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Understanding the New EB-5 Regional Center Audit Requirements: An Overview

by Carolyn Lee

Apr 17, 2024

The U.S. Citizenship and Immigration Services (USCIS) announced significant changes to the EB-5 Regional Center program on April 9, 2024, introducing new audit requirements aimed at enhancing program integrity. This comes as part of the broader EB-5 Reform and Integrity Act of 2022 (RIA). As investors and regional centers adapt to these changes, understanding the scope and impact of these audits is crucial.

20240419 USCIS Regional Center Audits
Source: EB-5 Regional Center Audits | USCIS

Under the newly amended section 203(b)(5)(E)(vii) of the Immigration and Nationality Act (INA), USCIS is now required to conduct audits of each designated regional center at least once every five years. These audits are designed to verify information provided in regional center applications and annual certifications, as well as associated investor petitions.

Starting April 23, 2024, USCIS will adopt Generally Accepted Government Auditing Standards (GAGAS) for these audits. The new standards aim to ensure a thorough review of the regional centers’ compliance with federal requirements. Audits will include various checks, such as:

  • Reviewing applications, certifications, and related records;
  • Inspecting public records and additional information about the regional centers;
  • Verifying supporting documentation submitted with applications;
  • Conducting on-site visits to assess operational and financial practices.

One of the pivotal aspects of the new policy is the handling of audit non-compliance. If a regional center does not consent to an audit or attempts to obstruct the process, USCIS may terminate its designation. This policy underscores the agency’s commitment to transparency and compliance in the EB-5 program.

Investors and regional centers have expressed concerns regarding the specifics of the audit process. Questions often include:

  • Will the request for information be standardized or tailored?
  • Are there clear separations between audits and site visits?
  • What legal recourses are available if a regional center disagrees with audit outcomes?

The updated audit requirements reflect a significant shift in how USCIS intends to oversee and regulate the EB-5 Regional Center program. For regional centers, staying compliant with these new regulations will be vital for maintaining their designation and supporting their investors’ immigration pursuits. Investors, on the other hand, will need to be more diligent in selecting regional centers that consistently adhere to USCIS regulations.

The EB-5 Regional Center audit updates mark a new era in the oversight of a program that has been pivotal in attracting foreign investment to the U.S. Both regional centers and investors should prepare for more rigorous compliance checks, which will ultimately enhance the integrity and reputation of the EB-5 program.

Watch the recording of our April 17, 2024 webinar for an introduction to this topic (slides available here). For more videos on this topic, check out our EB-5 Regional Center playlist on YouTube here.

For continued updates on EB-5 regulations and professional guidance, consider consulting with experts who specialize in immigration and investment, such as those at Carolyn Lee PLLC, with years of experience in navigating these complex legal landscapes. For more information or follow-up questions, please email contact@carolynleepllc.com.

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