On March 15, 2022, President Biden signed the Omnibus spending bill, which included the EB-5 Reform and Integrity Act of 2022 (“RIA”), providing authority for the EB-5 immigrant investor Regional Center Program to be placed into effect by the United States Citizenship and Immigration Services (“USCIS''). The new legislation came into effect with a host of updated policies that are designed to better the program for the benefit of the investors and other industry stakeholders. Therefore, to ensure the seamless transition from the previous legislation to the new laws, USCIS requested a 60-day no filing period, where the agency would review the new legislation and provide guidance on how new applications would be processed.
During the 60-day no-file period, USCIS announced the requirement for Regional Centers seeking Regional Center status under the EB-5 immigrant investor program to reapply for designation. USCIS as the implementing agency has interpreted the new laws as that RIA has placed a blanket requirement for all Regional Center to reapply for re-designation to ensure compliance. Since the announcement USCIS has issued Form I-956, along with filing instructions for Regional Centers to submit applications to the agency.
Re-designation
The request for Regional Centers to reapply for designation status with USCIS would essentially render all current Regional Centers registered under the EB-5 program on hold. On the enactment of the new EB-5 Reform and Integrity Act, the EB-5 industry was of the view that while the industry transitions from one regulatory statute to the other, Regional Centers would comply with the new regulations by obtaining new project approvals that comply with the new laws and implement all the newly introduced integrity measures. The issue with USCIS’s position on requesting complete reapplication for designation is that it creates redundant efforts for the Regional Centers that have continuously complied with USCIS requirements to maintain their Regional Center Status, even during the period where the program was lapsed. Additionally, this process will likely create an even longer period where EB-5 investment applications cannot be filed under the Regional Center program. This has led to prompt actions by certain Regional Centers and lobbyists within the EB-5 industry.
Currently, USCIS is stating that all EB-5 applications (I-526 applications) submitted to the agency using the Regional Center program must be from a Regional Center that has obtained designation, applied for project approval, and received their receipt notice. While there is no requirement for the project approval application to be approved before the submission of I-526 applications, there is no information on if both Regional Center designation and project approval applications could be submitted simultaneously to save time on processing. There further is no distinct communication from USCIS providing clear processing times for the approval of all re-designation applications.
Industry response to USCIS requirement
Following the announcement from USCIS, Behring Regional Center, represented by Greenberg Traurig LLP, filed a motion challenging USCIS’s interpretation of the RIA. In Case 3:22-cv-02487-JCS Behring Regional Center LLC v. Majorkas et al, the Behring Regional Center argued that USCIS’s requirement for Regional Center re-designation will have a significant negative impact on Regional Center operations and disrupt the program, they further argued that this interpretation of the statute attempts to improperly deauthorize existing Regional Center designations. The Regional Center initially filed for a temporary restraining order, requesting that the courts prevent USCIS from continuing to publish their request for re-designation guidance.
The EB-5 industry has continued to rally its support to Behring Regional Center through the submission of a declaratory letter on May 4, by Invest in the USA (“IIUSA''), a nonprofit organization formed to support the EB-5 immigrant investor program, to the Northern District Court of California declaring their support to the Behring Regional Center. In the letter IIUSA states that the primary purpose of developing the new law was to reauthorize the new Regional Center Program and to introduce new integrity and accountability measures. USCIS’s interpretation will jeopardize the ability of millions of investors to start their immigration process.
Currently, the case is still being heard at the Northern District Court of California, where parties are still litigating and submitting their motions before Judge Vince Chhabria.
Congressional response
Senators Chuck Schumer, Lindsay Graham, and John Cornyn and Representative Jerry Nadler sent a detailed letter to the U.S. Department of Homeland Security Secretary, Alejandro Mayorkas, requesting that USCIS rescind its request for Regional Centers to apply for re-designation. In the letter, the senators outline the legal reasoning behind the request for the agency to alter their interpretation of the law. The letter affirms that the EB-5 program is a catalyst for job creation and billions of dollars of investments to the U.S. economy and as such is a pertinent tool for the growth and development of the country.
The senators also stated that re-designation for all Regional Centers is not a requirement under the EB-5 Reform and Integrity Act and doing so will burden USCIS. They state that USCIS has been provided with authority to ensure that all Regional Centers comply with the new integrity measures without the need for complete re-designation. The letter further states, in detail the following legal points:
● The statutory language indicates existing Regional Centers remain designated.
● An interpretation requiring new Regional Center designation will result in all existing investors without approved conditional permanent residency facing denial.
● Retroactive application of law is potentially unlawful.
● Regional Centers still need to make all required compliance certifications at the end of the fiscal year.
The letter was then used by Greenberg Traurig as supporting evidence in the ongoing court case, proving that USCIS has interpreted the EB-5 Reform and Integrity Act incorrectly.
Prospective EB-5 applications
Now more than ever it is important for prospective investors to align themselves with EB-5 consultants that are fully aware of the constant changes that are occurring within the program. There are many exciting and positive elements that have been introduced, that will ensure faster access to the U.S. and more investor protections. Essentially the program is better than before the reforms were introduced. Families that are still seeking to participate in the EB-5 program should contact the team at The American Legal Center, where they will receive detailed information regarding the program and new applications.
Shai Zamanian, U.S. licensed attorney and EB-5 expert, expressed how excited and at ease the EB-5 industry is now after program reauthorization. “The program has been plagued with uncertainty for a very long time and for the first time we finally have some clarity. For the past few years we have been concerned with the program capital investment, lapse of the program, unavailability of visas, change in Regional Center project rules and designations, and other elements that are pertinent to the core structure of the program. Reauthorization aims to provide us with the stability the industry needs. With these new laws we will see a set capital investment price, a program extension of five years, concurrent filing, grandfathering (protection of investors currently in the system), new rules on reservations of visas based on project investments ,and other integrity measures that will protect the investor from any fraudulent activities.”
