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AAO Has Posted TWO Post Policy Memo Decisions!

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A Review of the Two Post-Policy Memo

Regional Center AAO Non-Precedent Decisions
By Joseph P. Whalen (September 1, 2013)

Just as Labor Day weekend was getting underway, I ran across some EB-5 AAO non-precedent decisions newly posted to
www.uscis.gov and was happy to finally see how AAO was interpreting and applying the recent policy changes. In the B7 category for 2013, I found eleven (11) I-526 visa petition non-precedents. Only one of them involved a Regional Center, namely, Chicagoland’s Elgin, Il. assisted living project which also has a U.S. District Court decision to which I added a link. The point to keep in mind for this discussion is that all of the I-526 non-precedents are dated in April 2013, just prior to the May 30, 2013 EB-5 Adjudications Policy Memo. All of them resulted in their case, whether an appeal or motion, being dismissed.

In the K1 category for 2013, I found two (2) Regional Center non-precedents. They are dated in June and July 2013, dates that fall after the issuance of the May 30, 2013, EB-5 Adjudications Policy Memo. Both decisions make very specific references to that memo and both resulted in AAO overturning the CSC Denials and approving the Regional Center requests as “hypotheticals”.

AAO makes a point of stating in the June non-precedent that the issue of having to request an expansion amendment had been rendered moot as the Regional Center was no longer required to file any such amendment. However, since it had filed one and paid a hefty fee, AAO felt that the agency was obligated to address it under the new relaxed policy and subsequent legal re-interpretations. AAO found that the requested extensions as to industries and geography were supported in the context of the “hypothetical” projects realm and as such approved the amendment. AAO made a point to state upfront that this decision would receive no deference in connection with any I-526 filed for that project and the the first I-526 (or an exemplar I-526) would receive a full de novo review. Only upon success at that next stage would subsequent I-526s receive deference as to the shared project documents and methodologies, if materially unchanged from the originally submitted information upon which that deference would be based.

Here is a snippet from that decision:

III. ANALYSIS

For the reasons set forth below, the applicant has provided sufficient evidence of a general proposal based on general predictions to establish that the amendment request is approvable.

A. Requirement to File Regional Center Amendments

The regulation at 8 C.F.R. § 204.6(m)(3) provides the evidentiary requirements for regional centers wishing to participate in the Immigrant Investor Pilot Program.
Page 23 of EB-5 Adjudications Policy, PM-602-0083 (May 30, 2013), discusses amendments to regional center designations and states:

Such formal amendments to the regional center designation, however, are not required when a regional center changes its industries of focus, its geographic boundaries, its business plans, or its economic methodologies. A regional center may elect to pursue an amendment if it seeks certainty in advance that such changes will be permissible to USCIS before they are adjudicated at the I-526 stage, but the regional center is not required to do so.

Thus, the applicant was not required to file the instant amendment request. While not required, the applicant has, in fact, filed the request. Therefore, the merits of that request are discussed below.

B. General Proposal and General Predictions

The applicant has not filed an exemplar or a request for approval of an actual investment project. Instead, the applicant has filed an amendment request for hypothetical projects, such as a coffee company that desires to branch out into the home and office delivery business.
Page 14 of EB-5 Adjudications Policy, PM-602-0083 (May 30, 2013), provides:

The level of verifiable detail required for a [regional center proposal] to be approved and provided deference may vary depending on the nature of the [regional center proposal]. If the [regional center proposal] projects are "hypothetical" projects, general proposals and general predictions may be sufficient to determine that the proposed regional center will more likely than not promote economic growth, improved regional productivity, job creation, and increased domestic capital investment. Determinations based on hypothetical projects, however, will not receive deference and the actual projects on which the Form I-526 petitions will be based will receive de novo review during the subsequent filing (e.g., an amended [regional center proposal] including the actual project details or the first Form I-526 petition filed by an investor under the regional center project).

The record contains a general proposal based on Census Bureau and other data and general predictions concerning the kinds of commercial enterprises that will receive capital, the direct and indirect jobs that will be created as a result of such capital investments based on RIMS II data and multipliers, and other positive economic effects. Thus, the AAO withdraws the director's concerns.

(Emphasis added.)

