Democrats and republicans in the U.S. Senate are collaborating to make some big changes to the EB-5 program, which currently sunsets on September 30, 2015.  For an overview of the EB-5 program as it currently exists through September 30th, click here.  They are still negotiating so it is not clear what the final proposed legislation will look like, but one of the biggest changes they are proposing is that the amount that investors contribute in order to get the EB-5 will go up.  Although $800,000 is the minimum amount being proposed, because the definition of a Targeted Employment Area (TEA) may become more stringent, EB-5 projects that would currently qualify for the minimum investment may no longer qualify under the new rules, which means that investors may need to contribute a higher amount ($1,200,000 is the number currently being proposed) for investment projects that are not grandfathered under the old rules or that do not meet the new TEA definition if it is adopted.  Moreover, the documentation regarding source of funds that is currently required is also likely to become more cumbersome under the proposed legislation.

It is still possible that the EB-5 program as it currently exists could be extended beyond September 30th either temporarily or for a more lengthy period.  It is also possible (but not likely) that the program could be eliminated after September 30th.  Given the uncertainty, any investor interested in using the EB-5 program should seriously consider filing the I-526 application before the current program expiration if at all possible - doing so does not guarantee that the I-526 will be processed under the current rules, but it is likely that there will be some type of grandfathering for those whose I-526 applications are received at USCIS by that date.

If you had a U.S. visa interview on or after June 9th, you may be affected by delays.  Here is the notification from the U.S. Department of State:

JUNE 15, 2015

Passport/Visa Systems Errors

• The Bureau of Consular Affairs is currently experiencing technical problems with our visa systems.  These issues have resulted in delays in printing visas and may mean rescheduling some visa interviews.
  
• This issue is not specific to any particular country or visa category. 
• Overseas passports are now being processed.  Domestic passport services are functioning, and we were always able to issue emergency passports to U.S. citizens overseas with urgent travel needs.
  
• The Consular Consolidated Database (CCD) problems we are experiencing are not the same challenges we overcame last summer.  We are working urgently around the clock to correct the problems and restore our system to full operational status as soon as possible.
  
• We apologize to applicants who are experiencing delays or were unable to obtain a passport overseas, Consular Report of Birth Abroad, or U.S. visa.  
  
• We are seeking to assist nonimmigrant visa applicants with urgent humanitarian travel.  Individuals with an urgent humanitarian need for travel should contact their nearest U.S. embassy or consulate. 
  
• We are aware of pending overseas adoption cases, including in China.  We are prioritizing these cases and seek to issue these visas with few delays.
  
• We regret the inconvenience to travelers, and remain committed to facilitating legitimate travel while protecting our borders. 
• We will post updates to Travel.State.Gov as more information becomes available.

Q: Is this the same issue as last year? Was it not fixed?

• This is not the same issue as last year.

Q: What is going on?  Why can’t the Department issue visas, passports, and other travel documents? 

• We are working as quickly as possible to resolve our technical issues. 
  
• We apologize to travelers and recognize that this may cause hardship to individuals waiting for visas overseas.

Q: What caused this outage?  Was it a malicious action or hack?

• There is no evidence the problem is cyber security related. We are working urgently to correct the problem and expect the system to be fully operational again soon. 

Q: How is this affecting consular operations?

      Passports – Overseas Issuance of Passports

• Passport applications accepted overseas on or after May 26, 2015, were affected, but overseas passports are now being issued.  If you applied for a U.S. passport between May 26 and June 14 and have travel plans within the next 10 business days, please consider requesting an emergency passport at the U.S. embassy or consulate at which you originally applied.  Information about how to apply for an emergency passport is available on the website of the nearest U.S. embassy or consulate.

      
Visas

• A hardware failure on June 9 halted the flow of biometric clearance requests from posts to the Consular Consolidated Database (CCD).   Individuals who submitted online applications or were interviewed for visas on or after June 9 may experience a delay in the processing. 
  
• The systems in place to perform required national security checks before we issue visas are experiencing technical difficulties.  As a result, we are unable to print visas. 
• We cannot bypass the legal requirements necessary to screen visa applicants before we issue visas for travel.
  
• As a result, there is a backlog of visas waiting to be processed.  We are working as quickly as possible to resolve the issue and to clear the backlog.  
• The technical issues we are experiencing have disrupted or prevented some of the Department’s primary data-share partners from accessing visa records.  

Q: Can you print a visa without using the data system?

• Security measures prevent consular officers from printing a visa until the case completes the required national security checks. 
  
• Service to our customers will be interrupted until the system is brought back online.  

Q: Can the Department just print travel letters for those who need to travel quickly?

• At this time we are able to issue passports to U.S. citizens overseas for emergency travel.
• Domestic passport operations are functioning.  U.S. citizens applying for a passport domestically will receive passports within the four-to-six week standard for routine passports and two-to-three weeks for expedited passports.
• We are seeking to assist nonimmigrant visa applicants with urgent humanitarian travel.  Please contact the embassy or consulate where you applied for additional information.

Q: How long before you restore full system functionality?

• Overseas passports are now being issued.  We are working urgently to restore visa processing.  We expect the systems to be fully operational again soon.

Q: How many overseas passport applicants have been affected?

• Overseas passport applications account for less than five percent of our annual passport workload. During the overseas passport systems issues that have since been resolved, we ‎were able to issue emergency overseas passports to U.S. citizens who needed them for urgent travel.

Link to Department of State available here.

By MATTHEW MOSK and BRIAN ROSS

Two leading U.S. Senators introduced legislation Wednesday night to clean up a boutique U.S. immigration program for wealthy foreigners that has repeatedly been undermined by fraud and in some cases may have been exploited by criminals, money launderers, and foreign agents looking for an easy way across the border.

