Category: News

The Department of Homeland Security (DHS) published new regulations on July 24, 2019 that seek to modernize the EB-5 program and will greatly increase the cost of obtaining the so-called “golden visa” starting November 21, 2019.

Congress established the EB-5 program in 1990 to allow foreign nationals to obtain lawful permanent resident status by investing at least $1 million in a new commercial enterprise that will create at least 10 full-time jobs in the United States.Under the program, DHS can specify a lower investment amount if the investment is in a Targeted Employment Area (TEA), which is defined to include certain rural areas and areas of high unemployment. Under the current rules, investors have been able to obtain an EB-5 visa by investing $500,000 in a project within a TEA.

Now, nearly three decades after the creation of the program, DHS has issued new rules that increase the required minimum investment amount and reform how an area can be designated as a TEA.

Increased Investment Amounts

Beginning November 21, 2019, the EB-5 program will generally require applicants to invest $1.8 million in a new commercial enterprise to obtain permanent residency through the program. The new rules continue to provide for a 50% reduction when visa seekers invest in a TEA, so the minimum investment amount in a TEA will rise from $500,000 to $900,000 (rather than the $1.35 million DHS initially proposed). However, the new rules also make it much harder for a project’s location to qualify as a TEA.

DHS has based the increased investment amounts on the effects of inflation since the EB-5 program launched in 1990. In recent years the demand for EB-5 visas has far exceeded supply, making it reasonable to expect that the program could continue to provide a flow of job-creating foreign direct investment at higher investment levels. However, by making a single adjustment for 30 years of inflation, the agency is almost doubling investment amounts overnight. Moreover, the great majority of EB-5 investments have been at the $500,000 level. If the increased minimum investment amounts and more restrictive TEA designations combine to make $1.8 million the new norm, many fear the increase will discourage new investors to the point that the EB-5 program ceases to serve as a meaningful source of alternative project financing.

Changes to TEA Designation

The new rules change the process of designating a project’s location as a TEA in several ways, which will make TEA status harder to obtain outside of rural areas. Specifically, the new rules make the following modifications:

• Previously, the government of each state had the authority to define a specified geographic area or political subdivision as a TEA based on high unemployment; now, DHS instead will make those designations.
• To obtain designation as a TEA based on high unemployment (defined as 150% or more of the national average), project sponsors can no longer combine many contiguous census tracts to define an area that meets the standard. Under the new rules, project sponsors may include only census tracts that are “directly adjacent” to the tract where the new commercial entity principally does business when determining unemployment levels.
• DHS had originally proposed to create a separate TEA designation category for any city or town with a population of 20,000 or more and with high unemployment. The final rules, however, limit this category to towns and cities outside of metropolitan statistical areas (MSAs). As a result, projects in major metropolitan areas must continue to rely on census tract unemployment statistics to obtain TEA status, and they must do so under the newly restricted methodology.

These changes are significant and will prevent TEA status for many EB-5 projects that might previously have qualified. For example, many EB-5 projects in the heart of Manhattan, Los Angeles, Las Vegas and Chicago have qualified for TEA status based on high unemployment in nearby census tracts. In particular, it has been common industry practice for project sponsors to tack several contiguous census tracts together to qualify for TEA status based on average unemployment rates, a procedure sometimes criticized as “EB-5 gerrymandering.” The new rules substantially restrict the ability to combine census tracts in this way. If the census tracts where a project principally does business do not of themselves have unemployment of at least 150% of the national average, then TEA status can be achieved only if adding the immediately adjacent tracts results in a weighted average unemployment rate at that level.

The new rules do not affect TEA designation methodology for rural areas.

The new rules also contain a number of other reforms. Among these is relief to investors in projects that change materially for reasons outside of the investors’ control after they have submitted their immigration applications. Investors will be able to retain the priority dates for their applications, where previously they may have been required to re-apply and go back to the end of the ever-lengthening queue for EB-5 visas.

Moving Forward

The new rules take effect for investors who submit their initial EB-5 application – the “I-526 petition” – on or after November 21, 2019. Both the minimum investment amount and the TEA status of the relevant project will be determined under the old rules until that date. Practitioners in the industry expect a flurry of activity as project sponsors move quickly to take in investors under the current rules. Projects currently open for investors, or planning to launch soon, especially those that may lose TEA status under the new rules, will find themselves under strict time pressure.

