HOT TOPICS IN U.S. IMMIGRATION

Transcription

1 HOT TOPICS IN U.S. IMMIGRATION Sponsor: Immigration & Nationality Law Section CLE Credit: 1.0 Thursday, June 22, :40 a.m. - 10:40 a.m. West Ballroom A-B Owensboro Convention Center Owensboro, Kentucky

2 A NOTE CONCERNING THE PROGRAM MATERIALS The materials included in this Kentucky Bar Association Continuing Legal Education handbook are intended to provide current and accurate information about the subject matter covered. No representation or warranty is made concerning the application of the legal or other principles discussed by the instructors to any specific fact situation, nor is any prediction made concerning how any particular judge or jury will interpret or apply such principles. The proper interpretation or application of the principles discussed is a matter for the considered judgment of the individual legal practitioner. The faculty and staff of this Kentucky Bar Association CLE program disclaim liability therefore. Attorneys using these materials, or information otherwise conveyed during the program, in dealing with a specific legal matter have a duty to research original and current sources of authority. Printed by: Evolution Creative Solutions 7107 Shona Drive Cincinnati, Ohio Kentucky Bar Association

3 TABLE OF CONTENTS The Presenters... i Executive Orders and 13780: "Protecting the Nation from Foreign Terrorist Entry into the United States"... 1 Hot Topics in Employment and Investment Immigration Law... 11

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5 THE PRESENTERS Kirby J. Fullerton Carman & Fullerton, PLLC 271 West Short Street, Suite 101 Lexington, Kentucky (859) KIRBY J. FULLERTON is a partner with Carman & Fullerton, PLLC in Lexington and focuses his practice in the area of immigration law. Mr. Fullerton received his B.A. from the University of Florida and his J.D. from the University of Kentucky College of Law. He is a member of the Fayette County and Kentucky Bar Associations and the American Immigration Lawyers Association. Mr. Fullerton was born in Berlin, Germany. As an army brat, he spent the majority of his childhood in Latin America. He has lived in two places that no longer exist: West Berlin and the Panama Canal Zone. He speaks fluent Spanish and reluctant English. D. Eric Funke 624 West Main Street, Suite 400 Louisville, Kentucky (502) davidefunke@gmail.com D. Eric Funke maintains a private practice in Louisville and concentrates his practice in the area of immigration law. He is also an Adjunct Professor of Law at the Louis D. Brandeis School of Law at the University of Louisville. Mr. Funke is a graduate of American University and received his J.D. from Case Western Reserve University School of Law. He is a member of the American Immigration Lawyers Association. i

6 Ryan E. Schwank Post Office Box 778 Bowling Green, Kentucky (270) RYAN E. SCHWANK is a solo practitioner in Bowling Green who represents foreign businesses, visitors, and immigrants to Kentucky on the issues of domestic and international law, including immigration, investment protection, estate planning, and civil litigation. His immigration practice is an integral part of offering comprehensive legal advice to his overseas clients and migrants. He received his B.A. in Political Science and Masters of Public Administration from Western Kentucky University. He received his J.D. from Stetson University College of Law, cum laude, and his LL.M. in International Business Law from King s College, London, with merit. Before practicing law, Mr. Schwank worked as a community advocate for migrants and continues this advocacy from his current practice. He is a member of the Kentucky, Federal, and Hispanic Bar Associations and the Society for International Economic Law. He is admitted to practice before the Kentucky Supreme Court and the Western District of Kentucky. ii

7 EXECUTIVE ORDERS AND 13780: "PROTECTING THE NATION FROM FOREIGN TERRORIST ENTRY INTO THE UNITED STATES" 1 Kirby J. Fullerton I. THE FIRST ONE: THE IMPORTANT STUFF A. On January 27, 2017, President Trump signed an executive order, "Protecting the Nation from Foreign Terrorist Entry into the United States." B. Citation: Exec. Order No , 82 Fed. Reg. 20 (Jan. 27, 2017) C. What was in EO 13769? 1. Summary. a. Suspended entry into the United States for ninety days of immigrant and nonimmigrant "aliens" from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. b. Suspended the entire U.S. Refugee Admission Program (USRAP) for 120 days. c. Halted the processing and admission of Syrian refugees indefinitely. 2. Section 3: Suspension of Issuance of Visas and Other Immigration Benefits to Nationals of Countries of Particular Concern. a. Pursuant to 212(f) of the Immigration and Nationality Act (INA), suspended both immigrant and nonimmigrant "entry" of "aliens from countries" designated pursuant to INA 217(a)(12) for ninety days from the date of the Executive Order. i. INA 212: General Classes of Aliens Ineligible to Receive Visas and Ineligible for Admission; Waivers of Inadmissibility. INA 212(f): Whenever the President finds that the entry of any aliens or of any class of aliens into the United States would be detrimental to the interests of the United States, he may by proclamation, and for 1 Disclaimer: The current situation regarding Executive Order is fluid. It is very likely that the topics discussed in these materials will change by the 2017 Kentucky Bar Association Annual Convention. Any changes will be discussed during the CLE program. 1

