Those who have been watching the progression of the US EB-5 Program since last year know that the Regional Center portion of the scheme was finally reauthorized by the US government on March 15, 2022 under the EB-5 Reform and Integrity Act after an almost eight-month hiatus. Many changes were made to the program as the government decided to heavily amend the wording of the law regulating EB-5. The main goal of these amendments was to add greater oversight and security to the program thus protecting investors. In addition to this, the price of the program was increased from $500,000 to $800,000.
EB-5 in the courts once again
In order to allow Regional Centers to comply with the new regulations and update project documentation accordingly, the government provided for a 60-day moratorium in which they would not accept new EB-5 applications. Therefore, new investors were prepared to make investments and submit applications by May 15, 2022.
Shortly before expiration of the 60-day hold period, USCIS (United States Citizenship and Immigration Services) announced that all existing Regional Centers would have to apply for recertification. Until Regional Centers are relicensed they will not be authorized to take on new investors. In addition, all projects will have to (at minimum) apply for exemplar approvals prior to accepting investors. This would require project documents and a USCIS application to be submitted prior to allowing for new investors.
This interpretation of the EB-5 Reform and Integrity Act has been strongly debated by Regional Centers and other industry stakeholders, who have been waiting since last year to take on new investors and projects. They are also concerned that the USCIS requirement for recertification of hundreds of Regional Centers could take many months or more to complete, therefore causing irreparable economic harm to these businesses which are still responsible for thousands of investors. In support, Congressional leaders have also provided a bipartisan letter insisting that EB-5 Regional Center re-designation is not required under the new regulations.
In response, on April 22, 2022 Behring Regional Center brought a case against USCIS in an attempt to stop the requirement for recertification. Behring claims that USCIS is acting unlawfully by nullifying Regional Centers and that this is being implemented to further delay new applications. However, USCIS has remained firm on their interpretation that the EB-5 Reform and Integrity Act was a comprehensive repeal of the previous program and therefore all existing Regional Centers must be re-designated. A ruling against USCIS would effectively stop the deauthorization of existing Regional Centers and allow for EB-5 investors to proceed with new applications swiftly and efficiently.
On May 24, five of the top Regional Centers also filed against USCIS. Their case strongly echoes that of Behring with more comprehensive arguments as to why USCIS has misinterpreted the new regulations.
On June 2, the court held a second live hearing on the Behring matter. During the hearing, Federal Judge Chhabria addressed several issues including Senator Grassley’s statements on the Congressional floor, what both parties feel the intention behind reauthorization of the program was, and whether an injunction on deauthorization should only apply to the Petitioner and not the 600+ remaining Regional Centers. During this hearing Judge Chhabria acknowledged that it was unlikely that Congress “plainly intended” Regional Centers to continue being authorized, but also stated that USCIS may have committed legal error by making the assumption that the new regulatory language requires Regional Centers to be deauthorized.
Both sides made their respective arguments and Judge Chhabria has requested each party to submit another brief on what the relief would be should he rule that the statute is silent. The briefs were provided on June 6, 2022.
Although there is no way to know how Judge Chhabria will rule in this proceeding, the likelihood of deauthorization of Regional Centers being dismissed seems positive. Most industry leaders are hoping for an outcome by mid-June which would allow for new investors to proceed with their EB-5 applications under the new and improved scheme. In the interim, USCIS has again started processing already existing applications and we are seeing progress on this front.
In addition, the government has stated that all prior investors have been grandfathered into the program meaning that any issues with deauthorization and relicensing of Regional Centers will not affect their applications.
Projects and changes
Along with the issue of Regional Center regulation, the government has also added new rules and visa set asides for certain project categories. There will now be priority processing for those investors in rural projects as the government has set aside 32 per cent of the 10,000 allocated visas under the EB-5 Program specifically for these projects. This is a significant benefit for EB-5 investors who wish to “skip the line” and move ahead faster with processing of their applications.
As the leading EB-5 consulting firm in the UAE, Step Global currently has projects available in all categories to suit each and every individual investor. Our vast legal and EB-5 network, along with over 12 years of experience in the industry allows us to provide not only expert service but exclusive projects, including those where we have successfully received approvals on expedited processing requests for many clients. If you are interested in the EB-5 Program, we encourage you to contact us for a free consultation.
US GREEN CARD AND CITIZENSHIP SEMINAR
Attend a free event hosted by Step Global at Sheraton Mall of the Emirates, on Wednesday, June 8 at 7pm with U.S. lawyers including exclusive session with expert panelists who weigh in on the reauthorization of the EB-5 Regional Center Program.
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