In addition to consulting with immigration counsel on the direct effect of the new rules, project sponsors with offerings in progress or planned for the near future should consult with corporate and securities counsel to determine how they may need to change their offering documents. Project sponsors may also need to modify organizational documents to handle investors who will have contributed very different amounts of capital under the two different regimes. They will likely need to revise offering memoranda to disclose the ramifications of the new rules, and ideally to bridge the old and new rules and accept investors under both regimes. In particular, EB-5 offerings that may have been open for some time and are seeking to place their final investments in the pre-November 21 crush may need to supplement their offering memoranda and modify their organizational documents.

There has been much debate about whether the new investment levels will further weaken the appeal of the EB-5 program, which already suffers from the effects of long agency processing times for applications and the years-long waiting lists for visas for investors from many countries. Industry advocates have responded by seeking to convince Congress to rescind the new rules, or to adopt other long-proposed EB-5 reforms that might revitalize the program. While the long-term outlook remains unclear, many are seeking to seize the opportunity presented by the impending changes to launch or complete offerings at what now look like bargain prices for immigrant investors.

 

Source: equities.com
Published: 9 August 2019

 

A spike in geopolitical uncertainty, a fall in HNWI wealth and a rise in the number of countries offering golden visas are all factors driving the Citizenship-by-investment (CBI) market, finds Oliver Williams.

The investment immigration market allows individuals to obtain either citizenship or residency of another country in return for an investment. Unlike its more exclusive Residence-by-investment cousin, however, CBIs are often cheaper and more flexible options for securing a second citizenship.

Now, a perfect storm of events is driving their popularity:

Geopolitical uncertainty

Henley & Partners, one of the largest residency and citizenship planning firms, says it has seen a significant spike in HNWIs applying for Portugal’s Golden Residence Permit Program.

Parallels between demand and geopolitical uncertainty are not hard to make. The Portuguese Consulate General in Macau and Hong Kong last week confirmed it had a flood of inquiries following the anti-government protests in the city.

The golden visa has also been popular among Brazilians who are concerned about right-wing President Jair Bolsonaro’s commitment to democracy. Portugal is an obvious choice for Brazilians offering them a familiar language and access to the EU.

While Portugal’s lingua franca draws others from Portuguese speaking Africa, it is far from the only option for Africans investors looking for an insurance against their often volatile homelands.

Cyprus is seeing demand from West African HNWIs according to Knightsbridge Capital Partners. Managing director Luke Hexter told Forbes that their European Passport program was driving 70% year-on-year growth at the firm. “Nigeria is a prime example of a country where a lot of people are becoming very wealthy quite quickly. But with the political instability, they still love their country … they just still need to have a contingency plan in place.”

Though immigration experts say few CBI applicants physically relocate to the country of their new citizenship, many will use the passport for easier travel across borders, business transactions and, in a worst-case scenario, a safe haven.

Falling wealth

Wealth also needs a safe haven, and now more than before. In the past year Forbes has seen the number and wealth of billionaires shrink: 55 dropped out of the exclusive wealth bracket, and of those that remained, half saw a fall in their wealth.

Traditionally China has provided a counterweight to falling wealth in the west. Not this year though. Hurun, which publishes a China rich list every year, said there are now 213 fewer billionaires in the country as a result of trade tariffs and market volatility.

Overall, there were 3% fewer HNWIs in 2018 compared to the year before, according to Capgemini’s World Wealth Report. The wealthiest suffered most. UHNWIs, those worth over $30 million, accounted for 75% of the decline in wealth in 2018. Their number dropped by 6%.

This falling wealth at the top has caused a rush towards wealth preservation rather than growth. Gold – the traditional safe asset during times of volatility – has already surged 40% in July according to the Royal Mint.

But now there is a new safety net when wealth planning: Citizenship. Dr Juerg Steffen, chief executive of Henley & Partners, says investment migration programs can help mitigate local volatility.

“On the one hand, they create security: reliably diversifying risk through greater protection from volatile markets and political instability. On the other hand, residence- and citizenship-by-investment programs permit access to a significantly expanded suite of opportunities for travel, investment, and influence.”

 

The golden era for golden visas

Driven by these two factors, citizenship has become a business, with its own rules of supply and demand.

On the demand side, 37% of HNWIs in China are currently considering immigration, according to Hurun. A survey by Knight Frank’s annual Wealth Report, found 65% of all Latin American HNWIs are “considering emigrating permanently to another country”.

