Immigration Archives - Page 21 of 44 - The National Law Forum

Federal Court Blocks Portion of Trump’s Executive Order Denying Federal Grants to Sanctuary Cities

Once again, a U.S. District Court has blocked part of one of President Donald Trump’s Executive Orders – the January 25^th EO “Enhancing Public Safety in the Interior of the United States.”. In explaining the purpose of that EO, President Trump stated “[s]anctuary jurisdictions across the United States willfully violate Federal law in an attempt to shield aliens from removal from the United States. These jurisdictions have caused immeasurable harm to the American people and to the very fabric of our Republic.” To further that purpose, President Trump stated in Section 9(a) of the EO that these jurisdictions that refuse to cooperate with federal immigration authorities “are not eligible to receive Federal grants, except as deemed necessary for law enforcement purposes. . . “ In a lawsuit filed by the cities of Santa Clara and San Francisco, California, U.S. District Court Judge William H. Orrick of the Northern District of California issued a preliminary injunction specifically blocking enforcement of Section 9(a) nationwide.

The government in defense of the EO argued that Section 9(a) had not actually done anything yet, that the President was only using the EO as a “bully pulpit” and that the cities could not show that they would be harmed. But like the various courts that ruled on the travel ban, Judge Orrick cited a list of comments made by President Trump, his advisors and Attorney General Jeff Sessions to cast doubt on the government’s argument and show that the administration planned to use the EO as a “weapon” against sanctuary cities. He found that: “[t]he order’s attempt to place new conditions on federal funds is an improper attempt to wield Congress’s exclusive spending power and is a violation of the Constitution’s separation-of-powers principles.”

This case is highly likely to find its way to the 9^th Circuit Court of Appeals and perhaps to the Supreme Court. President Trump has already tweeted his disapproval: “First the Ninth Circuit rules against the ban & now it hits again on sanctuary cities – both ridiculous rulings. See you in the Supreme Court!”

ARTICLE BY Amy L. Peck & Michael H. Neifach of Jackson Lewis P.C.

Estate Tax Planning for Non-United States Citizen Spouses: QDOT-ting I’s and Crossing T’s

Individual and corporate citizens from countries around the world have moved to North Carolina and contributed materially to our state’s economic, educational, and cultural growth. Foreign direct investment (“FDI”) in North Carolina generally surpasses $1 billion annually, which boosts our state’s private sector employment by hundreds of thousands of workers. In recent years companies based in Canada, Denmark, Germany, India, Japan, Switzerland, and the United Kingdom, among others, have invested in a range of industry projects “from Manteo to Murphy.”

Accompanying this foreign investment are individuals who are not United States (“U.S.”) citizens who establish residence here and who are known as “resident aliens” under U.S. tax law. In addition, nonresident, non-U.S. citizens (“nonresident aliens”) sometimes invest in real and personal property situated in our state—everything from vacation homes to ownership interests in North Carolina holding or operating companies. This increased foreign business and personal investment requires heightened attention to the complex Internal Revenue Code (“Code”) requirements applicable to non-U.S. citizens for income and transfer tax purposes.

The corporate and individual income tax issues surrounding such entities and persons have garnered much attention. For example, compliance with the sweeping changes under the Foreign Account Tax Compliance Act (FATCA) continues to affect U.S. citizen and resident alien taxpayers with foreign accounts and other foreign assets. Equally important are the tax issues that impact non-U.S. citizens in connection with transfers of money or property during lifetime or at death. This article is an overview of recurring basic considerations in estate and gift tax planning for non-U.S. citizen spouses. It is not intended to be an exhaustive treatment of this complex area of law, nor is it intended to address income tax planning for non-U.S. citizen spouses.

In general, the U.S. imposes estate and gift tax on the worldwide assets of U.S. citizens and resident aliens. A critical step in the estate planning process is the determination of the citizenship of a client and, if the client is married, that of the client’s spouse. The estate and gift tax implications largely depend on the type of tax, domicile tests, marital status, property ownership and situs tests, and treaty provisions.

With respect to the U.S. estate and gift tax rules, “residence” and “domicile” are threshold considerations that only a qualified tax professional should evaluate. The tests to determine “residence” in the U.S. income tax context are largely objective (e.g., the “substantial presence test”), but determining “residence” for transfer tax purposes is more subjective. For U.S. gift tax purposes, an individual donor is a U.S. resident if the donor is “domiciled” in the U.S. at the time of the gift. For U.S. estate tax purposes, a deceased person is a U.S. resident decedent if the person was “domiciled” in the U.S. at death. U.S. Treasury Regulations define “domicile” as living in a country without a definite present intention of leaving. The determination requires a facts-and-circumstances analysis of one’s “intent to leave” as demonstrated, for example, in visa status, tax returns, length of U.S. residence, social and religious affiliations, voter registration, and driver’s license issuance. Holding a “green card,” (i.e., status as a “lawful permanent U.S. resident” authorized to live and work here), though compelling, is not determinative evidence of U.S. domicile.

Tax treaties between the U.S. and other countries sometimes modify the Code provisions governing the transfer taxation of non-U.S. citizens. The treaties often explain concepts such as domicile, set forth which country taxes certain types of property, and relieve individuals from double taxation. The U.S. has entered into tax treaties with over 70 other countries. However, not all the treaties address estate and gift tax issues, including, significantly, the recent Code provisions regarding portability of a deceased spouse’s unused exclusion (“DSUE”). A recent check of the Internal Revenue Service (“IRS”) website reveals that treaties with at least 19 countries either contain estate and gift tax provisions or are freestanding estate and/or gift tax treaties.

To understand the general estate and gift tax rules applicable to non-U.S. citizen spouses, it is helpful first to review those applicable to U.S. citizen spouses.

The following examples illustrate the general rules relating to lifetime gifts:

EX. 1: LIFETIME GIFT FROM U.S. CITIZEN TO U.S. CITIZEN SPOUSE

Al, a U.S. citizen and resident, is married to Bea, also a U.S. citizen and resident. In 2017, Al Gives Bea $200,000, payable by check.

For U.S. gift tax purposes, Al’s gift to Bea does not trigger U.S. gift tax because Bea is a U.S. citizen spouse. The gift qualifies for the unlimited U.S. gift tax marital deduction applicable to gifts from one spouse to a U.S. citizen spouse.

The result would be the same if Al were a resident alien married to Bea, so long as she is a U.S. citizen. A gift from a resident alien to U.S. citizen spouse also qualifies for the unlimited U.S. gift tax marital deduction.

EX. 2: LIFETIME GIFT FROM U.S. CITIZEN TO NON-SPOUSE U.S. CITIZEN

Al, a U.S. citizen and resident, has an adult daughter, Claire, also a U.S. citizen and resident. In 2017, Al gives Claire $200,000, payable by check.

