Continued from page 23 Continued from page 23 in regional centers will be required to swear compliance and submit fingerprints to the FBI.
Terminations: The U. S. Department of Homeland Security( DHS) may terminate regional center participation in the investor visa program if prohibited persons are involved in the centers, or if the centers provide false information in the context of background checks.
Securities compliance: The bills require regional centers to certify compliance with federal securities laws. USCIS could terminate or suspend regional centers for failure to make the necessary certifications, or for securities law violations.
Impact on the economy: Mandates a review of the impact of the program on the U. S. economy— is it creating jobs and really encouraging foreign investment that will stimulate our U. S. economy?
National security: Include additional reviews of projects and individual investors, in order to protect against national security breaches that may have occurred in the program.
Interagency collaboration: USCIS has pledged that within the next six months it will develop and implement an interagency collaboration plan. This will involve input and collaboration between USCIS, the Department of Commerce, and the Securities and Exchange Commission. We anticipate this will also be mandated through legislation
Minimum investment: Legislation would provide for an adjustment to the amount of investment. The required capital investment would no longer be either $ 1 million or $ 500,000; instead, the amount would be controlled through the U. S. Department of Commerce and keyed off of the Consumer Price Index.
Targeted employment areas: The House bill includes changes to prevent the“ gerrymandering” of lowunemployment areas into targeted employment areas. Specifically, the legislation states that: 1) the TEA must be situated in an area that the U. S. Department of Labor determines to have an unemployment rate of at least 150 percent of the national rate; 2) the U. S. Secretary of Labor should implement a uniform methodology for determining areas’ unemployment rates; and 3) USCIS has the final decision on whether a particular area has experienced high unemployment. This provision could hamper TEA designations as we know them today.
As Congress and the administration review the OIG report and legislate, the EB-5 community can be certain that there will be changes in how regional centers are administered, who administers them, and how they must comply with a new host of legal and regulatory and administrative requirements.
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Laura Reiff is co-managing shareholder / co-chair of the Business Immigration and Compliance Group at Greenberg Traurig, LLP. Ms. Reiff’ s practice focuses on business immigration regulations affecting U. S. and foreign companies, compliance, and legislation. She is a leader in establishing and managing regional centers to create jobs and result in permanent residency for investors. She collaborates with specialists in securities law compliance, targeting employment areas, and projecting of 2013, and the subsequent USCIS response, will serve as road maps for these improvements. The SEC will work closely with USCIS and whistleblowers concerned about misdeeds plaguing the program. We will see further collaborative efforts between agencies, such as in the joint USCIS-SEC investor alert issued last year, which warned investors about fraudulent EB-5 investments.
Enforcement of policy and regulations
USCIS will also collaborate with other agencies in an effort to ensure that security issues are addressed. Former USCIS Director Mayorkas stated that USCIS is working with Immigration Customs Enforcement, Customs and Border Protection, the FBI, and the Treasury Department on EB-5 cases. The USCIS EB-5 office is also working closely with the SEC enforcement division in Washington, D. C. This trend will only continue as the agencies begin to review the program further. Regional centers, finders and others involved in EB-5 will need to consider their responsibilities as gatekeepers. Furthermore, there will be filings for more broker dealer licenses and regional center affiliations with registered broker dealers will become commonplace. Investment advisors and other professionals will have a permanent seat at the table next to the other new guests— the SEC and FINRA.
There will also be an increasing understanding of EB-5 as a multifaceted program that takes numerous skill sets to manage. USCIS already has on-staff corporate attorneys, seasoned economists, and officers from the Fraud Detection and National Security Directorate who help adjudicate applications and create new agency policy. The appointment of the new EB-5 director, Nicholas Colucci, is a strong indication of USCIS’ s mission to increase enforcement. Director Colucci previously served as the associate director at the Department of Treasury Financial Crimes Enforcement Network, which analyzes banks for evidence of financial crime.
Let’ s talk The government has improved its interagency cooperation and public outreach over the past decade. Post-9 / 11, it became clear that agencies must communicate with each other to be effective, and there is nothing novel about applying this idea to the EB-5 program. Interagency cooperation will benefit the program across the board and make it easier for USCIS to administer, for investors to navigate, and for regional centers and project owners to operate.
The OIG report was spot on when identifying the limitations of USCIS resources, and it reminds readers that the adjudication of EB-5 petitions takes a village. The report also identified issues relating to the integrity of the program and security concerns, external and internal influence, lack of protocols, and USCIS’ s inability to quantifiably measure the impact of the EB-5 program on the U. S. economy. These issues can all be tackled by interagency cooperation. Although the report was criticized for ignoring steps that USCIS had already taken, it took stock of the big picture and set an agenda for USCIS to take up internally.
24 EB5 Investors Magazine