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TECHNICAL CORRECTIONS ARE NOT MATERIAL CHANGES
By Joseph Patrick Whalen (Monday, February 15, 2016)
Page 1 of 5
In the EB-...
Page 2 of 5
A Regional Center (an RC) is quite different from a petitioner or beneficiary and
has a specific role to play ...
Page 3 of 5
However, before any EB-5-related services may be provided to any alien investors,
a Regional Center must be de...
Page 4 of 5
meeting the needs of the program and the EB-5 investors without whom Regional
Centers cannot exist! Once it is...
Page 5 of 5
The above policy statement places the first I-526 “petition” filed in a Regional
Center-affiliated pooled inve...
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TECHNICAL CORRECTIONS ARE NOT MATERIAL CHANGES

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TECHNICAL CORRECTIONS ARE NOT MATERIAL CHANGES

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TECHNICAL CORRECTIONS ARE NOT MATERIAL CHANGES

  1. 1. TECHNICAL CORRECTIONS ARE NOT MATERIAL CHANGES By Joseph Patrick Whalen (Monday, February 15, 2016) Page 1 of 5 In the EB-5 context, the term “material change” tends to strike terror in the hearts of all; or at least make them pause, squirm, cringe, be very-very afraid, or be extra cautious. The concept of prohibiting any “material change” in a visa petition sprang forth from Matter of Katigbak, 14 I&N Dec. 45 (R.C. 1971).1 The same prohibition was affirmatively adopted in the EB-5 context in Matter of Izummi, 22 I&N Dec.169 (AAO 1998).2 It must be remembered that Izummi, like Katigbak, dealt with a visa petition and so the concept of a “material change prohibition” needs to be limited to its proper place. In the EB-5 immigration process, the prohibition specifically applies to USCIS Form I-526, Immigrant Petition by Alien Entrepreneur.3 This is so because there is another USCIS customer within the EB-5 realm, it is the “Regional Center”. Employment-based visas are limited in number and there is often a greater demand than there is supply. For that reason it is necessary for there to be an orderly process for visa allocation and issuance. That orderly process demands that a visa petition be “approvable when filed”. For that to happen, the petitioner must be eligible to file a petition and the beneficiary must be qualified for the visa classification “at time of filing” the visa petition. In these circumstances, it is only fair that no unqualified petitioner or beneficiary get an unfair advantage by being allowed to supplement their filing by making the material change of counting qualifications attained post-filing. 1 http://www.justice.gov/eoir/vll/intdec/vol14/2125.pdf 2 http://www.justice.gov/eoir/vll/intdec/vol22/3360.pdf 3 https://www.uscis.gov/i-526
  2. 2. Page 2 of 5 A Regional Center (an RC) is quite different from a petitioner or beneficiary and has a specific role to play in the process. It will be a service provider that is tasked with striving to fulfill “the purpose of concentrating pooled investment in defined economic zones”. See 8 U.S.C. § 1153 Note: Immigration Program; Pub. L. 102–395, title VI, §610, Oct. 6, 1992, 106 Stat. 1874,4 as amended; most often called the “EB-5 Regional Center Program”. The designation as a Regional Center is attained through an application. The one who applies for the designation is therefore, an applicant. Applicants need not be fully eligible at time of filing. Applicants may perfect the application package post-filing and may be approved as long as they are meet all eligibility requirements at time of final adjudication. Beyond what is stated in the authorizing statute, there are implementing regulations, form instructions (for form I-924), and EB-5 industry best practices. Taken together, the RC is responsible for a wide variety of highly technical tasks on behalf of its EB-5 investor-partners. Ideally, the RC will have filed an I-526 “exemplar petition” as an I-924 amendment in order to obtain a “provisional approval” and a “project-specific” packet of prima facie evidence of eligibility to hand over to its EB-5 investor partners in support of individual I-526s filed en masse. In addition, in that same “ideal” approach, the RC will have spent some of the large administrative fee it collected to perform due diligence. It is necessary to run background checks on the project developer as well as the all of the funds being used, both foreign and domestic. All of the foregoing is merely the preliminary work. Over the course of several years it will be necessary to track data and collect evidence. The RC must file form I-924A annually in order to report certain information to USCIS. Lastly, the RC will need to deliver another packet of evidence to its EB-5 investor-partners in support of their I-829 petitions to lift conditions from their status. 4 http://uscode.house.gov/statviewer.htm?volume=106&page=1874
  3. 3. Page 3 of 5 However, before any EB-5-related services may be provided to any alien investors, a Regional Center must be designated as such by the Secretary of Homeland Security. The Secretary has delegated this function to USCIS. USCIS had little need to do very much about EB-5 Regional Centers for nearly the first two decades of the program. For instance, there was no form or filing fee needed to apply for Regional Center designation from 1992, until the I-924 became effective in late November 2010. Until then, someone (any “entity”) seeking EB-5 Regional Center status merely slapped together a Proposal and sent it to Headquarters in D.C. now they must file USCIS Form I-924, Application for Regional Center Under the Immigrant Investor Piot Program,5 the largest fee in immigration history, and a great deal of evidence, then wait for an answer. In fact, the adjudications involved in the EB-5 Program are so complex that USCIS has created a