8 such period as he shall deem necessary, suspend the entry of all aliens or any class of aliens as immigrants or nonimmigrants, or impose on the entry of aliens any restrictions he may deem to be appropriate. ii. INA 217: Visa Waiver Program for Certain Visitors. INA 217(a)(12): (i) (ii) Subparagraph (A): Specifically lists Iraq and Syria as countries ineligible for the Visa Waiver Program and allows for Secretary of State to include any other country designated as a state sponsor of terrorism. Subparagraph (D) Waiver: Department of Homeland Security (DHS) Secretary may waive application of subparagraph (A) to an alien if Secretary determines that waiver is in the law enforcement or national security interests of the United States. b. Countries included in "travel ban:" i. Per INA 217(a)(12): (a) (b) Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. Iraq and Syria specifically listed in statute, other included countries later added. ii. Additional countries could be added at any time. Note: There are rumors that the list will be expanded to include other countries e.g., Venezuela and Columbia but the government has denied these rumors. c. Included narrow exception permitting issuance of visas or other immigration benefits "to nationals of [such] countries" on a case-by-case basis when it is in the national interest during the suspension period. 2

9 3. Section 5: Realignment of U.S. Refugee Admissions Program for Fiscal Year a. Suspended the entire USRAP for 120 days. b. Halted the processing and admission of Syrian refugees indefinitely. c. Allowed limited exceptions for the admission of individual refugees on a case-by-case basis if it is in the national interest (e.g., when the person is a religious minority in his/her country of nationality facing religious persecution or when the person is already in transit and denying admission would cause undue hardship). Admission cannot pose a risk to the United States. d. Once USRAP resumed, refugee claims based on religious persecution were to be prioritized, but only if the person is of a minority religion in their country of nationality. e. Lowered refugee ceiling from 110,000 to 50,000 for remainder of fiscal year f. Directed DHS to examine laws to determine the extent to which state and local jurisdictions may have greater involvement in determining placement or resettlement of refugees in their jurisdictions. D. How Did the Government Intend to Enforce EO 13769? 1. Nonimmigrants. a. Suspension of Nonimmigrant Visa Processing: On January 27, 2017, DOS announced the immediate suspension of visa issuance to nationals of the seven affected countries Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen "until further notification." b. Revocation of Nonimmigrant Visas: On January 27, 2017, DOS announced, pursuant to INA 212(f) and 221(i) and 22 C.F.R , that "all valid nonimmigrant visas" issued to nationals of the seven affected countries were "hereby provisionally revoke[d]." Note: It was unclear how this would have affected nonimmigrants that were already in the U.S. when the Executive Order was signed. Since a nonimmigrant's status is determined upon entry, revocation of the nonimmigrant visa should not affect that status. However, presence in the U.S. with a revoked visa can lead to removability (i.e., deportability) under INA 237(a)(1)(B). 3

10 c. Boarding and admission. i. Individuals with a nonimmigrant visa in a passport from one of the seven affected countries would generally not be allowed to board a plane to the U.S., and the visa would likely be deemed provisionally revoked. ii. Dual nationals with a valid nonimmigrant visa in a passport from an unrestricted country would generally be permitted to board. 2. Immigrants. iii. According to DHS guidance issued January 29, 2017, the entry ban applies to individuals "traveling on passports" from the designated countries. a. Generally: On February 1, 2017, DHS confirmed that the travel ban did not apply to lawful permanent residents (LPRs). i. In order to be exempted from travel ban, person must have already been admitted to the United States as an LPR or have adjusted to LPR status. ii. Immigrant visas that had not been used to enter the U.S. appeared to have been provisionally revoked. b. Suspension of immigrant visa processing and interview cancellation. i. On January 27, 2017, DOS announced the immediate suspension of visa issuance to nationals of the affected countries "until further notification." ii. On February 1, 2017, DOS announced that the processing of immigrant visa (IV) for individuals who are nationals and dual nationals of one of the seven affected countries had been halted, and that all February, 2017, IV interviews had been cancelled. Note: IV applications are processed in the United States before being sent to the U.S. Consulate abroad for IV issuance. c. Revocation of immigrant visas: On January 27, 2017, DOS announced, pursuant to INA 212(f) and 221(i) and 22 C.F.R , that "all valid immigrant visas" of the 4