Meeting the increased demand for citizenship is a growing number of countries offering CBI programs, welcoming those with wealth worries.

Some of these are natural homes for the wealthy, like Monaco. Less so others: Moldova, an Eastern European nation with access to Schengen, launched a CBI program this year. Other oddities are expected soon, including Egypt’s golden visa.

Expect more in years to come, says Chris Kaelin, Chairman Henley & Partners, “I think that both residence- and citizenship-by-investment programs are expanding and equally. Worldwide there are over 100 countries with programs in place. And both on the residence and citizenship side it’s expanding”.

 

Source: verdict.co.uk
Published: 6 August 2019

During his annual budget address, the Prime Minister of the Commonwealth of Dominica, Roosevelt Skerrit, emphasised the key role the island’s Citizenship by Investment (CBI) Programme plays in boosting the country’s economic performance. According to statistics presented before the Dominican Parliament, the CBI Programme is expected to make up 51% of Dominica’s total recurrent revenue and 25% of its estimated GDP for the upcoming 2019-2020 fiscal year.

Prime Minister Skerrit also revealed how CBI has been utilised to enhance several areas of the Dominican society, including education, healthcare, housing and climate resilience. CBI has also helped substantially develop Dominica’s eco-tourism product. With three internationally renowned hotel brands expected to debut on the island, opportunities for business owners, farmers and fishers keep expanding.

The Dominican government has also invested a large portion of CBI funds into the island’s mass-scale ‘Housing Revolution’ initiative, which aims to build 5,000 weather-resistant and affordable homes for its population. At present, over 500 homes have been built with a further 1,068 currently undergoing construction. Lastly, the CBI Programme is also expected to contribute to building a new hospital and developing an international airport.

PM Skerrit said that non-tax sources are primarily being driven by the Citizenship by Investment Programme, totalling around EC$417.5 million. “Indeed, this improved performance relative to the previous fiscal year is reflective of the success of this major policy initiative,” commented the Prime Minister.

For over two decades, Dominica’s CBI Programme has played an important role in the long-term development of this small Caribbean island. It enables highly vetted global individuals and their immediate relatives to acquire second citizenship through an economic contribution. Applicants have a choice between making a one-time investment into the established Economic Diversification Fund (EDF) or buying into selected real estate.

The EDF offers one of the most affordable routes to second citizenship in the world, particularly convenient for single applicants. Investments are used to sponsor key development projects and invigorating the local economy. Dominica’s CBI Programme has also been internationally acclaimed as the world’s best offering for economic citizenship, as announced by the Financial Times’ Professional Wealth Management magazine. The special report, titled the CBI Index, cites the programme’s efficiency, affordability and reliable vetting procedures as some of the key reasons why investors continue to choose Dominica.

 

Source: wicnews.com
Published: 10 August 2019

Attorneys are turning to the courts to unclog a massive immigration application backlog that’s resulted in processing delays lasting up to seven years in some instances.

“It’s really reaching crisis proportions,” said H. Ronald Klasko of Klasko Immigration Law Partners in Philadelphia.

“Not only has the government increased the processing times substantially,” he said, it’s also “cut off lines of communication” so that resolving delays quickly and less formally is no longer possible.

Attorneys are hoping to capitalize on the relative success of a campaign launchedlast year to litigate denials of employment visa petitions. At the same time, they say they’re out of other options for addressing wait times that aren’t just annoying, but harmful for their clients.

It used to be that lawyers waited to sue until a client’s application or petition was taking longer than the expected wait times posted on U.S. Citizenship and Immigration Services’ website. Now, those expected times are so “absurd” that “it’s almost becoming like a joke now,” Klasko said.

Employment Visa Impact

The delays aren’t relegated solely to employment visa petitions, but some of the most extreme are in the employment area.

Applications to be classified as a regional center—an investment vehicle under the EB-5 immigrant investor program—are now taking anywhere between 30 and 85 months to adjudicate, per USCIS calculations. A foreign investor seeking a green card through the EB-5 program is looking at a wait time of between 27.5 and 49 months.

A petition to sponsor someone for an EB-1 green card for multinational executives or managers can take anywhere from 6.5 months to 10.5 months, while an application to replace a green card takes between 12 and 12.5 months.

Petitions to sponsor a worker for an H-1B specialty occupation visa take between two and 8.5 months to adjudicate, while petitions to extend an H-1B visa run between two and 13.5 months.