Senate Judiciary Chairman Charles Grassley, R-Iowa, and Vermont Democrat Sen. Patrick Leahycredited the program, known by the visa designation EB-5, for creating thousands of jobs by offering temporary residency and eventually Green Cards to foreigners who agreed to invest more than $500,000 in approved American ventures. But they also acknowledged what a two-part ABC News investigation found -- that the program had become a magnet for those seeking to sidestep the scrutiny of the traditional immigration process.

“We’ve seen too many occasions where national security has been put at risk and job creation has taken a back seat,” Grassley said. “Our bill strengthens oversight, ensures greater accountability and transparency, discourages fraud, and provides a higher priority for national security.”

Leahy said in a statement released Wednesday night that the “program faces some challenges, but I have not seen any flaw inherent to the program that could not be remedied.”

The two men crafted the legislation in order to fix the program before it was set to expire later this year. Leahy is one of the investor visa idea’s staunchest supporters, while Grassley has been one of its harshest critics. At the heart of the program’s difficulties has been a free-wheeling system that designates privately-run so-called “regional centers” designed to help pair up wealthy foreign investors with entrepreneurs and developers in the U.S.

A Feb. 1, 2013 Homeland Security internal review of the program obtained by ABC News laid out in stark detail the breadth of the troubles afflicting some of the roughly 600 regional centers. The document summarizes 41 investigations, some open and some now closed, into allegations ranging from espionage to fraud to drug trafficking involving investors in various EB-5 investment projects.

One regional center, run by an Iranian-born businessman living in Beverly Hills, continued to be approved to raise roughly $25 million in investment money from foreign sources even when one of his businesses was being raided by agents. Federal officials told ABC News the businessman was suspected of allegedly smuggling banned items to Iran. Lawyers for the company and its owner said they broke no laws.

Another regional center raised money from Chinese investors to finance the construction of federal buildings, including an FBI headquarters building in San Diego, raising what one internal document called “national security concerns” that “pertain to Chinese investors having visibility to FBI blueprints/information.”

DHS officials told ABC News in a statement that the immigration agency “only has the authority to terminate a regional center if there is evidence the center is no longer promoting economic growth -- not on the basis of national security concerns.”

“This lack of discretion limits the ability of the Director or the Secretary to terminate a regional center in the event of suspected or even proven criminal activity,” the statement says, adding that the administration sought additional leeway from Congress to act on security concerns but did not receive it.

The legislation introduced Wednesday attempts to solve that problem by vastly expanding the authority of Homeland Security officials to investigate regional centers for potential fraud or national security concerns, and terminate those that they believe pose a risk to investors or the country. The legislation proposed paying for the increased scrutiny with an “enforcement fund” paid for by the regional centers themselves. It also increases the minimum amount an investor can commit from $500,000 to $800,000 in order to qualify for temporary residency in the U.S.

The legislative proposal also requires enhanced vetting of regional center personnel and screening of applicants with background checks.

Leahy said he pushed forward on the legislation, separate from other immigration measures, because he believes it is important to repair the program before it is set to expire later this year.

Supporters of the program have noted that it is now so popular that the 10,000 visas allotted in 2014 for EB-5 investors were claimed in a matter of months. The money has paid for popular projects -- a Brooklyn basketball arena, a California winery, a Vermont ski lodge, even a Hollywood movie studio -- and it has supported an estimated 42,000 jobs.

"I have seen over the last two decades how the EB-5 program creates jobs and provides access to capital in communities in Vermont and throughout the country, all at no cost to American taxpayers,” Leahy said.

ABC Article and Video access here

Maddy Ellis participated in the American Immigration Lawyers’ Association (AILA) lobby day in April where she met with staffers in Virginia Senator’s Mark Warner’s office and Virginia House Representative Barbara Comstock’s office and pushed for business immigration reform, especially with respect to increasing the H-1B cap and reducing backlogs on employment-based green cards (items in the currently proposed Senate I-Squared Act bill). 

In addition, Maddy attended the AILA Spring conference in DC where she received the latest legislative updates on immigration law.  Among items of interest to our clients and colleagues that were relayed at the conference (note that these items are not intended as legal advice, but as information relayed at the conference only):

·      In the President’s budget proposal, filing fees will be charged for U.S. Department of Labor PERM labor certification applications, which will probably start in FY 2017;

·      For U.S. naturalization (citizenship) applications, credit card payment and electronic filing options are likely to be implemented this fall;

·      Regulations will be issued to expand I-601 waivers (for grounds of inadmissibility) and to clarify what hardship means;

·      Parole for entrepreneurs and researchers is unlikely to happen any time soon, but use of the National Interest Waiver category to expand options to apply for U.S. permanent resident status for entrepreneurs and researchers is already underway (though formal guidance has not yet been issued);

·      For L-1B visas, specialized knowledge does not have to be proprietary and a preponderance of the evidence standard will be used;

·      An original I-797 approval notice is not required for entry at the border – a copy can be produced – but secondary inspection will likely occur in these cases in order to verify the copy;

·      Employers’ use of USCIS E-Verify to determine eligibility of employees to work in the U.S. is shared with ICE and OSC if there are irregularities – since the program is voluntary, employers are not advised to use E-Verify;

·      Soon there will be electronic Forms I-9; and

·      If the U.S. Department of State revokes a visa while the visa holder is in the U.S., the visa holder does not automatically lose his or her status in the U.S. as long as the Form I-94 is still valid.

Coming up next week – Maddy is speaking on nonimmigrant visa strategies for researchers at the 2015 Symposium by the Council for Global Immigration, a SHRM affiliate, on June 9th in Washington, DC.  For more information about this program, click here.