11 seven affected countries were "hereby provisionally revoke[d]." d. Boarding and admission: see above. 3. Lawful permanent residents (LPRs). a. By definition, LPRs were originally included in the ban. b. On January 29, 2017, DHS issued guidance deeming "the entry of lawful permanent residents to be in the national interest" and that "absent the receipt of significant derogatory information indicating a serious threat to public safety and welfare, lawful permanent resident status will be a dispositive factor in [DHS] case-by-case determinations." c. On February 1, 2017, the White House clarified that the Executive Order does not apply to the entries of LPRs. d. LPRs from the affected countries should have generally been allowed to board airplanes and enter the United States. 4. Refugees. a. Refugees in transit: Exception for refugees that were currently "in transit" found in Section 5(e) of the Executive Order did not apply to people from the designated countries. b. Returning refugees and asylees: Returning refugees and asylees from the designated countries were included in the ban and would not have been allowed to board airplanes or enter the U.S. unless qualified for an exception. E. What Happened to EO 13769? 1. EO was effective immediately and was issued without any real notice or guidance provided to DHS, DOS or stakeholders (i.e., immigration attorneys and organizations), causing widespread confusion. 2. Federal court action. State of Washington v. Trump. a. Cite: State of Washington v. Trump, No. 17-CV JLR (W.D. Wash. filed Jan. 30, 2017). b. Timeline. 5

12 i. January 30, (a) (b) Washington State filed a lawsuit challenging EO on constitutional grounds, as well as claims that it violated the INA, the Foreign Affairs and Restructuring Act, the Religious Freedom Restoration Act, and the Administrative Procedures Act. Washington State also filed a motion asking the court to grant a nationwide temporary restraining order. ii. February 1, 2017: Minnesota joined the lawsuit and an amended complaint was filed. iii. February 3, (a) (b) The court granted a nationwide temporary restraining order. In issuing the order, Judge James L. Robart wrote, "The court concludes that the circumstances brought before it today are such that it must intervene to fulfill its constitutional role in our tri-part government." iv. February 9, (a) (b) The Ninth Circuit Court of Appeals, in a per curiam order, denied the federal government's motion for an emergency stay, finding that it failed to show a likelihood of success on the merits of its appeal, and that it also failed to show that the lack of a stay would cause irreparable injury. The temporary restraining order remained in place. v. February 16, The Department of Justice (DOJ) notified the court that President Trump intended to rescind EO and issue a new order in its place. vi. March 6, 2017: President Trump issued Executive Order (see below). 6

13 II. THE SECOND ONE: THE IMPORTANT STUFF A. On Mar. 6, 2017, President Trump signed a new executive order with the same title as the first, "Protecting the Nation from Foreign Terrorist Entry into the United States." B. Citation: Exec. Order No , 82 Fed. Reg. 45 (Mar. 6, 2017) C. What is in the EO 13780? 1. Summary. a. Revokes EO 13769, effective March 16, 2017, and replaces it with EO b. Takes effect March 16, Differences from first Executive Order. a. Omits Iraq as one of the designated countries, leaving Iran, Libya, Somalia, Sudan, Syria and Yemen as designated countries. b. Does not affect people with a valid visa, LPRs, etc. c. Does not revoke any visa. d. Allows for continued processing of immigrant and nonimmigrant visa applications, but will need a waiver. e. Clarifies waiver eligibility for visa issuance and entry to the United States. f. Discards indefinite Syrian refugee ban, but still subject to 120-day USRAP suspension. g. Discards preference to individuals facing religious persecution who practice minority religions in their country of nationality. 3. Section 2: Temporary Suspension of Entry for Nationals of Countries of Particular Concern during Review Period. Suspends the entry of individuals from the six designated countries Iran, Libya, Somalia, Sudan, Syria and Yemen for ninety days. 7

14 4. Section 3: Scope and Implementation of Suspension. a. Specifies that the ninety-day entry ban only applies to foreign nationals from one of the designated countries who: i. Are outside of the U.S. on the effective date; ii. iii. Did not have a valid visa at 5:00 p.m. EST on January 27, 2017; and Do not have a valid visa on the effective date of the order. b. Excludes the following individuals from the ninety-day entry ban: i. LPRs; ii. iii. iv. Individuals admitted to or paroled into the United States on or after the effective date; Individuals with a document that permits the individual to travel to the U.S. and seek entry or admission, such as an advance parole document; Dual nationals of a designated country who present a passport issued by a non-designated country; and v. Anyone granted asylum; any refugee who has already been admitted to the United States; or anyone granted withholding of removal, advance parole or Convention Against Torture (CAT) protection. c. Allows consular officers or Customs and Border Protection (CBP) officials to issue waivers and allow the entry of individuals who can show all of the following: i. That denial of entry would cause undue hardship; ii. iii. That they do not pose a threat to national security; and That their entry would be in the national interest. d. Says that "case-by-case waivers could be appropriate" in circumstances such as the following: 8

