Category: News

Source: klaskolaw.com

Published: 6 July 2021

The EB-5 Immigrant Investor Program saw two very important changes in June 2021. Below are the most common questions our EB-5 visa lawyer team members have been answering as the industry adjusts to these major, and likely temporary, changes.

1. WHAT EB-5 PROGRAM CHANGES OCCURRED IN JUNE 2021?

Two major changes occurred. First, a federal court ruled that the November 2019 USCIS regulation that increased the minimum investment amount from $500,000 to $900,000 in TEA areas (and $1,800,000 in other areas), and that changed the definition of a targeted employment area (TEA), is invalid. Second, the U.S. Congress allowed the regional center EB‑5 program to expire on June 30, 2021.  

2. WILL THE REGIONAL CENTER PROGRAM BE EXTENDED AND, IF SO, WHEN? 

Most observers believe that the chances that the program will be extended are extremely high. The regional center program, which is a temporary program, has already been extended approximately 20 times; and this is not the first time that there has been a lapse between extensions. In every case, the program was reauthorized. The more difficult question is when the program will be extended. The short answer is that nobody knows for certain. Congress will be in session for approximately three weeks in July and then not at all until September. It is certainly possible that the program will not be extended until September, if not later. 

3. WILL THERE BE EB-5 PROGRAM CHANGES IF/WHEN IT IS EXTENDED? 

There are two possibilities. One possibility is that there will be a straight extension with no changes to the program. Another possibility is that there will be a significant legislative package that will include an extension of the program and many other changes to EB‑5. It is possible, but by no means certain, that any extension bill will include changes to the investment amount and/or the definition of TEA. 

4. HOW LONG WILL THE INVESTMENT AMOUNT REMAIN $500,000? 

The investment amount will remain $500,000 unless and until one of three things occurs:  

• Congress passes legislation to increase the minimum investment amount and/or change the definition of TEA;
• The U.S. Court of Appeals for the 9th Circuit, which would be the court hearing any appeal of the District Court decision overturning the 2019 regulation, stays or reverses the District Court decision; 
• USCIS issues a new regulation to increase the investment amount and change the definition of TEA.

5. WHENEVER ONE OF THOSE THREE EVENTS OCCURS, WILL THE INVESTMENT AMOUNT GO BACK TO $900,000 OR $1,800,000 DEPENDING ON THE GEOGRAPHICAL AREA? 

Not necessarily. If the Court of Appeals stays the District Court decision, the investment amount will go back to $900,000 /$1,800,000. If Congress changes the investment amount by legislation, it can choose that amount or any higher or lower amount. If USCIS issues a new regulation, most observers believe it will reissue the original regulation with the same definitions of TEA and the same investment amounts, but that is not certain. 

6. CAN I-526 PETITIONS BE SUBMITTED FOR REGIONAL CENTER INVESTMENTS? 

We anticipate that USCIS will not accept I-526 petitions for regional center investments unless and until the regional center program is reinstated. 

7. WHAT WILL HAPPEN TO PENDING I-526 PETITIONS FOR REGIONAL CENTER APPLICATIONS? 

We expect USCIS will take no action until the regional center program is extended. We do not expect USCIS will deny or return pending I-526 petitions, which were filed before the program lapsed, but USCIS has not issued any definitive statement on that point. 

8. WHAT WILL HAPPEN TO PENDING I-485 APPLICATIONS OR DS260 IMMIGRANT VISA APPLICATIONS BASED ON APPROVED REGIONAL CENTER I-526 PETITIONS?  

We expect that USCIS will not take any action on pending I-485 applications and that the Department of State will not take any action on pending DS260 applications unless and until the regional center program is reauthorized. At this time, we do not believe USCIS or the Department of State will return pending applications.  

9. WILL USCIS ISSUE EMPLOYMENT AUTHORIZATION DOCUMENTS AND ADVANCE PAROLE DOCUMENTS TO APPLICANTS WITH PENDING I-485S BASED ON REGIONAL CENTER EB-5 PETITION APPROVALS? 

USCIS had indicated in various court filings that it will do so.  

10. WILL THE NATIONAL VISA CENTER CONTINUE TO PROCESS IMMIGRANT VISA APPLICATIONS BASED ON APPROVED REGIONAL CENTER EB-5 PETITIONS? 

The Department of State has not issued definitive guidance on this point. We think it is appropriate for the NVC to continue to process applications; However, immigrant visa interviews will not be scheduled until the original center program is reauthorized.  

11. HOW DO THESE CHANGES AFFECT DIRECT EB-5 PETITIONS? 

The expiration of the regional center program has no impact on direct EB-5 applications. These applications can still be filed, and USCIS can still adjudicate them. The invalidation of the regulation containing the definition of TEA and the increased investment amount does impact direct EB-5s. New direct EB-5 petitions filed after the date of the court decision can be filed based on the reduced investment amount that was in existence before November 2019 as well as the definition of TEA that existed prior to the November 2019 regulation. Presumably, newly filed and previously filed direct EB-5 petitions will be adjudicated based on the pre-November 2019 law.  

12. IF USCIS STOPS ADJUDICATING EB-5 PETITIONS, CAN THE INVESTOR WITHDRAW HIS EB-5 PETITION AND SEEK A RETURN OF HIS INVESTMENT CAPITAL? 

This depends entirely on the rights conferred by the project offering documents and the policy of the regional center. There is certainly nothing that prevents an investor from withdrawing his petition. The issue of return of capital is not an immigration law issue, but rather a contractual issue.  