For U.S. gift tax purposes, $14,000 of the $200,000 qualifies for the U.S. present interest gift tax annual exclusion, while the remaining $186,000 must be reported on a U.S. gift tax return in 2018. Assuming no prior taxable gifts and a U.S. estate tax exemption of $5,490,000 (2017), the $186,000 reduces the U.S. estate tax exemption available at Al’s death from $5,490,000 to $5,304,000.

The tax treatment changes if one spouse is not a U.S. citizen.

EX. 3: LIFETIME GIFT FROM U.S. CITIZEN (OR RESIDENT ALIEN) TO RESIDENT ALIEN SPOUSE

Al, a U.S. citizen, is married to Dot, a citizen of Country X. They live in the U.S. Dot holds a “green card” and does not intend to leave the U.S. In 2017, Al gives Dot $200,000, payable by check.

Dot is a resident alien, so Al’s gift to her does not qualify for the unlimited U.S. gift tax marital deduction. For U.S. gift tax purposes, Al’s gift to Dot is subject to the special present interest U.S. gift tax annual exclusion for lifetime transfers to non-U.S. citizen spouses. In 2017, this special annual exclusion is ,000.

Accordingly, $149,000 of the $200,000 gift qualifies for the special U.S. present interest gift tax annual exclusion, while Al must report as a taxable gift the remaining $51,000 on a U.S. gift tax return in 2018. Assuming no prior taxable gifts, the ,000 reduces the U.S. estate tax exemption available at Al’s death from $5,490,000 to $5,439,000.

The result would be the same if both Al and Dot were married resident aliens.

The result also would be the same if Al were a nonresident U.S. citizen and Dot were a nonresident alien.

EX. 4: LIFETIME GIFT FROM U.S. CITIZEN (OR RESIDENT ALIEN) TO NON-SPOUSE RESIDENT ALIEN

Al, a U.S. citizen, has a cousin, Eva, a citizen of Country X. Both are U.S. residents. Eva holds a “green card” and does not intend to leave the U.S. In 2017, Al gives Eva $200,000, payable by check.

For U.S. gift tax purposes, Al’s gift to Eva, a non-spouse resident alien, is treated the same as if Eva were a non-spouse U.S. citizen. Thus $14,000 of the $200,000 gift qualifies for the present interest U.S. gift tax annual exclusion, while the remaining $186,000 must be reported as a taxable gift on a U.S. gift tax return in 2018. Assuming no prior taxable gifts, the $186,000 reduces the U.S. estate tax exemption available at Al’s death from $5,490,000 to $5,304,000.

EX. 5: LIFETIME GIFT OF U.S.-SITUS PROPERTY FROM U.S. CITIZEN TO NONRESIDENT ALIEN SPOUSE

Al, a U.S. citizen and resident, is married to Fay, a citizen of Country X. Both are residents of Country X but own personal and real property located in the U.S. In 2017, Al gives Fay $200,000 (payable by check drawn on a U.S. bank).

Al’s gift to Fay, a nonresident alien spouse, does not qualify for the unlimited U.S. gift tax marital deduction. For U.S. gift tax purposes, Al’s gift to Fay is subject to the special U.S. present interest gift tax annual exclusion for lifetime transfers to non-U.S. citizen spouses. In 2017, this special annual exclusion is $149,000.

Accordingly, $149,000 of the $200,000 gift qualifies for the special U.S. present interest gift tax annual exclusion, while Al must report as a taxable gift the remaining $51,000 on a U.S. gift tax return in 2018. Assuming no prior taxable gifts, the $51,000 reduces the U.S. estate tax exemption available at Al’s death from $5,490,000 to $5,439,000.

EX. 6: LIFETIME GIFT OF U.S.-SITUS PROPERTY FROM U.S. CITIZEN TO NONRESIDENT ALIEN NON-SPOUSE

Al, a U.S. citizen and resident, has a cousin, Grace, a citizen and resident of Country X. In 2017, Al gives Grace $200,000 (payable by check drawn on a U.S. bank).

For U.S. gift tax purposes, Al’s gift to Grace, a non-spouse nonresident alien, is treated the same as if Grace were a U.S. citizen. Thus $14,000 of the $200,000 gift qualifies for the present interest U.S. gift tax annual exclusion, while the remaining $186,000 must be reported as a taxable gift on a U.S. gift tax return in 2018. Assuming no prior taxable gifts, the $186,000 reduces the U.S. estate tax exemption available at Al’s death from $5,490,000 to $5,304,000.

EX. 7: LIFETIME GIFT OF U.S.-SITUS PROPERTY FROM NONRESIDENT ALIEN TO U.S. CITIZEN SPOUSE

Hope, a citizen and resident of Country X, is married to Al, a U.S. citizen. They live in Country X. In 2017, Hope gives Al real property located in the U.S. worth $200,000.

For U.S. gift tax purposes, Hope’s gift of U.S.-situs real property to Al, a U.S. citizen spouse, qualifies for the unlimited U.S. gift tax marital deduction.

EX. 8: LIFETIME GIFT OF U.S.-SITUS PROPERTY FROM NONRESIDENT ALIEN TO U.S. CITIZEN NON-SPOUSE

Ida, a citizen of Country X, has a cousin, Al, a U.S. citizen. They live in Country X. In 2017, Ida gives Al $200,000 (payable by check drawn on a U.S. bank).

Ida and Al are not married. Whether the U.S. gift tax applies to the transfer depends on whether the transferred property is situated in the U.S. The situs rules are complex and are not necessarily the same for U.S. estate tax and U.S. gift tax purposes. Ida’s gift to Al, cash held in a U.S. bank, is considered U.S.-situs “tangible personal property” for U.S. gift tax purposes. Therefore, after utilization of the $14,000 U.S. gift tax present interest annual exclusion available to Ida as a nonresident alien donor, the remaining $186,000 of the $200,000 gift is subject to U.S. gift tax payable in 2018 by Ida as a nonresident alien donor.

A nonresident alien may use the U.S. gift tax present interest annual exclusion ($14,000), but the Code prohibits a nonresident alien from using the $5,490,000 lifetime U.S. gift tax exemption that is available to U.S. citizens and resident aliens.

EX. 9: LIFETIME GIFT OF U.S.-SITUS PROPERTY FROM NONRESIDENT ALIEN TO NONRESIDENT ALIEN SPOUSE

Al and Jane are married citizens of Country X. In 2017, Al gives Jane real property located in the U.S. worth $200,000.

