USCIS announced on March 21, 2017 the launch of its EB-5 Regional Center Compliance Audit Program (Audit Program). The Regional Center Compliance Audit partially clarifies what USCIS has spoken about in public at stakeholder engagements, which is the eventual use by USCIS of site-visits to verify information submitted in EB-5 petitions.
There appears to be two aspects to the Audit Program. First, the employees of the Audit Program will review a regional center’s filings, which would likely include all Form I-924 and Form I-924A applications submitted by a regional center, and any ancillary documents submitted with those filings to verify the information provided using public and non-public databases. For instance, if a regional center is incorporated within the state of Delaware, USCIS will likely verify the regional center entity is still validly operating and active with the state. However, USCIS also could seek verification of information which relates to a job creating enterprise that the regional center is sponsoring, such as whether or not the job creating entity is still validly operating or whether or not the permits required for the job creating entity to operate are still valid. These types of routine audits of existing regional centers conducted by USCIS should be relatively easy to for USCIS to dispense with, as they simply require an individual at USCIS to verify information remotely.
The second aspect of the Audit Program is performing a site-visit by USCIS. According to USCIS’ webpage, this could entail any of the following:
- Review of Form I-924 filings by the regional center;
- Review of Form I-924A filings by the regional center;
- Review of any updates to those filings; and
- Information to verify submissions or statements in those filings.
It appears from the above that USCIS is requiring regional centers to have paper copies of all submissions to USCIS available on demand. That appears to be a fairly significant compliance requirement given that a regional center filing can be more than 1,000 pages. Additionally, it is unclear what USCIS would require from a site-visit when it requests updates to previously submitted regional center filings. As noted, those filings can be more than 1,000 pages and potentially include information and documentation regarding its sponsored job-creating entities. The vagueness of these requests, while likely intentional by USCIS, does little to assist regional center operators in preparing for a site-visit. It is likely that at the time of a site-visit a regional center will need to provide USCIS with additional information after the fact.
While some regional centers are affiliates of the job-creating entities they sponsor, many are not. If USCIS seeks to verify information regarding a job-creating entity, it is not clear how a site-visit to a regional center operator would accomplish this. While many regional centers receive regular updates regarding projects they sponsor, those updates may not be day-to-day, and may be limited to information the job creating entity is contractually obligated to provide. For instance, a job creating entity may only be required to provide information to a regional center as necessary to comply with USCIS requirements. Without a written request from USCIS regarding information concerning a job creating entity, that job creating entity may not want to divulge such information for fear of disclosure of trade secrets. Additionally, it is unclear how USCIS will handle submissions of projects or new commercial enterprises that never moved forward.
Lastly, USCIS’ statement that it will request to review any updates to regional center filings calls into question whether USCIS believes that regional centers have an ongoing duty to update USCIS. The relevant regulations are vague, and generally speaking, appear to only require regional centers to annually provide USCIS with information to demonstrate that the regional center is continuing to promote economic growth (i.e., submission of the Form I-924A). Given that regional centers already annually file the From I-924A, it appears unclear under what statutory or regulatory authority USCIS could require a regional center to provide information and data more than annually.
To that end, it is noteworthy that USCIS specifically states the following: “If you decline to participate in a compliance audit, USCIS may follow-up with you separately regarding compliance with program requirements.” What is certain is that each regional center operator should immediately develop internal protocols in the event of a USCIS site-visit, and consider training their staff to identify an individual from USCIS and how to handle questions from USCIS. The regional center may wish to designate a point person to be contacted in the event of a site visit and to handle all USCIS questioning, as USCIS notes that any information provided during a site-visit will become part of the regional center’s record. Having a plan in place not only can help everyone respond appropriately in this type of situation and can also help alleviate any panic that may occur when a government agent shows up.