In this issue
- President Announces Thaw in Relations with Cuba
- U.S. District Court Dismisses Sheriff's Challenge to Obama's Executive Action
- Securities and Exchange Commission issues investor alert to potential EB-5 investors
- States, Governors File Suit Against President’s Executive Actions on Immigration
- USCIS Adds Five Countries to H-2A, H-2B Visa Program Participation
President Announces Thaw in Relations with Cuba
On December 17, 2014, President Barack Obama announced a thaw in the United States' relations with Cuba. He noted that decades of U.S. isolation of Cuba have failed to accomplish any U.S. goals.
The measures President Obama announced included, among other things, initiating discussions to re-establish diplomatic relations with Cuba, and facilitating an expansion of travel under general licenses for the 12 existing categories of travel to Cuba authorized by law, including: (1) family visits; (2) official business of the U.S. government, foreign governments, and certain intergovernmental organizations; (3) journalistic activity; (4) professional research and professional meetings; (5) educational activities; (6) religious activities; (7) public performances, clinics, workshops, athletic and other competitions, and exhibitions; (8) support for the Cuban people; (9) humanitarian projects; (10) activities of private foundations or research or educational institutes; (11) exportation, importation, or transmission of information or information materials; and (12) certain export transactions that may be considered for authorization under existing regulations and guidelines.
Also announced was raising remittance levels from $500 to $2,000 per quarter for most donations to Cuban nationals, and other measures to facilitate trade and commerce.
The fact sheet is available here.
U.S. District Court Dismisses Sheriff's Challenge to Obama's Executive Action
On December 23, 2014, Judge Beryl Howell of the U.S. District Court for the District of Columbia denied Maricopa County, Arizona, Sheriff Joseph Arpaio's motion for a preliminary injunction against the United States and federal officials. Sheriff Arpaio's suit alleged that certain immigration policies announced by President Barack Obama on November 20, 2014, are unconstitutional, otherwise illegal, and should be stopped from going into effect. The judge granted the U.S. government's motion to dismiss for lack of subject matter jurisdiction.
Judge Howell noted that the suit "raises important questions regarding the nation's immigration policies, which affect the lives of millions of individuals and their families. The wisdom and legality of these policies deserve careful and reasoned consideration." She said that the key question in this case, however, "concerns the appropriate forum for where this national conversation should occur." She raised the issue of standing, which she noted ensures that courts act as judges rather than policymakers. "The role of the Judiciary is to resolve cases and controversies properly brought by parties with a concrete and particularized injury—not to engage in policymaking better left to the political branches," she said.
Sheriff Arpaio's suit challenged, among other things, the Obama administration's program launched in 2012 known as Deferred Action for Childhood Arrivals (DACA). The suit also challenged President Obama's recent expansion of DACA and creation of a new program for deferred action for parents of U.S. citizens or lawful permanent residents (DAPA). Judge Howell noted that the executive branch has long used "deferred action" to implement enforcement policies and priorities. " Under long-existing regulations, undocumented immigrants granted deferred action may apply for authorization to work in the United States," she added, noting that "[f]or almost twenty years, the use of deferred action programs has been a staple of immigration enforcement."
The court's opinion is available here. The full text of a similar lawsuit filed by more than 20 states is available here. That lawsuit, discussed below, is still pending.
The Obama administration's memoranda and a related White House address announcing the actions are available here.
Additional memoranda are available here (modernizing and streamlining the U.S. visa system) and here (establishing a White House Task Force on New Americans).
Securities and Exchange Commission issues investor alert to potential EB-5 investors
The SEC has issued an investor alert to potential EB-5 investors. It provides a warning of several investment scams as well as providing the following advice regarding choosing an appropriate regional center:
- Confirm that the regional center has been designated by USCIS. If you intend to invest through a regional center, check the list of current regional centers on USCIS's website at www.uscis.gov. If the regional center is not on the list, exercise extreme caution. Even if it is on the list, understand that USCIS has not endorsed the regional center or any of the investments it offers.
- Obtain copies of documents provided to USCIS. Regional centers must file an initial application (Form I-924) to obtain USCIS approval and designation, and must submit an information collection supplement (Form I-924A) at the end of every calendar year. Ask the regional center for copies of these forms and supporting documentation provided to USCIS.
- Request investment information in writing. Ask for a copy of the investment offering memorandum or private placement memorandum from the issuer. Examine it carefully and research similar projects in evaluating the proposal. Follow up with any questions you may have. If you do not understand the information in the document or the issuer is unwilling or unable to answer your questions to your satisfaction, do not invest.
- Ask if promoters are being paid. If there are supposedly unaffiliated consultants, lawyers, or agencies recommending or endorsing the investment, ask how much money or what type of benefits they expect to receive in connection with recommending the investment. Be skeptical of information from promoters that is inconsistent with the investment offering memorandum or private placement memorandum from the issuer.
- Seek independent verification. Confirm whether claims made about the investment are true. For example, if the investment involves construction of commercial real estate, check county records to see if the issuer has obtained the proper permits and whether state and local property tax assessments correspond with the values the regional center attributes to the property. If other companies have purportedly signed onto the project, go directly to those companies for confirmation.
- Examine structural risk. Understand that you may be investing in a new commercial enterprise that has no assets and has been established to loan funds to a company that will use the funds to develop projects. Carefully examine loan documents and offering statements to determine if the loan is secured by any collateral pledged to investors.
- Consider the developer's incentives. EB-5 regional center principals and developers often make capital investments in the projects they manage. Recognize that if principals and developers do not make an equity investment in the project, their financial incentives may not be linked to the success of the project.
