On August 24, 2022, the United States District Court for the Northern District of California entered a settlement agreement between plaintiffs, EB-5 regional centers, and defendants, U.S. Department of Homeland Security and United States Citizenship and Immigration Services (“USCIS”) officials.
The Settlement Agreement memorialized resolution between the plaintiff regional centers and USCIS, whereby USCIS agreed to retreat from its prior interpretation of the EB-5 Reform and Integrity Act of 2022 (“RIA”) deauthorizing previously approved regional centers. After RIA’s passage on March 15, 2022, USCIS had interpreted the RIA as decertifying previously approved regional centers, an interpretation that would have forced regional centers to obtain recertification under RIA before resuming business under the RIA. Given no defined processing times for recertification and USCIS’s reported multi-year processing times for regional center filings, this interpretation would have meant that regional centers would likely languish for years after RIA’s passage wasting much of the 5-year reauthorization span RIA granted. The regional center industry naturally had to take action.
So what are the key terms of the Settlement Agreement, and where do we stand today, these 10 months later?
Settlement Term 1 – “Previously Approved Regional Centers Retain Approval”
- USCIS rescinded its categorical deauthorization of previously approved regional centers.
- However, previously approved regional centers were required to file the new RIA Form I-956 by December 29, 2022 to continue their approved status for purposes of sponsoring new projects and investors.
- Post-Settlement Development – USCIS later extended the December 29, 2022 deadline to file the I-956. This extension remains in place as of this writing. This means previously approved regional centers are still approved even if they have not yet filed the new I-956.
Settlement Term 2 – “Previously Approved Regional Centers May Immediately File Project Applications and USCIS Must Thereafter Accept Investor Petitions”
- Previously approved regional centers (let’s call them PARCs) may file the Form I-956F for project approval.
- The Form I-956F must be filed before any new investor can file his/her I-526E.
- To provide the I-956F “receipt number”, USCIS will accept:
- Form I-956F formal receipt OR
- If formal receipt not received within 10 days of physical delivery, USCIS lockbox notice plus a copy of the first 6 pages of the filed Form I-956F (Parts 1-5).
- For PARCs, USCIS will accept proof of I-956F filing payment (proof of cashed check or credit card charge), but investors will need to interfile the I-956F receipt notice when received.
- Post-Settlement Status – USCIS agreed to provide electronic receipt notices for all I-956Fs within 16 weeks of the settlement’s Effective Date. To our knowledge, this has not been fully implemented yet. But the alternative I-956F receipt evidence takes care of the I-956F receipt delay issue.
- PARCs must file the Form I-956F for previously approved exemplars (I-924s) for RIA investors.
- USCIS confirms that “all aspects of the project previously approved in the I-924 . . . shall be binding for purposes of the new I-956F filing” unless there has been material change, fraud, the prior approval implicates national security, or legal error in the I-924 approval.
Settlement Term 3 – “Previously Approved Regional Centers Will Be Governed by the Integrity Act”
- PARCs “sponsoring new projects or new investors” will comply with RIA.
- Persons involved with a regional center, new commercial enterprise, or job creating entity will file the new Form I-956H for each entity with which they’re involved.
- If a PARC fails to file the I-956 [by December 29, 2022], it may no longer engage in any activities under the RIA, including “sponsoring I-526E visa petitions or the development of new projects”.
- USCIS will continue to process investor petitions filed prior to RIA.
- Failure to file I-956 won’t by itself be a basis for denying investor petitions.
- Investors still have the protections of INA 203(b)(5)(m).
- New Forms I-956, I-956H, I-956F, I-956G, and I-526E are interim until notice and comment rulemaking is undertaken by USCIS. USCIS will therefore solicit comments until they are finalized by formal rulemaking.
- Post-Settlement Status – This is the biggest pocket of uncertainty among the settlement terms. What are “retiring” regional centers to do – that is, regional centers with investors still in the immigration process with no intent to sponsor new projects? If they don’t file the I-956, will they be terminated? Do they have to file the I-956G? Do they have to pay the Integrity Fee? I tackled some of these questions back in December before USCIS wisely postponed the deadline.
We’ll be covering some highlights from the Settlement Agreement during our EB-5 Project Structuring Webcast June 21, 2023, 2pm ET. Stay tuned for further developments – next up from USCIS, an actual due date for the Form I-956, more news on I-956G requirements.