13. WILL THE LAPSE IN THE EB-5 REGIONAL CENTER PROGRAM AFFECT THE QUOTA WAITING TIMES FOR DIRECT EB-5S? 

The writers believe that all direct EB-5 petitions should have a current priority date since no regional center EB-5 visa is available to be issued unless and until the regional center program is reinstated.  

14. WILL USCIS CONTINUE TO ADJUDICATE DIRECT EB-5 PETITIONS? 

The answer should certainly be yes. In fact, since EB-5 adjudicators cannot adjudicate regional center applications, it would make logical sense that USCIS would have its adjudicators work on direct EB-5 petitions, which should result in prompt processing times. We want to emphasize that that is a logical assumption and will not necessarily be reality.  

15. HOW WILL USCIS ASSIGN EB-5 ADJUDICATORS? 

We do not know for certain. However, it would make logical sense that the adjudicators would be assigned both to direct I-526 petitions and to I-829 petitions, which have exceedingly long processing delays.  

16. DO THESE DEVELOPMENTS AFFECT THE DEFINITION OF A TEA?

The impact of the court decision is that the definition of TEA reverts to the definition that existed prior to November 2019. This would require states to resume issuing TEA letters as they did prior to the November 2019 regulations.  

17. WHAT WILL HAPPEN TO I-526 MANDAMUS CASES IN FEDERAL COURT? 

Nothing will happen automatically. It is possible that the government will move to dismiss mandamus cases for regional center EB-5 petitions. Plaintiffs do not want USCIS to be compelled to adjudicate, since the adjudication would presumably be a denial.

18. SHOULD INVESTORS INVEST NOW TO MAXIMIZE THE CHANCES OF HAVING I-526S APPROVED BASED ON A $500,000 INVESTMENT? 

Investors who want to avail themselves of the $500,000 investment amount should invest and file as soon as possible since there is no certainty as to when the investment amount will increase. However, it is critical that the investor assess the investment project relating to its qualification under the pre-November 2019 regulation. For example, a significantly increased amount of job creation is required for projects with $500,000 investment amounts. In addition, the project offering documents have to be revised to reflect the possibility that the investment value may increase from $500,000 to a higher amount. The business plan likely will also need to be revised. The investor will also want to look carefully at the provisions regarding the return of their investment amounts, especially in the event that the Court of Appeals reverses the District Court decision.  

19. DO THESE EB-5 PROGRAM CHANGES AFFECT I-829 PETITIONS? 

No. The only possible impact could be more prompt adjudication times if adjudicators working on I-526 petitions and I-924 petitions are reassigned to I-829 petitions.

20. WILL IT BE POSSIBLE TO FILE MANDAMUS COMPLAINTS FOR LONG-PENDING I-829 PETITIONS? 

Yes.  

21. CAN REGIONAL CENTERS FILE I-924 PETITIONS FOR NEW REGIONAL CENTERS, REGIONAL CENTER AMENDMENTS OR PROJECT EXEMPLAR APPROVALS? 

USCIS has indicated that it will not accept these filings until the program is reauthorized.  

22. SHOULD REGIONAL CENTERS AND NEW COMMERCIAL ENTERPRISES REVISE PROJECT DOCUMENTS BASED ON THE NEW DEVELOPMENTS?

Yes. The project documents have to account for the possibility that, in the middle of the marketing and subscription process, the investment amount may increase. The project documents have to deal with differing job creation requirements depending on whether the investment amounts are $500,000 or higher since more investors and, therefore, more jobs will be required to meet the necessary capital raise and since 10 jobs for each investor will be required.  

23. FOR HOW LONG WILL THE INVESTMENT AMOUNT BE $500,000? 

No one knows. It will depend on action either by Congress, by USCIS, or by the 9th Circuit Court of Appeals. 

24. WHAT IF AN INVESTOR INVESTS AT THE $500,000 INVESTMENT AMOUNT AND THE MINIMUM INVESTMENT REQUIREMENT IS SUBSEQUENTLY RAISED? 

First, the issue is not the date of the investment but rather the date that the I-526 petition is filed. If the minimum investment amount on the date of petition filing is $500,000, the investor should be protected against a subsequent increase in the minimum investment amount by either Congress or USCIS. However, in the event that the 9th Circuit Court of Appeals reverses the District Court decision, it is likely that the impact of such a decision would be to retroactively reinstate the November 2019 regulation. In that event, presumably the I-526 petition would be denied; or possibly investors will be given the opportunity to increase their investments.  

25. CAN AN INVESTOR INVEST LESS THAN THE FULL REQUIRED AMOUNT AND FILE THE EB-5 PETITION? 

The answer is complicated. The investor can invest less than the full amount and file an EB‑5 petition as long as the investor can prove at the time of filing that he had the full investment amount available and can document the lawful source of the full amount of the investment, even the amount not yet invested.  

26. WHAT IF AN INVESTOR FILES WITH LESS THAN THE FULL AMOUNT AND THE MINIMUM INVESTMENT AMOUNT IS INCREASED BEFORE THE I-526 PETITION IS ADJUDICATED? 

The required investment amount should be determined based on the required investment on the date of the filing of the petition.  

27. WHAT WILL HAPPEN TO AAO APPEALS OF I-526 OR I-924 DENIALS? 

Presumably, the appeals will remain in abeyance and not be decided unless and until the regional center program is extended.  

28. WHAT WILL THE LAPSE IN THE REGIONAL CENTER PROGRAM DO TO I-526 PROCESSING TIMES? 

For regional center applications, processing times will increase because presumably there will be no processing during the lapse of the program. As previously stated, we are hopeful that direct EB-5 petition processing times will improve. 