- Look for warning signs of fraud. Beware if you spot any of these hallmarks of fraud:
- Promises of a visa or becoming a lawful permanent resident. Investing through EB-5 makes you eligible to apply for a conditional visa, but there is no guarantee that USCIS will grant you a conditional visa or subsequently remove the conditions on your lawful permanent residency. USCIS carefully reviews each case and denies cases where eligibility rules are not met. Guarantees of the receipt or timing of a visa or green card are warning signs of fraud.
- Guaranteed investment returns or no investment risk. Money invested through EB-5 must be at risk for the purpose of generating a return. If you are guaranteed investment returns or told you will get back a portion of the money you invested, be suspicious.
- Overly consistent high investment returns. Investments tend to go up and down over time, particularly those that offer high returns. Be suspicious of an investment that claims to provide, or continues to generate, high rates of return regardless of overall market conditions.
- Unregistered investments. Even though a regional center may be designated as a regional center by USCIS, most new commercial enterprise investment opportunities offered through regional centers are not registered with the SEC or any state regulator. When an offering is unregistered, the issuer may not provide investors with access to key information about the company's management, products, services, and finances that registration requires. In such circumstances, investors should obtain additional information about the company to help ensure that the investment opportunity is bona fide.
- Unlicensed sellers. Federal and state securities laws require investment professionals and their firms who offer and sell investments to be licensed or registered. Designation as a regional center does not satisfy this requirement. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms.
- Layers of companies run by the same individuals. Some EB-5 regional center investments are structured through layers of different companies that are managed by the same individuals. In such circumstances, confirm that conflicts of interest have been fully disclosed and are minimized.
The SEC Memo can be found here
States, Governors File Suit Against President’s Executive Actions on Immigration
Various states and four governors filed suit on December 3, 2014, challenging several of President Barack Obama's recent executive actions on immigration, announced on November 20 and detailed in Department of Homeland Security (DHS) memoranda. The lawsuit singles out a DHS directive on expanding deferred action for childhood arrivals (DACA) for certain individuals who came to the United States as children and creating a new deferred action program for certain parents of U.S. citizens or permanent residents. The lawsuit claims that the directive constitutes a "unilateral suspension of the Nation's immigration laws [that] is unlawful."
The lawsuit contains numerous quotations from President Obama stating that he can't change laws himself and needs Congress to pass immigration reform. The suit notes that later, however, he expanded DACA and said, "I just took an action to change the law." White House spokeswoman Brandi Hoffine responded, "The Supreme Court and Congress have made clear that federal officials can set priorities in enforcing our immigration laws, and we are confident that the president’s executive actions are well within his legal authorities."
Shortly after the mid-term elections in November 2014, President Barack Obama initiated various executive actions on immigration. The actions challenged in the lawsuit include:
- Expanding DACA to encompass a broader class of children. DACA eligibility had been limited to those who were under 31 years of age on June 15, 2012, who entered the United States before June 15, 2007, and who were under 16 years old when they entered. Under President Obama's executive action, DACA eligibility is expanded to cover all undocumented immigrants who entered the United States before the age of 16, not just those born after June 15, 1981. The entry date is adjusted from June 15, 2007 to January 1, 2010. The relief (including work authorization) will now last for three years rather than two. The memo explaining this action is available here.
- Extending eligibility for deferred action to parents of U.S. citizens and lawful permanent residents. This new program, called Deferred Action for Parental Accountability (DAPA), includes individuals who (i) are not removal priorities under the new policy, (ii) have been in the United States at least five years, (iii) have children who on the date of the announcement (November 20, 2014) were U.S. citizens or lawful permanent residents, and (iv) present no other factors that would make a grant of deferred action inappropriate. These individuals will be assessed for eligibility for deferred action on a case-by-case basis. They may then apply for work authorization, provided they pay a fee. Each individual will undergo a background check of relevant national security and criminal databases, including DHS and FBI databases. The memo explaining this action is available here.
A letter transmitted by 136 law professors to the White House on November 20, 2014, and updated on November 25, supports President Obama's legal authority to expand the DACA program and to establish the DAPA program. It is available here.
The full text of the states/governors lawsuit is available here.
The memoranda summarized above, along with the White House address announcing the actions and related USCIS and ICE info, are available here. Additional memoranda are available here (modernizing and streamlining the U.S. visa system) and here (establishing a White House Task Force on New Americans).
USCIS Adds Five Countries to H-2A, H-2B Visa Program Participation
U.S. Citizenship and Immigration Services (USCIS) and the Department of Homeland Security, in consultation with the Department of State, have added the Czech Republic, Denmark, Madagascar, Portugal, and Sweden to the list of countries whose nationals are eligible to participate in the H-2A and H-2B visa programs for the coming year. The notice listing the 68 eligible countries was published in the Federal Register on December 16, 2014.
The H-2A and H-2B visa programs allow U.S. employers to bring foreign nationals to the United States to fill temporary agricultural and non-agricultural jobs, respectively. USCIS only approves H-2A and H-2B petitions for nationals of countries the Secretary of Homeland Security has designated as eligible to participate in the programs. USCIS may approve H-2A and H-2B petitions for nationals of countries not on the list if it is determined to be in the interest of the United States.
The list of 68 countries is available here (announcement) and here (Federal Register notice).
Government Agency Links
Follow these links to access current processing times of the USCIS Service Centers and the Department of Labor, or the Department of State's latest Visa Bulletin with the most recent cut-off dates for visa numbers: