On July 16, the United States Citizenship and Immigration Services released a new version of its policy guidance on violations and sanctions under the EB-5 project. New policies in Volume 6 of the USCIS Policy Manual include statutory reforms in the Reform and Integrity Act of 2022, effective March 15, 2022.

The policy guidance explains: “These reforms add new options for USCIS to impose sanctions on regional centers when they fail to comply with statutory requirements, such as the payment of EB-5 Integrity Fund fees. Powers.” The new guidance explains provisions related to sanctions related to the termination, debarment and suspension of regional centers, new commercial enterprises, job creation entities, investors, etc. that do not comply with the regulations.

The new policy guidance also addresses threats to national interests, fraud, intentional material misrepresentation, deception and criminal abuse. It also addresses how to retain "reform" under sec. 203(b)(5)(M) of the Immigration and Nationality Act after USCIS terminates or debars its regional center, new commercial enterprise, or job-creating entity. Special considerations were raised with respect to the qualifications of pre-Integrity Act investors.

Sanctions

The Reform and Integrity Act authorizes the United States Citizenship and Immigration Services to impose suspensions, debarments and terminations on various participants in the EB-5 program various sanctions within.

General Process

If USCIS determines that a violation has occurred and sanctions are appropriate, it will issue a Notice of Intent to Sanction to the affected person or entity, Include a summary of the violation and a description of the sanctions.

USCIS generally provides a 30-day response time and may issue multiple sanctions against one or more parties or the same party for a violation.

If USCIS determines that sanctions are warranted after considering the response, it will issue a final notice of sanctions. The sanctioned party may appeal to the Office of Administrative Appeals.

U.S. Citizenship and Immigration Services will consider relevant factors such as history of violations, intentionality, cooperative attitude, management awareness, due diligence, and impact on innocent parties when determining the severity of sanctions.

Types of Sanctions

Suspension: A temporary ban from participating in some or all activities of the EB-5 program for a specified period of time or until the violation is corrected. The specific scope is determined by the case.

Debarment: USCIS has interpreted its right to terminate participation in a new commercial enterprise or job-creating entity to be equivalent to debarment. Permanent bans may be applied to participants who knowingly participate in conduct that results in termination or ban.

Termination: The regional center is no longer designated and can no longer submit project applications or recruit investors. After receiving the notification, investors have 180 days to re-affiliate to another regional center.

Discretionary decision

If USCIS determines that approval of an EB-5 related application or interest is contrary to the national interest, such as public safety or national security threats Relevant, or the application or interest is based on or involves fraud, deception, intentional material misrepresentation or criminal abuse, it will refuse or revoke approval.

National interest grounds

Threats to public safety may include serious felonies.

National security concerns may include provisions of the Immigration and Nationality Act related to general security, terrorist activities, or association with terrorist organizations.

Fraud and related grounds

Fraud and intentional material misrepresentation: Deliberately making false statements or concealing material facts with the intent to induce others to act or deceive.

Deception: Deliberately misleading others into believing something that is false.

Criminal Abuse: The improper use of EB-5 projects or capital in connection with a crime, usually a financial crime.

Examples of triggering actions include:

Financial fraud or crime.

Fake job creation or economic development claims.

Misreport or omission of required information.

A fake answer to a real question.

Conceal the source or path of funds.

Submit false derivative materials.

Use alternative identities to gain benefits.

USCIS’s revised policy “clarifies that bona fide investors, including those who filed prior to the effective date of the new Act, may terminate or debar an investor if USCIS How a regional center, new commercial enterprise, or job-creating entity can maintain its eligibility. The new policy guidance also “describes the processes and factors that USCIS generally considers when evaluating sanctions.”

The new version of the policy guidance clarifies that “USCIS will not impose sanctions for conduct that occurred before the Reform and Integrity Act was enacted, but may still sanction the Reform and Integrity Act based on significant violations or repeated violations before the Reform and Integrity Act was enacted.” "The revised policy is effective immediately and the previous guidance is invalidated."