And applications for work permits through the optional practical training program can take upward of five months. The program allows international students on F-1 visas to work in the U.S. for a period of time after graduation.

 

The delays drew the attention of lawmakers, prompting a House Judiciary Immigration and Citizenship Subcommittee hearing in July.

Testifying at the hearing, American Immigration Lawyers Association President Marketa Lindt said USCIS data reveals that average overall processing times jumped by 91 percent from fiscal year 2014 to FY 2018. The agency’s FY 2018 backlog stood at 5.69 million cases, a 69 percent increase from FY 2014, she said in her written testimony.

AILA also issued a report in January blaming the delays in part on Trump administration immigration policies.

Agency Working on It

“The truth is that while many factors relating to an individual’s case can affect processing times, waits are often due to higher application rates rather than slow processing,” USCIS spokeswoman Jessica Collins said.

“That is why USCIS has implemented a range of process and operational reforms, hired additional staff, and expanded its facilities to ensure its ability to adjudicate keeps pace with extraordinary demand for its services over recent years,” she said in an email.

The agency said it’s working on several initiatives to cut down on its backlogs, including redistributing workloads, allowing for more overtime by officers, technological solutions, and realignment of its field offices. It has also boosted its processing of naturalization applications, deciding the most since fiscal 2013 despite the number of those applications jumping from 291,800 in September 2010 to nearly 700,000 in January 2017.

Staff increases also are on the horizon, already having gone from 10,695 in FY 2009 to the current 20,390.

‘No Alternative’

Immigration attorneys, however, say they have no choice but to sue.

“They’ve removed any reasonable way to inquire about a case,” said Tammy Fox-Isicoff of Rifkin & Fox-Isicoff in Miami. “We are left with no alternative,” she said.

In the past, attorneys could call an immigration officer or supervisor about a lengthy delay and often get a decision on the application soon thereafter, Fox-Isicoff said.

Now, an applicant or petitioner first has to wait to contact the USCIS until after the delay exceeds the agency’s posted processing times, wait on hold for hours to speak to an officer who decides whether to grant an appointment, and then be on call for the next 72 hours in order to receive a call back about an appointment time, she said.

If you miss that call, “you have to start all over,” Fox-Isicoff said. “It’s maddening. There’s no predictability.”

In some cases, the law itself expects that the USCIS will make a decision in a certain amount of time, she said. In others, the delay may be forcing an applicant to commit a misdemeanor by not having the benefit that he or she applied for months or years earlier, she said.

And then there are just the situations in which a particular delay is “beyond the normal processing time lines,” even if it’s still within the window posted by the USCIS, Fox-Isicoff said.

Despite the USCIS being a fee-funded agency, “they no longer view our clients as customers and they no longer view their mission as a service,” she said.

 

Source: news.bloomberglaw.com
Published: 8 August 2019

Our analysis confirms what most industry stakeholders have believed for a long time; residence by investment programs are, at their core, a mechanism for moving people from unfree to broadly free countries.

We have written before that one of the most transformative and meaningful roles investment migration plays in world economics and politics is to punish countries that suppress the civil and economic liberties of its citizens and, correspondingly, rewards those jurisdictions that largely steer clear of coercion.

While it’s true that, at first glance, it appears only the rich in unfree countries benefit from this, it’s also true that a rich person having new options and leaving – bringing with him/her capital, talent, and other resources – has a disproportionately negative impact on the tax receipts of the unfree regime compared to a middle-or-lower income class individual departing.

To discourage the rich from leaving, or encourage them to return, the more coercive regimes would have to change to become more like the countries to which their best and brightest are going. In practical terms, that means they must become freer and treat their citizens better. Not just the rich; everyone.

Investment migration is one of several indispensable levers that prevent despots from subjugating their populations with impunity.

Now, for the first time, we have statistical evidence to support that theory.

The Human Freedom Index and its relationship to investment migration

The Human Freedom Index (HFI) is the most comprehensive index of overall freedom in the world ever created and ranks countries from 1 to 10 on their overall freedom. Jointly published by the Cato Institute, the Frasier Institute, and the Friedrich Naumann Foundation’s Liberales Institut, the index draws on dozens of more specific indices to quantify the freedom of humans along 79 distinct indicators.

These measure things like Rule of Law, Security, Religion, Business Freedom, Size of Government, Identity and Relationships, Property Rights, Access to Sound Money, and many, many more.