15 i. The foreign national was previously admitted for a continuous period of work, study, or other long-term activity, is outside the United States on the effective date of the order, and would enter to resume the activity. ii. iii. iv. The foreign national has significant contacts with the United States but is outside of the United States on the effective date of the order. The foreign national has significant business or professional obligations that would be affected. The foreign national has "close family members" (i.e., spouse, child or parent) who are citizens, LPRs or valid nonimmigrant visa holders. v. The foreign national is an infant, young child, or adoptee; needs urgent medical care; or has "special circumstances." 5. Section 6: Realignment of the U.S. Refugee Admissions Program for Fiscal Year a. Suspends USRAP for 120 days beginning on the effective date. b. Suspension excludes refugees who, before effective date, were formally scheduled for transit by DOS. c. DOS will resume travel of refugees into the United States, and DHS will resume adjudication of refugee applications after 120 days (July 4, 2017) for stateless persons and nationals of countries for which DOS, DHS and DNI have jointly determined that procedures are adequate to ensure U.S. security and welfare. d. Refugee ceiling is lowered from 110,000 to 50,000 for remainder of fiscal year e. DOS and DHS may jointly determine to admit refugees on a case-by-case basis as long as the individual does not pose a threat to the security or welfare of the United States. f. Includes consideration for international agreements and undue hardship. g. Directs the Secretary of State to examine laws to determine the extent to which state and local jurisdictions 9

16 may have greater involvement in determining placement or resettlement of refugees in their jurisdictions. 6. Section 12: Enforcement. a. No immigrant or nonimmigrant visa issued before March 16, 2017, will be revoked as a result of the Executive Order. b. Any individual with a revoked or cancelled visa as a result of EO is entitled to a travel document for travel or entry to the United States. c. Prior revocation or cancellation of a visa solely on the basis of the EO will not be the basis for inadmissibility. d. EO does not apply to those that have been granted asylum, to refugees already admitted to the United States, or to those granted withholding of removal or protection under the CAT. 7. Section 15: Severability. If any provision of EO is held to be invalid, the remainder of EO will not be affected. D. How Does the Government Intend to Enforce EO 13780? The government has issued some guidance on EO 13780, mainly restating what is already explained in EO E. What Will Happen to EO 13780? 1. EO was tailored to address some of the concerns that arose from EO (e.g., preference based on religious persecution, invalidation of valid visas, and indefinite suspension for Syrian refugees). 2. Serious concerns still exist and there are several lawsuits pending in the federal courts. III. MORE WILL BE REVEALED! 10

17 HOT TOPICS IN EMPLOYMENT AND INVESTMENT IMMIGRATION LAW Ryan Schwank I. INTRODUCTION The material presented here is intended to provide the general practitioner with a broad understanding of executive actions in the employment based immigration benefit system. This material lays out the basic laws behind the headlines, and should give the reader enough knowledge to provide competent advice to a client on the impact of executive orders, agency policy memos, and public statements of federal agencies in a time when immigration law is undergoing substantial uncertainty. This presentation addresses two particular areas of immigration law. The first is the Employment Based 5th preference system, or Eb-5 visa, for foreign entrepreneurs. The second is the H1-B work permit, and efforts by government agencies to overcome perceived shortcomings in the temporary worker program. These two areas were selected on the basis of media attention, and their prominence as issues of concern to the new presidential administration. II. THE EB-5 VISA 203(b)(5) I.N.A. [8 U.S.C. 1153] (A) In general Visas shall be made available, in a number not to exceed 7.1 percent of such worldwide level, to qualified immigrants seeking to enter the United States for the purpose of engaging in a new commercial enterprise (including a limited partnership) (I) in which such alien has invested (after November 29, 1990) or, is actively in the process of investing, capital in an amount not less than the amount specified in subparagraph (C), and (ii) which will benefit the United States economy and create fulltime employment for not fewer than 10 United States citizens or aliens lawfully admitted for permanent residence or other immigrants lawfully authorized to be employed in the United States (other than the immigrant and the immigrant s spouse, sons, or daughters). Section 1153(b)(5) of the Immigration and Nationality Act authorizes the United States Citizenship and Immigration Services to grant entry to up to 10,000 entrepreneurs willing to invest into the U.S. economy. The EB-5 investment visa program is a mechanism for attracting foreign investment to the United States by offering participants permanent legal residence and eventually citizenship in exchange for qualifying investments into approved projects. Although the 11

18 EB-5 Petitions by Year Eb-5 Petitions program has had success in raising funds for large private capital projects, smaller investment schemes have encountered serious setbacks and allegations of fraud in several states. The EB-5 visa program has morphed in the last ten years from a relatively minor part of the immigration landscape to a hot button topic in immigration law and public debate. Originally, the program was envisioned as a mechanism for generating jobs and economic opportunity in traditionally under-developed rural or poorer urban Source: USCIS Statistical Report 1st Qtr, 2017, available at: Resources/Reports%20and%20Studies/Immigration%20For ms%20data/employment-based/i526_performancedata_ fy2017_qtr1.pdf (last viewed May 15, 2017) areas. For most of its twenty-seven years of operation, the program was small and did not attract significant attention. However, in the wake of the financial crisis, the program has undergone a substantial metamorphosis as a sudden influx of investors in China, and the creation of sophisticated equity funding models converted the program into a powerful real estate investment tool for developers and projects in wealthy urban areas like Los Angeles and New York. Among the many beneficiaries of the EB-5 program has been President Donald Trump, and members of his family, who have raised tens of millions of dollars in investment funds for their real estate projects. 1 Because the program has diverged so fundamentally from its original purpose, it has been subject to attack and frequent criticism by members of the media and Congress. This has been exacerbated by the Kushner's family's high profile appeal to potential Chinese investors at a Shanghai event where several not very subtle references to their connection to President Trump were on display. 2 This has triggered increased media coverage of the program and exemplifies the type of program misuse which is the typical focus of the criticisms leveled by opponents of the EB-5 visa system. Critics voice concerns over a program that sells citizenship, shows a strong predilection towards fraud, and has been mis- 1 See Trump Tower Funded by Rich Chinese Who Invest Cash for Visas, Drucker, J Bloomburg Politics (March 6, 2016) available at: 07/trump-tower-financed-by-rich-chinese-who-invest-cash-for-visas (last visited May 15, 2017). 2 See Flap Over Kushner Family High-Rise Pitch Prompts Concern over Visa Incentive, Rose, J. All Things Considered, National Public Radio, (May 10, 2017) available at (last visited May 15, 2017). 12

