EB-5 Community Braces For New Announcement Regarding Regional Center Redesignation

Following the enactment of the EB-5 Reform and Integrity Act, the regional center program was to begin functioning on May 15th, 2022. However, in late April of 2022, the U.S. Citizenship and Immigration Service (USCIS) published a set of frequently asked questions (FAQs) in which it announced a new policy in which, “Entities seeking to be designated as a regional center are required to file Form I-956, Application for Regional Center Designation.” The USCIS indicated that it would publish this new form, including the form instructions, with additional information regarding the filing process by May 14, 2022.

Unwelcome Anticipated Change

The implementation of this new step was not a welcome development. The problem was that the USCIS was taking the view that previously designated regional centers would be eligible to help new investors file for their green cards only after the regional center: 1) got the approval of the Form I-596 and 2) then submitted a project application and 3) received a receipt number.

Objections Raised

This prompted Invest in the USA (IIUSA) a national, membership-based 501(c)(6) not-for-profit industry trade association formed to support the EB-5 Regional Center Program to object to the USCIS about this delay. IIUSA wrote a letter, dated April 29th, 2022 expressing its, “profound disappointment regarding the events of April 29, 2022, involving unworkable interpretations of the EB-5 Reform and Integrity Act of 2022 (“RIA”).” It added, “These events vividly show the need for a working dialogue between USCIS and the EB-5 stakeholder community.”

The letter then proceeded to further lay out the concerns of the Association. “IIUSA had requested by letter dated April 18, 2022, that should USCIS interpret RIA as requiring regional center redesignation, such redesignation be accomplished by an attestation rather than a filing requiring adjudication. This proposal, based on the annual regional center certification precedent, would allow regional centers to resume promoting economic growth and job creation as soon as possible while maintaining USCIS’s authority to terminate non-compliant regional centers.” The letter concluded that the interpretation being adopted by USCIS amounted to impossible prolonged delays in adjudications, or as the IIUSA put it, “ This absurd result would stand RIA on its head.” In short, IIUSA was unhappy and felt the interpretation of the USCIS of its new mandate was impossible to work with.

Congressional Intervention

This position was later supported by four leaders from Congress, Senators Chuck Schumer, Lindsay Graham, and John Cornyn and Representative Jerry Nadler, who together sent a letter to U.S. Department of Homeland Security Secretary Alejandro Mayorkas on May 9th, 2022 urging the Secretary not to require Regional Centers designated under the previous law to redesignate. The letter set out their views as follows:

“Specifically, requiring all regional centers to go through a process to be redesignated is not required under the EB–5 Reform and Integrity Act of 2022 and will put an immense burden on the agency. Instead, the agency currently has the authority and the tools to confirm compliance with the new integrity measures without the need for a full-scale redesignation of existing regional centers.”

The letter went on to say, “It is our hope that the agency will take into consideration the legal points below, which establish that regional centers need not be redesignated by USCIS:

1. The statutory language indicates existing regional centers remain designated.
2. An interpretation requiring new regional center designations will result in all existing investors without approved conditional permanent residency facing denial.
3. The retroactive application of law is potentially unlawful.
4. Regional centers still need to make all required compliance certifications at the end of this fiscal year.

Under each of the four points, the four leaders laid out more detailed arguments supporting their contentions.

Uncertain Next Step

It is not known whether these representations will substantially change the direction USCIS was going regarding redesignation. Its decision is expected soon. The EB-5 community is bracing to see what develops. This is a pivotal moment for the EB-5 community. Hopefully, the USCIS will make a decision that will breathe new life into the program.