The HFI, in turn, obtains its quantitative data from a plethora of more specialized indices that themselves have rigorous methodologies. These include the Index of Economic Freedom, the Press Freedom Index, the World Bank’s Ease of Doing Business Ranking, the Economist’s Democracy Index, and so on. The HFI, therefore, is more appropriately thought of as a meta-index.

Since 9 out of the world’s 13 countries that have formal citizenship by investment programs were too small to be included in the Index, we have focused only on countries that have residence by investment programs.

Findings

We compared the countries that are home to residence by investment programs with significant application volume (the “destination” countries) to those countries that have the most significant outfluxes of investor migrants (the “departure” countries). Four countries (the US, Malaysia, Thailand, and South Korea) have both large influxes and outfluxes of investor migrants (these are marked in yellow on the graph).

No country in the index scored higher than 8.89 (New Zealand) and none lower than 3.77 (Syria). The average human freedom rating among all countries was 6.89.

For our purposes, we compared only the countries relevant to investment migration. We found that, in all but a few cases, the destination countries have a considerably higher Human Freedom score than the departure countries.

The average score among departure countries was 6.06, while the average score among destination countries was 8.00. Removing the four countries that are both destination and departure countries, the difference becomes even more stark; 8.17 versus 5.86.

Investor migrants are voting with their feet and with their dollars. That they are casting their ballots in favor of freedom – economic, political, and social – is incontrovertible.

 

Source: imidaily.com
Published: 25 July 2019

Malta, the European Union’s smallest member state by population, but the bloc’s fastest growing economy, today competes with other EU jurisdictions within the Mediterranean region – Cyprus, Greece, Spain and Portugal – to attract so-called “citizenship by investment”.

Boasting one of the EU’s most attractive fiscal frameworks, the country’s general economic strategy can be summarised as achieving growth through investment. And Malta has been remarkably successful in accomplishing this objective over the past few years, due in no small part to its open and inclusive investment climate, coupled by an Individual Investor Programme (IIP).

Although legally recognised by the European Commission and the EU’s executive body, the implementation of the IIP by Malta – and various other Southern EU countries – has drawn criticism from some fellow EU members and institutions. But this criticism is strongly rebuked by the Maltese government, which highlights the use of similar programmes in the past by larger states (including the United Kingdom) to develop their own economies.

Malta has also vehemently defended the rigorousness of its IIP criteria. Along with a list of eligibility requirements including residence in Malta, successful candidates and their families – who, if successful, are granted Maltese and EU citizenships – must invest an estimated 900 thousand euros, of which 650 thousand euros is a minimum for contributing to the National Development and Social Fund (NDSF).

Spurring Growth and Development

The NDSF, which was established in 2015 and acts as Malta’s Sovereign Wealth Fund, is mandated with administering these funds. Beyond its investment activities, the NDSF finances projects in the country linked to public health, education, job creation, social improvement, and innovation – making the IIP a very potent and meaningful source of foreign investment into the country.

As the CEO of the Fund, Raymond Ellul, explains: “The raison d’être of the NDSF is really to administer the funds which emanate from the Citizenship by Investment Program. It was set up by law, and our funding regulations state that 70 percent of those proceeds have to be administered by a specially set up government agency.”

Though autonomous, the NDSF – which currently manages a portfolio totalling close to half a billion euros – works closely with the government and has two main objectives. While the first objective is linked to economic development, the second – specifies the CEO – “is towards the social wellbeing of the nation”.

“So in actual fact, this is a differentiating factor from other sovereign wealth funds. [Though] we are a sovereign wealth fund, the main investment objective – the overriding objective – is to preserve capital and seek a positive total return in the long term.”

Conversely, the majority of sovereign wealth funds around the world act as stabilisation funds, because their main export is a commodity – most commonly, oil or gas – that is highly susceptible to fluctuations in international prices. As a country that lacks natural resources, Malta’s fund capitalises on revenues derived from the IIP.

Of the NDSF’s two main portfolios, one is a discretionary portfolio which is managed by the Central Bank of Malta, through which 30 percent of investable funds are channelled. The remaining 70 percent is invested in a directed portfolio, which contains strategic economic and social investments for the long-term development of the island.  On this front, the Fund’s autonomy from the government is significant.

 

Source: southeusummit.com
Published: 29 July 2019

The governments of Antigua and Barbuda and the Republic of Kosovo on Wednesday,  signed agreements simultaneously establishing diplomatic relations and abolishing visa requirements between their nations.