29. WHAT CAN USCIS OR CONGRESS DO TO ALLEVIATE THIS PROBLEM? 

USCIS is powerless to do anything to reinstate the regional center program. Only Congress can do so.  

30. WHAT CAN INVESTORS, REGIONAL CENTERS, OR PROJECT DEVELOPERS DO TO IMPROVE THE CHANCES OF A PROMPT REAUTHORIZATION OF THE REGIONAL CENTER PROGRAM? 

It is of critical importance that everyone interested in the regional center EB-5 program should contact their congressmen and senators, emphasizing that this program is critical to project development and job creation in the US, to enable high net worth individuals who benefit the U.S. economy to immigrate to the U.S. and to ensure the continuity of a program which, if not continued, will result in loss of faith internationally in the integrity of investing in the U.S. 

Source: findbiometrics.co.uk

Published: 30 June 2021

The Caribbean Commonwealth of Dominica will soon be rolling out a new biometric passport for its citizens. The document will formally debut on July 19. Citizens who renew their passports will automatically be issued biometric documents, while those who have recently applied for a new passport will be given the opportunity to wait for the new document to be released. The country will eventually allow citizens to update their passports ahead of their official expiration deadline, and will announce procedures for doing so at some point in the future.

Dominica’s biometric passport will store the holder’s personal information on a microchip embedded in the document. That includes biometric face, fingerprint, and iris data, all of which can be used to verify the holder’s identity while traveling. The Dominican government noted that the document is compatible with the country’s new e-Gates, which means that holders will be able to use them to pass through border checkpoints more quickly. The e-Gates were part of a $13 million project to update the Dominican border in anticipation of the biometric passports.

The government also claimed that the biometric data will make it more difficult for criminals to produce forgeries. As a result, the documents can inform the creation of watchlists, and will make it easier to track the comings and goings of people and cargo in the country.

The biometric passports will be issued to those who gain citizenship through Dominica’s citizenship by investment program. The program offers citizenship to foreign nationals that make a large enough investment in the island’s Economic Diversification Fund, or in select real estate projects.  

While biometric passports are still relatively rare in the Caribbean, they have become increasingly common in other parts of the world. Monaco, Cameroon, and Thailand have all announced plans for or unveiled new documents in the past few months.

Source: washingtontimes.com

Published: 30 June 2021

The EB-5 program has two main parts; the smaller piece of the program, that calling for aliens to actually run a business in the U.S., has a permanent authorization but few customers. But the larger segment, which dealt with pooling aliens’ investments through middleman “regional centers,” never had a permanent authorization and had to be periodically renewed by Congress.

Until November 2019, an alien could buy a set of visas by putting $500,000 into a Homeland Security-designated, but not guaranteed investment, usually in big city real estate ventures. This gave the investor, along with his or her spouse and all their under-21 children, a route to green cards, and beyond that to citizenship.

The principal de facto economic role of the program was to supply cheap capital to big city real estate developers, to fatten their profits in already planned projects. It rarely created jobs in depressed rural or small city areas, as it was originally supposed to do. And in a couple of cases in which the program did reach into rural areas — GOP ones in South Dakota and Democratic ones in Vermont — a barrage of scandals ensued, with prison terms looming over some of the U.S. citizen middlemen involved.

In 2019, the Trump administration, following recommendations crafted under former President Obama, made two major changes. First, it upped the minimum ante to $900,000; the $500,000 figure had been set back in the prior century and its increase was long overdue.

Source: dw.co.uk

Published: 22 June 2021

This year, the United Nations (UN) ranked Finland the world’s happiest country for the fourth year running. The recognition is based on international surveys in which citizens are asked about their perceived happiness.

But Finland also faces a major demographic dilemma, namely the fact that 39% of its shrinking workforce is currently over 65. The UN forecasts that Finland’s “old age dependency ratio” will balloon to over 47% by 2030.

Although Finland has posted a net immigration plus for much of the past decade — 15,000 more people arrived than left in 2019, for instance — the government warns the nation of 5.5 million must double immigration to between 20,000-30,000 a year to maintain public services and avert a looming pension deficit.

Finnish government recognizes demographic problem

To that end, the Finnish government came up with its “Talent Boost” program four years ago. The cross-administrative program, operating under the aegis of the Ministry of Economic Affairs and Employment, is very straightforward in describing the situation and its own mission: “Finland needs more skilled labor.

The objective of the Talent Boost program is to attract international talent to Finland and to improve awareness and recognition of Finland globally.”

“Finland’s working age population is decreasing and population growth is based exclusively on immigration,” reads the ministry’s website.

“Without sufficient immigration, the supply of labor and, in the longer term, employment will fall significantly, which will affect Finland’s economic dependency ratio, employment rate and sustainability gap. Finland competes with the rest of the world for the best talent,” it added. 

Issue of anti-immigrant sentiment in Finland

Despite scoring extremely high in international comparisons for quality of life, freedom and gender equality, lack of corruption, crime and pollution; Finland is also known for its high prices, cold weather, dark winters and notoriously difficult language.

Anti-immigrant sentiment as well as a unwillingness to employ outsiders are also widespread in one of western Europe’s most homogenous societies.

Although labor shortages are pushing more companies to loosen their insistence on only hiring native Finnish workers, many foreigners complain of a broad reluctance to recognize overseas qualifications, and a prejudice against non-Finnish applicants.

