Latest / IMI Podcasts / #18: Matt Galati, Ishaan Khanna, and Suzanne Lazicki on the EB-5 Reform and Integrity Act

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#18: Matt Galati, Ishaan Khanna, and Suzanne Lazicki on the EB-5 Reform and Integrity Act · IMI Podcasts

• 0:02
  SPEAKER_02: Ladies and gentlemen, it's 7 p.m.
• 0:05
  SPEAKER_02: in Dubai, 3 p.m.
• 0:06
  SPEAKER_02: in Lisbon, 11 a.m.
• 0:07
  SPEAKER_02: in St.
• 0:08
  SPEAKER_02: Kitts.
• 0:09
  SPEAKER_02: Welcome to a new episode of the Mobility Standard, the podcast where we dissect current events, trends, and crucial questions related to investment migration.
• 0:19
  SPEAKER_02: I'm your host, Christian Nessim, editor of Investment Migration Insider, and with me in today's episode I have a record three guest experts from the EB5 field who engaged in an in-depth conversation about the recently reauthorized Regional Center Program and the EB5 Reform and Integrity Act 2022.
• 0:41
  SPEAKER_02: Topics under discussion included who is happy about how the bill turned out, who isn't, and why.
• 0:50
  SPEAKER_02: We talked about why the new bill could create a great deal of chaos in the absence of further guidance and regulations.
• 0:58
  SPEAKER_02: We asked what's necessary to get the program up and running again and how long that will take.
• 1:04
  SPEAKER_02: And we explored how the reserved visa categories or set-asides will work and whether they're fair to existing applicants.
• 1:14
  SPEAKER_02: All of that and a great deal more in today's episode of the Mobility Standard.
• 1:19
  SPEAKER_02: I'd like to remind you that you can follow all of IMI stories on our website, imidail.com, on our mobile phone apps, in our free newsletters, as well as on your favorite social media network.
• 1:30
  SPEAKER_02: You can also follow this podcast on Spotify, Apple Podcasts, and most other podcast platforms.
• 1:37
  SPEAKER_02: With the preambles out of the way, let's get this show on the road.
• 1:44
  SPEAKER_02: I'm in Stellar Company.
• 1:45
  SPEAKER_02: Today I have with me Mr.
• 1:47
  SPEAKER_02: Matthew Galati, founder and principal of the Galati Law Firm.
• 1:51
  SPEAKER_02: Welcome back to the show, Matt.
• 1:53
  SPEAKER_02: We also have Ishan Khanna, president of the American Immigrant Investor Alliance, who played a crucial role in the recent reauthorization of the Regional Center program, as well as Suzanne Lazicki, a globally recognized expert on the EB5 program, a prolific writer of EB5 business plans, and not least the author of Lucid Text, the world's best blog about EB5 bar none.
• 2:22
  SPEAKER_02: Welcome to the show, guys.
• 2:24
  SPEAKER_02: I just want to say from the beginning, you know, we usually have um I usually have two co-hosts because we have typically one guest.
• 2:33
  SPEAKER_02: This time I have the tremendous fortune of getting an incredible trifecta of EB5 experts on at the same time.
• 2:40
  SPEAKER_02: And because of that, I've asked my regular co-hosts Ahmad and Rohelio to uh sit this one out.
• 2:47
  SPEAKER_02: Um being somewhat of a layman myself when it comes to EB5, I'm prepared to stay mostly in the background during this recording, only popping in from time to time to raise sophomore questions.
• 3:01
  SPEAKER_02: But I'll let Matt lead the conversation.
• 3:04
  SPEAKER_02: Um, so I think Matt, a good place to start would be to kind of get a summary from you as to what's transpired in the last few weeks in the world of EB5, starting from the reauthorization of the regional center program and including the recently announced relief measures for the backlog, um, and any other events of consequence you you think are worth mentioning.
• 3:30
  SPEAKER_02: And then we'll move on to talk a little bit more about uh Suzanne's article from yesterday.
• 3:36
  SPEAKER_02: So take it away, Matt.
• 3:38
  SPEAKER_04: Yeah, sure.
• 3:39
  SPEAKER_04: Thank you so much, Christian.
• 3:40
  SPEAKER_04: Uh it's good to be back.
• 3:41
  SPEAKER_04: I was on last summer, I believe.
• 3:44
  SPEAKER_04: Uh we had a great time, and and now that I'm taking the lead here, it feels like I'm hosting Saturday Night Live or something like that.
• 3:50
  SPEAKER_04: So this is definitely a bucket list event for me.
• 3:54
  SPEAKER_04: Um so again, yes, I'm Matthew Galati, founder and principal of the Galati law firm.
• 4:00
  SPEAKER_04: I've been in the EB5 space for going into my 12th year now, so that feels like ancient history.
• 4:06
  SPEAKER_04: And um we certainly had a tectonic event happen this month.
• 4:12
  SPEAKER_04: So a quick recap.
• 4:13
  SPEAKER_04: Um at the end of June of last year, 2021, authorization for EB5 Regional Center visa set asides, as interpreted by USCIS, the entire regional center program, had lapsed, um, effective midnight July 1st, Eastern time.
• 4:31
  SPEAKER_04: And as a result of that, we've really not seen any kind of regional center-related adjudications.
• 4:37
  SPEAKER_04: Um, investors' anxiety spiked significantly, wondering whether the program would come back.
• 4:43
  SPEAKER_04: There was uh opportunities for reauthorization over the summer and at the end of the year, those didn't pan out.
• 4:51
  SPEAKER_04: And then, I believe it was in February coming into March, uh, the government had signaled to people in Congress that if Congress didn't get this done, they'd start denying petitions, um, which would have been catastrophic.
• 5:05
  SPEAKER_04: So happily, uh, none of the EB5 hostages have been shot.
• 5:10
  SPEAKER_04: We do have a major rewrite of the visa.
• 5:14
  SPEAKER_04: Uh EB5 was already super complicated.
• 5:18
  SPEAKER_04: Christian, I know you're involved with every uh investment migration visa in the world.
• 5:24
  SPEAKER_04: I think you might agree that EB5 is the most complicated out of all of them.
• 5:28
  SPEAKER_02: Man, I spent I spent what seven years in in this line of work and uh looked into uh every program under the sun.
• 5:36
  SPEAKER_02: But EB5 is really very complex and it's more of a you know, I think when you're evaluating the investments, it's it's more it's more of a finance guy that you have to be to kind of wrap your head around it.
• 5:50
  SPEAKER_02: And that's before you even get into talking about the legal aspects.
• 5:55
  SPEAKER_02: You know, how does the law work?
• 5:56
  SPEAKER_02: And you have you have the laws and you have the regulations and you have lawsuits and you have countersuits and you have motions, and you know, it's just very big and hairy for me.
• 6:07
  SPEAKER_02: So I'm very glad to have you guys here explaining it.
• 6:11
  SPEAKER_02: It's with that for everyone, I think.
• 6:13
  SPEAKER_04: So March 15th, uh a couple weeks ago, um President Biden signed a sweeping federal spending package.
• 6:21
  SPEAKER_04: This was must-pass legislation that funds the overall government omnibus spending bill, about 3,000 pages long.
• 6:29
  SPEAKER_04: Buried in that legislation uh was something called the EB5 Reform and Integrity Act of 2022.
• 6:36
  SPEAKER_04: We're already calling that the RIA in the industry.
• 6:39
  SPEAKER_04: So if we reference RIA, that's what we're talking about.
• 6:43
  SPEAKER_04: And at least in my opinion, this is the most fundamental visa reform we have seen in the American immigration system since at least 1990, when the current iteration of the American Immigration Act was enacted.
• 6:57
  SPEAKER_04: So obviously, this is a big deal.
• 6:59
  SPEAKER_02: Um and it's why do you say why is it the most fundamental change since the beginning of the program?