The agreements were signed in Washington, DC by the ambassador of Antigua and Barbuda, Sir Ronald Sanders, and the Republic of Kosovo’s Ambassador, Vlora Citaku.

Commenting on the two agreements, Sir Ronald said that “they are in keeping with the policies of the Gaston Browne administration to maintain friendly and cooperative relations with as many nations as possible and to abolish the requirements for visas for tourism, business and investment”.

Ambassador Sanders noted that with this latest abolition of visa requirements, the Antigua and Barbuda passport “continues its high rating as one of the strongest and most acceptable in the world”.

At the signing ceremony, the two ambassadors expressed the joint view that global inter-connectedness in telecommunication and transportation provide real opportunities for trade, investment and tourism which will be vigorously pursued.

Ambassador Citaku said that her government recognizes that, despite its size, Antigua and Barbuda plays a dynamic role in Caribbean and hemispheric affairs.  In this connection, she said the Republic of Kosovo looked forward to cooperating with Antigua and Barbuda based on the joint commitment of the two nations to the principles of international peace, respect for national sovereignty and territorial integrity, and non-interference in the international affairs of states.

 

Source: caribbeannewsnow.com
Published: 26 July 2019

 

A U.S. visa that awards green cards to foreign investors will require a much larger investment under new rules released today and slated to take effect Nov. 21.

Foreign citizens are already contacting immigration lawyers about getting their EB-5 investor visa applications in before the new rules impose higher costs, but once the rules are in place, EB-5 investments will drop and fewer jobs will be created through the program, an immigration lawyer said.

The EB-5 visa, created in 1990 to stimulate the economy through job creation and capital investment, will under the new rules require a minimum investment of $900,000 instead of the current $500,000, U.S. Citizenship and Immigration Services said. That minimum amount will be for investments in businesses in rural areas or regions of high unemployment. For investments in other areas, the minimum will be $1.8 million, compared to the current $1 million.

Homeland Security had originally proposed a new minimum of $1.35 million.

The visa will still require creation of at least 10 full-time jobs but the new rule strips states of the ability to designate areas as rural or high-unemployment “Targeted Employment Areas” to qualify EB-5 applicants for the lower investment threshold. The U.S. Department of Homeland Security will make all such designations, according to the new rules.

Under the current rules, developers offering investment opportunities to people seeking EB-5 visas have worked with officials in some states to effectively gerrymander regions to create Targeted Employment Areas that encompass smaller regions without unemployment levels that meet the visa’s requirements, said Mitch Wexler, a Los Angeles-based partner at immigration law firm Fragomen.

The EB-5 program provides a two-year conditional green card upon issuance of the visa, and visa holders who remain eligible can obtain full permanent residency after two years. Up to 10,000 EB-5 visas are issued per year.

An industry has emerged around the EB-5 program, with developers marketing projects to foreign citizens, Wexler said. But because an investor’s main priority is almost always getting a green card, returns on the investments have typically been less than 3 percent, he said.

“This isn’t really a financial investment,” Wexler said. “Clients view the return on investment as the value of green card.”

Republican Sen. Chuck Grassley of Iowa said in a press release Tuesday that he’d been warning for most of the last decade that the EB-5 was being abused “to steer investment away from rural America. He added that the new rules would bring opportunities to rural America and “communities in need.”

Last week, Grassley said on the Senate floor that there were examples of EB-5 fraud from all over the country.

“In Chicago, a businessman defrauded 290 investors of $150 million in funds that were supposed to be used for the construction of a hotel and conference center hear O’Hare Airport,” Grassley said.

“In Palm Beach, Florida, a real estate developer and real estate attorney teamed up to defraud 60 Chinese and Iranian EB-5 investors of $50 million. Instead of being used to fund the construction of a proposed hotel, it was instead used to pay personal taxes and purchase a 151-foot yacht. In Wisconsin, a businessman used over half of the $7.6 million in funds he had solicited from investors to pay for personal expenses including Green Bay Packers tickets and the purchase of a Cadillac Escalade.”

A May 2017 probe by Citizenship and Immigration turned up 19 cases within the EB-5 program that raised national security concerns related to terrorism, espionage, and unauthorized transfer of information and technology, Grassley said.

In the Bay Area, a lawyer and her firm’s office manager were charged earlier this yearwith criminal fraud, identity theft and obstruction of justice, as well as with civil fraud, over alleged crimes and abuses related to the EB-5 program. The Securities and Exchange Commission said that between 2008 and 2016, the two made $12.7 million in illegal commissions by referring more than 400 clients to groups that bundle investments from foreigners seeking EB-5 visas.