“The Talent Boost program will stimulate debate on the openness of the Finnish labor market. Workplace attitudes, discrimination and a lack of diversity affect the willingness of international specialists to stay and find employment in Finland, and they also affect the general attractiveness of Finland in their eyes,” reads the Ministry of Economic Affairs and Employment’s website.

Helsinki: ‘Safe, functional, reliable, predictable’ … welcoming? 

Speaking with AFP news agency, Helsinki Mayor Jan Vaaavuori said that young startup companies, “have told me that they can get anyone in the world to come and work for them in Helsinki, as long as he or she is single. But their spouses still have huge problems getting a decent job.”

Still, Vapaavuori voiced confidence, saying his city is, “safe, functional, reliable, predictable — those values have gained in importance.” 

Source: prnewswire.co.uk

Published: 22 June 2021

The Government of Dominica is reaffirming its commitment to the education sector after a ceremony recently took place on the island to mark the beginning of the Mahaut Primary School construction. Once completed, the school is anticipated to herald new opportunities for local children while also providing jobs with teachers and administrators. Notably, the project will be funded by Dominica’s Citizenship by Investment (CBI) Programme – a vital tool in supporting national development initiatives across the island in various sectors.

Over the last few years, Dominica’s CBI Programme has invested roughly $26 million into sponsoring the education of students abroad, placing tutors with students and rehabilitating 15 schools that were devastated by Hurricane Maria in 2017. During the ceremony for the primary school, Prime Minister Roosevelt Skerrit highlighted that his government was responsible for making secondary education on the island 100 percent accessible, building the Dominica State College and ensuring that transportation along with uniforms and textbooks were also freely available.

Octavia Alfred, the Minister for Education, noted: “This government continues to invest heavily in the improvement of our school plans to ensure the comfort of students, teachers and administrators. Spaces for teachers and students with proper ventilation, lighting, water, electricity, and internet service all contribute to the creation of a learning environment where students can flourish.”

Established in 1993, Dominica’s CBI Programme has been crucial to the nation’s sustainable development. Not only has it contributed to education, but it has also backed healthcare initiatives, including the construction of a state-of-the-art hospital, multiple health centres, hurricane-resistant homes and environmentally friendly resorts and villas. It supports the island’s commitment to becoming the world’s first climate-resilient nation, a feat announced by Prime Minister Skerrit at the United Nations in 2017.

For savvy investors looking for a safe and stable destination for themselves and their families, Dominica’s CBI Programme offers a trusted route to second citizenship that has been internationally hailed by independent studies like the annual CBI Index. Applicants need only make an economic contribution to the country’s Economic Diversification Fund or purchase pre-approved real estate to become citizens of the island – if they pass the necessary security checks.

Once becoming citizens, investors gain access to increased travel freedom to over 140 destinations, alternative business prospects and a second home in a stable democracy with ties to major hubs like the United States and the United Kingdom.

Source: bloomberglaw.com

Published: 26 June 2021

The immigrant investor visa program will expire on June 30, despite a last-ditch bipartisan effort led by senators Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vt.) to extend it, with potentially thousands of petitions still pending at U.S. Citizenship and Immigration Services.

The Homeland Security Department subagency can’t yet say what the fate of those EB-5 applications are, USCIS spokesman Joe Sowers said Friday. The data is current through the second quarter of the government’s fiscal year.

The program—in which people can get green cards in exchange for investing $1 million, or half that amount for economically depressed areas, and creating 10 or more jobs—dates back to the administration of President George H.W. Bush.

Lawmakers failed to reach a deal on its extension before adjourning Thursday until after the Fourth of July holiday. It also follows a spate of mostly unsuccessful lawsuits against government officials seeking to speed up processing of those applications.

Deep fissures between lawmakers on both sides of the aisle cast doubt on the success of future negotiations to reauthorize the program, with some opposing increases to the baseline investment amounts that made the visas more costly, particularly in affluent areas, and others focused on integrity measures meant to stamp out fraud.

“A narrow subset of big-moneyed and corrupt interests has now shown that they would rather kill the program altogether than have to accept integrity reforms designed to clamp down on their bad behavior,” Grassley said during a Senate floor debate Thursday during which he and Leahy argued for its preservation.

Leahy likewise said in a statement that the program is set to lapse, with “untold economic consequences throughout the communities that rely on the program for development projects.” He added he remained “committed to reforming the EB-5 program should there be another opportunity to do so.”

Asked whether the expiration will put pressure on lawmakers to act, Cornell University Law School professor Stephen W. Yale-Loehr noted that time pressure hasn’t been enough to force them to reauthorize the program thus far.

With Congress tied up in negotiations over hundreds of billions and potentially trillions in infrastructure spending, “it’s a competition of priorities,” he added.

Court Fights

The program’s end follows a recent run of federal court rulings rejecting claims that immigration officials have dragged their feet when processing applications for the visas.

Judges in 2020 threw out two of four lawsuits in which they ruled on those allegations. This year, the denial and dismissal rate increased substantially, with courts finding for the government in two of three rulings issued in January and February, and in all four such decisions in March.

While a judge only partly sided with the government in a May ruling, three more requests for orders compelling the DHS unit to hasten its determinations were denied just this month.

In many of these cases, judges cite a set of factors in a 1984 case—Telecommunications Research and Action Center v. FCC—that set standards for when courts ought to compel agencies to take action in the event of an unreasonable delay. The opinions often cited the concern that siding with the plaintiffs would send a signal that litigious applicants for the program can jump to the front of the line.

“This precedent applies even more powerfully here than in the typical case presenting claims of unreasonable delay,” wrote U.S. District Judge Timothy Kelly in Washington wrote in a June 18 opinion.

