By statute, the Office of the Citizenship and Immigration Services Ombudsman submits an Annual Report to Congress by June 30 of each year. The Office of the Ombudsman’s Annual Report provides a summary of the most pervasive and serious problems encountered by individuals and employers applying for immigration benefits with U.S. Citizenship and Immigration Services (USCIS) and reviews past recommendations to improve USCIS programs and services.

The Office of the Ombudsman’s 2021 Annual Report details that the pandemic compounded USCIS’ already-strained processing and fiscal situation, with the agency now experiencing backlogs of applications and petitions “at record levels,” as well as drastically reduced “customer service functions.” The aforementioned is in most part due to temporary office closures, reduced staffing, and lack of end-to-end electronic processing capabilities for many benefit types. Near-total shutdown of the agency’s offices in March 2020 also significantly affected already-low receipts and fee revenue insufficient to cover operating costs and led to mass cancellation of in-person interviews, biometrics appointments, and oath ceremonies.

The Office of the Ombudsman’s 2021 Annual Report details that USCIS field offices were only gradually reopened at limited capacity—with reduced services and fewer staff—starting in June 2020. All USCIS field offices were open by October 2020 but were offering services at only about 50% capacity at that time. As a result, backlogs and processing times grew substantially throughout 2020. Due to temporary office closures and reduced staffing, USCIS cancelled roughly 280,000 interviews at the start of the pandemic. But the agency lacked the staff to reschedule all of these interviews in a timely fashion because, even after reopening, application support centers were operating at 65% or 70% capacity at best. According to USCIS statistics, approximately seven million applications and petitions were pending as of March 31, 2021. Additionally, the report states that the agency’s backlog was significantly exacerbated for two reasons: first, applicants and petitioners rushed to file before a proposed fee increase was due to take effect Oct. 2, 2020 (although the increase was never actually implemented); and second, after the new fiscal year began on Oct. 1, 2020, thousands of applicants filed all at once when their priority dates became current. Since USCIS offices were still operating at reduced staffing levels during October 2020, there were not enough personnel to process all the new applications and petitions.

The Office of the Ombudsman’s 2021 Annual Report makes a number of recommendations as to how the agency can best work through its backlog, first recommending that the agency not rely entirely on fees to fund its operations, as fees are inherently unpredictable. The report recommends some combination of fee revenue and congressionally appropriated funding to enable the agency to effectively improve operational deficiencies. The Biden administration agrees that USCIS requires additional funding, and President Biden’s first budget allotted $350 million to USCIS for backlog reduction purposes. On June 30, 2021, the House Appropriations Committee approved the fiscal year 2022 Homeland Security funding bill, which included $474.5 million for USCIS, an increase of $346.7 million above the fiscal year 2021 enacted level. However, until this bill is passed, USCIS may struggle to resolve its backlogs and processing time delays. The Office of the Ombudsman’s 2021 Annual Report also details that USCIS has made strides in expanding online filing and digital adjudications, but its goal of an end-to-end electronic strategy has yet to be fully achieved.

On June 9, 2021, USCIS issued three new Policy Alerts in the USCIS Policy Manual. These updates support Executive Order (EO) 14012, “Restoring Faith in Our Legal Immigration Systems and Strengthening Integration and Inclusion Efforts for New Americans,” directing federal agencies to identify strategies that promote inclusion and identify barriers that impede access to immigration benefits, issued by President Biden on Feb. 2, 2021. The Policy Updates outline those changes that USCIS made, including:

