On Jun 17 2019 by H. Ronald Klasko

EB-5 Processing Times: Suggestions for Actions by Investors and Regional Centers

We were outraged when I-526 processing times increased from 4 months to 6 months to 12 months to 18 months to 24 months. In most cases, we did nothing.

USCIS has now announced that the “normal” processing time for I-526 petitions has extended to 45 months. Also, USCIS has now expanded the published processing time for I-829 petitions to 40 months. It is the height of understatement to state that this is outrageous treatment of investors who invest substantial amounts of money and create substantial numbers of jobs for US workers.

Other than complaining, what are the options? I suggest that the options are different for different categories of clients:

 

EB-5 INVESTORS FROM CHINA, VIETNAM OR INDIA: Delayed processing times can actually help these clients. Whether the petition is approved in 1 day or 5 years will not change how long it will take them to obtain their conditional permanent residence because of the quota backlogs. However, during the entire time that the I-526 petition is pending, the ages of the investor’s children are frozen. 4-year processing times could actually lead to many children not aging out who otherwise would have aged out if the processing times were 12 months.

Despite this fact, there is a huge psychological benefit to the investor to know that his or her petition has been approved. This is especially true for the investor who has no children who will benefit from the delay.

 

INVESTORS FROM OTHER COUNTRIES: For these investors, the increased processing times are an unmitigated disaster. Instead of being able to immigrate to the US in 1 to 2 years, they may not be able to get to the US for 5 to 6 years. These expanded processing times make a program that was designed for investments of 3 to 5 years to become investments of 8 to 10 years or more. Not only that, but investors have to worry about where their investment dollars will be redeployed, which would not have been an issue if processing times were 18 or 24 months.

What can they do? Serious consideration should be given to filing a federal court complaint for mandamus and/or unreasonable delay under the Administrative Procedure Act. While this blog is not intended to be an exhaustive analysis of mandamus or unreasonable delay cases, it is important to understand that there is a difference. Mandamus is a complaint to force a government agency to adjudicate a petition that it has a legal duty to adjudicate. To some extent, by publishing processing times of up to 45 months, USCIS has made a mandamus complaint more difficult since it can take the position in litigation that the investor is being treated no worse than other investors and should not be moved ahead of other investors. This can be counteracted by showing that published processing times nearly doubled in one month.

An APA unreasonable delay complaint may be a better option. Under the Administrative Procedure Act, the issue is not whether a particular investor is being treated better or worse than other investors. The issue is whether the agency is acting “within a reasonable time” and whether the “unreasonable delay” is prejudicing the investor. This is a fact-based case‑by‑case determination. I believe there is a strong case to be made that an agency that doubles its processing times almost overnight to a period of 45 months is imposing an unreasonable and prejudicial delay on many investors.

 

INVESTORS WITH CONDITIONAL RESIDENCE STATUS: A USCIS regulation requires adjudication of an I‑829 petition within 90 days (8 C.F.R. §216.6 (c)(1)). Citing this regulation can be very helpful for purposes of a mandamus complaint. For an unreasonable delay complaint, prejudice can be shown in that the investor must, during the entire processing time of the I-829, be able to present proof of his ongoing permanent resident status, which is critical for traveling in and out of the US. For many investors, USCIS delays have made this a difficult or sometimes impossible task, thereby significantly restricting travel of these investors. Furthermore, many projects do not provide for release of EB-5 investor money to the investor until the investor’s conditions on residence have been removed. These hardships caused by USCIS delays in I-829 adjudications are of critical importance in successful litigation challenging the delays.

 

DEVELOPERS AND REGIONAL CENTERS: Many regional center projects have offering documents that do not allow for the release of some or all of the investor’s funds from escrow to the project until the I-526 petition is approved. The unprecedented I-526 processing delay can result in unforeseeable delays in money getting to projects, which can result in unforeseeable delays in the projects themselves. For this reason, regional centers and developers may want to consider funding mandamus/unreasonable delay litigation with their investors as plaintiffs.

In a world where 4-year processing time is normal, the advantage to a project and to an investor of a USCIS-approved expedite of investors in the project is beyond obvious. Although USCIS criteria for expedite have been very restrictive – – and recently have become possibly more restrictive – – an approved expedite can put a project at the top of the list of investor choices. Previous expedite requests that we have gotten approved have been either for reasons of “severe financial loss” or “national interest”.

A national interest expedite is similar in many ways to a national interest waiver EB-2 petition and an interested government agency waiver application to waive the 2-year return requirement for J-1 exchange visitor visa holders. We regularly prepare both of these types of petitions. For purposes of this blog, suffice to say that the key to such a petition is defining what is in the national interest, documenting why it is in the national interest and obtaining support from one or more US government agencies confirming that the project is in the national interest. Once that is done, it is critical to show not just that the project is in the national interest but why expediting the approval of the investors in the project is critical to the national interest.

The previous criterion of “DOD or national interest situation” now reads “compelling US government interests (such as urgent cases for the Department of Defense or DHS, or other public safety or national security interests)”. It is not clear if the addition of the words “compelling” and “urgent” will result in meaningful changes in adjudication. It is also not clear if, by giving examples, USCIS intends to exclude other compelling US government interests. The expedite criterion of “compelling interest of USCIS” has been eliminated and presumably folded into the criterion of “compelling US government interests”.

Two of the expedite criteria – – “severe financial loss” and “emergency situation” – – have now been combined into one expedite criterion that reads as follows: “Severe financial loss to a company or a person, provided that the need for urgent action is not the result of the petitioner’s or applicant’s failure: (1) to file the benefit request or the request to expedite in a reasonable time frame; or (2) to respond to any requests for additional evidence in a reasonably timely manner.” Although the language has been expanded, the practical impact of the change is likely minimal.

So, while the choice of many will be to sit back and justifiably complain about the unreasonable processing times for EB-5 petitions, for some investors, developers and regional centers, the delays may prove to be a call to action.

To schedule a consultation to discuss which option is best for you, click here.

 

The material contained in this article does not constitute direct legal advice and is for informational purposes only.  An attorney-client relationship is not presumed or intended by receipt or review of this presentation.  The information provided should never replace informed counsel when specific immigration-related guidance is needed.

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