Government officials, Kelly continued, “not this Court, are best positioned to understand the continued effect of the pandemic on their operations, the entire backlog of visa applications, the competing demands on involved personnel, and even how (if at all) to account for the impending deadline for Congress reauthorize the EB-5 Regional Center Program.”

No ‘Reasonable Timeline’

Proponents of the program said it was unfair for applicants to have had to wait so long.

Combined with the wait times, a 2019 rule imposed by then-President Donald Trump’s administration—raising the minimum amounts to $1.8 million, or $900,000 in more distressed areas, up from $1 million and $500,000, respectively—drove up the risks investors, backers of the program say.

A federal judge threw out that rule late Tuesday.

The program has been operating on a “pilot” basis for decades, and warring EB-5 lobbying groups are at odds over whether to back a bill that would reauthorize it for five years while giving USCIS more authority and putting more guardrails on the program.

Disagreements in the Senate spelled the program’s demise. Grassley and Leahy wanted their five-year reauthorization bill (S. 831), with measures to root out fraud in response to scandals in recent years.

Senate Majority Leader Chuck Schumer (D-N.Y.) co-sponsored a 2019 bill (S. 2778) from several Republicans that would set investment minimums at $1 million for projects in targeted areas and $1.1 million elsewhere, and lobbyists have said they’ve been circulating language from that proposal this year.

Key issues dividing both sides include the minimum investment amounts and definitions of the areas with lower minimums.

Legislation would be a better way forward than litigation, and it’s unfortunate Congress isn’t paying enough attention to investors’ years-long waits for visas after committing large sums of money, said Jane Wu, president of the EB-5 investment and real estate development firm Panorama Holdings and founder of the American Alliance for Economic Development.

The group had been lobbying Congress and parts of the executive branch on the EB-5 program for the past three years, primarily through the firm Alpha Strategies LLC, as well as through former Rep. Kevin Yoder (R-Kan.), and lobbied on the Grassley-Leahy measure in the first quarter of this year, disclosure forms show.

“New investors need to believe they can get their green card within a reasonable timeline,” said Wu. “Without getting these investors comfortable, the program is not going to be attractive anymore.”

Tens of thousands of foreigners have bought their way to U.S. permanent residency through a federal investor visa program.

But this popular shortcut to the American dream is now turning into a nightmare for some amid a rise in lawsuits and fraud cases. The Covid-19 pandemic has made matters worse.

Foreigners get what are known as EB-5 visas by investing at least $900,000 in U.S. real-estate projects and other businesses that create jobs. The program has raised more than $40 billion, according to trade group Invest in the USA, and funded developments such as New York City’s Hudson Yards. But it has long been dogged by fraud cases.

The pandemic has magnified the problem, because many EB-5 projects are hotels, malls and urban apartment buildings whose revenues have dropped during the past year.

With a crucial part of the program set to expire, a longstanding overhaul effort is heating up on Capitol Hill. Some senators say they won’t agree to an extension without new measures meant to prevent fraud, putting the program’s future in doubt. The program has already experienced a decline in fundraising after U.S. Citizenship and Immigration Services raised the minimum amount from $500,000 to $900,000 in 2019.

Attorneys say EB-5 applicants are far more vulnerable to fraud than other real-estate investors. They often don’t speak English and know little about the U.S. real-estate market. Once they invest there is usually no way to track their money.

“There’s this tremendous amount of opportunity for unsavory developers to abscond with the funds,” said Gary Friedland, a scholar-in-residence at New York University’s Stern School of Business who has researched the EB-5 program.

The Securities and Exchange Commission has charged people affiliated with EB-5 projects with violating U.S. laws in 16 cases since 2013, according to Mr. Friedland. Earlier this month, one of the people behind an $85 million EB-5 scheme in Vermont pleaded guilty to charges including wire fraud after prosecutors said much of the investors’ money was spent on things that had little to do with the project.

Although there is no reliable data on the number of investors who are owed money, attorneys who represent them say they are seeing more cases. That is partly because many projects that raised capital during the EB-5 boom years are now hitting the five-year mark when they are supposed to return the funds to investors, and partly because of the state of the real-estate market.

Investors in a $350 million Staten Island outlet mall are getting only a fraction of their money back under a settlement with the company that pooled their funds, according to attorney Rongping Wu of DGW Kramer LLP, who represented the investors. The property, which opened in 2019, has been struggling with high vacancies and low sales during the pandemic. Representatives of the company and the developer BFC Partners didn’t respond to requests for comment.

When projects default, investors also sometimes lose their eligibility for a green card, which grants its holder the right to live and work in the U.S. permanently. Getting a visa depends on the number of jobs a project creates. If the project runs out of money before enough jobs are created, investors might not qualify.

Investors don’t have anyone who looks out for their interests, attorneys and researchers say. U.S.-based entities called regional centers collect the money and funnel it to real-estate deals in return for fees, but attorneys and real-estate investors say the centers often have close relationships with the developers and don’t always keep investors in the loop on what is happening at the project.

During the pandemic, some hotel developers have been able to pile more debt onto their projects over the past year to avoid a foreclosure. But that can be bad news later for EB-5 investors, who typically only get their money back if all other lenders have been paid off first.

Ma, a Beijing resident who would share only her family name, said she took out a mortgage on her home in 2014 to invest $500,000 in a medical-equipment company, Vertebral Technologies Inc. Her immigration agent said the project was safe, and promised that she would get her money back in five years, she recalled, speaking through a translator.