• 7:07
  SPEAKER_04: Oh well, without question, um there's been virtually no legislative action since the beginning of the program other than mere technical tweaks and reauthorizations here or there.
• 7:18
  SPEAKER_04: This is the first time Congress has substantively addressed EB5, I would say.
• 7:24
  SPEAKER_04: Um but I think it's just bigger than EB5.
• 7:26
  SPEAKER_04: We just haven't seen Congress take this kind of action with respect to any visa classification, be it EB1 or family-based or the non-immigrant visas.
• 7:35
  SPEAKER_04: Nothing this comprehensive, in my opinion, uh since 1990.
• 7:40
  SPEAKER_04: So it is definitely a major rewrite.
• 7:42
  SPEAKER_04: Incredibly complicated rewrite.
• 7:44
  SPEAKER_04: Um, just throwing out the quick disclaimer that we are still trying to figure this out.
• 7:49
  SPEAKER_04: The government's websites say they're still trying to figure it out in litigation.
• 7:53
  SPEAKER_04: The Department of Justice is saying they're still trying to figure it out.
• 7:57
  SPEAKER_04: So, you know, we're recording this on April 4th, and a lot could be different in the coming weeks and months as we get more interpretive guidance from the government.
• 8:05
  SPEAKER_04: We're gonna do the best we can today to summarize what's most important for you listeners and uh hit the high notes, but there's certainly a lot to cover here.
• 8:14
  SPEAKER_04: We'll do the best we can in the time that we have.
• 8:17
  SPEAKER_00: Um Christian asked earlier why why now did this change happen?
• 8:24
  SPEAKER_02: Yeah.
• 8:25
  SPEAKER_00: Why did this change happen?
• 8:26
  SPEAKER_02: Well, I mean, because because uh what I've seen in the past is you have these continuing resolutions, right?
• 8:32
  SPEAKER_02: And you get an extension or um uh short-term extensions of the program.
• 8:37
  SPEAKER_02: Yeah, right.
• 8:38
  SPEAKER_02: So the the regional center program would get kind of uh an extended uh short-term lease on life.
• 8:45
  SPEAKER_02: Uh and it was, you know, I think at the beginning, I mean you have a great graph, uh, Suzanne, on on your blog about this showing how the the extensions got kind of shorter and shorter and shorter, and then we were down to like two-month extensions at some points.
• 9:00
  SPEAKER_02: Um, what is it that, you know, now it's a what is it, a five-year extension, or uh why now?
• 9:07
  SPEAKER_04: Yeah, it's it's five and some change to September 30th, 2017.
• 9:12
  SPEAKER_04: Uh, why now?
• 9:13
  SPEAKER_04: Uh there has been proposed legislation to reform EB5 that's been uh tinking around in Congress since 2015.
• 9:23
  SPEAKER_04: Um and I think with the pressures associated with the lapse and the fact that the government did signal that they would start denying people that were affected by the lapse, I think Congress realized that we have to save the hostages before USCIS shoots them.
• 9:39
  SPEAKER_04: And it certainly felt like that from my perspective, representing a lot of investors.
• 9:43
  SPEAKER_04: I know a lot of my clients were certainly anxious about this.
• 9:48
  SPEAKER_01: Um, so I have a different perspective.
• 9:51
  SPEAKER_01: Go for it.
• 9:52
  SPEAKER_01: Um look, the way I see it, and having learned a lot about the history of what's what's happened, you know, you have to kind of go back to the past and understand that even back in 2014-2015, um, Congress wanted to reform the program.
• 10:10
  SPEAKER_01: Look, EB5 really became popular in the during the banking crisis when big developers weren't able to get loans to build their giant skyscrapers, they went to countries like China where they were able to pick up cheap, easy financing for their projects.
• 10:27
  SPEAKER_01: And all these investors, all these foreigners wanted was to invest half a million dollars to a million dollars, get a green card by ensuring that their money would be used to create good American jobs, and essentially, you know, come to the US, get their green cards, and eventually get their money back.
• 10:46
  SPEAKER_01: And they were happy to take a small you know interest percent on their investment.
• 10:52
  SPEAKER_01: And of course, developers made good use of that.
• 10:55
  SPEAKER_01: Congress wanted to reform the program so that essentially more money would flow towards areas of the United States that really needed it, rather than you know, big developers just financing their buildings, which is completely fair.
• 11:10
  SPEAKER_01: From talking to my from my perspective, as someone as a as a foreign national who wants to legally migrate to this country, um, I think that's a fair trade.
• 11:19
  SPEAKER_01: Uh, I would like, for example, I invested in a hotel in Puerto Rico.
• 11:24
  SPEAKER_01: Once the project is completed, I know it's gonna have a great impact on the local economy.
• 11:29
  SPEAKER_01: Puerto Rico as a as a state has been struggling.
• 11:32
  SPEAKER_01: Um, I guess not a state yet, but uh Puerto Rico has been struggling.
• 11:36
  SPEAKER_01: It's been hit by a hurricane, it's it's had effects, people have left the island.
• 11:40
  SPEAKER_01: But I know once a project like mine, like the one I've invested in, is completed and succeeds, it's going to truly positively impact the local economy, which is what EB5 has always meant to be.
• 11:51
  SPEAKER_01: But Congress has faced resistance.
• 11:54
  SPEAKER_01: Now, I'm not afraid to say this because I guess I have different uh type of clients from my two other co-hosts, but I do know that there are members of the industry who resisted against many of these changes, which is why Congress was never able to truly enact change.
• 12:14
  SPEAKER_01: Um, I don't personally think that Congress held immigrant 80,000 immigrant investors hostage.
• 12:22
  SPEAKER_01: I feel really the industry held them hostage because they refused to allow Congress to change the program in a manner that would have been beneficial to the United States.
• 12:34
  SPEAKER_01: Um that's my take on it.
• 12:37
  SPEAKER_02: Yeah, so you you had two uh competing advocacy groups, right?
• 12:41
  SPEAKER_02: You had was the IISA and the EB5 Investor Coalition, right?
• 12:46
  SPEAKER_02: What was it that they uh didn't see eye to eye on?
• 12:50
  SPEAKER_02: That's what you're referring to, Ishan, correct?
• 12:52
  SPEAKER_02: Yes, yeah.
• 12:53
  SPEAKER_01: I'm referring to, I mean, I I'm not necessarily referring to those factions because even within those factions, there are folks with different views.
• 13:00
  SPEAKER_01: And it's complicated.
• 13:01
  SPEAKER_01: But you know, uh the way I would just sort of describe it is really big moneyed interest.
• 13:07
  SPEAKER_01: And and really what has annoyed me throughout these last throughout this last year and a half is that these big developers seem to forget that that back in the 90s, Congress enacted the EB5 program to create American jobs in underserved areas.
• 13:22
  SPEAKER_01: It was not created to protect you know their cheap financing uh uh uh efforts with that that came from immigrant investors like me.
• 13:31
  SPEAKER_01: For immigrant investors like us, green cards for creating jobs, creating American jobs is what we wanted.
• 13:39
  SPEAKER_01: And we want our money to go to areas which require it, where it is going to make a positive impact to the very country that we're looking to move to.
• 13:47
  SPEAKER_01: And some of these industry members did not did not want that.
• 13:53
  SPEAKER_01: They wanted to continue benefiting from this cheap source of financing.
• 13:56
  SPEAKER_01: Uh, because, you know, like I said, it's it's a uh it's good for them.
• 14:01
  SPEAKER_01: I mean, who doesn't want to, you know, build a gigantic you know building in the middle of a big city at a very, very cheap interest with very cheap loans?
• 14:10
  SPEAKER_01: Um it's it's you save a lot of money, it lines a lot more pockets.