As for the July non-precedent, it involved a request for initial designation based solely on “hypotheticals” that relied upon “general predictions” drawn from a “general proposal”. In its overzealous approach in demanding too high of a level of specifics, CSC denied the request. AAO applied the more realistic and business friendly approach set down as Policy in the May 30, 2013 Memo and reversed the onerous and draconian decision of the CSC adjudicators. The following excerpts serve to illustrate the change that I find most welcome.

The director determined that the applicant had not provided a business plan with verifiable detail regarding how the proposal will create sufficient jobs. The director denied the proposal accordingly and certified the matter to the AAO. The director afforded the applicant 30 days to supplement the record. The applicant's response is now part of the record.
* * * * *
III. ANALYSIS

The applicant seeks regional center designation based solely on a hypothetical project to establish [REDACTED] funds that will invest in the [REDACTED] and distribution of unidentified [REDACTED]. The applicant concedes on certification, through prior counsel, that the regional center proposal is not based on an actual project and does not include an exemplar I-526 petition.
Page 14 of EB-5 Adjudications Policy, PM-602-0083 (May 30, 2013), provides:

The level of verifiable detail required for a [regional center proposal] to be approved and provided deference may vary depending on the nature of the [regional center proposal]. If the [regional center proposal] projects are "hypothetical" projects, general proposals and general predictions may be sufficient to determine that the proposed regional center will more likely than not promote economic growth, improved regional productivity, job creation, and increased domestic capital investment.

The record contains a general proposal based on general predictions concerning the kinds of commercial enterprises that will receive capital, the jobs that will be created as a result of such capital investments based on RIMS II data and multipliers, and other positive economic effects. As the record contains a general proposal, the applicant is not required to submit letters of intent or commitment from the prospective sources of matching funds for regional center designation.FN1 Thus, the AAO withdraws the director's determination.
_______________
FN1 The regulation at 8 C.F.R. § 204.6(g)(1) requires an individual investor to identify the sources of all capital invested and to demonstrate that all invested capital has been derived by lawful means when filing an I-526 petition for
classification as an alien entrepreneur.
________________

While the proposal for designation as a regional center is approved, it is based on hypothetical projects. Determinations based on hypothetical projects will not receive deference, and the actual projects on which the Form I-526 petitions will be based will receive de novo review in a subsequent filing (e.g., an amended Form I -924 application including the actual project details or the first Form I-526 petition filed by an investor under the regional center project). See EB-5 Adjudications Policy, PM-602-0083, page 14 (May 30, 2013).

(Emphasis added.)

I, for one, am glad that CSC and AAO have finally come around in their thinking as to that onerous approach we disagreed about for years. When I trained the first batch of Regional Center adjudicators for CSC, I tried my best to get them to see that business plans tend to be fluid and that asking for too much detail upfront was futile and contraindicated to reality. Most of them seemed to “get it” but once left to the constant “Culture of NO!” mentality and environment within CSC at that time, the best and brightest either got turned around in their thinking or moved on to other positions or duties (and a few retired).

One last tidbit is that of all of these thirteen (13) non-precedents, only the July decision is actually labelled as a “NON-PRECEDENT DECISION” in the header beginning on the second page, and it is the first EB-5 non-precedent posted thus far that contains the new language on the first page as follows:

Enclosed please find the decision of the Administrative Appeals Office (AAO) in your case. This is a nonprecedent decision. The AAO does not announce new constructions of law nor establish agency policy through non-precedent decisions.

These changes were made official and mandatory with the AAO Policy Memo of July 2, 2013, PM-602-0086, entitled: “Precedent and Non-Precedent Decisions of the Administrative Appeals Office (AAO)”; which accompanied the other Memo of the same date, PM-602-0087, entitled: “Certification of Decisions to the Administrative Appeals Office (AAO)”. I certainly hope that eventually we will get a few more actual Precedents in EB-5. Naturally, we need some that post-date the policy change and the process of certification should be pursued but maybe we can wait and see what else comes along before jumping off the deep-end.

For more info on ALL of the 2013 EB-5 Decisions see the doc at the below link (it was too large to attach here).

http://www.slideshare.net/BigJoe5/aa...posted-in-2013

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