And two dozen Chinese investors late last month sued a Santa Clara County businesswoman claiming fraud, after they each put up $500,000 investments.

Applying for an EB-5 is a lengthy process that can produce a pile of documents a foot and a half high, and the money for the investment must be deemed lawfully earned and taxed, Wexler said. “We have to trace the path of every dollar of this investment,” he said.

Wexler said he hadn’t seen anything in the new rules, except perhaps the removal of states’ ability to designate Targeted Employment Areas, that would directly address abuse of the program.

While Wexler’s office and other immigration firms are seeing a spike in interest in the EB-5 because of the new rules, once the rules take effect, the number of investors will drop because of the higher cost, he said. “This is going to result in far fewer jobs being created,” he said.

 

Source: mercurynews.com
Published: 24 July 2019

The government of Moldova has temporarily suspended a controversial citizenship-by-investment scheme that has been recently used to entice customers by a Dubai developer.

The Moldova Citizenship-by-Investment (MCBI) programme made global headlines in June following Dubai developer Kleindienst Group’s announcement that investors in its Heart of Europe project on The World will be eligible for Moldovan citizenship.

As part of the offer, those who invest AED5 million ($1.36 million) into the project are eligible to apply for the MCBI, which is subject to a multi-stage due diligence procedure.

Late last week, however, Moldovan president Igor Dodon announced that the programme would be suspended following concerns about some of the companies involved.

One of the MCBI’s main service providers, global residency and citizenship advisory firm Henley & Partners, in a statement confirmed the suspension.

“The government has informed the MCBI office that it wishes to review the program and the various companies involved as service providers,” Henley & Partners said in a statement.

The Henley & Partners statement added that “all applications that have been officially accepted by the programme thus far will be fully processed to completion”.

“There will, however, be a temporary cessation of processing new applications so that the government can complete its evaluation and optimization process,” the statement added.

However, Henley & Partners – which has an office in Dubai – did not manage the MCBI applications from Kleindienst, which was handled by another accredited agent. Kleindienst has not divulged which company handles its MCBI applications.

When contacted by Arabian Business, Kleindienst Group declined to comment on the impact that the MCBI’s suspension will have on its previously announced offer.

Dr Juerg Steffen, the CEO of Henley & Partners, said that the company remains committed to Moldova and its people.

“We have invested significant time and capital in Moldova and believe that this investment will generate hundreds of millions of capital over time for the Moldovan economy that will enhance the lives of the Moldovan population.”

Criticism of the MCBI

Since its introduction last year, the MCBI programme has faced criticism from some who view the programme as a security risk.

“Beyond the obvious ethical concerns, this poses a serious security risk to both Moldova and the entire Schengen area to which it has visa-free access,” Naomi Hirst, a researcher at anti-corruption group Global Witness, was quoted as saying in the Daily Mail. “We look forward to an end to the super-rich buying citizenship and access to Europe.”

Additionally, a European Commission spokesperson told the United Kingdom’s Times newspaper that “the commission is closely monitoring the impact of the scheme launched in November [Moldova’s] as it could pose migratory and security risks.”

Henley & Partners, for its part, has said that the programme will support the Moldovan economy with much needed capital, create a platform that will “amplify and enhance” Moldova’s voice on the world stage, and drive flows of foreign direct investment to the country.

 

Source: arabianbusiness.com
Published: 23 July 2019

Citizenship applicants have expressed concern following a High Court ruling that nobody can be granted Irish citizenship if they have spent a single day outside the country in the past year.

The unexpected judgment, handed down by Mr Justice Max Barrett, could affect thousands of people applying for Irish citizenship on the basis of residence in the country.

Experts have called the ruling “absurd”,  pointing out that the law on citizenship has never been interpreted so strictly before and have called for emergency legislation to be enacted.

The Department of Justice & Equality has said it is “studying the decision carefully”. In a statement today, justice minister Charlie Flanagan said: “This issue is being dealt with as an urgent priority and I will take any necessary action to resolve it.”

With the Dáil in summer recess until 17 September, it’s as yet unclear how exactly this issue will be resolved.

Majo Rivas, who is originally from Paraguay and has been living in Cork for four years, has said she was “shocked” by the ruling.