• 14:14
  SPEAKER_01: I mean, it's and it's and you know, a lot of these immigrant investors don't do the same kind of diligence that a a bank would before they give you a loan.
• 14:22
  SPEAKER_01: But what's wrong with that?
• 14:24
  SPEAKER_06: I think for people who want to understand what's the drama behind the scenes in EB5, um, it's not so much these past five years industry against industry, it's more of an industry against Congress.
• 14:35
  SPEAKER_06: And by Congress, I specifically mean Senator Leahy, who has um kind of personally shepherded the regional center program um since its inception.
• 14:46
  SPEAKER_06: He's from the state of Vermont, which had an early regional center, which um did a lot of projects that benefited rural areas, and Senator Leahy was very proud of that.
• 14:56
  SPEAKER_06: And subsequently, um he was disturbed to see the rise of um EV5 being used to fund skyscrapers in New York.
• 15:05
  SPEAKER_06: He was also devastated when the Vermont Regional Center got caught up in a fraud case.
• 15:11
  SPEAKER_06: And so Senator Leahy has been personally very motivated to number one at first just to get the regional center on a strong foundation.
• 15:21
  SPEAKER_06: In um 2012, when he did the last long-term reauthorization, he said, now we're giving a three-year reauthorization to give a chance to do major legislation, to put EB5 on a stable footing, make it make it a permanent program.
• 15:35
  SPEAKER_06: And then as these things that he perceived as problems emerged, he it became not only about long-term reauthorization, making it permanent, but also reforming it.
• 15:44
  SPEAKER_06: And because he was um coming from the perspective of enforcement, of cracking down on EB5 just being all channeled to the big cities, he went up against people who were using EB5 in the big cities and wanted to be able to continue to do so and didn't want um a lot of um regulation and red tape um tying up what they wanted to do.
• 16:08
  SPEAKER_06: And so um from 2015 until 2022, when we finally got the bill, there was a battle at the end of most years between the Leahy bill to reform the program and people who did not want um that bill to get enacted and shut down the things that they were in the middle of.
• 16:28
  SPEAKER_06: And finally it came to the point where this uh ongoing battle with the tiny short-term authorizations to give more time to resolve that battle, the decision makers in Congress said this is enough.
• 16:41
  SPEAKER_06: You need guys need to actually resolve this.
• 16:43
  SPEAKER_06: And um, finally, we did get a bill.
• 16:46
  SPEAKER_02: So so who's happy uh about this bill and who's not happy about the way this bill turned out in the end?
• 16:54
  SPEAKER_00: Should I answer that question?
• 16:56
  SPEAKER_06: I I I think all of us have an opinion about this.
• 16:58
  SPEAKER_06: So you guys go ahead.
• 17:01
  SPEAKER_04: I'm I'm happy that our investors are protected.
• 17:04
  SPEAKER_04: I think that that is priority number one for me.
• 17:07
  SPEAKER_04: Uh we'll get into it in a little bit what that means and and how hard Ashawn has been working on that issue.
• 17:13
  SPEAKER_04: Very happy about that.
• 17:14
  SPEAKER_04: I am not happy about a bill that turned four about, you know, a couple paragraphs of legislative text into 30 pages of legislative text over just one visa, uh, has some rather difficult to understand terminology, not the greatest job drafting, and in my opinion, could create more chaos, uh, absent the agency stepping in and prov and you know issuing regulations and guidance.
• 17:47
  SPEAKER_04: And we'll talk about what that means in the time frame for that.
• 17:50
  SPEAKER_04: Um so overall, I guess you know, the the acute danger that my clients faced is now subsided.
• 17:59
  SPEAKER_04: So I'm very happy about that.
• 18:00
  SPEAKER_04: But I am not terribly happy about the let's call it medium term uh success of the program given what Congress has done here.
• 18:11
  SPEAKER_02: Well, what what specifically in it uh gives cause to that pessimism for the medium term for you?
• 18:19
  SPEAKER_04: Well, for me, uh it's it's it's it's incredibly complicated.
• 18:23
  SPEAKER_04: And uh so much needs to be done here uh in order to get the program back off the ground, at least for new filings.
• 18:32
  SPEAKER_04: Um for example, uh there is now rather sweeping requirements for attestations, for fund management, for registration of foreign migration agents, for background checks of regional center, people affiliated with regional centers, which isn't also incredibly broadly defined.
• 18:52
  SPEAKER_04: And I think it will take a long time between people in the industry working with trial and error and seeing how cases are adjudicated, as well as just USCIS, the agency issuing new forms, issuing new processes, I think it'll a long time it'll take a long time for this program to be stable.
• 19:12
  SPEAKER_04: I don't know if that gets done before 2027, frankly.
• 19:16
  SPEAKER_06: As far as Matt's estimate of how long it will take the program to stabilize, I agree with that.
• 19:21
  SPEAKER_06: Um just based on how much is going to have to be figured out and who has to figure it out.
• 19:29
  SPEAKER_06: So based on the new law, they'll have the policy manual will need to be revised.
• 19:34
  SPEAKER_06: Um, we're gonna need some new regulations, we'll need all new forms for all of the form types.
• 19:40
  SPEAKER_06: Um the immigration, the uh investor program office, which is the um USCIS agency that manages EB5, apparently lost a lot of its staff during the regional center shutdown.
• 19:52
  SPEAKER_06: So they're gonna have to get staff back up again, get their people trained in the new law.
• 19:58
  SPEAKER_06: And all of those things take a long time to do.
• 20:04
  SPEAKER_06: So um and in the past in EB5, we have worked with uncertainty.
• 20:10
  SPEAKER_06: For example, I wrote my first regional center application in 2009, back before there was any form for a regional center application.
• 20:17
  SPEAKER_06: We just had to look at the statute and figure out what should go in there in order to meet these requirements.
• 20:23
  SPEAKER_06: We submitted something saying, look, here's what's in the statute, here's what we're providing to meet these requirements.
• 20:29
  SPEAKER_06: And back then at least that worked.
• 20:30
  SPEAKER_06: So I don't know, maybe we're entering a kind of period too where people who are starting can help to set the standard that the government hasn't figured out yet.
• 20:40
  SPEAKER_06: But we are looking for toward a time of uncertainty where uh people who are going in early are going to be guinea pigs who are um figuring it out as they go along.
• 20:52
  SPEAKER_06: And as far as the question of who's happy about the law that was passed, one thing you can do is just look at whose fingerprints are on it.
• 21:00
  SPEAKER_06: So if you do a um document comparison between the final law and what Senator Leahy um requested uh and what his office drafted, it's about 80% Senator Leahy's bill.
• 21:13
  SPEAKER_06: It has all of the integrity measures that he drafted.
• 21:16
  SPEAKER_06: What uh what was added to that, which um is the result of industry lobbying, apparently.
• 21:22
  SPEAKER_06: One thing is a um paragraph on grandfathering for existing investors, which uh Ishan's group can take credit for.
• 21:29
  SPEAKER_06: Um and then there are um three other things.
• 21:32
  SPEAKER_06: One is the um new investment amounts for EB5, another is targeted employment area changes um along with the visa change, and a third thing is redeployment.
• 21:42
  SPEAKER_06: And those three things are all things that the industry wanted and they got into the bill.
• 21:50
  SPEAKER_02: Um maybe Sean can talk a little bit about um his part in that bill of the the grandfathering in of uh pre existing uh applicants.
• 22:00
  SPEAKER_02: Uh tell us a little bit about the the the process of you getting involved in that uh as because you are yourself uh an EB5 applicant originally, right?
• 22:11
  SPEAKER_01: Yeah, that's right.
• 22:12
  SPEAKER_02: So how did uh how did you end up doing this and uh how did you how did your words end up becoming part of US law?
• 22:20
  SPEAKER_01: Yeah, yeah.