But by 2017 she learned that the company had run into financial difficulties. Ms. Ma said she wanted to sue, but her immigration agent and the company that pooled investor funds discouraged her, telling her that would hurt other investors’ chances of getting a green card. Ms. Ma said she is still waiting for a green card and doesn’t think she will get one. She didn’t get her money back either, and finally teamed up with other investors to sue the company and the entity that pooled the funds this February, alleging their money was misappropriated.

An attorney representing the company, which no longer has a website, declined to comment.

Sens. Chuck Grassley (R., Iowa) and Patrick Leahy (D., Vt.) are looking to protect investors more. They introduced a bill earlier this year that would renew the program, but also require independent fund administrators or annual audits of EB-5 projects, and force regional centers to update investors on the status of their money each year, among other changes. But industry groups and some lawmakers oppose the changes, and it is unclear whether they will get a majority.

Even if they pass, the changes would come too late for some investors. Ian Huang, a 25-year-old immigrant from Guangzhou, China, said his family invested $500,000 in a hotel development near Seattle in 2014 after a family friend told them about the project. His parents, who work as managers at a bank and a telecommunications company, took out a loan to come up with the money. The project ran out of funds and was auctioned off last year, wiping out Mr. Huang’s family’s investment. The Huangs and other investors sued the hotel’s developer and its new owner in December 2020 for fraud and breach of fiduciary duty. An attorney representing the new owner said the owner didn’t have “any role in soliciting or managing the proceeds of the EB-5 investment.”

Mr. Huang at least got his green card and now lives in New York City, where he is applying for software-development jobs. He said he feels pressured to get high-paying work to make up for the lost money, and regrets that his parents made the investment in the first place. “I don’t necessarily want to stay in the U.S. that badly,” he said.

Source: wsj.com

Published: 22 June 2021

The attorney-general’s office on Tuesday released the full text of the report by a committee of inquiry into the now-defunct citizenship-by-investment scheme

The approximately 780-page dossier, heavily redacted, recommends among others the revoking of the citizenships granted to a number of foreign nationals, and also prompts authorities to investigate the possible commission of criminal offences, including making false declarations.

In a statement with the report’s release, the attorney-general’s office said it had to necessarily blank out certain information and names for reasons of public interest: to protect personal data, in line with EU law; to safeguard ongoing criminal investigations and possible future ones; and to safeguard the reasoned opinion procedure initiated by the European Commission against the Republic of Cyprus.

Revealing certain names and details would jeopardise investigations and potentially lead to evidence tampering, “preventing the courts from dispensing justice, given that the punishment of the guilty is what is at stake.”

The extent of the redactions was agreed with the Personal Data Commissioner, the statement added.

The attorney-general’s office said the dossier is being evaluated by a state prosecutor “with the aim of speedily forwarding the report to the police for the start of criminal investigations.”

More later.

Source: cyprus-mail.com

Published: 22 June 2021

El Salvador has become the first country in the world to officially classify Bitcoin as legal currency.

Congress approved President Nayib Bukele’s proposal to embrace the cryptocurrency, with 62 out of 84 possible votes on Tuesday night.

The president said the government had made history, and that the move would make it easier for Salvadoreans living abroad to send money home.

Bitcoin will become legal tender, alongside the US dollar, in 90 days.

The new law means every business must accept Bitcoin as legal tender for goods or services, unless it is unable to provide the technology needed to do the transaction.

“It will bring financial inclusion, investment, tourism, innovation and economic development for our country,” President Bukele said in a tweet shortly before the vote.

He has previously said the move will open up financial services to the 70% of Salvadorians who do not have bank accounts.

El Salvador’s economy relies heavily on remittances, or money sent home from abroad, which make up around 20% of the country’s gross domestic product (GDP).

More than two million Salvadoreans live outside the country, but they continue to keep close ties to their place of birth, sending back more than $4bn (£2.8bn) each year.

On Twitter, some financial and legal observers described the law change as a remarkable accomplishment and a game changer, while others raised concerns about the cryptocurrency’s volatility. Experts have warned it could also complicate matters with the International Monetary Fund (IMF), where El Salvador is seeking a more than $1 billion programme.

The Congress vote happened on the same day that former US President Donald Trump said he saw Bitcoin as a “scam”.

“I don’t like it because it’s another currency competing against the dollar,” he told Fox Business.

He added that he wanted the dollar to be “the currency of the world”.

Bitcoin, a virtual asset with no direct connection to the real economy, has seen large fluctuations in value over the years.

Most of the world’s central banks are looking into the possibility of creating their own digital currencies. In April, the Bank of England announced it was looking into creating a digital money that would exist alongside cash and bank deposits.

Source: bbc.com

Published: 9 June 2021

Introduction and summary

Today, 10.2 million undocumented immigrants are living and working in communities across the United States. On average, they have lived in this country for 16 years and are parents, grandparents, and siblings to another 10.2 million family members. At the same time, it has been nearly 40 years since Congress has meaningfully reformed the U.S. immigration system, leaving a generation of individuals and their families vulnerable. Poll after poll has illustrated that the vast majority of Americans support putting undocumented immigrants on a pathway to citizenship. And as the nation emerges from the COVID-19 pandemic and looks toward the future, legalization is a key component of a just, equitable, and robust recovery.

