One of the practical approaches to establishing the framework for adjudication is to introduce the evidence that the parties who have never anticipated that their earning capacity and financial status may be a subject to a scrutiny of the U . S . Government , did not keep certain records or did not structure certain transactions in the manner consistent with the practice of U . S . law . Creating a context , cultural and socioeconomic , may assist the adjudicator in assessment of the legitimacy of the transaction without fully exposing financial affairs of the donor or a lender .
Also , the new statutory language supports the proposition that alternative evidence may be considered in source of funds adjudication . The new law specifically references “ business and tax records , or similar records ” 11 as evidence of the legitimacy of the funds . The regulation and policy are silent on what constitutes a record “ similar ” to business and tax documents . During the most recent EB-5 Stakeholder meeting , USCIS indicated that the Agency is currently updating the Consolidated Handbook of Adjudication Procedures , as well as Policy Manual , templates , and other documents to provide more guidance and achieve a consistent application of the law . 12 Though the EB-5 community is generally skeptical on efficiency of the USCIS ’ policy making , until guidance is issued , the investor may argue that functional equivalent of tax declarations ( for example , corporate books , audited statements , profit and loss report , etc ) may satisfy burden of proof without releasing confidential information of third parties to the immigration services .
Finally , the landmark decision on use of loan proceeds in EB-5 process , Zhang et al v USCIS , expressly held that provisions of C . F . R . focus “ on the exchange between the foreign investor … and the new U . S . enterprise ”, rather than “ on any prior exchange between the investor and his source of funds .” 13 Armed with this argument , the investor may still successfully limit the inquiry into the mechanics of the exchange between the investor and the third parties .
THE RESULTS OF RIA AND THE FUTURE OF SOURCE OF FUNDS
RIA , though welcomed by the EB-5 community , created multiple unprecedented challenges that require a development of approaches never utilized in the industry before . As the denial rate for Vietnamese investors traditionally relying on dealing with third parties in the EB-5 process raised , it became apparent that methods of documentation of SOF used for years without any detriment to I-526 adjudication need to be reconsidered . The enhanced requirement that the RIA imposes on lenders or donors of investment funds is reshaping the way attorneys now need to advise their clients on evidentiary burden and incorporates additional “ hidden figures ” into an already complex equation . While USCIS is yet to develop the guidance and policies for navigating this issue , it is up to the immigration practitioners to adapt to the changing environment .
Natalia Polukhtin , attorney at Global Practice , specializes in employmentbased immigrant and non-immigrant visa categories . She published several articles on the integration of non-traditional sources of funds , such as cryptocurrency , into immigration processes . Polukhtin is a recipient of multiple professional awards , including Top 25 Immigration Attorneys by EB5 Investors Magazine and an industry recognition from IIUSA . She is a long-standing member of the AILA National Ethics Committee and Executive Council of the Immigration Law Section of the State Bar , a blogger , and an author of the first-ever comprehensive guide to U . S . business immigration written in Russian .
Sources :
1 8 CFR § 204 . 6 ( j )( 3 )
2 8 C . F . R . § 204 . 6 ( e )
3 PL 117-103 , Part 2 ( L )( i ) (“ Source of Funds ”)
4 Id . ( L )( ii )( III )
5 See e . g . pending litigation AIIA v USCIS , Case 1 : 23-cv-00820 ( U . S . District Court for District of
Columbia ); alleging “ illegal and unconscionable policy shift ” in adjudication of the Vietnamese Investors ’ cases involving the third-party money exchangers ;
6 IRS Notice 2014-21 ; www . irs . gov / pub / irs-drop / n-14-21 . pdf ( last accessed July 5 , 2022 )
7 PL 117-103 , Part 2 ( L )( iii )( I )( aa )
8 Kirke La Shelle Company v . The Paul Armstrong Company et al . 263 N . Y . 79 ; 188 N . E . 163 ( 1933 ), codified as USS 1-304
9 Spencer Enterprise Inc v . U . S ., 229 F . Supp . 2d 1025 , 1040 ( E . D . Calif . 2001 ) aff ’ d 345 F . 3d 683 ( 9th Cir . 2003 ).
10 TRW Inc v . Andrews , 534 U . S . 19 , 28 ( 2001 )
11 PL 117-103 , Part 2 ( L )( i )
12 EB5 National Stakeholder Engagement hosted by USCIS ( October 19 , 2022 ); available at
https :// www . uscis . gov / sites / default / files / document / data / National % 20Engagement-EB-5 % 20 Immigrant % 20Investor % 20Program . pdf ( last accessed on July 5 , 2023 );
13 Zhang v USCIS , 978 F . 3d 1314 , 1319-22 ( D . C . Cir . 2020
14 EB5 INVESTORS MAGAZINE