• 22:21
  SPEAKER_01: Uh I guess that is kind of cool when you think about it that you know a group of immigrants were able to even affect some small form of change in uh in US immigration law.
• 22:30
  SPEAKER_01: Um so sure, I'll I'll give a quick little background about me and how I got into this.
• 22:34
  SPEAKER_01: So I did EB5 myself in 2016.
• 22:37
  SPEAKER_01: Um I ended up joining the EB5 industry because the investment issuer that I had invested with called me the most annoying investor I ever had they ever had to deal with because I asked like a million questions before I invested.
• 22:50
  SPEAKER_01: And um, you know, I I I guess I'm pretty well informed about everything.
• 22:54
  SPEAKER_01: I did a lot of research and I started working in EB5 um more seriously around early 2018, and I you know helped raise a lot of money and I was pretty good at it.
• 23:06
  SPEAKER_01: Um in early 2021, I could see the rumblings, I could see the writing on the wall that a lapse was coming.
• 23:15
  SPEAKER_01: I knew that the industry groups in Congress had been fighting for a long time, and it and even though lots of attorneys and a lot of issuers out there kept giving reassurance to people that don't worry, everything will be fine, the program will not lapse.
• 23:30
  SPEAKER_01: It did lapse.
• 23:31
  SPEAKER_01: Um, a few months before it did lapse, a couple of investors and I got together and and said, hey, maybe we should start a little nonprofit, let's get some representation out there for us.
• 23:41
  SPEAKER_01: And you know, initially for us, we just wanted the investors' voice heard.
• 23:45
  SPEAKER_01: That that was it.
• 23:46
  SPEAKER_01: We just want to make a little bit of noise and make sure that you know at least people knew about us and the the impact this would this lapse could have on investors.
• 23:53
  SPEAKER_01: So we started an organization called the American Immigrant Investor Alliance or AIIA.
• 23:59
  SPEAKER_01: Um, we sort of rallied around one cause when the immigrant when this in the EB5 program, regional center program lapsed.
• 24:08
  SPEAKER_01: We advocated for grandfathering, which was a really simple concept, which was simply allowing everyone who has already invested for their applications to continue to be processed under the old rules of the program.
• 24:20
  SPEAKER_01: Yes, the program had lapsed, but the program had lapsed because Congress and these industry factions were still trying to debate upon the future of the program and what that would look like.
• 24:30
  SPEAKER_01: And that's completely fair.
• 24:32
  SPEAKER_01: Congress, that's Congress's prerogative.
• 24:34
  SPEAKER_01: I didn't want everyone, all the folks that had invested with me and everywhere else, with you know, in any other regional center, to be impacted by this lapse.
• 24:45
  SPEAKER_01: I just felt it was unfair for them to have to suffer while this argument takes place.
• 24:51
  SPEAKER_01: And so we advocated for grandfathering.
• 24:54
  SPEAKER_01: We worked with initially with Robert Devine, um, who's an excellent attorney, and he helped draft our initial version of the Foreign Invest Affairness Protection Act, uh, which we nicknamed FIFA, and it was a simple one-page grandfathering bill.
• 25:08
  SPEAKER_01: Uh, we were able to go from a small nonprofit that had about$10,000 in the bank to raising almost$150,000 to$200,000.
• 25:16
  SPEAKER_01: That allowed us to hire a lobbyist, a former congressman, in fact, the very author of the original INA back in the 90s.
• 25:24
  SPEAKER_01: Uh, this congressman then lobbied for us and our organization and our cause.
• 25:29
  SPEAKER_01: Um, and eventually we succeeded in having this portion of text, this grandfathering portion of text put into the the final RIE.
• 25:40
  SPEAKER_01: So that was kind of what we rallied behind.
• 25:44
  SPEAKER_01: Um now I want to answer your other question, which you asked earlier, which was you know, who's sort of won and lost in this whole matter?
• 25:52
  SPEAKER_01: And I'm gonna answer from two perspectives.
• 25:54
  SPEAKER_01: First is the existing EB5 investor, the the people that I fought for.
• 25:59
  SPEAKER_01: Um, you know, I also work for an investment issuer and I will continue to raise EB5 money.
• 26:03
  SPEAKER_01: So from my second perspective, I'm gonna talk a little bit about what it's gonna be like for the future investors or for the you know investment issuer going EB5 regional center or investment issuer going in the future.
• 26:14
  SPEAKER_01: So, first for the existing investors, um, yes, grandfathering is there.
• 26:19
  SPEAKER_01: However, I when I look back at all of this, I feel like they have suffered.
• 26:25
  SPEAKER_01: Um, they've suffered because of nine, uh, seven, eight, nine months of no processing of their applications.
• 26:31
  SPEAKER_01: Um, there will be a loss of visa numbers because of this lapse, because less, less the interviews will only resume uh, I guess, in the middle of this year.
• 26:42
  SPEAKER_01: And it is same thing with visa issuance for for folks who are already here in the US.
• 26:47
  SPEAKER_01: So that's a lot of visa numbers lost.
• 26:50
  SPEAKER_01: Um just massive delays.
• 26:53
  SPEAKER_01: Uh, the way the new law is written, there is uh something called visa set asides, which would allow for folks who invest in specific projects, allow them to skip the queue and get their green cards ahead of someone who's already invested in the past.
• 27:08
  SPEAKER_01: So I especially will feel bad for those Chinese, Indian, and Vietnamese investors uh with regards to this.
• 27:15
  SPEAKER_01: Um, Suzanne Lazicki has written an excellent blog, which actually just got published on a blog which I highly recommend everyone reads for a bit more in-depth understanding of this.
• 27:26
  SPEAKER_01: Um I I I definitely I'm not too happy that the existing investors are gonna get the short end of the stick.
• 27:34
  SPEAKER_01: Um, there are some other provisions such as concurrent filing and all that, which are positive.
• 27:37
  SPEAKER_01: However, it does not it does not benefit all existing investors, only the ones who are here in the United States on non-immigrant visas.
• 27:45
  SPEAKER_01: But for all the investors who are still waiting in their home countries who've been delayed because of COVID and the lapse and everything, they've uh I feel like they've lost out on a lot.
• 27:55
  SPEAKER_01: Um, and I hope the industry remembers that and empathizes with them.
• 28:00
  SPEAKER_01: Now, for the second perspective, which is as an investment issuer and someone who's going to go out and raise EB5 money as well as future investors out there, I think that this new bill will positively help raise, allow for more EB5 money to be raised in rural areas and uh and underserved communities.
• 28:20
  SPEAKER_01: So, for example, uh rural projects specifically now benefit from priority processing as well as visa set asides.
• 28:29
  SPEAKER_01: So this is a this is great for anyone who wants to essentially move to the US quickly or wants to get ahead with their process faster than the standard timeline.
• 28:43
  SPEAKER_01: So in that way, I think that's great.
• 28:45
  SPEAKER_01: I think a lot more investors and a lot more agents and a lot more EB5 investment issuers will now switch to rural projects.
• 28:53
  SPEAKER_01: Um there is also some benefits to the infrastructure projects as well as the urban distressed ones, but they just benefit from visa set asides, uh, which is it's much smaller than rural.
• 29:05
  SPEAKER_01: And uh I don't see, you know, I I I personally don't expect that there'll be too many projects in that area, but you know, they won't benefit from priority processing.
• 29:13
  SPEAKER_01: And why does this priority processing matter?
• 29:16
  SPEAKER_01: Um, while the specifics have not yet been defined by USCIS, currently, if someone invests in EB5, you're looking at like two to four years to even move to the US.
• 29:26
  SPEAKER_01: I mean, what gonna I mean, I I just can't imagine someone, a foreign national who invests nearly a million dollars into the US having to wait that long to move to the US.