Al and Jane are married nonresident aliens, so Al’s gift of U.S.-situs real property to Jane does not qualify for the unlimited U.S. gift tax marital deduction. For U.S. gift tax purposes, Al’s gift to Jane is subject to the special U.S. present interest gift tax annual exclusion for lifetime transfers to non-U.S. citizen spouses. In 2017, this special annual exclusion is $149,000.

There is no lifetime gift tax exemption for a nonresident alien’s gift of U.S.-situs property to another nonresident alien. Thus, $149,000 of the $200,000 gift qualifies for the U.S. special present interest gift tax annual exclusion for non-U.S. citizen spouses. The remaining $51,000 of value is subject to U.S. gift tax. It is reportable and payable by Al as a nonresident alien donor on a U.S. gift tax return in 2018.

The examples above illustrate the general rules applicable to gratuitous lifetime transfers of property, or gifts. The following examples illustrate the general rules applicable to transfers at death:

EX. 10: TRANSFER AT DEATH FROM U.S. CITIZEN TO U.S. CITIZEN SPOUSE

Carl, a U.S. citizen and resident, is married to Dawn, also a U.S. citizen and resident. Carl dies in 2017 with a gross estate valued at $7,000,000. His will, revocable trust, and beneficiary designations leave his real and personal property to Dawn.

The U.S. imposes estate tax on the transfer of the taxable estate of every U.S. citizen or resident decedent. The taxable estate is reduced by the value of any property that passes from the decedent to a U.S. citizen surviving spouse. This is called the unlimited U.S. estate tax marital deduction.

Accordingly, the “date of death value” of the property passing from Carl to Dawn, $7,000,000, qualifies for the unlimited U.S. estate tax marital deduction. No U.S. estate tax is due upon Carl’s death. Furthermore, assuming no prior taxable gifts, Carl’s DSUE, $5,490,000 (the applicable amount for 2017), is “portable,” that is, transferable, to Dawn for use upon Dawn’s death in addition to Dawn’s available U.S. estate tax exemption.

The result would be the same if Carl, a resident alien, were married to Dawn, a US citizen.

EX. 11: TRANSFER AT DEATH FROM U.S. CITIZEN TO RESIDENT ALIEN (OR NONRESIDENT) ALIEN SPOUSE

Carl, a U.S. citizen and resident, is married to Evelyn, a citizen of Country X and U.S. resident (i.e., a “resident alien”). Carl dies in 2017 with a gross estate valued at $7,000,000. His will, revocable trust, and beneficiary designations leave his real and personal property to Evelyn.

Absent proper U.S. estate tax planning (i.e., “QDOT” structure described below), and assuming no prior taxable gifts, the property passing at Carl’s death to Evelyn, a resident alien spouse, would NOT be eligible for the unlimited U.S. estate tax marital deduction. Specifically, Carl’s available U.S. estate tax exemption, $5,490,000, would be consumed fully, leaving $1,510,000 subject to U.S. estate tax (top rate of 40%) with the balance passing to Evelyn.

If both Carl and Evelyn were married resident aliens, the result would be the same.

Why QDOT Planning Matters

In Example 11 above, proper planning with a “qualified domestic trust” (“QDOT”) could have preserved eligibility for the U.S. estate tax marital deduction and avoided the onerous U.S. estate tax imposed.

The QDOT is an exception to the non-U.S. citizen spouse exception to the U.S. estate tax marital deduction. The U.S. estate tax marital deduction operates to defer estate tax until the death of the surviving spouse. When Congress enacted the non-U.S. citizen spouse exception to the U.S. estate tax marital deduction (disallowing the U.S. estate tax marital deduction for non-U.S. citizen spouses), it did so to avoid the scenario where a non-U.S. citizen spouse inherits untaxed property then leaves the U.S. for a country without a treaty in place to facilitate the collection of U.S. estate tax upon the surviving spouse’s death.

In general, U.S. estate tax would be paid upon actual distributions of QDOT principal to the non-U.S. citizen spouse or upon the death of the surviving spouse. The QDOT enables deferral of the U.S. estate tax, as the exception to the U.S. estate tax marital deduction for non-U.S. citizen spouses does not apply when property passes to a properly drafted QDOT for the surviving spouse’s benefit.

To qualify as a QDOT, the trust must meet four general requirements:

• At least one trustee must be a U.S. citizen or a U.S. corporation;
• No distribution of trust property may be made unless the U.S. trustee has the right to withhold U.S. estate tax payable on account of the distribution;
• The trust must meet security requirements set out in the U.S. Treasury Regulations to ensure the collection of U.S. estate tax; and,
• The decedent’s executor must make an irrevocable election on Schedule M of IRS Form 706, the U.S. estate tax return.

The substantive provisions of a QDOT must meet the requirements of a marital trust intended to qualify for the U.S. estate tax marital deduction. A QDOT is often designed as a Qualified Terminable Interest Property (“QTIP”) martial trust of which the spouse is the sole beneficiary entitled to receive trust income. Other QDOT trust designs meeting the marital deduction requirements are available as well. It is essential that a QDOT is drafted with care. For example, to avoid being deemed a “foreign trust” under U.S. tax law, certain powers should be limited to U.S. persons and the trustee should be prohibited from moving the trust to a country beyond the reach of the U.S. courts.

QDOT planning is most effective when planning for gross estate values around, above, or expected to be above the U.S. estate tax exemption. However, if the date of death value of worldwide property owned by a U.S. citizen or resident is substantially below the U.S. estate tax exemption, then the U.S. citizen or resident may decide to leave such property outright to the non-U.S. citizen spouse, which would consume the decedent’s available U.S. estate tax exemption (illustrated in Example 11 above).

If the date of death value of property passing to the QDOT exceeds $2,000,000 (not adjusted for inflation) (known as a “large QDOT”), then additional requirements apply to secure payment of U.S. estate taxes attributable to the transferred property. At least one U.S. trustee must be a U.S. bank (several of which offer corporate trustee services to North Carolina residents). Alternatively, the U.S. trustee can furnish a bond or a letter of credit meeting certain conditions. These additional requirements also apply to smaller QDOTs where foreign real property holdings exceed 35% of trust assets.

If a decedent’s estate elected QDOT treatment and portability of DSUE on a U.S. estate tax return, then the estate also must report a preliminary DSUE that is subject to decrease as QDOT distributions occur or even modification by tax treaty. The DSUE amount is determined finally upon the surviving spouse’s death or other termination of the QDOT. The intersection of the QDOT rules and portability of unused estate tax exemption requires careful analysis upon filing the estate tax return and thereafter when planning for the non-U.S. citizen surviving spouse during the QDOT administration, including if the spouse attains U.S. citizenship.

