POST-RIA REALITY CHECK: HOW DID THE SOURCE OF FUNDS ADJUDICATION FOR CHINESE EB-5 INVESTORS CHANGE?— BY F. OLIVER YANG
JUDICIAL INFLUENCE ON ADMINISTRATIVE PRACTICE While neither legal case, Battineni v. Mayorkas or Zhou v. McAleenan, creates binding precedent on USCIS adjudications, both have positively influenced the adjudication of RFEs significantly, influencing how immigration officers evaluate source of funds documentation and respond to petitioner arguments.
The Battineni decision, which addressed the scope of required financial documentation from a third party, appears to have influenced USCIS ' s approach to evaluating circumstantial evidence in source of funds cases.
Officers increasingly accept wellreasoned explanations supported by available documentation, even when perfect records are unavailable due to the passage of time or foreign documentation practices.
Similarly, the Zhou case has provided helpful precedential support for petitioners responding to RFEs and Notices of Intent to Deny( NOIDs). USCIS officers demonstrate increased receptiveness to arguments citing these decisions, particularly when addressing questions regarding sources of funds originating from third parties long ago. While the full impact of these cases on the appeals process remains to be determined due to limited data points, their influence on RFE adjudications has proven beneficial for many EB-5 investors.
NAVIGATING CHINESE INVESTOR-SPECIFIC CHALLENGES Chinese EB-5 investors continue to face several recurring documentation challenges that require careful strategic planning. Understanding these patterns enables investors to develop more effective SOF strategies.
Tax Return Requirements
USCIS has demonstrated surprising flexibility regarding uncommon source of funds scenarios that comply with regulatory requirements while addressing practical business constraints
While the RIA establishes a seven-year baseline for tax return documentation, USCIS has not been strictly enforcing this requirement in practice. In most cases, when investors utilize cash accumulated from sources that originated more than seven years ago, the U. S. immigration agency has approved cases without requesting the full seven years of tax records. However, some EB-5 investors still have occasionally received RFEs on this issue.
Historical Documentation for Distant Source Events For investments sourced from cash savings accumulated over decades, officers typically accept explanations supported by available financial records without demanding comprehensive tax returns for the entire accumulation period. This practical approach acknowledges the reality of Chinese financial recordkeeping practices, focusing on demonstrating the legitimacy of fund accumulation rather than perfect documentation trails.
The key to success lies in providing plausible explanations supported by available contemporaneous evidence, even when perfect records are unavailable. USCIS appears to recognize the practical limitations of obtaining pristine financial records from decades past, particularly given evolving Chinese banking and taxation systems.
Importantly, these historical documentation requests appear somewhat random rather than systematic, suggesting that individual officer preferences rather than official policy drive these inquiries.
Employment History Verification USCIS maintains rigorous attention to employment history consistency, particularly when employment relates directly to the generation of source of funds. Officers routinely compare current EB-5 petitions against previous visa applications, including tourist visas, student visas, and employment-based petitions.
Any discrepancies in employment history that connect to SOF creation trigger intensive RFE scrutiny. This pattern underscores the importance of maintaining consistent biographical information across all immigration filings and carefully reviewing historical submissions before preparing EB-5 documentation.
Personal Loan Documentation The Zhang v. USCIS court decision has provided helpful clarity regarding personal loans as SOF, and USCIS generally accepts well-documented personal loans without collateral. However, additional documentation is essential for establishing the bona fide nature of the loan, particularly when the kinship ties between the borrower and lender appear tenuous.
Successful personal loan documentation typically includes a clear explanation of the relationship between the parties, evidence of the lender’ s source of funds, a loan agreement with detailed terms, proof of the borrower’ s ability to repay both principal and interest, and records of fund transfers. Where family relationships are distant or not clearly established, additional corroborating evidence is often necessary to demonstrate the legitimacy of the loan arrangement.
USCIS Adaptability to Less Common Scenarios USCIS has demonstrated surprising flexibility regarding uncommon source of funds scenarios that comply with regulatory requirements while addressing practical business constraints. Complex structures, such as loans against company cash flow rather than shareholder equity, have gained acceptance when properly documented and explained.
Similarly, loan arrangements
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