• 29:36
  SPEAKER_01: I think they would much rather invest in projects where the timeline is going to be shorter.
• 29:40
  SPEAKER_01: And the the the the possibility of them not being affected by their country's backlog is not gonna be an issue.
• 29:48
  SPEAKER_01: So um, yeah, so in my opinion, I think a lot more weight will go towards rural projects.
• 29:53
  SPEAKER_01: I think uh uh infrastructure and urban distress projects will uh benefit as well slightly, but but not as much.
• 30:02
  SPEAKER_04: Yeah, that was a great summary, Ashon.
• 30:04
  SPEAKER_04: I think you hit a lot of the issues of the nuts and bolts in the bill.
• 30:08
  SPEAKER_04: So why don't we just kind of jump right in and just kind of talk about some of these in in greater detail?
• 30:14
  SPEAKER_04: Um so we've now made two references to the Visa set-asides issue, and you're right.
• 30:20
  SPEAKER_04: Um, we know we were prepping for this panel less yesterday, uh, and uh Suzanne just drops this amazing analysis of the Visa set-asides issue.
• 30:31
  SPEAKER_04: I kind of want to turn the discussion over to Suzanne now.
• 30:34
  SPEAKER_04: Suzanne, can you talk about how Visa set-asides have historically worked in EB5, what the new RIA has to say about set-asides and the pros and cons of that?
• 30:48
  SPEAKER_06: EB5 really has a challenge right now, that we only have 10,000 visas a year approximately to issue.
• 30:55
  SPEAKER_06: And we have over 80,000 applicants already queued up for those visas.
• 31:00
  SPEAKER_06: So basically, we've already sold the next eight years of visas.
• 31:04
  SPEAKER_06: And then with the country caps, it means that the countries where there's most demand for EB5, um, that pain of the backlog is concentrated on them because they are most of the backlog and they can only go through at this low rate.
• 31:20
  SPEAKER_06: And so that that problem in EB5 is was in the background when people were negotiating with this new law.
• 31:28
  SPEAKER_06: How do we um continue to be viable and sell EB5 when we've got such big backlogs?
• 31:36
  SPEAKER_06: And the idea of reserved visas appears against that background.
• 31:42
  SPEAKER_06: Um the new law sets aside 32% of the annual limit to um people who are in special TEA categories.
• 31:51
  SPEAKER_06: They invest in a rural project, they invest in a high unemployment area project is newly defined or an infrastructure project.
• 32:00
  SPEAKER_06: And if those so 32% of visas that these 80,000 people were already queued up for are now reserved in new categories.
• 32:10
  SPEAKER_06: And if they're exclusively reserved, then these 3,000 or so visas are now available for new applicants coming in.
• 32:21
  SPEAKER_06: And we can go out and offer those visas, being able to tell people, you know what, you're not if you're from China, you're not going to have to wait in line behind 50,000 other Chinese for old categories.
• 32:33
  SPEAKER_06: You've we've got these new categories that are set aside exclusively, you can be at the front of that line instead, which is a wonderful marketing pitch to be able to have.
• 32:44
  SPEAKER_06: At the same time, it's a very sad thing if you're one of the 50,000 Chinese who was in line and having to depend on there being leftover visas at the end of every year for your visa allocation.
• 32:58
  SPEAKER_06: Um that's the good news and the bad news of quick history.
• 33:04
  SPEAKER_04: Yeah, quick history background, just to add some context for our listeners.
• 33:07
  SPEAKER_04: Um, so the program was almost exclusively Chinese uh throughout most of its history, right?
• 33:14
  SPEAKER_04: Now it was never 100%, but certainly higher than 90% in some years.
• 33:18
  SPEAKER_04: Even when Ashan got into the program, he was far the exception rather than the rule.
• 33:25
  SPEAKER_04: Um, with people going to mainland China, similar like they do in other kinds of immigration by investment uh offerings, um, to work with agents on the ground in China and recruit large numbers of Chinese investors.
• 33:39
  SPEAKER_04: Then in the middle of the last decade, let's call it 2016, 17, 18, the party came to a screeching halt, uh, crashing down once we saw that China was very oversubscribed in B5.
• 33:54
  SPEAKER_04: And Suzanne, I think there were some estimates saying it could be 12, 13 years before new investors would get their visas, right?
• 34:01
  SPEAKER_06: Yes, at least.
• 34:03
  SPEAKER_04: So I guess what you're saying now with the set-asides issue is there's a danger because the fact that the program has been so China dominated means that you know the rest of the world never really ate up a share of their visas.
• 34:19
  SPEAKER_04: So all of the leftover visas would go to China and then we'd see that everyone move forward in line.
• 34:26
  SPEAKER_04: Are you saying that with this 32% set aside that people could cut in line in front of those Chinese, many of whom have been patiently waiting since 2015 to get a visa?
• 34:38
  SPEAKER_06: Specifically, other people from China can cut in line.
• 34:42
  SPEAKER_06: Wow.
• 34:43
  SPEAKER_06: If you're from a small country, you know, if you're Norwegian, for example, um I don't know anyone.
• 34:51
  SPEAKER_06: You can count on not having a wait at the visa stage for an EB5 visa because there are not more than 700 Norwegians every year who are even want an EB5 visa.
• 35:02
  SPEAKER_06: So by virtue of being from a country that doesn't have excess demand, you don't have a wait.
• 35:07
  SPEAKER_06: But if you are someone from China and you are interested in EB5, you have to look at the um over 40 or over 50,000 other Chinese who have earlier priority dates, who invested in the past, and you're going to be at the back of that line normally for whatever visas are going to China.
• 35:30
  SPEAKER_06: The magic of set-asides is that they take visas out of the general pool and reserve them in special categories for which probably most of the backlog does not qualify.
• 35:44
  SPEAKER_06: For example, very few people invested in rural in the past.
• 35:47
  SPEAKER_06: So even if Department of State were willing to allocate these new categories to pending applicants, there aren't very many rural people there.
• 35:54
  SPEAKER_06: So as Chinese, you come in as a new investor, you invest in a rural project.
• 36:01
  SPEAKER_06: And then when Department of State has to give out visas, they can't look at those 50,000 other Chinese in line.
• 36:07
  SPEAKER_06: They're not rural investors.
• 36:08
  SPEAKER_06: They don't qualify in this new category.
• 36:10
  SPEAKER_06: Who can they give this visa to except for you, who's at the front of the line for rural, even though you're a Chinese investor and would otherwise have been in line behind all those backlog people?
• 36:22
  SPEAKER_04: Yeah, I I gotta say, from reading the bill, it's not at all clear if existing investors how they would go about declaring their existing investment potentially filed in 2018-2019 as being rural.
• 36:36
  SPEAKER_04: Like certainly had a different kind of definition of what was rural under the under the regulations, but now we have the statutory basis for it, the the you know, a federalized designation of what is rural or what is not, and then getting the Department of State, of course, to just recognize that as a whole other battle to be fought.
• 36:56
  SPEAKER_04: So this is what we've been saying when we've been saying maybe this might not all be sorted out by 2027, because it is a fundamental change in the way that we award EB5 visas.
• 37:08
  SPEAKER_01: And and Christian, I just want to add that look, it's not just the Chinese, it's going to be other populations affected by this too.
• 37:15
  SPEAKER_01: Like there have been a massive surge of Indian investors over the last few years.
• 37:21
  SPEAKER_01: Um, there's been a surge of Vietnamese investors as well.
• 37:24
  SPEAKER_01: Uh, when set-sides are implemented and full force, there will be investors from those countries who will be allowed to get their green cards ahead of someone who invested a year or two or a few years ago.
• 37:38
  SPEAKER_01: And to me, as an existing investor, as someone who's gone through the process, you know, I'm I just think that's unfair.
• 37:45
  SPEAKER_01: Yes, I'm happy that rural projects will benefit because of this, they will attract more investors.