Nonresident decedents are subject to U.S. estate tax on the value of U.S.-situs assets valued in excess of $60,000. The Code’s rules applicable to nonresident alien decedents are complex and should be analyzed with care. The analysis may include, for example, the types of U.S. property treated as U.S.-situs property subject to U.S. estate tax, whether any tax treaty modifies U.S.-situs property classification and the taxing jurisdiction, and whether a nonresident alien formerly a U.S. citizen or long-term resident alien is subject to the Code’s “covered expatriate” rules.

The following example illustrates these general rules and assumes no treaty between the U.S. and the foreign country.

EX. 12: TRANSFER AT DEATH OF U.S.-SITUS PROPERTY FROM A NONRESIDENT ALIEN TO A NONRESIDENT ALIEN SPOUSE

Carl, a nonresident alien, is married to Fran, also a nonresident alien. Carl leaves his worldwide assets, including U.S.-situs real and personal property, to Fran. His gross estate is valued at $7,000,000.

A nonresident alien decedent’s U.S.-situs property is subject to U.S. estate tax. Absent proper estate tax planning (i.e., QDOT structure described above), the U.S.-situs property passing at Carl’s death to Fran, a nonresident alien spouse, is ineligible for the unlimited U.S. estate tax marital deduction.

Specifically, Carl’s available U.S. estate tax exemption—only $60,000 for nonresident aliens—would be consumed fully, leaving $6,940,000 subject to U.S. estate tax (top rate of 40%) with the balance passing to Fran.

If Carl, a nonresident alien, were married to Fran—this time a U.S. citizen—the result generally would be the same except the U.S. estate tax marital deduction would apply only to U.S.-situs property.

In either scenario above, Carl’s executor must file IRS Form 706-NA, the U.S. estate tax return for nonresident alien decedents, and pay the U.S. estate tax due.

United States tax law is changing while families and businesses continue to move among countries. Estate planning for non-U.S. citizens is multidimensional and demands attention right here in North Carolina. The QDOT is a powerful U.S. estate tax planning technique to help certain non-U.S. citizen spouses defer taxes and preserve wealth in the face of such change.

ARTICLE BY John R. Cella, Jr. of Ward and Smith, P.A.

Failure To Pay Minimum Wage Can Jeopardize Employment-Based Visa Petitions

Rudyard Kipling famously noted, “East is East, and West is West, and never the twain shall meet.” Many employers may feel that this quote aptly describes the relationship between immigration law and wage & hour law — certainly, it is not often that these two areas are discussed in the same article, let alone the same sentence. However, a recent U.S. Citizenship & Immigration Services (USCIS) policy memorandum illustrates a circumstance in which the government will take wage & hour considerations into account when addressing a visa petition.

The April 12, 2017 policy memorandum binds all USCIS personnel to follow the reasoning of the agency’s earlier Administrative Appeals Office (AAO) decision. In that AAO decision, the agency establishes policy guidance which clarifies that USCIS cannot approve an employment-based visa petition that is based on an illegal or otherwise invalid employment agreement. Specifically, before approving an employment-based visa petition, it must be established that the employment visa beneficiary will not be paid less than the state or federal hourly minimum wage. (Whichever has the highest minimum wage is the minimum to follow.)

The AAO decision involved a U.S. semiconductor manufacturing company’s petition, in which it sought to temporarily employ a “Failure Analysis Engineer” in Oregon under the L-1B nonimmigrant specialized knowledge classification for intracompany transferee employees. USCIS California Service Center had denied this petition, concluding that the evidence did not show that the beneficiary had specialized knowledge or would be employed in a capacity requiring specialized knowledge. However, the AAO decision identified an overreaching issue that it determined had to be dealt with prior to addressing the issue of specialized knowledge. Namely, the U.S. employer intended to pay the beneficiary less than the minimum hourly wage. The AAO decision made clear the agency’s position that under no circumstances is a U.S. employer allowed to pay an employment visa beneficiary below the highest applicable minimum state or federal hourly wage.

Through this AAO decision, USCIS employment visa adjudicators have been instructed to prevent a conflict with the Fair Labor Standards Act by ensuring that any prospective employment agreement between a U.S. employer and a foreign national worker allows for compensation that cannot be less than the higher government-required hourly wage, whether it be the state or federal minimum — only if that highest minimum hourly wage is met can USCIS approve a U.S. employer’s employment visa petition. As we have frequently discussed in these updates, there are many reasons that it is critical for employers to comply with wage and hour requirements. Employers now have another reason to ensure compliance with the FLSA and state minimum wage laws: the risk of jeopardizing employee visa status.

ARTICLE BY Roy J. Barquet of Foley & Lardner LLP

President Trump Signs New Executive Order: “Buy American and Hire American”

On April 18, 2017, President Donald Trump signed an Executive Order (EO) titled “Buy American and Hire American.” The stated purpose of this EO is to protect the American economy by having the U.S. government and agencies focus on purchasing goods made in America, and to also protect American workers. The first part of the EO includes text that focuses on conducting studies and putting forth plans for federal agencies to immediately maximize the use and procurement of materials and products made in the United States—or “Buy American.”

The second part of the EO includes text that focuses on “Hire American,” that is, reviewing current U.S. immigration laws, specifically as they relate to nonimmigrant visa categories. A summary of the second part of the EO is below:

Ensuring the Integrity of the Immigration System in Order to “Hire American”:

The Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security are tasked with proposing new rules and issuing new guidance with the intent of protecting U.S. workers and eliminating fraud or abuse.
In addition, the text of the EO directs that reforms should be focused on ensuring that H-1B status is only granted to those who are the “most-skilled” or the “highest-paid.”

This EO comes only a few weeks after various U.S. federal agencies tasked with administering immigration law issued guidance and decisions with the intent of preventing fraud and abuse in the immigration system, specifically the H-1B program. The United States Citizenship and Immigration Service, the Department of Justice, and the Department of Labor all released statements and/or policy with regard to the H-1B program. To see a summary regarding these statements and/or policies, please visit our previous post.

ARTICLE BY Kristen W. Ng of Greenberg Traurig, LLP

USCIS Announces FY 2018 H-1B Cap Lottery Completed and Total Filed Numbers

United States Citizenship and Immigration Services (USCIS) announced on April 17, 2017, that it had completed its annual H-1B lottery and had selected a sufficient number of H-1B petitions to meet the 65,000 petition bachelor’s degree cap and the 20,000 petition U.S. master’s degree cap. In total, USCIS received 199,000 petitions this year during the filing period that ran from April 3, 2017, until April 7, 2017. On April 11, 2017, the agency completed its random computerized lottery to select the cap petitions. The 20,000 U.S. master’s cap petitions were randomly selected first. All unselected U.S. master’s petitions plus the bachelor’s petitions were then pooled and subjected to the general lottery where 65,000 petitions were selected.