  1. Clarifies the criteria and circumstances for expedited processing, including providing benefit requestors and USCIS officers further guidance on when expedited processing may be warranted as well as clarifying what USCIS considers an emergency situation, (e.g., a critical need to travel to obtain medical treatment in a limited amount of time). USCIS considers all expedite requests on a case-by-case basis and generally requires documentation to support such requests. A benefit request may be expedited in the following circumstances: it will cause severe financial loss to a company or a person; it is for emergency and urgent humanitarian reasons; it is for the interest of the U.S. government or it is to clear USCIS error. In addition, nonprofit organizations (as designated by the Internal Revenue Service) whose request is in furtherance of the cultural and social interests of the United States may request that a benefit be considered for expedited processing, even if premium processing is available for that benefit. The Policy Alert also clarifies that expedited requests for noncitizens with a final order of removal or noncitizens in removal proceedings are coordinated between USCIS and U.S. Immigration and Customs Enforcement. (ICE).
  2. Improves request for evidence (RFE) and notice of intent to deny (NOID) guidance. USCIS now returns to the adjudicative principles of a June 2013 memo that instructed agency officers to issue an RFE or NOID when additional evidence could potentially demonstrate eligibility for an immigration benefit. The Policy Alert provides guidance on when and how officers should issue RFEs and NOIDs as well as timeframes and options for benefit requestors to respond to RFEs and NOIDs. Only if the totality of the evidence submitted does not meet the applicable standard of proof, and the adjudicator determines that there is no possibility that additional information or explanation will cure the deficiency, then the adjudicator shall issue a denial. Pursuant to this update, an officer should generally issue an RFE or NOID in cases involving insufficient evidence before denying such cases. This reverses the previous administration’s more restrictive RFE and NOID policy.
  3. Increases the validity period for initial and renewal employment authorization documents (EADs) for applicants seeking adjustment of status under Section 245 of the Immigration and Nationality Act (INA). This is expected to reduce the number of employment authorization requests USCIS receives, allow the agency to shift limited resources to other priority areas, and ease an unnecessary burden on individuals waiting on the adjudication of their adjustment of status applications. This is particularly important for those applicants who may be stuck in a visa backlog and have a long-pending I-485 application. The guidance is effective immediately.

The changes by USCIS are consistent with the Biden-Harris administration’s priorities to eliminate unnecessary barriers to the legal immigration system and reduce burdens on noncitizens who may be eligible for immigration benefits, according to Acting USCIS Director Tracy Renaud.

In April 2021, USCIS approved the I-526 Petition of Huashan Zhang, a Chinese national who had appealed the denial of his EB-5 petition under USCIS’s recent “Loan Proceeds Policy,” which was invalidated by the U.S. Circuit Court of Appeals for the D.C. Circuit on Oct. 27, 2020. In a break from previous interpretation, USCIS’s recent Loan Proceeds Policy sought to impose collateralization requirements on all EB-5 capital investments resulting from loans. Previously, USCIS only analyzed whether capital resulting from secured loans (“indebtedness”) was secured by the assts of the investor and that the assets of the new commercial enterprise upon which the petition was based were not used to secure any of the indebtedness.

In 2015, USCIS adopted the policy of treating cash resulting from a loan as “indebtedness” rather than “cash,” which required collateralization secured by assets owned by the investor.

The appellees in Zhang v. USCIS, Huashan Zhang, a Chinese citizen, and Masayuki Hagiwara, a Japanese citizen, both borrowed $500,000 from corporations they controlled and invested the capital in a new commercial enterprise for purposes of participation in the EB-5 program. In both instances USCIS concluded in 2015 that because the loans were not secured by the investor’s assets, their investment did not satisfy the regulatory requirements for “indebtedness” to qualify as “capital.” In analyzing the regulations, the definitions of the terms “cash” and “indebtedness,” and the purpose of the EB-5 program, the D.C. Circuit highlights that the security requirement serves no purpose for loan proceeds because “title to the cash passes unencumbered to the enterprise.”

Accordingly, on Oct. 27, 2020, the D.C. Circuit invalidated USCIS’s Loan Proceeds Policy, holding that loan proceeds are properly classified as “cash,” rather than “indebtedness,” and that USCIS therefore erred in imposing collateralization requirements on the investment of loan proceeds. This decision from the D.C. Circuit became binding on USCIS, and the approval of Huashan Zhang’s EB-5 petition provides precedent for future compliance. However, as of April 27, 2021, USCIS has not updated its Policy Manual to reflect the interpretation promulgated by the D.C. Circuit; it is not known if or when USCIS will so do.