• 37:50
  SPEAKER_01: And I yes, I do think it's good for the country overall, but you know, just for in terms of fairness and you know who goes first and all that, um, you know, this is something that my organization addressed in a newsletter months ago when the first you know talk about set-asides came about.
• 38:09
  SPEAKER_01: And and we plainly said, like, we're we're not happy with this.
• 38:13
  SPEAKER_01: We think cue cutting is is is not fair to existing clients.
• 38:18
  SPEAKER_01: And uh we did make noise about that.
• 38:20
  SPEAKER_01: We did ensure that Congress members and staffers knew about this issue, but you know, this is where I'm gonna kinda blame the money and interests for succeeding in succeeding in getting what they wanted.
• 38:31
  SPEAKER_04: Yeah, so some pretty incredible stuff.
• 38:34
  SPEAKER_04: Um let's move on and kind of get back into like the other sections of the bill.
• 38:40
  SPEAKER_04: So the bill's really broken down into two parts.
• 38:43
  SPEAKER_04: One involving stuff that's effective right now, and two involving a new regional center program that is 60 days from March 15th when president signed the RIA into law, which is what, May 14th, right?
• 39:01
  SPEAKER_04: 31 days in March.
• 39:02
  SPEAKER_04: Um, so as of right now, there's no regional center program.
• 39:07
  SPEAKER_04: It it's it's it's been repealed.
• 39:08
  SPEAKER_04: But we do have a couple things that are that are that are in effect right now.
• 39:12
  SPEAKER_04: Um, let's talk about the new investment amounts.
• 39:16
  SPEAKER_04: So, Suzanne, uh, you know, throughout the program's history, 500,000 is the lower amount.
• 39:22
  SPEAKER_04: That's always been the exception that's eaten the rule.
• 39:24
  SPEAKER_04: Sure, there were a couple investors investing at a million.
• 39:27
  SPEAKER_04: Um that was a very, very small percentage.
• 39:31
  SPEAKER_04: We had new regulations in 2019.
• 39:34
  SPEAKER_04: Bering Regional Center comes along with their lawsuit and validates those regulations.
• 39:38
  SPEAKER_04: We had a solid week before the program lapsed where people could file at 500,000.
• 39:44
  SPEAKER_04: What are the new investments now?
• 39:46
  SPEAKER_04: And then maybe Ashan, you can talk about how you see that being attractive or unattractive to new investors.
• 39:54
  SPEAKER_04: So go ahead, Suzanne.
• 39:56
  SPEAKER_06: Well, the new standard amount is 1,050,000, with the the discounted option for a targeted employment area infrastructure project being 800,000.
• 40:09
  SPEAKER_06: So the major difference is that the differential between the incentive amount and the base amount is narrower than it used to be.
• 40:18
  SPEAKER_06: And the higher amount is not much higher.
• 40:21
  SPEAKER_06: The lower amount has been significantly increased.
• 40:25
  SPEAKER_04: Right.
• 40:25
  SPEAKER_04: I mean, that that is a fundamental change from which was essentially double the the capital required.
• 40:30
  SPEAKER_04: Um, Ashawn, you know, you you like you mentioned you work for an issuer.
• 40:35
  SPEAKER_04: Um, you know, I've traveled to India with you in the past in efforts to meet potential.
• 40:40
  SPEAKER_04: How many do you think this is going to be attractive?
• 40:42
  SPEAKER_04: Like, would I do EV5 if I can get the Portuguese Golden Visa for 500,000 euros, right?
• 40:49
  SPEAKER_00: I mean, what are is this?
• 40:52
  SPEAKER_04: At 900, no one, very few people did investments at 900.
• 40:56
  SPEAKER_04: You think there's an appetite at 800?
• 40:59
  SPEAKER_01: I think there is an appetite at 800,000.
• 41:02
  SPEAKER_01: Um, in fact, I'm kind of looking forward to it.
• 41:05
  SPEAKER_01: Um, even at 900,000, I found myself dealing with a I mean, don't mean to be do class test here, but like I found myself dealing with a lot of sophisticated investors, a lot more at 500 that in comparison to$500,000.
• 41:19
  SPEAKER_01: So I am definitely looking forward to that.
• 41:21
  SPEAKER_01: Um, I think the folks who will do EB5 going forward um kind of will know what they want and the reason why they're doing it.
• 41:30
  SPEAKER_01: You know, we're talking about$800,000 with nearly an additional$100,000 in fees being spent on this, and this$800,000 isn't going to get much return on investment.
• 41:42
  SPEAKER_01: So I think the folks who will do this will know you know their reasons for doing it.
• 41:46
  SPEAKER_01: So, for example, you know, we've got this concurrent filing benefit.
• 41:50
  SPEAKER_01: So anyone who's in the US, say like Indian nationals who are stuck in their extremely long EB2, EB3 backlog, many of them will leverage sort of their earnings and their savings from the time they've been here in the US and invest that towards EB5.
• 42:06
  SPEAKER_04: So this is important just to clue everybody in.
• 42:10
  SPEAKER_04: US immigration system is so complicated, you can't even get a green card in one step, right?
• 42:15
  SPEAKER_04: An EB5, it was always a two-step process.
• 42:18
  SPEAKER_04: You would file your initial petition, which is called in 526, show your investments coming from lawful sources, show you invested in a qualified project.
• 42:27
  SPEAKER_04: Then you had to wait somewhere between three and five years-ish to get an approval of that before you could actually seek the green card itself.
• 42:36
  SPEAKER_04: Concurrent filing is interesting, right?
• 42:39
  SPEAKER_04: Because if if a visa is available to you, which right now is the entire world except for people born in China, uh the mainland, um, you're able to seek the green card at the same time.
• 42:51
  SPEAKER_04: So that's what's really important there.
• 42:53
  SPEAKER_04: Sorry to cut you off, Ashon.
• 42:55
  SPEAKER_01: Yeah, no, and and you know, from the issuer's perspective, uh, I know like in an issuer like mine, we're looking at uh putting together a solid rural project.
• 43:06
  SPEAKER_01: Uh we've done rural projects in the past, thankfully, and we've got great experience and they have been extremely successful.
• 43:12
  SPEAKER_01: Um, I know that for a lot of foreign nationals from other countries, they don't understand what rural America is all about.
• 43:19
  SPEAKER_01: But I feel like at least the work that we're doing, we're looking to put together some solid projects that would qualify for the priority processing, for the rural set-asides, and and would also be safe investments that that foreign nationals can can look forward to.
• 43:37
  SPEAKER_01: Um, and I expect to see kind of see more of that too.
• 43:41
  SPEAKER_01: Um, as far as foreign nationals who may want to invest at the higher investment amount, I don't typically think that would happen.
• 43:48
  SPEAKER_01: I think folks who still want to go out there and start their own business, do their own direct project, um, that there's still a chance for them to do that.
• 43:57
  SPEAKER_01: And you know, it's you know, it's still close to a Million dollars as close to what it was before.
• 44:01
  SPEAKER_01: So I would expect there will be plenty of people like that too.
• 44:04
  SPEAKER_01: Um entrepreneurs, etc., who have that million dollars in the bank and are looking to invest and create their business here in the US.
• 44:11
  SPEAKER_01: I think there's there's room for them to grow and and and do good things here too.
• 44:16
  SPEAKER_01: So uh that's where I kind of see sort of the the future of the investments going.
• 44:21
  SPEAKER_01: Great.
• 44:22
  SPEAKER_04: Okay, let's talk about the new Regional Center program.
• 44:25
  SPEAKER_04: So the way that the RIA is drafted, uh the the old program has been repealed, and a new program, like I said, will come into effect uh on around May 14th.
• 44:37
  SPEAKER_04: Um importantly with this regional center program is that if investors want to pool their capital together, they have to use the regional center program.