As the Biden administration and Congress craft their recovery legislation and consider how best to move the nation’s policies toward a more fair, humane, and workable immigration system, the Center for American Progress and the University of California, Davis’s Global Migration Center modeled the economic impacts of several proposals that are currently before Congress. Using an aggregate macro-growth simulation, the model illustrates the benefits to the whole nation from putting undocumented immigrants on a pathway to citizenship. Such legislation would increase productivity and wages—not just for those eligible for legalization, but for all American workers—create hundreds of thousands of jobs, and increase tax revenue.⁴

To help inform policymakers and advocates, this report looks at four potential scenarios where Congress grants a pathway to citizenship to: all undocumented immigrants; undocumented immigrants working in essential occupations; Dreamers and those eligible for Temporary Protected Status (TPS); and a combination of Dreamers, those eligible for TPS, and essential workers.⁵

The report finds that during the next decade:

Scenario 1: Providing a pathway to citizenship for all undocumented immigrants in the United States would boost U.S. gross domestic product (GDP) by a cumulative total of $1.7 trillion over 10 years and create 438,800 new jobs.⁶

• Five years after implementation, those eligible would earn annual wages that are $4,300 higher.
• Ten years after implementation, those annual wages would be $14,000 higher, and all other American workers would see their annual wages increase by $700.⁷

Scenario 2: Providing a pathway to citizenship for undocumented immigrants who are essential workers would boost the GDP by a cumulative total of $989 billion over 10 years and create 203,200 new jobs.

• Five years after implementation, those eligible would experience annual wages that are $4,300 higher.
• Ten years after implementation, those annual wages would be $11,800 higher, and all other American workers would see their annual wages increase by $300.

Scenario 3: Enacting the American Dream and Promise Act (H.R. 6) would increase U.S. GDP by a cumulative total of $799 billion over 10 years and create 285,400 new jobs.

• Five years after implementation, those eligible would experience annual wages that are $4,300 higher.
• Ten years after implementation, those annual wages would be $16,800 higher, and all other American workers would see their annual wages increase by $400.

Scenario 4: Providing a pathway to citizenship for H.R. 6-eligible and undocumented essential workers would boost the GDP by a cumulative total of $1.5 trillion over 10 years and create 400,800 new jobs.⁸

• Five years after implementation, those eligible would experience annual wages that are $4,300 higher.
• Ten years after implementation, those annual wages would be $13,500 higher, and all other American workers would see their annual wages increase by $600.

Importantly, this analysis considers only these direct economic benefits. The model does not capture the potentially large additional benefits to eligible immigrants’ children in education, health, and future productivity gains, as these effects would take place likely more than 10 years from implementation.

As the findings above show, creating a pathway to citizenship for undocumented immigrants not only is the right thing to do but also would be a substantial stimulus to the U.S. economy. Undocumented immigrants are critical to the nation’s social infrastructure—a fact that has become even more widely understood amid the coronavirus pandemic. Across the country, they are building families and starting businesses, they are keeping hospitals open and functioning, and they are caring for Americans’ loved ones. To that extent, legalization and a pathway to citizenship—which would raise wages for all workers, create hundreds of thousands of new jobs, and boost the GDP—is an investment in the country’s infrastructure in and of itself. As the United States continues to address the coronavirus pandemic and works toward a just and equitable recovery, Congress must consider these proposals.

Road map to the report

This report begins with the parameters that the model uses when estimating the economic impacts of legalization and a pathway to citizenship for undocumented immigrants. From there, it discusses the short-term (implementation to five years) and long-term (five to 10 years post-implementation) nature of the effects, before presenting the simulation’s economic effects for four scenarios protecting different subsets of undocumented immigrants.

The report is followed by a methodological appendix detailing how the undocumented population is measured, a discussion of the impacts of the coronavirus pandemic on employment rates, and a review of literature measuring the impacts of legalization and citizenship on wages and human capital of undocumented immigrants. Lastly, a technical appendix includes summary tables of data included in the model, additional detail on model inputs, and technical definitions.

Parameters used to model impacts of legalization and citizenship for the undocumented

In order to model the economic effects of legalization and a pathway to citizenship for undocumented immigrants, one must first identify who would be eligible. Using the 2019 and 2020 Current Population Survey’s (CPS) Annual Social and Economic Supplement (ASEC) conducted by the U.S. Census Bureau, the authors identified 10.2 million undocumented immigrants living in the United States. Using an average of these two years of data allowed the authors to establish a picture of the undocumented workforce both before and at the onset of the pandemic, providing a more realistic picture of the undocumented labor force as the country recovers.

Once the authors established the eligible population, they considered the previous literature on the economic impacts of legalization and citizenship for undocumented immigrants on a host of different inputs. The authors based calculations on a model of economic growth with documented and undocumented workers; human capital depending on labor effectiveness and schooling; and total factor productivity, which depends positively on average human capital.¹¹ They include:

• A 10 percent wage bump from legalization¹²
• An additional 5 percent wage bump that comes from citizenship¹³
• Productivity increases resulting from additional educational attainment and on-the-job training¹⁴

For more details, see the methodological appendix.

What this model measures

Using the conditions described above, the model simulates the effects that legalization and naturalization would have on four segments of the undocumented adult population. Such policies result in permanent changes in labor effectiveness, productivity, and capital investments that are evaluated in a model of an economy growing in a balanced trajectory. The model includes estimates of the effect on average wages of eligible workers, average wages of all other workers, GDP, and number of permanent new jobs using—as base measure of employment—an average of the 2019 and 2020 CPS ASEC.

These effects are estimated for two time frames: the short- to medium-term run (the first five years after implementation) and the long-term run (five to 10 years after implementation).