The United States Citizenship and Immigration Services (USCIS) has reported significant delays for processing receipt notices due to a significant increase in filings at USCIS lockbox facilities, as well as facility capacity restrictions due to COVID-19. In particular, USCIS now confirms the following lockbox backlogs:

  • Dallas Lockbox: Currently intaking Employment-Based I-485 adjustment of applications and standalone cases filed around Oct. 29, 2020, and Oct. 30, 2020, with approximately 415,000 applications/petitions waiting to be receipted
  • Phoenix Lockbox: Currently intaking cases of all form types filed in early December 2020 with approximately 67,000 envelopes (or about 100,000 applications) waiting to be receipted

The CIS Ombudsman continues to assist individuals who have not received receipt notices 90 days after their application/petition was received at USCIS. However, the CIS Ombudsman’s Office recently stated that USCIS has confirmed it is unable to expedite the issuance of receipt notices at this time.

The delays at the Dallas Lockbox facility are affecting the receipting of Form I-829 Petitions by EB-5 investors. USCIS instructions require all Form I-829 Petitions to be filed with the Dallas Lockbox facility. For those EB-5 investors filing Form I-829 Petitions, continued delays are expected to receive the receipt notices. For investors requiring proof of ongoing status via the I-829 Receipt Notice, petitions should be filed as early as possible to the opening of the 90-day window prior to conditional permanent residence expiration. If urgent proof of status is required for EB-5 investors, petitioners should contact their attorney for additional guidance.

As part of USCIS’ updated Redeployment guidance released July 24, USCIS released a Q&A. The Q&A confirms the guidance from July 24, including the more questionable aspects of USCIS’ policy update. Importantly, USCIS doubled down on the idea that it can apply the new redeployment guidance to pending I-526 petitions and I-829 petitions by stating they have “…determined that any potential impacts to investors would be minimal because the updated guidance merely clarifies continuing eligibility requirements…” and that “[t]his clarification does not change any substantive requirements.” This statement appears contradictory to USCIS’ earlier policy changes, such as the early 2017 revision to whether or not regional center geographic area expansion requests must be approved prior to filing I-526 Petitions within that expanded area. Furthermore, given USCIS’ posted processing times are currently over six years, it seems likely that EB-5 capital has been or will be redeployed before many I-526 Petition adjudications. Thus, not only does this change materially affect the eligibility requirements of pending petitions, it changes substantive requirements.

It also appears USCIS is using the Q&A to solicit interfilings for these pending I-526 Petitions. USCIS discouraged “interfiling” in the past, as there is no mechanism to interfile documents into a pending petition, and no legal, regulatory or statutory authority exists for an interfiling. Thus, it could be expected that USCIS will issue requests for evidence to long-pending I-526 petitions if it believes sustainment of the investment will not occur during the petitioner’s conditional permanent residency. Furthermore, the starting point for this question appears to be that deployment of capital must be ongoing throughout the I-526 Petition adjudication period. That starting point is plainly incorrect, as the applicable standard at the I-526 petition stage is whether the petitioner has demonstrated by a preponderance of the evidence that his or her capital will be at risk, and such capital will be at risk throughout the period of conditional permanent residency. EB-5 capital never has to be at risk prior to I-526 petition approval.

On July 24, 2020, USCIS issued a Policy Alert titled “Clarifying Guidance for Deployment of Capital in Employment-Based Fifth Preference (EB-5) Category.” The Policy Alert outlines those changes that USCIS made, without prior notice to the public, regarding its policy on “redeployment” of EB-5 capital, including:

  1. Clarifies requirements for deployment of capital generally, including providing new language regarding the deployment of capital through any financial instrument that meets applicable requirements as well as explaining how the purchase of financial instruments on the secondary market will generally not satisfy such requirements.
  2. Clarifies that capital may be further deployed into any commercial activity that is consistent with the purpose of the new commercial enterprise to engage in the ongoing conduct of lawful business. This clarification is meant to address potential confusion among stakeholders regarding prior language about the “scope” of the new commercial enterprise while remaining consistent with applicable eligibility requirements.
  3. Provides that further deployment must be through the same new commercial enterprise.
  4. Provides that further deployment must be within the geographic area of the same regional center, including any amendments to the regional center’s geographic area approved before the further deployment.
  5. Explains that, based on an internal review and analysis of typical EB-5 capital deployment structures, USCIS generally considers 12 months as a reasonable amount of time to further deploy capital, but will consider evidence showing that a longer period was reasonable.