19 managed in many of the investment projects. There are strong drives on Capitol Hill to either terminate the program or replace it with a strongly reformed program. The original Investment Pilot Program was set to expire in 2012, but the law has just undergone the most recent of several short-term extensions which keep the program alive until September 2017, without being changed. 3 Currently, there appears to be a lack of consensus at the national level on how to reform the program, but the Department of Homeland Security has recently announced a proposal for reform discussed below. It is possible the program will undergo substantial changes by the end of the year or be terminated entirely. A. The Basic EB-5 Structure The EB-5 visa program, 203(b)(5), Immigration and Nationality Act, [8 U.S.C. 1153], sets aside 10,000 visas per year for entrepreneurs who invest in new or troubled American businesses. Qualified individuals may make an at-risk investment individually, or in association, into a single new commercial enterprise. 4 An application must be accompanied by evidence that the investor has placed lawfully sourced funds at risk. 5 Participants who make approved investments can apply for a conditional green card, and if the business generates sufficient employment and has a modicum of success, the applicants are eligible to remove those conditions. The qualified commercial enterprise is required to document the generation of ten full time positions for each visa which it supports. 6 Passive activities, such as real estate speculation, are generally not qualifying investments. Under the original 1990 law, investments were made directly by the immigrant into a particular business and required the direct creation of at least ten full time jobs. 7 Two years later, Congress enacted a pilot program allowing investment into approved geographically restricted investment funds focused on targeted economic areas 8 called regional investment centers which could count indirectly created employment. 9 Direct capital investments are $1,000, while indirect 3 542, Pub. Law (2017 Consolidated Appropriations Act, 2017) 4 8 C.F.R (e),(h) 5 8 C.F.R (j) 6 Defined as 35 hours/per week. 203(b)(5) INA [8 U.S.C. 1153]. 7 8 C.F.R (e) "an individual who provides services or labor for the new commercial enterprise and who receives wages or other remuneration directly from the new commercial enterprise." 8 8 C.F.R (e) "an area which, at the time of investment, is a rural area or an area which has experienced unemployment of at least 150 per cent of the national average rate." 13

20 investments through investment centers are at least $500, Invested funds must be kept in an at-risk investment during the two-year period of conditional residency, so investments cannot be structured to guarantee or protect the investors funds in case of business failure. 11 Because passive investments require less capital and have more relaxed standards for job creation, most visas come through regional investment centers. Despite their name, regional investment centers are not government entities. 12 Instead they are private enterprises which act as investment funds that pool investor money into projects within defined geographic areas. Each regional investment center can set its own geographic boundary, and many of them overlap, often extensively. Approval of regional investment center target areas is calculated on average employment and population. Because the regional investment center can draw its own coverage map, many centers are gerrymandered so that high income urban centers can be qualified as part of a broader region incorporating rural and low income neighborhoods. As of May 1, 2017, there are 883 approved regional investment centers incorporated in the United States. 13 Many of these have little to no actual investment, and are closed each year by USCIS for failure to engage in business activity. 14 As of May 1, 2017, there are eleven regional investment centers in Kentucky, each with varying degrees of success, areas of focus, and investment strategies. 15 As of 2013, USCIS had no reported instance of qualifying investment in Kentucky through the EB-5 program, but that data may not 9 8 C.F.R (e) "In the case of the Immigrant Investor Pilot Program, 'employee' also means an individual who provides services or labor in a job which has been created indirectly through investment in the new commercial enterprise." 10 8 C.F.R (f)(1),(2). 11 Matter of Izummi, 22 I&N Dec. 169, (Assoc. Comm. 1998). 12 However, some states operate their own "official" EB-5 centers to attract investment, e.g. Vermont ( and some are set up by particular cities, e.g. Lansing, Michigan ( 13 USCIS maintains an up-to-date register of approved regional investment centers at (last visited May 15, 2017). 14 USCIS maintains an active list of terminated regional centers on their website Listed here without endorsement: Bluegrass International Fund, LLC; Bluegrass International Fund Regional Center, LLC; Central Western Regional Center LLC (former name USA Midwest Regional Center LLC); CP Southern Regional Center; EB5 of Ohio, LLC; KOIT Global Investments; Live in America South Regional Center LLC; Midwest Center for Foreign Investment, LLC; Midwest Regional Center, Inc; Pangaea Regional Center, LLC. 14