“It’s going to have a domino effect,” Rivas told TheJournal.ie. “People who are waiting are worried.”

‘Perfectly normal reasons’ 

Under the Irish Nationality and Citizenship Act 1956, foreign nationals wishing to naturalise as Irish have to be legally resident in the State for at least five years out of the last nine – or three out of the last five if married to an Irish citizen.

This includes one year of “continuous residence” in the 12 months up to the date of application.

In practice, the Department of Justice and Equality had been allowing citizenship applicants to be out of the country for up to six weeks in that final year, and “possibly more in exceptional or unavoidable circumstances”.

Judge Barrett’s ruling says this six-week rule goes “beyond what is legally permissible in this regard, because…the Act of 1956 does not confer any discretionary power on the Minister”.

Pointing to the dictionary definition of “continuous”, the judge held that “an applicant must show a one-year period of residence in Ireland that is ‘unbroken, uninterrupted, connected throughout in space or time’”.

In what was essentially a Test Case for the six-week rule, Judge Barrett interpreted the phrase “continuous residence” to mean no absence from the State meaning the six-week rule can no longer apply.

For Rivas, it means uncertainty and possible delays in receiving her citizenship.

Rivas has been married to her Irish husband for over four years and applied for citizenship last October. “Delays are already existing [in the application process],” she said. “I knew it was going to take some time.”

Rivas has a list of each time she left the country in the last year. She travelled to Spain for one day and visited her sister for holidays. “I left for perfectly normal reasons,” she said. ”Thank God I didn’t have to travel [home] for a funeral.”

Justice Barrett’s ruling casts doubt over when Rivas will receive her citizenship due to her recent absence from the State.

‘Emergency legislation’ 

Elsewhere, concerns have been raised about what the ruling means for new citizenship  applicants, citizenship refusals and how the Department of Justice & Equality will act following the ruling.

Solicitor Simon McGarr has said the ruling is “so significant that an emergency piece of amending legislation is the appropriate response.”

“One which will remove the requirement for “continuous residency” and replaces it with a more flexible requirement allowing for normal travel,” he said.

Brian Killoran, CEO of The Immigrant Council of Ireland, has called for the Department to issue a temporary freeze on issuing citizenship refusals until this issue is resolved.

Immigration lawyer Aoife Gillespie has said the effect of the decision is that “an applicant must literally never leave the State [in those 12 months]. Not even for one day. Not even to enter Northern Ireland (an impossibility for many persons living by the border). They must have entirely uninterrupted residence in Ireland”.

She added, “It is absurd to require a person to be detained within the State for an entire year in order to qualify for Irish citizenship.”

Speaking to the TheJournal.ie, Gillespie said that foreign citizens resident in Ireland should not now apply for citizenship if they have been out of the country even once in the past 12 months – at least until the legal position is resolved.

She added that pending citizenship applications would have to be refused:

“Those applications that are sitting on the Department’s desk at the moment, where there is any absence at all, can’t be approved until either the judgment is appealed and overturned or the law changes.”

‘Continuous residence’

David Kenny, an Assistant Professor in Law at Trinity College Dublin told TheJournal.ie that emergency piece of legislation is a likely next step for the Department. 

“The problem is that the judge has interpreted this very important section [of the Act] in a such way that will change what we thought the process was…that the Minister has been applying this discretionary allowance for how long you could be absent and maintain continuous residence.

“The judge has basically said ‘That’s not what the Act says.”

Justice Barrett made clear in his judgement that it’s up to the legislators to resolve the absence question for citizenship applicants.

The Judge wrote in his decision that while his judgment “may seem unfair”, it was what the letter of the law required. He said that “the cure for any (if any) such unfairness as is resulting is not to be found in the law-courts; it lies in the gift of the legislature”.

Rivas, who was already planning her citizenship party with friends and family, is now uncertain as to when she’ll receive her Irish citizenship.

Absences from the State, she said, are a fundamental part of being a migrant. “Most of my family are abroad.”

Rivas, her husband and her parents-in-law were planning a trip to Paraguay so they could see where she grew up.

That trip, she said, is far from certain following the High Court ruling.

Speaking today, Second Deputy Secretary at the Justice Department Oonagh Buckley said that “we obviously have to take account of the High Court and make sure that the Minister is appropriately advised on the best approach, legal & administratively.”

“That will take us a wee while. No one should precipitate anything.”

 

Source: thejournal.ie
Published: 18 July 2019