EB-5 RCs’ lawsuit against USCIS settled, all EB-5 RCs reinstated
The EB-5 Immigrant Investor Program is now fully up and running again, and EB-5 investors can file new I-526 petitions. This comes as a result of EB-5 regional centers and USCIS agreeing on a settlement of federal court litigation, which the regional centers had launched in order to block USCIS from invalidating the authorizations of all existing EB-5 regional centers. On September 1, 2022, the U.S. Federal District Court for the Northern District of California approved and placed the agreement into legal effect but retained jurisdiction over the cases while the settlement is being implemented, which will guard against USCIS reneging on any provisions of the settlement.
To give you some background to this situation, the EB-5 Reform and Integrity Act of 2022 (“RIA”) entered into law on March 15, 2022, and had the effect of reinstating the regional center EB-5 program. In the RIA, Congress did impose a requirement that EB-5 regional centers submit to reauthorization of their regional center authorization, which included the vetting of the owners and managers of the companies operating the EB-5 regional centers in order to ensure that they not have any history of criminal activity, particularly any history of defrauding investors, and that the regional centers all accept the newly expanded rules for ensuring the integrity of the EB-5 program, including stronger protections of investors and closer compliance with the securities laws in the U.S. USCIS misinterpreted the RIA as necessitating that it invalidate all existing EB-5 regional centers until each of them would file a new form I-956, based on which USCIS would approve or deny the authorization of the EB-5 regional center, pursuant to the new legal requirements imposed by the RIA. USCIS blindsided EB-5 regional centers with an announcement on its website on April 20, 2022, that all existing EB-5 regional center authorizations were suddenly invalidated.
Promptly on April 22, 2022, Behring Regional Center LLC (“BRC”) filed suit against USCIS, in the Federal District Court for the Northern District of California, in order to block USCIS from enforcing this policy. Five other EB-5 regional centers and the EB-5 industry organization, IIUSA, joined the litigation, with a total of 2 lawsuits against USCIS. On June 24, 2022, the aforementioned federal court granted a temporary injunction, which had the effect of blocking USCIS from enforcing its policy of invalidating existing regional centers until the same court could issue a final decision on the lawsuit. That meant that the federal court prohibited USCIS from invalidating any regional center, not just BRC’s regional center. As a result, all existing regional centers were reinstated and could offer new projects to investors, while the federal court litigation would continue, provided that the regional centers abide by all new requirements imposed by the RIA and that any projects that they offer meet all new requirements imposed by the RIA.
Pursuant to the above-mentioned settlement, from September 1, 2022,
- Previously authorized regional centers retain their authorization;
- Previously authorized regional centers must file a Form I-956 (or an already filed 956 will meet this requirement) by December 29, 2022, along with the filing fee to maintain authorization;
- Previously authorized regional centers need not wait for approval of their Form I-956 to file and receive adjudications from USCIS;
- Previously authorized regional centers may immediately file project applications;
- If, after filing a form I-956F, a regional center does not receive a formal receipt notice within ten calendar days of delivery to USCIS, an investor may use other forms of proof of the I-956F filing in their I-526E petition, such as a lock box receipt, cashed check or credit card charge provided by the regional center to the investor;
- The failure of a previously approved regional center to file a Form I-956 application or amendment will not standing alone, be a basis for USCIS to deny an investor’s I-526 or I-829 petition;
- USCIS will update its website, forms, and instructions to conform to the terms of the settlement agreement.
To read the full settlement, please click here.
The end effect is that the EB-5 Immigrant Investor Program is fully back in effect, and investors can file to immigrate under the program until September 30, 2027.
For further details of all the changes and approvements to the EB-5 program brought about by the RIA, please click here to read my blog article from March 12, 2022.