21 reflect the business activity of the centers currently active in the Commonwealth. B. Proposed Changes to the EB-5 Program Changes to the EB-5 program are focused on reforming the regional investment center to address concerns over fraud and a lack of investment in smaller states. The most important suggested reform currently is the Department of Homeland Security's proposal of January 13, DHS proposes to: 1. Raise the minimum investments to $1,800,000 for direct investments to adjust for inflation since the program began in Reduce the discount for investments in targeted economic areas to 75 percent of the direct investment minimum, or $1,350, Tie minimum investment amounts to the unadjusted Consumer Price Index for All Urban Consumers (CPI-U), and make future adjustments every five years. 4. Remove state authority to designate targeted economic areas and instead reserve that authority to the Department of Homeland Security; which would then designate any metropolitan statistical areas, counties with cities of 20,000 or more, and cities of 20,000 or more, census tracts, where unemployment is greater than 150 percent of the national average as targeted economic areas. 5. Allow adjudication of applications to take place in either the location of the new economic enterprise or the USCIS office closest to the applicant. (Currently, adjudication is done at the office nearest the new economic enterprise.) 17 The most important reform proposed is limiting geographic scope of investment centers to preexisting political unit or project tracts made of adjacent census tracts. Developers were previously able to gerrymander high value urban areas into qualifying targeted economic areas because the current law allows applicants to design their own geographic boundaries subject to state approval of the designation. Essentially, long chains of census tracts are joined together by joining relatively distant rural and impoverished areas to high value real estate in urban markets EB-5 Immigrant Investor Program Modernization 82 Fed. Reg (Jan 13, 2017). 17 Paraphrased from Id. at See, for example Rules Stretched as Green Cards Go to Investors, McGeehan, P & Semple, K, The New York Times (Dec. 18, 2011) available at: 15

22 The adjacent census tract analysis proposed by DHS would discourage or at least limit the ability of project developers to qualify high value urban areas for regional investment projects. The result of which is that the use of EB-5 visas as a financing mechanism for large commercial developments may decline, and investments in smaller projects targeting second or third tier cities would increase in proportion. Based on these proposed changes, practitioners can expect to see increased interest in direct investment projects either by lone investors or as syndicates. Given the increased investment amount, and the reduced incentive to use regional centers, potential entrepreneurs may be less willing to put their funds into large scale projects with limited historic returns. The stricter targeted economic area designations are designed to reduce gerrymandering and disqualify projects in wealthy urban communities. The proposed priority retention date would allow investors to transition from prior projects to new projects without losing their place in line, reducing the negative incentive on entrepreneurs to stick it out with questionable investments. Practitioners however should be hesitant when dealing with an applicant looking to transition their investment to ascertain whether the proposed change will meet the client's needs and not subject the investor to additional oversight. Part of the reason for the large uptick in Chinese investors is the low dollar cost of the investment, so the increase is likely to reduce that market, and replace it with individuals who have a higher level of financial sophistication. C. Practice Pointers With the anticipated changes to the rules almost certain to include higher minimum investment thresholds but the same employment requirements, counsel for potential investors need to review pending proposed new commercial enterprises to verify they can effectively make use of the increased mandatory minimum funding. Under the new capital investment rules, projects need to generate one full time position for every $130,000 invested vs. the previous $50,000 which creates the potential for financing investments in less labor-intensive manufacturing and retail projects which were previously untenable. Counsel for financially challenged municipal and county governments should review the proposed new rules to determine whether USCIS will recognize their community as a targeted employment area and if so, whether that classification can be used to attract direct investments in their markets. Under the new priority retention scheme, investors have an incentive to move their money to projects with better returns and better likelihood of success. Counsel for group projects or regional investment centers new-york-developers-take-advantage-of-financing-for-visas-program.html?_r=3& (last visited May 15, 2017.). 16