Short- to medium-run effects

Short-run effects derive mainly from increased productivity of legalized workers. These individuals can move to higher-paying jobs, improve the effectiveness and productivity of their skills, and are less constrained in job searches and opportunities. At the same time, their increased income and spending leads to businesses in their communities being more willing to invest and to take advantage of increased purchasing power that raises returns to investments. This generates increased consumption and demand and higher returns to investment, and it leads to additional investment and production capacity.

Long-run effects

Additional effects need to be considered in the longer run of these policy implementations. On this time horizon, younger undocumented immigrants see their additional schooling translate to higher wages and productivity, especially as one of the ways through which Dreamers can pursue citizenship is by attaining additional education or degrees. These educational advances generate higher efficiency and adoption of better technology and innovation. Other legalized workers are likely to improve their on-the-jobs skills, including their language abilities. In addition to these gains, naturalization, which is likely to occur in this five- to 10-year window, leads to further gains, access to more jobs, and additional wage gains.¹⁵

This increased human capital in turn increases productivity at established businesses and in local economies. It will also stimulate investments in new businesses and increase productivity and wages of other workers as well as generate permanent new jobs.

Findings from the 4 scenarios

Scenario 1: All undocumented immigrants

Who is eligible in this scenario?

Under this scenario, all undocumented immigrants would be eligible for immediate legalization and a five-year path toward naturalization. The model includes all undocumented workers along with Dreamers, regardless of work status. The authors estimate that 7.7 million of the 10.2 million undocumented individuals eligible for protection using 2019–2020 CPS data were either employed in the year prior to the COVID-19 crisis or were Dreamers.¹⁶

Short-run impacts (implementation to year five):

• Increase in annual wages of undocumented workers: $4,300 (10 percent)¹⁷

Long-run impacts (year five to year 10):

• Increase in annual wages of undocumented workers: $14,000 (32.4 percent)
• Increase in annual wages of all other workers: $700 (1.1 percent)

Total cumulative GDP increase through the decade: $1.7 trillion

Total number of new jobs created: 438,800

Scenario 2: Undocumented immigrants working in essential roles

Who is eligible in this scenario?

Under this scenario, all undocumented immigrants working in essential jobs, as defined by the U.S. Department of Homeland Security (DHS), would be eligible to legalize immediately and access a pathway to citizenship after five years.¹⁸ The authors estimate that 5 million undocumented individuals are eligible for protection using 2019–2020 CPS data.

Short-run impacts (implementation to year five):

• Increase in annual wages of undocumented workers: $4,300 (10 percent)

Long-run impacts (year five to year 10):

• Increase in annual wages of undocumented workers: $11,800 (27.3 percent)
• Increase in annual wages of all other workers: $300 (0.5 percent)

Total cumulative GDP increase through the decade: $989 billion

Total number of new jobs created: 203,200

Scenario 3: Undocumented immigrants eligible for the American Dream and Promise Act

Who is eligible under this scenario?

Undocumented immigrants are considered eligible for a conditional permanent resident status under the Dream provisions of the law if they arrived in the United States prior to 2021 at the age of 18 or younger and have a high school diploma or are enrolled in high school. They are eligible for permanent residency after completing any of the following three criteria: two years of study toward an advanced degree or technical training; two years of military service; or three years of employment, 75 percent of which must be performed while work authorized.¹⁹ The authors estimate that 2 million undocumented individuals are eligible for protection using 2019–2020 CPS data.

Undocumented immigrants are considered eligible under the Promise provisions of the law if they were eligible for either TPS as of September 2017 or Deferred Enforced Departure as of January 2021.²⁰

Short-run impacts (implementation to year five):

• Increase in annual wages of undocumented workers: $4,300 (10 percent)

Long-run impacts (year five to year 10):

• Increase in annual wages of undocumented workers: $16,800 (38.9 percent)
• Increase in annual wages of all other workers: $400 (0.7 percent)

Total cumulative GDP growth through the decade: $799 billion

Total number of new jobs created: 285,400

Scenario 4: Undocumented immigrants who are either essential workers or eligible for the American Dream and Promise Act

Who is eligible under this scenario?

Undocumented immigrants who were either employed as essential workers or eligible for the American Dream and Promise Act are eligible for legalization and a pathway to citizenship. Undocumented immigrants are considered eligible for a conditional permanent resident status under the Dream provisions of the law if they arrived in the United States prior to 2021 at the age of 18 or younger and have a high school diploma or are enrolled in high school. They are eligible for permanent residency after completing any of the following three criteria: two years of study toward an advanced degree or technical training; two years of military service; or three years of employment, 75 percent of which must be performed while work authorized. Undocumented immigrants are considered eligible under the Promise provisions of the law if they were eligible for either TPS as of September 2017 or Deferred Enforced Departure as of January 2021.²¹ The authors estimate that 6 million undocumented individuals are eligible for protection using 2019–2020 CPS data.²²

Short-run impacts (implementation to year five):

• Increase in annual wages of undocumented workers: $4,300 (10 percent)

Long-run impacts (year five to year 10):

• Increase in annual wages of undocumented workers: $13,500 (31.3 percent)
• Increase in annual wages of all other workers: $600 (1 percent)

Total cumulative GDP growth through the decade: $1.5 trillion

Total number of new jobs created: 400,800

Conclusion

Undocumented immigrants are longtime members of their communities, and the nation as a whole, and have made significant economic contributions. By putting them on a pathway to citizenship, Congress and the administration can turn those contributions into massive gains for the entire economy and for all workers—by as much as a cumulative $1.7 trillion during the next decade. As Congress debates further recovery and immigration reform legislation, it must include legalization in those discussions.

Source: americanprogress.org

Published: 14 June 2021