• 44:48
  SPEAKER_04: And if you want to be a single investor in your new commercial enterprise in your project, you cannot use the regional center program.
• 44:55
  SPEAKER_04: You have to go the EB5 direct route, which was interesting because during the laps we saw people doing pool directs, and you know, the viability of those are certainly numbered.
• 45:06
  SPEAKER_04: Um, but if you want to do a regional center project, like I said, you can't file today, you'd have to wait at least till May.
• 45:12
  SPEAKER_04: What are our thoughts that that the agency, USCIS, is actually going to have something functional by May 14th?
• 45:23
  SPEAKER_04: Suzanne, let me turn it over to you.
• 45:25
  SPEAKER_04: It took them, you know, over two years to just raise the minimum investment amounts through regulation.
• 45:33
  SPEAKER_04: Then those got overturned in court.
• 45:36
  SPEAKER_04: Do we think we're gonna have a new suite of forms and new processes and you know, new bases for designating projects in regional centers?
• 45:45
  SPEAKER_04: Do we think we're gonna have that in what is you know essentially six weeks from now?
• 45:53
  SPEAKER_06: I believe it's impossible, but I'll hope for a miracle.
• 45:56
  SPEAKER_04: So we're we're actually I I agree with you.
• 45:58
  SPEAKER_04: I I think it would be something miraculous to be able to have something workable.
• 46:04
  SPEAKER_04: Um what I think is extremely controversial now, and I think none of us had thought this until after the bill had passed.
• 46:12
  SPEAKER_04: Senator Grassley, who was involved with the legislation with Senator Leahy, after the bill passed, went to the floor of the Senate and basically declared all regional centers to be dead, that they've all been um they've all been been repealed thanks to the repeal of the existing bill.
• 46:31
  SPEAKER_04: Um Senator Cornyn, of course, that you know came to the legislative history rescue shortly after that, said no, that's not the case.
• 46:39
  SPEAKER_04: But what are our thoughts on that?
• 46:41
  SPEAKER_04: Are we all starting from ground zero?
• 46:43
  SPEAKER_04: Do we do we are all regional centers going to need to file for recertification?
• 46:48
  SPEAKER_04: Can they use their existing designations?
• 46:51
  SPEAKER_04: I don't know the answer to that off the top of my head.
• 46:53
  SPEAKER_04: I think the stronger legal arguments are that they are still in effect.
• 46:57
  SPEAKER_04: But I'll ask my other panelists what they think, especially as Sean, as you work for an issuer.
• 47:03
  SPEAKER_04: Um, you know, do we think that regional centers exist now?
• 47:06
  SPEAKER_04: Will they exist on May 14th, or are we really going to be starting from ground zero on this?
• 47:13
  SPEAKER_01: I don't I don't think it's clear.
• 47:15
  SPEAKER_01: Um yeah, I work for an issuer, but I'd say you know, my work with the nonprofit AIA is a bit more uh relevant at this point because we're right now communicating with uh members of staff, uh congress members, as well as you know people in USCIS, trying to get some clarity on this rulemaking process that's sort of taking place right now.
• 47:38
  SPEAKER_01: And I think we're gonna have to wait and see.
• 47:40
  SPEAKER_01: Um I do think for new applications going forward, there will definitely be some new paperwork required.
• 47:48
  SPEAKER_01: Um for applications in the past, I would hope that USCS would continue to honor that and ensure that you know those investors are taken care of, regardless of having them have especially not having their issuers reapply for you know renewal of the regional center status or something like that.
• 48:05
  SPEAKER_01: Um you know, I mean it sucks to say this, but we're gonna have to wait and see.
• 48:09
  SPEAKER_04: Yeah, enormous amounts of uncertainty right now.
• 48:11
  SPEAKER_04: Suzanne, anything to add to that?
• 48:14
  SPEAKER_06: Well, just a reminder again of those 80,000 plus people I keep mentioning who are regional center investors currently dependent on the regional center sponsorship.
• 48:25
  SPEAKER_06: So the in practice, regional centers have to be continuously operating and designated in order to provide protection for all those pending applicants.
• 48:35
  SPEAKER_06: And I think that that's something that the immigration service will keep in mind.
• 48:39
  SPEAKER_06: Also, they'll keep in mind what is the path of least resistance and least work for them, and not having a separate recertification process for all of 300 plus regional centers is definitely going to have less work for them.
• 48:54
  SPEAKER_04: And hopefully less litigation too.
• 48:56
  SPEAKER_04: Right.
• 48:58
  SPEAKER_04: Okay, so brand new program and we've got a new process.
• 49:02
  SPEAKER_04: Starting in May, if I am a regional center and I am offering a project to investors, let's assume I have my certification, so that's not an issue.
• 49:12
  SPEAKER_04: I do need to go through what has historically been called the exemplar process, meaning that I have to submit certain documents to uh USCIS for pre-approval.
• 49:25
  SPEAKER_04: I know lots of other programs do some version of this, but historically that has always been optional.
• 49:33
  SPEAKER_04: Suzanne, what are your thoughts on, especially as a business plan writer, what are your thoughts on USCIS now being required to review business plans, securities documentation, other kinds of documentation before any investor can get his or her investment approved?
• 49:53
  SPEAKER_06: Well, I don't know how much difference we'll see in practice, just because the law doesn't say that the application for pre-approval has to be both filed and approved before investors can file petitions because it just has to be filed.
• 50:09
  SPEAKER_06: And so in practice, the time it takes the immigration service to review that petition, the time it takes them to get to the first investor petition, it may be about the same.
• 50:21
  SPEAKER_06: And unfortunately, it's not going to provide protection for investors just because they won't have at least the initial investors won't have the comfort of having had the documents reviewed before they have to commit to them themselves.
• 50:35
  SPEAKER_03: Right.
• 50:36
  SPEAKER_03: And and that has been a benefit there in that regard.
• 50:39
  SPEAKER_06: If processing times improve, though, it will be a wonderful thing, I think.
• 50:44
  SPEAKER_04: Let's talk about that.
• 50:45
  SPEAKER_04: Because the bill does, the RIA does have provisions in it to improve processing time.
• 50:51
  SPEAKER_04: So the last time I came on this podcast, I talked about how uh investors have been fighting back through things called Ritz and Mandamus because the processing times had become so unreasonable.
• 51:03
  SPEAKER_04: Um in the RIA, there's there's this discussion of a fee study, potentially raising fees to reduce processing times.
• 51:10
  SPEAKER_04: Let me let me ask both our guests here today do we do we have reason to believe or reason for optimism that processing times will get better?
• 51:20
  SPEAKER_04: Uh do we have reason to believe that UICIS will raise its fees and by throwing more money at the problem, they'll be more efficient?
• 51:27
  SPEAKER_04: So let me let me start with you, Ashon, first.
• 51:29
  SPEAKER_04: What are your thoughts on current processing times and uh the provisions in the bill that uh seek to address?
• 51:37
  SPEAKER_01: I think the current processing times are atrocious.
• 51:40
  SPEAKER_01: Uh I don't think that's the same.
• 51:42
  SPEAKER_04: And this is going even before the laps, they were really bad.
• 51:44
  SPEAKER_01: Yeah, yeah.
• 51:45
  SPEAKER_01: And I hate being a pessimist, but I don't think any of the new stuff will actually help.
• 51:49
  SPEAKER_01: I mean, I look, I I'll I'll believe it when I see it.
• 51:52
  SPEAKER_01: Okay, maybe if things pick up, if people start getting their green cards faster, if the interviews start getting scheduled quicker, yes, I will tell the public, yeah, things are moving quickly.
• 52:02
  SPEAKER_01: But until then, I'm gonna remain pessimistic.