23 should review their partnership agreements or investment agreements to account for the new ability of investors to safely back out of existing projects. D. EB-5 Conclusions Because the proposed changes will encourage investment in new markets, and reduce the advantage of investing in large capital projects, an uptick in direct investments may occur in small state investing. Presently, EB-5 investments are targeted at real estate developments in wealthy urban markets, but this could change under the new rules. Critics of the investor visa program have previously criticized it for failing to bring relief to economically challenged areas, which the proposed changes will discourage. These types of projects are very different from the original intentions of the program creators, and the proposed DHS reforms should have the effect of making such projects less viable. It is not unreasonable to speculate that the proposed changes will lead investors to look for projects with faster turnaround times, lower total capital costs, and more direct involvement in the project. III. UPCOMING CHANGES TO TEMPORARY WORK VISAS (H1-B) E.O Sec. 2(b) Hire American. In order to create higher wages and employment rates for workers in the United States, and to protect their economic interests, it shall be the policy of the executive branch to rigorously enforce and administer the laws governing entry into the United States of workers from abroad, including section 212(a)(5) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(5)). Sec. 5. Ensuring the Integrity of the Immigration System in Order to "Hire American." (a) In order to advance the policy outlined in section 2(b) of this order, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, and consistent with applicable law, propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of United States workers in the administration of our immigration system, including through the prevention of fraud or abuse. (b) In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries. A. The H-1B Visa The H-1B Visa is a non-immigrant temporary worker program limited to alien workers who will fill open positions in specialty occupations for which they have the appropriate qualifications. The program is meant to assist U.S. businesses in finding employees with appropriate skills to 17

24 meet shortages in the workforce. There are a limited number of visas available in any given year which makes competition for the available visa pool fierce. In recent years, temporary placement businesses have drawn criticism for using H1-B visas to import technology workers from abroad to fill positions in the tech sector. B. Who Are H-1B Workers? Visas are limited to foreign workers coming to the United States to perform services in a specialty occupation or as a fashion model. 19 Specialty occupations are occupations which require the theoretical and practical application of a body of highly specialized knowledge; and attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States. 20 To establish their qualification for admission the petitioner must demonstrate that the employee meets minimum requirements and the position is one which requires special skills. The Employer (petitioner) must show the position requires that: 1. Bachelor's or higher degree or its equivalent is normally the minimum entry requirement for the position. 2. The degree requirement for the job is common to the industry or the job is so complex or unique that it can be performed only by an individual with a degree. 3. The employer normally requires a degree or its equivalent for the position. 4. The nature of the specific duties is so specialized and complex that the knowledge required to perform the duties is usually associated with the attainment of a bachelor's or higher degree. The Employee must demonstrate they possess the required skills through: 1. Have completed a U.S. bachelor's or higher degree required by the specific specialty occupation from an accredited college or university. 2. Hold a foreign degree that is the equivalent to a U.S. bachelor's or higher degree in the specialty occupation. 3. Hold an unrestricted state license, registration, or certification which authorizes them to fully practice the specialty occupation 19 This presentation will not discuss the fashion model applicant (i) INA. 18

25 and be engaged in that specialty in the state of intended employment. 4. Have education, training, or progressively responsible experience in the specialty that is equivalent to the completion of such a degree, and have recognition of expertise in the specialty through progressively responsible positions directly related to the specialty. 21 Additionally, the employer must first file a Labor Condition Application (LCA) with the Department of Labor. The employer must attest to four provisions in seeking the Labor Certification for its prospective recruit. It must attest: 1. That it is offering and will offer during the period of authorized employment wages that are at least the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question; or the prevailing wage level for the occupational classification in the area of employment, whichever is greater. 2. That it will provide working conditions for such a non-immigrant that will not adversely affect the working conditions of workers similarly employed. 3. That there is not a strike or lockout in the course of a labor dispute in the occupational classification at the place of employment; that the employer has provided notice of the application to the bargaining representative (if any) of the employer's employees in the occupational classification and area for which the visa is sought; or if there is no such bargaining representative, has provided notice of filing in the occupational classification through such methods as physical posting in conspicuous locations at the place of employment or electronic notification to employees in the occupational classification for which the foreign workers are sought. 4. Specify of the number of workers sought, the occupational classification in which the workers will be employed, and wage rate and conditions under which they will be employed. 22 Certain employers, including those who have violated the requirements above, or who are determined under 212(n)(3)(a) to be dependent on 21 The above list was taken directly from USCIS' H-1B visa webpage, available at: (Last visited May 15, 2017) (n),(t), I.N.A., 8 U.S.C

26 foreign born workers, are required to submit additional documentation. Such employers are required to attest that: 1. The employer will not displace any similarly employed U.S. worker within ninety days before or after applying for H-1B status, or an extension of status for any H-1B worker; 2. The employer will not place any H-1B worker employed pursuant to the LCA at the work site of another employer unless the employer first makes a bona fide inquiry as to whether the other employer has displaced or intends to displace a similarly employed U.S. worker within ninety days before or after the placement of the H-1B worker; and 3. The employer, before applying for H-1B status for any alien worker pursuant to an H-1B LCA, took good faith steps to recruit U.S. workers for the job for which the alien worker is sought, at wages at least equal to those offered to the H-1B worker. Also, the employer will offer the job to any U.S. worker who applies and is equally or better qualified than the H-1B worker. This attestation does not apply if the H-1B worker is a "priority worker" (see Section 203(b) (1) (A), (B), or (C) of the INA). 23 Once the above requirements are demonstrated, the application may be submitted for one of the visas allocated to temporary workers entering the United States. C. Concerns over H1-B Visas The principle criticism leveled against the H-1B program goes against the "exempt" foreign worker language of the visa program. The additional attestation requirements and employment restrictions imposed on dependent businesses do not apply if they only employ exempt employees. Thus, there is a thriving market, particularly in the tech sector, for placement and H1-B contracting agencies to import foreign workers who can be employed at less than the cost of their equivalent domestic competition. Organizations such as Tata Consultancy, Infosys, and other large recruiting firms which are among the largest users of the H1-B program are criticized for a business model which sees them importing highly skilled workers on $60,000 a year contracts to fill 212(n)(3)(b) INA the term 'exempt H-1B nonimmigrant' means an H-1B nonimmigrant who-- (I) receives wages (including cash bonuses and similar compensation) at an annual rate equal to at least $60,000; or (II) has attained a master's or higher degree (or its equivalent) in a specialty related to the intended employment (n) I.N.A., 8 U.S.C

