest orSpeculation About InvestingBy Joseph P. Whalen (June 3, 2013)The May 30, 2013, EB-5 Policy memo states as follows:“It is important to note that at this preliminary Form I-526 filing stage, theimmigrant investor must demonstrate his or her commitment to investthe capital but need not establish that the required capital already has beeninvested; it is sufficient if the immigrant investor demonstrates that he or she isactively in the process of investing the required capital. However, evidence of amere intent to invest or of prospective investment arrangementsentailing no present commitment will not suffice. 8 C.F.R. § 204.6(j)(2); seeMatter of Ho, 22 I&N Dec. at 210. Similarly, at this preliminary stage theimmigrant investor need not establish that the required jobs already have beencreated; it is sufficient if the immigrant investor demonstrates in a business planthat it is more likely than not that the required jobs will be created. 8 C.F.R. §204.6(j); 8 C.F.R. § 204.6(m).” At p. 21The above stated requirement is not new. Prior to the codification of theemployment-based fifth preference immigrant visa (EB-5) viaIMMACT90 (Immigration Act of 1990) and subsequent amendments,this concept already existed for an earlier incarnation of the “investorvisa”. That prior version was really a “labor certification exemption” for“other qualified immigrants”. See 8 CFR § 212.8(b)(4), promulgated at31 FR 10021, July 23, 1966; 31 FR 10355, Aug. 22, 1966, and as amendedat 34 FR 5326, Mar. 18, 1969.The original version of 8 CFR § 212.8 stated, in pertinent part:(b) Aliens not required to obtain labor certifications. The following members arenot considered to be within the purview of section 212(a)(14) of the Act and donot require a labor certification: ....... (4) an alien who will engage in a commercialor agricultural enterprise in which he had invested or is actively in the process ofinvesting a substantial amount of capital.In addition, earlier Precedent Decisions already addressed this situationand took the same position on the subject matter.Matter of Shon Ning Lee, 15 I&N Dec. 439 (BIA 1975), Decided by theBoard August 26, 1975, aff’d, Shon Ning Lee v. INS, 576 F.2d 1380 (9thCir. 1978) or No. 77-2681 (June 13, 1978).
From the Ninth Circuit:“The major issue is whether the motion to reopen is a new application or arenewal of a previously denied application. If it is a renewal, as Lee argues, a visacould be available to Lee. If the former, the BIA was correct in finding Leeineligible for resident status. We have concluded that Lees motion to reopen wasa new application.” At ¶ 2“On April 3, 1973, Lee filed with the District Director an application forpermanent resident status. A previous application, not relevant here, had alreadybeen denied. In this application, Lee sought admission as anonpreference immigrant who was exempted from the laborcertification requirements of 8 U.S.C. § 1182(a)(14) on the groundthat she was an alien investor within the purview of 8 C.F.R. § 212.8(b)(4).The District Director found that Lee was not entitled to the claimedexemption because she had not invested in and was not actively inthe process of investing in a commercial or agricultural enterprise. 8 C.F.R. §212.8(b)(4). He denied the application.” At ¶ 6 [Emphasis added.]“At oral argument before the BIA in December 1974, Lees counsel stated thatLee owned no business at the time of argument and that no business relating toLee was identifiable. Nine months after argument, in August 1975, the BIAaffirmed the denial. During this nine-month period, visas for Chinesenonpreference immigrants apparently became available on three occasions.” At ¶8Lee claimed that she was “looking for a suitable investment” and by thatmere assertion she should be viewed as “actively in the process ofinvesting”. She claimed that on the advice of her attorney she should onlycommit to an investment after obtaining her LPR status. Neither theINS, BIA, nor 9th Circuit agreed with her “attorney’s advice” or thatparticular interpretation of an investor’s visa eligibility requirements.Her later allegation that she had actually invested in November, a monthprior to the last BIA hearing (which heard oral argument from herso-called attorney in December) and was therefore entitled to recapturean earlier priority date was found unacceptable (and dubious). The Court(and everyone with half a brain) questioned why that information, if itwas true, would conceivably have been withheld from the last BIA hearingin December 1974.“On February 25, 1976, the BIA received the motion to reopen in question here.The motion attempts to demonstrate once more Lees entitlement to permanentresident status as an alien investor and shows that Lee had actually purchased a
business in November, 1974, one month before the oral argument mentionedabove. The BIA treated the motion as a new application for permanentresident status with a filing date of February 25, 1976. Under theterms of 8 U.S.C. § 1255, the BIA found that Lee was not eligible forpermanent resident status because a visa was not available to her onthis filing date.” Id. at ¶ 9 [Emphasis added.]BIA Decision at: http://www.justice.gov/eoir/vll/intdec/vol15/2424.pdf9th Circuit Decision at: http://openjurist.org/576/f2d/1380____________________________________________________Matter of Khan, 16 I&N Dec. 138 (BIA 1977), Decided by the BoardMarch 15, 1977. The respondent moved to reopen his deportation order inorder to apply for adjustment as an investor.At that time, he had demonstrated that he had invested $8,600.00 whichwas less than the required minimum of $10,000.00. He argued that hewas “actively in the process of investing” additional funds and “should begiven a reasonable period of time to complete the investment” at p. 140.He could not show any evidence of any future commitment inconnection with that claim. He presented no “copies of contractsshowing a legal commitment to make certain expenditures, or similaritems” at p. 141. The burden of proof rests on the alien and the evidencemust be unambiguous, any doubts will be resolved against the “investor”,Cf. Shaw and Ahmand.The IJ’s DENIAL was upheld and the Appeal was DISMISSED.Above found at: http://www.justice.gov/eoir/vll/intdec/vol16/2565.pdf____________________________________________________Matter of Lee, 15 I&N Dec. 408 (BIA 1975), Decided by the Board July28, 1975.Assuming arguendo that a promissory note could be counted, this onefailed miserably due to its conditional basis. Lee only invested $5,000.00in a restaurant and put up a “promissory note” for an additional$5,000.00 but only payable under the condition that he gainsadjustment of status first.
In addition, he was employed there as a cook. His employment placedhim in direct competition with American labor and was disqualifying forany “investor” at that time. This was an obvious attempt to circumventthe labor certification process and use the “investment” as a conduit forhis own entrance into the job market improperly and without anunattainable labor certification.The IJ’s DENIAL was upheld and the Appeal was DISMISSED.Above found at: http://www.justice.gov/eoir/vll/intdec/vol15/2415.pdf__________________________________________________These are but a few of the older, pre-EB-5, Precedents that simply go toreinforce what was made more substantial via the EB-5 regulations andthe later (1998) EB-5 Precedents.In sum, the clarifications in the May 30, 2013, EB-5 Policy Memo needfurther clarifications themselves. The latest blurb(s) from a PolicyMemo need(s) to be considered along with (not instead of) the existingbody of administrative and judicial legal interpretations as well as thecontrolling statute(s); and implementing regulations.