The 199,000 total H-1B petitions filed this year represents 37,000 fewer petitions than were received during last year’s filing period.

USCIS will now begin its process of formally receipting all the selected H-1B petitions, and will reject and return all unelected petitions including filing fees.

Please note that, as of April 3, 2017, USCIS temporarily suspended premium processing on all H-1B petitions, both cap and non-cap cases. Thus, all cases selected under the lottery will be processed under the regular processing timeline.

ARTICLE BY Andrew G. Drozdowski & Amy R. Dalal of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

USCIS Releases New Edition of Form I-526 with New Changes and Information Requested From Investors

USCIS recently announced the release of a new edition of Form I-526, with the new edition dated 04/10/2017. Starting on June 9, 2017, USCIS will only accept the 04/10/2017 edition. Until then, investors can use the 12/23/2016 edition. Both editions of Form I-526 are available to download at no cost on the USCIS website.

Investors should be mindful of several substantial changes to the new Form I-526 (04/10/2017 edition). At first glance, the length of the form has noticeably increased: up from 3 pages in the 12/23/16 edition to 13 pages in the new edition. The additional pages include new fields that request information on the investor, dependents, the Regional Center, NCE, and JCE(s). The 04/10/2017 edition includes the following new changes:

List of Employment for Last 5 Years: USCIS will now require the investor to certify his/her previous employment history for the last five years, including the employer’s name and address, and the investor’s job title and dates of employment. Therefore, the Form I-526 should accurately reflect the investor’s employment history, and the same should for all employment records, tax returns, and resumes submitted as part of the investor’s source of funds.
List of Physical Addresses for Last 5 Years: The investor will need to list all addresses in or out of the United States for the last 5 years.
Other Information About the Investor: The new form provides space for the investor to all other names ever used (including aliases, maiden name, and nicknames), place of birth (city/town and state/province), sex, and country of last foreign residence if the investor is a citizen of more than one country or his/her nationality differs from citizenship.
Is the Investor Currently in Immigration Proceedings? The investor will be required to certify whether he or she is currently in exclusion, deportation, or removal proceedings before the Department of Homeland Security (DHS) or the Department of Justice (DOJ).
Information on Dependent Family Members: This new addition to the Form I-526 requires the name, date of birth, and relationship of the dependent spouse and children applying with the investor. The form also asks the investor to specify whether the dependent will apply for adjustment of status of for a visa abroad.
Information about the Investment. A new addition to Form I-526 is that the investor will now need to check off and also describe the source(s) of the investment capital.
Information on the Regional Center: The new form requires information on the Regional Center which prior versions of the form did not request. The new form includes fields for the Regional Center’s name, the Regional Center Identification Number, the receipt number for the approved Regional Center, and the New Commercial Enterprise (NCE) Identification Number.
Information on the NCE: The form requests that the investor list the name of any other person or entity that holds a percentage ownership in the NCE, their percentage of ownership, and whether that person has obtained classification or is seeking classification as an alien entrepreneur under INA section 305(b)(5) on the bases of his or her investment in the NCE.
Information on the JCE: There is space to include information on all JCEs involved with the new commercial enterprise, if the JCE(s) differs from the NCE.
Interpreter’s Certification: If an interpreter was used by the investor to complete the form, then he or she will need to complete the Interpreter’s Certification section of the form.

Are these new additions to Form I-526 a sign of other changes to come for the EB-5 program? With the comment period already concluded on the proposed EB-5 Regulations (the deadline to submit comments on the Notice of Proposed Rule Making ended on April 11, 2017 at 11:59pm eastern), it remains to be seen if any of the proposed amendments will be implemented by USCIS. The proposed rules seek to increase the minimum investment amount for high employment areas from $1 million to $1.8 million, and increase the minimum investment amount for targeted employment areas from $500,000 to $1.3 million. On top of this, the Regional Center program is set to expire again on April 28, 2017. It still remains to be seen what changes, if any, will be made by the agency or by Congress in the next few weeks. We will be sure to keep you updated on any developments.

ARTICLE BY Sylvia Sobczyk of Greenberg Traurig, LLP

Department of State Releases May 2017 Visa Bulletin

Expect some retrogression in EB-1 and EB-2 cutoff dates in the coming months.

The US Department of State has released its May 2017 Visa Bulletin setting out per-country priority date cutoffs that regulate immigrant visa availability and the flow of status adjustments and consular immigrant visa application filings and approvals.

What Does the May 2017 Visa Bulletin Say?

The May 2017 Visa Bulletin includes both a Dates for Filing Visa Applications chart and an Application Final Action Dates chart. The former indicates when intending immigrants may file their applications for adjustments of status or immigrant visas, and the latter indicates when adjustment of status applications or immigrant visa applications may be approved and permanent residence granted.

If US Citizenship and Immigration Services (USCIS) determines that there are more immigrant visas available for a fiscal year than there are known applicants for such visas, it will state on its website that applicants may use the Dates for Filing Visa Applications chart. Otherwise, applicants should use the Application Final Action Dates chart to determine when they may file their adjustment of status applications.

It is not yet clear which chart USCIS will select for May 2017 filings. To be eligible to file an employment-based (EB) adjustment application in May 2017, a foreign national must have a priority date that is earlier than the date listed below for his or her preference category and country (changes from last month’s Visa Bulletin are shown in yellow).

Application Final Action Dates

EB	All Charge- ability Areas Except Those Listed	China (mainland born)	El Salvador, Guatemala, and Honduras	India	Mexico	Philippines
1^st	C	C	C	C	C	C
2nd	C	08FEB13 (was 15JAN13)	C	22JUN08	C	C
3^rd	15MAR17 (was 15FEB17)	01OCT14 (was 15AUG14)	15MAR17(was 15FEB17)	25MAR05 (was 24MAR05)	15MAR17(was 15FEB17)	01JAN13(was 15SEP12)
Other Workers	15MAR17 (was 15FEB17)	08MAR06 (was 01MAR06)	15MAR17 (was 15FEB17)	25MAR05 (was 24MAR05 )	15MAR17 (was 15FEB17)	01JAN13 (was 15SEP12)

Dates for Filing Visa Applications

EB	All Charge- ability Areas Except Those Listed	China (mainland born)	India	Mexico	Philippines
1st	C	C	C	C	C
2nd	C	01OCT13 (was 01MAR13)	01FEB09 (was 22APR09)	C	C
3rd	C	01SEP15 (was 01MAY14)	22APR06 (was 01JUL05)	C	01JUL14 (was 01SEP13)
Other Workers	C	01JUN08 (was 01AUG09)	22APR06 (was 01JUL05)	C	001JUL14 (was 01SEP13)

On the Application Final Action Dates chart, the cutoff dates for EB-1 will remain “current” for all chargeable countries, including India and China.