27 positions previously held by Americans earning in the six figures. 24 These concerns have now led to efforts to update the laws to remove the mechanism used by these businesses, and a set of administrative policy announcements intended to address public concerns over the alleged abuse of the H-1B program. D. Administrative Actions Concrete reforms of the laws governing the employment based temporary visa system are still pending. However, the new administration has made several pronouncements regarding enforcement of the existing laws which will E.O Sec. 2(b) Hire American. impact employment visas In order to create higher wages and immediately. The primary employment rates for workers in the United criticism of the H1-B visa States, and to protect their economic interests, it shall be the policy of the program has been its use as executive branch to rigorously enforce and an outsourcing tool for jobs administer the laws governing entry into the in the tech sector, where United States of workers from abroad, outsourced foreign labor is including section 212(a)(5) of the Immigration used to replace domestic and Nationality Act (8 U.S.C. 1182(a)(5)). employees. Following up on campaign promises to emphasize domestic worker's interests, President Trump issued a Presidential Executive Order on Buy American and Hire American. E.O of Apr 18, Fed. Reg This order calls upon the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security to propose new rules and guidance, to reform the application process to reduce fraud and the impact of immigration on American Sec. 5. Ensuring the Integrity of the Immigration System in Order to "Hire American." (a) In order to advance the policy outlined in section 2(b) of this order, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, and consistent with applicable law, propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of United States workers in the administration of our immigration system, including through the prevention of fraud or abuse. (b) In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries. 24 Using H-1B Visas To Help Outsource IT Work Draws Criticism, Scrutiny Harnett, S, NPR All Tech Considered (Feb 13, 2017) available at: /02/13/ /using-h-1b-visas-to-help-outsource-it-work-draws-criticism-scrutiny (last visited May 15, 2017) and also, Large Companies Game H-1B Visa Program, Costing the U.S. Jobs, Preston, J, The New York Times (Nov. 10, 2015) available at: (last visited May 15, 2017). 21

28 employment. President Trump's Executive Order requires a rewrite of selection criteria; dropping the previous random lottery distribution of visas in favor of a system which prioritizes the most-skilled or highestpaid petition beneficiaries. In addition to the Executive Order, United States Citizenship and Immigration Services, the Department of Justice Civil Rights Division, and the Department of Labor have issued agency notices of increased enforcement and reform to the labor visa program. Much like the Presidential announcement, the notices given by the Department of Justice, Department of Labor and USCIS are light on details. However, perhaps because of these announcements, USCIS reported a noticeable decline in the total number of H1-B visa requests from 233,000 in 2016 to 199,000 in USCIS has issued two new memos which address part of the concerns raised by the President's executive order. On April 3, 2017, USCIS issued a press release announcing a new campaign to combat fraud employment based immigration through increased worksite inspections. USCIS will emphasize targeted reviews of work places in three cases: 1. Where USCIS cannot validate the employer's basic business information through commercially available data; 2. H-1B-dependent employers (those who have a high ratio of H-1B workers as compared to U.S. workers, as defined by statute); and 3. Employers petitioning for H-1B workers who work off-site at another company or organization's location. 26 Additionally, USCIS issued a notice of policy change on March 27, 2017, which rescinded previous guidance identifying computer programmer as a specialized occupation. As a result, applications based on this category would be subject to enhanced scrutiny. 27 Applicants in this category will now need to independently qualify their position under H-1B standards by demonstrating that the position requires more than the industry standard associates degree in programming. 28 This announcement will have some 25 H1B Visa Applications Down Amid Reform Effort, Barrios, A Voice of America News, April 19, Available at / html (last visited May 15, 2017). 26 Putting American Workers First: USCIS Announces Further Measures to Detect H-1B Visa Fraud and Abuse USCIS News Release, Apr. 3, 2017, available at: (last visited May 15, 2017). 27 Rescission of the December 22, 2000 "Guidance memo on H1B computer related positions" PM (Mar. 31, 2017) available at: nativedocuments/pm h-1bcomputerrelatedpositionsrecission.pdf. 28 Id. 22