The changes by USCIS, meant to clarify the agency’s position on redeployment, have caused concern among stakeholders. Among the changes above, USCIS never confirmed the redeployments need to occur within geographic scope of the regional center, nor did it assign a timeline for redeployment. Moreover, USCIS clarified that “any financial instrument” can qualify for a redeployment but that the purchase of financial instruments traded on secondary markets generally does not satisfy the EB-5 requirements because such secondary market purchases generally: (1) are not related to the actual undertaking of business activity; (2) do not make capital available to the job-creating business; and (3) represent an activity that is solely or primarily financial rather than commercial in nature.

The Policy Alert states that these clarifications apply to all Form I-526 and I-829 petitions pending on or after the date of publication, which occurred on July 24, 2020. This is problematic from a stakeholder perspective, as USCIS provided no notice to the public regarding these changes, yet it seems USCIS seeks to apply these rules to all EB-5 cases. Further, USCIS published draft redeployment guidance in 2015 and final guidance in 2017, neither of which included these above-listed restrictions. EB-5 stakeholders have been operating under the previous USCIS guidance for almost five years. There may be litigation over these changes that were published without any notice to the public before its effective date of July 24, 2020.

As a follow-up to our Jan. 31 blog post, we have yet to see an official announcement from the U.S. Embassy & Consulates in China regarding visa appointment cancellations for the week of Feb. 10 or later. However, this week, we began receiving non-immigrant and immigrant visa appointment cancellations for the week of Feb. 10. Likewise, the U.S. Consulate General in Guangzhou informed some EB-5 investors that “Due to the evolving situation with the novel corona virus, and the Chinese government response, the USCIS Consulate Guangzhou is cancelling immigrant visa appointments the week of February 10.” As there is no official announcement at this time, we are unable to confirm whether the cancellation of interview appointments applies to all visa appointments, immigrant and nonimmigrant, and whether this applies to all U.S. Embassy and Consulates in China. However, given the cancellation notices issued so far, and the authorization by the U.S. State Department that allowed non-emergency U.S.-government employees to evacuate China, we believe that more visa appointments are likely to be cancelled in the coming week. Please contact your GT attorney with any questions regarding interview cancellation and rescheduling. We will continue to monitor the situation and provide you with the updates as we receive them.

Additionally, on Feb. 5, USCIS published a response to the 2019 Coronavirus. According to the news alert, USCIS is temporarily closing its field offices in Bejing and Guangzhou, and will be rescheduling all affected appointments and sending new appointment notices to applicants. (Please note that USCIS field offices in China have limited jurisdictions and do not handle EB-5 and other employment-based cases, which are processed at the U.S. Embassy and Consulates in China). USCIS also suggests that those who are in the United States and are sick or start to feel symptoms of feeling sick, follow instructions to reschedule their USCIS appointments in the United States. As such, we suggest that applicants unable to attend their appointments reach out to their GT attorneys to reschedule. Finally, USCIS indicates that it may take into consideration the coronavirus, which has prevented the departure of certain nonimmigrant visa holders currently in the United States, in adjudicating their applications for extension or change of status due to the situation. For those readers who are nearing the expiration date of their I-94 but are prevented from their planned departure due to the virus, please contact your attorney should you need to file an extension of status.

On Jan. 29, 2020, USCIS announced that it would be making a significant change to the processing of I-526 Petitions, commonly referred to as EB-5 Petitions. USCIS previously had a policy to adjudicate EB-5 Petitions on a “first-in, first-out” basis. This meant that USCIS was to review and decide EB-5 Petitions based solely on the date the petition was filed with USCIS. Today, USCIS announced that it would change this policy and decide EB-5 Petitions using the “visa availability” approach.

What is the “Visa Availability” approach?

The “visa availability” approach outlined by USCIS would prioritize EB-5 Petitions for adjudication based on whether a visa number is available to the investor. This ties the timing of the decision on the EB-5 petition to whether the investor is subject to visa retrogression based on their country of birth. As a reminder, the employment-based fifth preference category “EB-5” is allotted approximately 10,000 immigrant visas annually. This quota includes principal applicants, as well as spouses and dependent children under 21 years of age. No one country can exceed more than seven percent of the total EB-5 visas available in each fiscal year.