The EB-2 cutoff dates for the worldwide allotment as well as for El Salvador, Guatemala, Honduras, Mexico, and the Philippines will also remain “current.” Cutoff dates will advance by one month for EB-2 India and by three weeks for EB-2 China.

The EB-3 cutoff dates for the worldwide allotment as well as for El Salvador, Guatemala, Honduras, and Mexico will advance by one month to March 15, 2017. The cutoff date for EB-3 China will advance by six weeks to October 1, 2014 and the cutoff date for EB-3 India will advance by one day to March 25, 2005. The cutoff date for EB-3 Philippines will advance by three and a half months to January 1, 2013.

The EB-5 China cutoff date will advance by ten days to June 1, 2014.

On the Dates for Filing chart, the cutoff dates for EB-1 will remain “current” for all chargeable countries, including India and China.

The EB-2 cutoff dates for the worldwide allotment as well as for El Salvador, Guatemala, Honduras, Mexico, and the Philippines will also remain “current.” Cutoff dates for EB-2 China will advance by seven months to October 1, 2013. Cutoff dates for EB-2 India will retrogress by three months and three weeks, to February 1, 2009.

Cutoff dates for EB-3 China will advance by 16 months to September 1, 2015, but for “other workers” the cutoff dates will retrogress by 14 months, to June 1, 2008. Cutoff dates for EB-3 India will advance by nine months and three weeks, to April 22, 2006. Finally, cutoff dates for EB-3 Philippines will advance by ten months, to July 1, 2014.

The State Department projected that a Final Action date will be established in the EB-1 category for China and India in the near future. Visa numbers would advance slowly for the remainder of this fiscal year. Additionally, the EB-2 category for the worldwide allotment, El Salvador, Guatemala, Honduras, Mexico, and the Philippines is expected to retrogress no later than July. It is anticipated that this category will also become current at the start of the FY 2018 in October.

Read the May 2017 Visa Bulletin.

ARTICLE BYA. James Vázquez-Azpiri of Morgan, Lewis & Bockius LLP

USCIS Issues Guidance on H-1B Petition Adjudication, Announces ‘Targeted’ Site Visits

USCIS issued a policy memorandum to increase scrutiny of H-1B petitions for computer-related positions and an announcement regarding increased H-1B employer site visits—what will these changes mean for foreign worker visa programs?

In a policy memorandum dated March 31, United States Citizenship and Immigration Services (USCIS) announced that it is formally rescinding the 2000 Immigration and Naturalization Guidance Memo on H-1B Computer Related Positions issued to Nebraska Service Center employees adjudicating H-1B petitions. USCIS considers the 2000 memo to adopt an “obsolete” view of the types of computer-related occupations that qualify as specialty occupations for H-1B purposes (based on the memo’s inaccurate reading of the Occupational Outlook Handbook) and also to not “properly” apply the regulatory criteria that govern qualification for H-1B status. Specifically, the policy memorandum calls attention to the fact that the rescinded memo, while observing that “most” computer programmers hold bachelor’s degrees, did not note in which “specific specialties” such degrees were held. The rescinded memo is also criticized for not mentioning that only “some” computer programmers hold degrees in computer science or information systems, and for inaccurately presenting the fact that some jobs held by computer programmers require only two-year or associate’s degrees. The memo is further criticized for not clarifying that entry-level computer programmers will generally not qualify for H-1B status. Thus, the policy memorandum concludes that an H-1B petitioner cannot rely on the Occupational Outlook Handbook to establish that a computer programmer position is a specialty occupation and that “other evidence” must be provided to establish the specialty occupation.

Several immigration lawyer groups have raised concerns that this new policy memorandum may constitute a first step by the Department of Homeland Security (DHS) to carry out the previously announced intentions of the presidential administration to make foreign worker visa eligibility more restrictive. The new memorandum, by withdrawing a little-known memo, may well make it more difficult for H-1B petitions filed for persons working in computer-related positions to be approved. Its practical effect is that companies in the IT industry seeking H-1B status for their employees will likely have to prove that the positions at issue are not entry-level computer programming positions and that the employees’ degrees and education are specifically related to such positions. Extensive Requests for Evidence (RFEs) seeking such proof are expected to become commonplace, as are denials for failure to offer such proof. As an indication of the scrutiny and limited focus that H-1B petitions for persons working in computer-related positions are now receiving, apparently a number of RFEs questioning the relevance of a degree in electrical engineering to a computer engineer position have been issued recently.

Since the policy memorandum took effect immediately, all H-1B petitions subject to the 2018 fiscal cap will be adjudicated under its provisions, even though no advance notice of its publication was provided.

USCIS Announces ‘More Targeted’ H-1B Site Visits

In a separate announcement issued April 4, USCIS stated that, effective immediately, it will embark upon a “more targeted” campaign of site visits to the worksites where H-1B beneficiaries are employed. Such site visits have been conducted by officers of the USCIS Office of Fraud Detection and National Security since 2009. Under the new initiative, H-1B site visits will focus on three categories of employers:

H-1B dependent employers (generally, employers with 51 or more employees with at least 15% of their workforce composed of H-1B beneficiaries)

Employers filing petitions for employees who will be assigned to work at the worksites of different companies

Employers whose business information cannot be verified through commercially available data (including, primarily, the Validation Instrument for Business Enterprises (VIBE) tool, which is based on a Dun & Bradstreet database

In addition, the announcement notes that “random” site visits will continue to occur.

The practical effect of this announcement may be that site visits to the workplaces of employers that do not fall into one of these categories will diminish, while site visits to employers that do fall into one of these categories will spike sharply and possibly be all but certain. All employers of H-1B beneficiaries are encouraged to adequately prepare for such site visits by ensuring that

information contained in H-1B petitions is at all times accurate and up to date, and

thorough site visit protocols that govern in detail how such visits will be handled are in place.

The announcement notes that the targeted site visit program is intended to identify employers engaging in fraud and abuse of the H-1B category, not to punish individual H-1B employees. To serve this purpose, USCIS has established an email address, reportH1Babuse@uscis.dhs.gov, that will allow both American and H-1B workers to notify the agency, presumably anonymously, of instances of such fraud and abuse.

What Do These Changes Mean?