separate EB-5 adjudication unit. The Immigrant Investor Program Office (IPO)6 was established over the past several years and is still not fully staffed as of this writing with a little over 50 positions to be filled in order to reach its authorized staffing level of 171 (not including OCC attorneys devoted to the program or the FDNS EB-5 Unit embedded in the IPO office). If an I-924 cannot be approved based upon the initial evidence, as submitted in the initial filing, it is the usual course of action for USCIS to send a “Request For Evidence” (RFE). Unlike a visa petition, a Regional Center application need not be “approvable when filed”. This application is instead subject to “perfection after filing”. In fact, USCIS often makes specific requests for “technical corrections” in its RFEs, albeit they are often buried in an excess of verbiage. Regional Center Designation is a form of licensure and as with licenses in general, the initial process can be quite demanding. This process needs to be demanding in order to weed out those who are incapable of 5 https://www.uscis.gov/i-924 6 USCIS, Immigrant Investor Program, 131 M Street NE, 3rd Floor, Mailstop 2235, Washington, DC 20529
  4. 4. Page 4 of 5 meeting the needs of the program and the EB-5 investors without whom Regional Centers cannot exist! Once it is fully understood that unqualified individuals and/or entities are detrimental to the integrity of the EB-5 Program and cannot fulfill Congressional Intent, perhaps USCIS will raise the bar back up from whence it has eroded if Congress does not beat them to that finish line. I believe that the flexibility being accorded to the first I-526 filed in a Regional Center pooled investment is unfair to stand-alone, direct; or non-RC pooled investors. The May 30, 2013, EB-5 Adjudications Policy Memo, PM-602-0083;7 p. 14, includes the following: “The level of verifiable detail required for a Form I-924 to be approved and provided deference may vary depending on the nature of the Form I-924 filing. If the Form I-924 projects are “hypothetical” projects, 2 general proposals and general predictions may be sufficient to determine that the proposed regional center will more likely than not promote economic growth, improved regional productivity, job creation, and increased domestic capital investment. Determinations based on hypothetical projects, however, will not receive deference and the actual projects on which the Form I-526 petitions will be based will receive de novo review during the subsequent filing (e.g., an amended Form I-924 application including the actual project details or the first Form I-526 petition filed by an investor under the regional center project). Organizational and transactional documents submitted with a Form I-924 hypothetical project will not be reviewed to determine compliance with program requirements since these documents will receive de novo review in subsequent filings. If an applicant desires review of organizational and transactional documents for program compliance, a Form I-924 application with a Form I-526 exemplar should be submitted.” “2 An “actual project” refers to a specific project proposal that is supported by a Matter of Ho compliant business plan. A “hypothetical project” refers to a project proposal that is not supported by a Matter of Ho compliant business plan. The term “exemplar” refers to a sample Form I-526 petition, filed with a Form I-924 actual project proposal, that contains copies of the commercial enterprise’s organizational and transactional documents, which USCIS will review to determine if they are in compliance with established EB-5 eligibility requirements.” 7 https://www.uscis.gov/sites/default/files/USCIS/Laws/Memoranda/2013/May/EB- 5%20Adjudications%20PM%20%28Approved%20as%20final%205-30-13%29.pdf
  5. 5. Page 5 of 5 The above policy statement places the first I-526 “petition” filed in a Regional Center-affiliated pooled investment on an equal footing with an I-924 amendment “application”. This essentially gives an unfair advantage to an EB-5 alien investor, affiliated with a Regional Center, over an EB-5 alien entrepreneur, in a direct or stand- alone investment. It makes sense that non-RC pooled EB-5 ventures might seek the same “first I-526” flexibility on shared deal documents with subsequent deference being accorded to the remaining EB-5 investor-partners. If this flexibility is requested and refused by USCIS, I smell a lawsuit brewing. If this flexibility is requested and provided then I see bad repercussions in the form of growing ranks of incompetent “franchise vendors” and “scammers” bypassing the Regional Center designation process and thereby, bypassing annual I-924A filings, USCIS oversight, and site visits. This Policy misstep needs a technical correction of its own before it is too late. You can quote me on this, I won’t mind, just don’t steal it without giving proper credit. I also want to point out that the policy statement quoted above can be used appropriately if USCIS affirmatively limits the scope of the flexibility afforded to the “first I-526” as opposed to a proper “I-924 amendment”. If USCIS revises the Policy to differentiate the level of flexibility afforded to each of these types of filings, then the agency can protect itself and stave off lawsuits. It seems most appropriate to limit I-526 flexibility to a wide range of “technical corrections” of a “non-material” nature. Proper I-924 amendments would be the most appropriate vehicle for the much wider range of changes, especially of a material nature. That is my opinionated opinion on that! Dated this 15th day of February, 2016 /s/ Joseph P. Whalen Digitally signed by Joseph P. Whalen DN: cn=Joseph P. Whalen, o, ou, email=joseph.whalen774@gmail.com, c=US Date: 2016.02.15 22:36:01 -05'00'

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