IIUSA and several other Regional Centers have recently initiated a lawsuit (IIUSA v. Blinken) against the Department of Homeland Security (DHS), aiming to block the reallocation of unused EB-5 visas. A successful outcome would have a substantial impact on investors under the pre-RIA era, particularly those from countries with severe visa retrogression, such as Mainland China or India. This legal action follows another lawsuit by IIUSA concerning the definition of the sustainment period. While ARCFE is a Regional Center member of the IIUSA organization, we do not endorse either lawsuits. Our steadfast commitment is to serve and protect the rights of our valued investors.
Read the full filing here: https://iiusa.org/wp-content/uploads/2024/09/First-Amended-complaint-filed-version.pdf
Background
On August 6, 2024, IIUSA and several other Regional Centers filed a lawsuit against the DHS in the U.S. District Court for the Eastern District of Wisconsin, seeking to block the reallocation of unused EB-5 visas. Notably, the organization did not issue any formal public statement prior to filing the lawsuit.
The EB-5 Reform and Integrity Act of 2022 (EB-5 RIA 2022 or RIA) mandates that any unused set aside visas (also referred to as "reserved visas") at the end of a succeeding fiscal year must be transferred to the unreserved visa category in the following year to address backlog issues.
Excerpt from the EB-5 RIA 2022 Bill (page 1022). Read it here: https://www.congress.gov/117/plaws/publ103/PLAW-117publ103.pdf
IIUSA criticizes the U.S. Citizenship and Immigration Services (USCIS) for its slow processing of EB-5 immigrant petitions (I-526E) for post-RIA investors. They state that this delay has caused set aside visas to be moved into the unreserved category. Additionally, they argue that the current prioritization of other EB-5 petitions, such as those for pre-RIA unreserved investors, is unlawful, as Congress intended to prioritize certain post-RIA set aside categories, such as those for rural areas.
The plaintiffs further contend that USCIS and the Department of State (DOS) have made several errors that have contributed to delays and inefficiencies in the EB-5 program. These include issuing incorrect receipt notices, rejecting petitions due to missing notices, failing to implement a pre-paid return envelope system, neglecting to provide electronic copies of receipt notices, and misallocating unreserved vistas by granting Green Cards (GCs) to set aside investors from the unreserved category.
In summary, IIUSA is requesting the following:
Overturning the DOS’s interpretation of the RIA as permitting “rollover” into other employment-based (EB) or family-based immigration categories.
Prevent unreserved EB-5 visas from “rolling up” into the EB-1 and family-based categories.
Prevent set aside EB-5 visas from rolling over to the unreserved visa category if remain unused in the succeeding fiscal year.
The Positive Point of the Lawsuit
IIUSA contends that the EB-5 visas carried over from the set aside categories should never be reallocated from the unreserved visa category to other EB or family-based categories (ie. EB-1, EB-2, etc.). Looking ahead, if USCIS becomes more inefficient in processing EB-5 petitions, maintaining unused visas solely within the EB-5 category will be vital to ensuring investors can immigrate without excessive delays.
...and the Potential Effect to the Pre-RIA Investors
If the Plaintiffs' claims are upheld and the proposed injunctions granted, pre-RIA investors in the unreserved category, especially those from Mainland China (with a priority date of December 2015*) and India (with a priority date of December 2020*), would face significant impacts. These investors are already burdened by substantial backlogs, and this would further extend the delays in receiving Conditional Green Cards and prolong the investment sustainment period. Some investors have been waiting nearly a decade, during which their capital has had to be redeployed.
If the Plaintiffs succeed, these challenges will continue, as a significant backlog of pre-RIA investor petitions remains unprocessed by USCIS. Addressing this backlog is a top priority, which calls for continued unused visa rollovers into the unreserved category to secure timely lawful permanent resident status for pre-RIA investors. This approach would also improve the efficiency of processing post-RIA applications.
(*) September 2024 Visa Bulletin
September 2024 Visa Bulletin
Potential Outcome
Unless USCIS accelerates its adjudication process, IIUSA’s attempt to prevent set aside visa rollovers is likely to be unsuccessful. Keeping 4,200 visas in the set aside category is ineffective, as there may not be enough applicants to exhaust next year’s allocation. It could also lead to the ROW cut off date for unreserved visas by 2025/2026, further exacerbating the retrogression for Mainland China and India by causing them to lose access to 4,238 rollover visas in FY 2025.
Additionally, IIUSA’s stance also conflicts with the plain language of the EB-5 RIA 2022, which explicitly allows unused set aside visas to be rolled over to the unreserved category. The court is unlikely to support IIUSA’s attempt to change policy through legal means.
ARCFE Reaffirms Our Steadfast Commitment to Serving Investors
With over a decade of experience in raising and managing EB-5 funds, ARCFE positions itself as a reputable and well-established medium-sized fund entity. Our team takes immense pride in our demonstrated professionalism and wealth of experience, attributes that have enabled us to assist over 700 investors in realizing their American Dream through the EB-5 program. Our steadfast commitment is to serve and protect the rights of our investors. We pledge to continue prioritizing your needs and aspirations as we move forward.
We will continue updating investors as the situation progresses.