On January 24, 2017, a draft executive order titled “Executive Order on Protecting American Jobs and Workers by Strengthening the Integrity of Foreign Worker Visa Programs” was publicly circulated. This draft executive order essentially mandates a top-to-bottom review of all foreign worker visa programs to make certain that such programs are not administered in a way that creates a disadvantage to US workers. Although the order has not been finalized to date, it would appear that the presidential administration has started the process of reviewing certain visa classifications, and it is likely that DHS will issue further guidance on other visa classifications in the near future.

ARTICLE BY A. James Vázquez-Azpiri of Morgan, Lewis & Bockius LLP

Tips for Surviving in a Time of Immigration Uncertainty

We planned to write a blog about the revised travel ban Executive Order as soon as it came out. That the revised order was delayed for several weeks until March 6 highlights the uncertainty we face in 2017.^[1] Below we try to answer various questions we regularly receive about immigration issues.

Is domestic airplane travel OK? This may sound like a simple question, but recent events suggest more caution may be wise. For example, Immigration and Customs Enforcement (ICE) agents recently met a plane landing at JFK Airport in New York City, and asked everyone about their immigration status.^[2] The agents were looking for someone who had an old deportation order, but it is possible that anyone without evidence of status could have faced delays. This is a good time to remind ourselves that the law requires anyone who is not a U.S. citizen to carry evidence of status at all times (green card, Employment Authorization Document (EAD), Form I-94 or electronic I-94 printout, valid, unexpired nonimmigrant DHS admission or parole stamp in a foreign passport, etc.).^[3] Try to make it easy for a government officer.
Isn’t that overreacting based on one incident? Maybe, but the bigger picture is that immigration enforcement agents have more discretion and wider operating room than before.^[4] Two memos issued by the Department of Homeland Security (DHS) on February 20 allow for “expedited removal,” which is a fast track process that skips a hearing with an immigration judge.^[5] Expedited removal now can apply to anyone who entered the country within the past 2 years (used to be 2 weeks), and anywhere in the United States (used to be within 100 miles of the border).^[6] Expedited removal happens quickly, sometimes within a matter of days. Having a copy of a document showing status and that you have been in the United States more than two years could help avoid questioning and expedited removal.
How about electronic devices? Can those be searched at the airport or border? The simple answer is “yes,” and this is happening more often.^[7] We recommend that private information, such as a doctor with patient information, should be encrypted. According to the Customs and Border Protection (CBP) website,^[8] CBP officers may search laptops, cell phones, or other electronic devices. CBP may not select someone for a personal search or secondary inspection based on religion, race, national origin, gender, ethnicity, or political beliefs. U.S. citizens may also be questioned and have their devices seized for refusal to provide passwords or unlock devices, but cannot be prevented from entering the United States. Noncitizens may, however, be denied entry. Adding to the uncertainty about how this will play out is a section in one of the January Executive Orders that directs federal government agencies to make sure they “exclude persons who are not United States citizens or lawful permanent residents” from Privacy Act protections concerning personal information.
What does this mean for people from the six countries covered by the new travel ban? Will the court battle still continue? The new order clarifies that green card holders and Iraqis are NOT affected by the visa ban, and that people who had visas revoked or cancelled by the first order may be able to get a travel letter to return. The new order takes effect March 16, 2017, and lasts for 90 days. People with valid visas stamps in their passports can still use them, but new visa stamps will not be issued with very limited discretionary exceptions. The Visa Interview Waiver program is suspended for all countries, and the order states that DHS may add countries to the list after further review. People who are citizens of the six countries can still face additional questioning when they enter the United States as part of a general pattern of enhanced vetting. Travel for citizens of the six countries remains a calculated risk.

We expect that court challenges will continue. The ban still focuses on six predominently Muslim countries, which some see as a religious-based action.^[9] There are still arguments about the negative effects on U.S. business and academic programs.

What does this all mean for DACA recipients? The January Executive Orders state that the deferred action for childhood arrivals (DACA) program remains in effect, but that DACA “will be addressed in future guidance.” This is good news for the 750,000 plus people who have DACA. However, continuation of the program is not guaranteed. And the January Executive Orders call for greater enforcement against anyone with any kind of criminal issue or with a previous deportation order. Some DACA recipients have minor criminal issues – will they be able to renew? Some recipients have previous deportation orders – how will they be treated? DACA recipients should carry their DACA approval and work card with them, should keep investigating ways to get back into status, and talk to an attorney or legal service agency if they have ANY criminal issue, no matter how minor.
What does this mean for undocumented parents of students who want to fly within the United States for their child’s graduation? Some of them have traveled before with no problems. President Obama’s “Priorities Memo” used the idea of prosecutorial discretion to give some level of comfort to those at the bottom of the priority list for enforcement. The new orders make clear that there is a top of the list, but no bottom. The law is the law, and anyone undocumented who is caught could be removed. Anyone who is undocumented who is considering traveling should talk to an attorney or legal service agency to evaluate their own particular situation. For example, immigrationlawhelp.org has a list of accredited agencies. Also, this is not a completely new situation. Every year we see family members abroad who do not receive tourist visas to come to the United States. For those situations, some schools have set up a Skype feed of the ceremony through someone’s cell phone, or sent the family a photo of the student graduating, or other clever ways of trying to include the family in the event.
Speaking of DACA, can many of them really move beyond DACA now? It is certainly worth asking. Many filed for DACA on their own, and have never had a legal consultation despite the fact that their immigration histories can be incredibly complicated. Most interestingly, a growing number of DACA recipients got DACA under age 18½ and now have degrees. Those people MAY (emphasize “may”) not have what is called “unlawful presence,” and MAY be able to consular process an employment based visa or green card.
Going beyond travel, are there any other ways campuses can prepare for new immigration enforcement priorities, short of declaring a “sanctuary campus”? Yes, there are some basic steps that campuses can take. One set of model guidelines focuses on interaction with government officials.^[10] Campus response has varied but generally been strong in favor of international education and diversity. A Washington Post article found that the vast majority of schools have made some kind of statement.^[11] Some schools have been concerned about the political effects of opposing the travel bans. They worry that if they declare themselves immigration sanctuaries they may put a target on their backs. While some schools may be less vocal in their responses, most are supporting students and scholars who are concerned, and connecting students with extra services including counseling and legal services.
If I feel my school is not doing enough, what can I do? In immigration, stories matter. For example, an Iranian graduate student may be thinking of leaving the United States to do a post doc in another country, or cannot travel to present work at a conference abroad, or is simply not sleeping or eating well out of concern, or have a spouse is not still able to enter the United States. These stories help show the real impact of the travel ban. And facts matters – there are some good articles and websites that provide data on the basis of the travel ban and the effects, and also on the positive impact of immigrants on our economy.^[12]
I heard the Executive Orders canceled all of President Obama’s orders except for DACA. Does that include the “sensitive locations” memo that said enforcement should not take place at sensitive locations such as campuses, churches, and hospitals? It appears that the ban on enforcement at sensitive locations survives. This policy is still on the ICE website, and in a DHS Q&A.^[13] We hope this will continue.
Is it true that the Administration and Congress plan to cut back F-1 STEM OPT and the H-1B program, and raise the minimum salaries for H-1B workers? A lot of ideas and draft memos are floating around Washington how to “fix” immigration, including the H-1B system. Bills pending in Congress would amend the H-1B process. The White House may ask DHS to conduct a study of the visa process to determine which visa regulations may or may not be in the national interest, and to make recommendations on how to improve visa systems, including the H-1B system. Are we sure that nothing like this will happen quickly, surprising us the way the travel ban did? Not sure, but passing legislation in Congress and amending federal regulations are normally long-term projects. Remember, the Obama administration was successfully sued for trying to make big changes without formal procedures.
That’s 11 questions – anything else I should know? We all need to remember the energy it takes to operate in uncertainty. In a recent presentation at a university, the director of the counseling center explained that uncertainty can be more tiring and emotionally challenging than bad news. At least with bad news, we can focus attention on how to address it. So hang in there!

