A trade organization and several other groups have sued the U.S. Citizenship and Immigration Services (USCIS) after it revised a statute involving its EB-5 Regional Center Program.
While filing the lawsuit, Invest in the USA (IIUSA) and other regional centers termed the amendment an arbitrary deauthorization of regional centers.
Vivek Tandon, the founder of EB5 BRICS, which is based in Beverly Hills, California, and who is a member of IIUSA, told indica that despite President Joe Biden signing the EB-5 Reform and Integrity Act 2022 (RIA) into law on March 15, 2022, USCIS has taken the position that investors cannot file their EB-5 application until the regional center that sponsors the investment project gets ‘re-certified.’
“The EB-5 industry disagrees with this interpretation of the new legislation,” Tandon said.
According to uscis.gov, the EB5 visa was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a program first enacted as a pilot in 1992 and regularly reauthorized since then, investors may also qualify for EB-5 classification by investing through ‘regional centers designated by USCIS’ based on proposals for promoting economic growth and offering green cards to foreign investors in return.
Asked how many Indians availed of the EB5 visa, Tandon said, “Anecdotally, anywhere between 3,000-5,000 individuals should receive Green Cards through EB-5. It is likely that about 2,000 applications are pending.”
The lawsuit challenges the USCIS’s unilateral deauthorization of over 600 designated regional centers existing when the RIA was passed.
According to IIUSA, between 2008 and 2021 the EB-5 Regional Center Program helped generate $37.4 billion in foreign direct investment to create and retain U.S. jobs for Americans, all at no cost to the taxpayer.
On March 15, President Biden signed a $1.5 trillion Omnibus Bill (aka budget bill) that included major immigration measures for the EB5 visa. But in May, the USCIS effectively deauthorized already certified regional centers and retroactively applied new requirements to these centers, shocking stakeholders.
USCIS announced new forms effective June 2. Form I-956F is a new form that can only be filed by an approved regional center. Centers can use Form I-956G to provide the required information, certifications and evidence to support their continued eligibility for regional center designation. This must be submitted in compliance with new program requirements. The filing fee is $17,795 for Form I-956F, and $3,035 for Form I-956G.
Tandon told indica that the regional centers have not officially been revoked, but USCIS (not Congress) is asking them to file for re-certification through Form I-956, and wait for approval before investors can file their EB-5 application through them.
“The new legislation brings a lot of much-needed integrity and investor protection measures,” Tandon said. “It impacts all EB-5 stakeholders. The act was expected to pass by the US Congress but the position that USCIS has taken was not expected. It was a surprise to many.”
According to a IIUSA press release, five leading EB-5 regional centers, along with the IIUSA, which is a EB-5 trade organization, May 24 collectively filed a lawsuit against USCIS in the district court for the District of Columbia.
Tandon shared details of another lawsuit, filed separately by the Behring Regional Center LLC, formerly known as Berkeley Regional Center Fund, LLC, but relying on similar ideas – challenging the position USCIS has taken on reauthoritzation.
According to that lawsuit, the retroactive ‘deauthorization’ has had a detrimental effect on all regional centers, threatens their existence, and caused them irreparable harm.
USCIS takes between 62 and 115 months to approve regional centers, while the statute only reauthorizes the regional center program for five years. Since the regional centers cannot bring in new EB-5 investments when they are deauthorized, regional centers will have no funds to sustain operations. Despite being deauthorized, regional centers will be compelled to remain open for investors with pending EB-5 applications, and keep paying the USCIS thousands of dollars in annual recertification dues. Due to the agency’s decisions, BRC in particular has had withdrawal requests from investors stalled and canceled projects, amid funding concerns.
BRC claimed that the deauthorization inhibits innovative projects, frustrates foreign investment by escalating risks to unacceptable levels, and destroys the last lifelines regional centers can offer to prospective investors.
In a press note, IIUSA said, “We are putting our different business interests aside and joining forces to reach the common goal of protecting our clients’ rights and to provide needed capital for economic development projects.”
It further added, “We believe Congress intended to allow regional centers to immediately get back to the business of EB-5, while at the same time working to bring themselves quickly into compliance with the new integrity and other requirements of the RIA. In fact, there is consensus within the EB-5 industry that Congress intended to have the Regional Center Program back in business as soon as the RIA was in effect on May 15, 2022.”