When the annual quota is exhausted in a particular fiscal year, the State Department has to establish a wait line that determines the order in which immigrant visas are issued. This wait line is referred to as “retrogression.” The investor’s place in line is determined by his or her “priority date,” or the date the EB-5 Petition was filed and received by USCIS. This date is found on the I-526 Petition receipt notice issued by USCIS. Investors and their dependent family members cannot move forward to receive the two-year conditional green card until his or her priority date becomes “current.” Each month, the State Department monitors visa retrogression and “current” priority dates on their Visa Bulletin publication. Once a priority date becomes “current” on the Visa Bulletin, the investor and his or her dependents can obtain the two-year conditional green card.

What does this mean for investors born in mainland China, Vietnam, and India?

Currently, investors who were born in mainland China, Vietnam, and India are subject to visa retrogression due to the higher demand for EB-5 visas for investors and family members born in those countries. Investors with a spouse born in a country that is not mainland China, Vietnam, or India are not subject to retrogression, as they can be “cross-chargeable” to the spouse’s country of birth for this purpose.

As a result of this change in policy at USCIS, investors who were born in mainland China, Vietnam, and India who are subject to the visa retrogression with priority dates that are not yet “current” on the Visa Bulletin can expect to wait longer for their EB-5 petition to be approved by USCIS.

Investors who were born in mainland China, Vietnam, and India, but who have a “current” priority date on the Visa Bulletin also should continue to be adjudicated on a first-in, first-out basis. Only those investors currently subject to visa retrogression may receive delayed adjudications on the EB-5 Petition.

What does this mean for investors not subject to retrogression?

Investors who were born in all other countries and who are not subject to visa retrogression should continue to have their EB-5 petitions approved on a first-in, first-out basis using the receipt date on the I-526 receipt notice issued by USCIS. The current processing time for EB-5 petitions per the USCIS website is 32.5-49.5 months. Until the new policy is implemented, we will not fully know if the processing time for EB-5 petitions will be reduced from this current wait time.

What does this policy mean for an investor’s dependent children?

Investors who were born in mainland China, Vietnam, and India who are subject to the visa retrogression often worry about their dependent children reaching the age of 21 and “aging out” before they are able to obtain their permanent residence. This new USCIS policy could serve to protect some children from “aging out,” and allow them to continue processing with their investor parent.

The Child Status Protection Act (CSPA) was enacted in order to protect children of petitioners against lengthy petition processing times. The determination of whether the protection of CSPA applies is made when the petition priority date becomes current. At that time, the number of days the petition was pending is deducted from the child’s biological age. Assuming the resulting number is under 21 years of age (even if it’s days shy), the CSPA protections apply, and the child has one year to seek to acquire his or her immigrant visa.

For those petitions subject to retrogression and that remain pending at USCIS now, the I-526 petitions likely will be pending for more days. Those days can be deducted from the child’s age later, when the visa number becomes current. While it may not protect a child from “aging out” in every case, this likely will improve the chances for many children to continue in the immigration process with their parents. Previously, USCIS would not hold EB-5 petitions in abeyance to help protect children from “aging out.”

When will USCIS implement this change?

The new visa availability approach will apply to petitions pending as of the effective date of the change. USCIS will implement the visa availability approach on March 31, 2020. USCIS will hold a public engagement on March 13, 2020, from 11:00 a.m. to 12:00 p.m. EST, to provide information and answer questions from the public about these operational changes to the management of Form I-526 petition inventory.

Greenberg Traurig, LLP will continue to monitor this change in processing and report updates to our blog.

Starting July 1, 2019, international offices of the U.S. Citizenship and Immigration Services (USCIS) will no longer accept Form I-407, Record of Abandonment of Lawful Permanent Residence Status. On that date and going forward, all I-407 forms must be sent by mail to the address below. USCIS anticipates that processing of the form, from receipt to completion, will take 60 days or less, not including the mailing time to and from outside the United States (and please note that given the below address is a post office box, these notices cannot be sent via courier services like FedEx and UPS).