ARTICLE BY Steve Yale-Loehr of Miller Mayer LLP & Dan Berger of Curran & Berger, LLP

^{[1] The new executive order is at https://www.whitehouse.gov/the-press-office/2017/03/06/executive-order-protecting-nation-foreign-terrorist-entry-united-states (Mar. 6, 2017).}

^{[2] https://www.theatlantic.com/politics/archive/2017/02/papers-please/517887/?utm_source=fbb.}

^{[3] INA § 264(e) provides: “Every alien, eighteen years of age and over, shall at all times carry with him and have in his personal possession any certificate of alien registration or alien registration receipt card issued to him pursuant to subsection (d). Any alien who fails to comply with the provisions of this subsection shall be guilty of a misdemeanor and shall upon conviction for each offense be fined not to exceed $100 or be imprisoned not more than thirty days, or both.” 8 C.F.R. § 264.1(b) lists the acceptable types of “registration” document that must be carried.}

^{[4] https://www.nytimes.com/2017/02/25/us/ice-immigrant-deportations-trump.html.}

^{[5] The DHS memos and accompanying fact sheets and Q&As are at https://www.dhs.gov/executive-orders-protecting-homeland.}

^{[6] For an article discussing whether expedited removal is constitutional, see David Savage, Trump’s fast-track deportations face legal hurdle: Do unauthorized immigrants have a right to a hearing before a judge?, Mar. 3, 2017, http://www.latimes.com/politics/la-na-pol-deport-legal-20170302-story.html.}

^{[7] For general information on the rights of travelers regarding social media accounts and electronic devices, see https://www.aclu.org/know-your-rights/what-do-when-encountering-law-enforcement-airports-and-other-ports-entry-us. For an interesting NPR piece on this issue, see http://www.wbur.org/hereandnow/2017/02/16/border-agent-unlock-phone.}

^{[8] https://www.cbp.gov/border-security/protecting-nation-foreign-terrorist-entry-united-states.}

^{[9] https://www.washingtonpost.com/opinions/the-evidence-for-trumps-travel-ban-simply-isnt-there/2017/02/27/90e228ac-fd36-11e6-8f41-ea6ed597e4ca_story.html; http://wapo.st/2mZbkx8.}

^{[10] https://www.nilc.org/issues/immigration-enforcement/campus-safe-zones-language-college/.}

^{[11] https://www.washingtonpost.com/news/monkey-cage/wp/2017/02/20/universities-overwhelmingly-objected-to-the-trump-travel-ban-here-are-the-values-they-emphasized/}

^{[12] https://www.washingtonpost.com/graphics/national/visas-impact/; https://www.bloomberg.com/news/articles/2017-01-31/trump-s-immigration-ban-could-cost-u-s-colleges-700-million; immigrationimpact.org.}

^{[13] https://www.ice.gov/ero/enforcement/sensitive-loc; https://www.dhs.gov/news/2017/02/21/qa-dhs-implementation-executive-order-border-security-and-immigration-enforcement (Question 28).}

New USCIS Policy Announced at March 3, 2017 Stakeholders Meeting: Regional Center Geography

At the EB-5 Stakeholders Meeting in Washington DC on March 3, 2017, USCIS announced that I-526 petitions filed for a regional center project in an area not already within the regional center’s approved geography may be denied if filed on or after December 23, 2016.

Under the newly announced policy, a regional center must first have received approval of its expanded geography before I-526 petitions may be filed. Petitions filed before geographic amendment approval will be deniable due to ineligibility at the time of filing.

The announced policy reverses the policy in the May 30, 2013 USCIS EB-5 Policy Memorandum which states that “formal amendments to the regional center designation, however, are not required when a regional center changes its industries of focus, its geographic boundaries, its business plans, or its economic methodologies” (emphasis added). Notwithstanding, investor petitions filed in reliance upon this written guidance are subject to denial if filed after December 23, 2016.

Why did USCIS use December 23, 2016 as the effective date for this new policy? According to Investor Program Office (IPO) officials present at the March 3 meeting, the instructions to new Form I-924 which became effective on December 23, 2016 should have alerted stakeholders of the change. However, stakeholder surprise and dismay at the March 3 meeting indicate that a policy change announced by instructions on a form is insufficient notice for a full reversal of prior policy by memorandum.

Rather, filing fee increases, filing place address changes, or even changes in filing procedure are more in the vein of changes typically made in new form instructions. Moreover, a form instruction that directly contravenes final written authority, such as the May 2013 Policy Memorandum, cannot itself be said to provide notice of policy change. Finally, while the instructions state that an amendment must be filed to “change the geographic area of a regional center,” the instructions do not also state that associated I-526 petitions must wait until such an amendment is approved. Neither is this requirement made in the instructions to the new Form I-526, also made effective on December 23, 2016.

USCIS may change its policy. However, it must do so transparently. The integrity of EB-5 adjudication is compromised when USCIS changes its policy without notice and applies those changes retroactively, as it has done here. Past examples of retroactive policy changes include denials based on findings of “indebtedness,” “tenant occupancy,” and “material change.” Unfortunately, we now add “unapproved geography” to the list. Hearing stakeholder feedback, USCIS will hopefully either revert to prior policy or at least rescind the December 23, 2016 effective date for a prospective one.

Stakeholder feedback on the March 3 meeting may be sent to ipostakeholderengagement@uscis.dhs.gov.

ARTICLE BY Carolyn S. Lee of Miller Mayer LLP

Category: Immigration