USCIS Eastern Forms Center
Attn: I-407 Unit
124 Leroy Road
PO Box 567
Williston, VT 05495

For various reasons, foreign nationals who have obtained Lawful Permanent Residence (LPR) status in the United States sometimes choose to voluntarily abandon their LPR status. When these individuals choose to live in another country and maintain residency there, it is a best practice to submit a Form I-407 so that a record of their abandonment of LPR status is filed with USCIS. Once the I-407 form has been accepted and the abandonment is recorded and acknowledged by USCIS, the former LPR-status individual no longer has to be concerned about certain tax requirements to file as a U.S. resident, and he also need not be concerned about maintaining residency in the U.S.

As EB-5 investors are aware, maintenance of their residency is of vital importance. After obtaining Conditional Permanent Resident (CPR) status, the investor must continue to maintain residency in the U.S. or else risk possible deportation or inadmissibility, as discussed in a prior blog post. EB-5 investors and dependent family members should maintain as many ties to the U.S. as possible, and when taking longer trips outside of the U.S., they should apply for and obtain reentry permits and consider carrying evidence of their U.S. ties with them when they return to the U.S. Without the maintenance of residency, a Customs and Border Protection (CBP) officer could find the investor inadmissible for having abandoned residency, and that individual may face an uphill battle when applying to remove the conditions on the green card (filing of the I-829) or when ultimately applying for naturalization by filing the N-400 form (see our blog post here on the residency requirements for maintaining LPR status and for applying for naturalization).

Once abandonment of LPR status occurs, the foreign national no longer need worry about maintaining a residence in the U.S., filing and paying income taxes as a resident, and demonstrating ties to the U.S. to maintain LPR status. Of course, once LPR status has been abandoned, the foreign national may have to apply for entry visas for short trips to the U.S. We note that if someday the foreign national wishes to apply for a new green card, the voluntary abandonment will not be held against him.

The I-407 filing address change discussed above is in keeping with the March 2019 announcement by then-USCIS Director L. Francis Cissna that USCIS intends to shut down all international USCIS offices and shift all duties of these international offices to domestic USCIS offices and U.S. Department of State embassies and consulates. This announcement was confirmed by USCIS this week at the American Immigration Lawyers Association (AILA) Annual Conference.

For more on USCIS, click here.

Former Virginia Attorney General Ken Cuccinelli has been appointed acting director of USCIS, replacing Acting Director Koumans. Director Koumans replaced Director Cissna on June 3 as acting director.

Below is the USCIS release:

WASHINGTON— Department of Homeland Security Acting Secretary Kevin McAleenan today announced that Kenneth T. (Ken) Cuccinelli will serve as the new acting director of U.S. Citizenship and Immigration Services (USCIS), effective June 10, 2019.

Cuccinelli will lead an agency of 19,000 employees and contractors who are responsible for administering our nation’s lawful immigration system while protecting Americans, securing the homeland, and honoring our values. In fiscal year 2018 alone, USCIS adjudicated more than 8.7 million requests for immigration benefits.

“I am honored to be given the opportunity to lead U.S. Citizenship and Immigration Services at this critical time and serve alongside this agency’s dedicated workforce,” said Acting Director Cuccinelli. “USCIS has the extraordinary responsibility to administer and protect the integrity of our nation’s lawful immigration system. Our nation has the most generous legal immigration system in the world and we must zealously safeguard its promise for those who lawfully come here. I look forward to working with the men and women of USCIS to ensure our legal immigration system operates effectively and efficiently while deterring fraud and protecting the American people.”

Cuccinelli previously served as Virginia’s attorney general from 2010 to 2014. During his time as attorney general, he led the Commonwealth in fighting human trafficking. Additionally, he led efforts resulting in record enforcement against gangs, health care fraud, and child predators. Cuccinelli also served in the Senate of Virginia from 2002 to 2010 and has practiced law for nearly 25 years.

Cuccinelli earned a mechanical engineering degree from the University of Virginia, a law degree from Antonin Scalia Law School at George Mason University, and a Masters in International Commerce and Policy from George Mason University.

Cuccinelli and his wife, Teiro, grew up and live in Virginia and have seven children.

For more on USCIS, click here.