• 52:04
  SPEAKER_01: I'm gonna tell the future investors that, hey, it's gonna take you a while to move to the US, especially if you're investing in a non-expedited project.
• 52:12
  SPEAKER_01: Like, you know, life is it's it's gonna take you time.
• 52:15
  SPEAKER_01: So, and your consulate itself may take even more time because there's a huge backlog of other people who have to be interviewed before you.
• 52:22
  SPEAKER_01: So, yeah, I'm gonna I'm gonna stick with that.
• 52:25
  SPEAKER_01: Um, look, I I I've suffered from long processing times myself.
• 52:28
  SPEAKER_01: I have myself used attorney Matt Suom Galati to help litigate for my 829.
• 52:35
  SPEAKER_01: Um, I applied for my 82 i829 uh application.
• 52:39
  SPEAKER_02: Sorry, sorry to interrupt you, Sean.
• 52:41
  SPEAKER_02: I just wanna is that moniker sticking?
• 52:44
  SPEAKER_02: Uh because I believe I coined it.
• 52:47
  SPEAKER_02: You coined it invented.
• 52:49
  SPEAKER_04: I invented it.
• 52:50
  SPEAKER_02: Matt Suom Galati.
• 52:52
  SPEAKER_02: I love it.
• 52:52
  SPEAKER_02: I love it.
• 52:53
  SPEAKER_04: Okay, let's let's first nickname I've had since I was a fraternity for Lance, but we're not gonna discuss that one publicly.
• 52:58
  SPEAKER_01: Go on.
• 53:00
  SPEAKER_01: So I applied for my I-829 application at the beginning of 2020.
• 53:04
  SPEAKER_01: Um and the expected wait time for the 829 approval was around three to four years.
• 53:10
  SPEAKER_01: Um I didn't like that.
• 53:12
  SPEAKER_01: I, of course, being the well-informed investor that I am, um had a long discussion with Matt about a legal strategy that would work.
• 53:20
  SPEAKER_01: Um he he helped me find local counsel.
• 53:23
  SPEAKER_01: We we worked together to sort of draft up a complaint.
• 53:27
  SPEAKER_01: And uh yeah, Matt Matt represented me uh in court.
• 53:31
  SPEAKER_01: Um I think that litigation against the US government is something a lot of foreign nationals are wouldn't be comfortable with, but I think that suing the government is quite frankly the most patriotic thing that you can do, holding government responsible to the their promised adjudication times because the law says that my IE to nine should have been approved within 90 days.
• 53:54
  SPEAKER_01: But they took nearly more than a year.
• 53:56
  SPEAKER_01: And then I know there are applicants out there who have waited had to wait even longer.
• 53:59
  SPEAKER_01: So uh thanks to Matt, I was able to get my IE29 approved quickly and I received my permanent green card in the mail.
• 54:07
  SPEAKER_01: Um, but that shouldn't have to be the case.
• 54:09
  SPEAKER_01: Why should investors have to spend money and time and energy and resources on litigation?
• 54:16
  SPEAKER_01: I I would hope that there would be a time that USCS follows the law and actually gets things done as promised.
• 54:23
  SPEAKER_01: Uh but until then, you know, I think it's folks like us who just have to sort of fight the good fight.
• 54:27
  SPEAKER_01: Yeah.
• 54:28
  SPEAKER_04: Um when it comes to processing times and the analyses there, I don't think there's anyone in the business that's better than Suzanne in this.
• 54:34
  SPEAKER_04: Suzanne, you know, full disclosure, I've used a lot of your analyses in my litigation, just attaching it to the complaints and mentioning it in responses to motion to dismiss.
• 54:44
  SPEAKER_04: So you are uniquely qualified, I think, to talk about processing times historically and whether more resources will solve the problem.
• 54:53
  SPEAKER_04: I mean, what are your thoughts here?
• 54:54
  SPEAKER_04: Do you think it's just been a lack of funding for the government?
• 54:58
  SPEAKER_04: You know, we did double the filing fees for the initial stage of the process, I-526s, in 2016.
• 55:06
  SPEAKER_04: Um that didn't really solve the problem, did it?
• 55:10
  SPEAKER_06: Yeah.
• 55:11
  SPEAKER_06: Well, I think that there are two issues in processing times.
• 55:14
  SPEAKER_06: One is the will and one is the way.
• 55:17
  SPEAKER_06: And I am I am happy to see that the uh new law at least sets a goal of timely processing.
• 55:25
  SPEAKER_06: Because, in my observation in recent years, the government actually had a positive goal for processing to take longer and for a wall to be built through the immigration service if it's not possible to build it anywhere else.
• 55:39
  SPEAKER_06: And in EB5, we saw even though the investor program office still had all of its fee-funded staff, its productivity went down between four to five times after they got in new leadership in 2018.
• 55:55
  SPEAKER_06: That was that was just a decision that we're going to really focus on extreme vetting.
• 56:01
  SPEAKER_06: And if it takes longer, maybe we'll be able to catch more catch more possible fraud.
• 56:07
  SPEAKER_06: We're going to put the fine-tooth comb and find every little problem.
• 56:10
  SPEAKER_06: It was actually a value, I think, to have low productivity.
• 56:14
  SPEAKER_06: And it was not a value to anti-immigration.
• 56:19
  SPEAKER_04: A value to the management.
• 56:22
  SPEAKER_06: Yeah.
• 56:22
  SPEAKER_04: Okay.
• 56:23
  SPEAKER_06: So if management is now looking down and saying, okay, we actually value timely processing, we've put it in the law.
• 56:30
  SPEAKER_06: This is the intent of Congress.
• 56:32
  SPEAKER_06: Here are processing times that we like to see.
• 56:34
  SPEAKER_06: That's nice that they're giving that goal.
• 56:36
  SPEAKER_06: And as far as accomplishing that goal, if you look at the processing productivity in the most recent quarter, the investor program office at USCIS would have to become more than 50 times more productive than it was in the most recent quarter in order to meet those processing goals.
• 56:52
  SPEAKER_03: Wow.
• 56:53
  SPEAKER_06: And how do you become more than 50 times more productive?
• 56:57
  SPEAKER_06: Maybe you just bring back the adjudicators that you quietly let go over to asylum or whatever they were doing when they weren't doing EV5 and actually have them work on the forms that their funding comes from.
• 57:09
  SPEAKER_06: Or maybe it's going to be a process where you have to go out and recruit more people, you have to hire them, you have to train them, uh, you have to put in new policies and procedures in place.
• 57:20
  SPEAKER_06: That's going to take some time.
• 57:21
  SPEAKER_04: And that was all pre-lapse, too, right?
• 57:24
  SPEAKER_04: I mean, you know, we during the lapse, we should have seen unaffected things like IE-29 processing times uh plummet.
• 57:31
  SPEAKER_04: We didn't.
• 57:31
  SPEAKER_04: And I know that you wrote an excellent article about that.
• 57:33
  SPEAKER_04: I believe it was published in IMI, um, talking about um A29 processing times.
• 57:39
  SPEAKER_04: And if if they can't even get that right, when they seemingly had all of these adjudicators sitting idly, I do think I agree with you.
• 57:47
  SPEAKER_04: It takes management, it takes a major culture change to put value on timely processing.
• 57:54
  SPEAKER_04: Um otherwise, yeah, I agree with Sean.
• 57:57
  SPEAKER_04: Like a lawsuit seems to be the only thing to to get things moving, otherwise.
• 58:02
  SPEAKER_06: And I think that in EB5 also recently we've just had so many battles to fight that the processing battle is not one that we've really focused on.
• 58:10
  SPEAKER_06: But I'm hoping that going forward, that is something that gets focused on and is something that we can even call to the congressman's attention saying, look, this um law has been passed to help unlock the economic potential of the EB5 program, but see, it's being held back by failures on the administrative side where these petitions that could be funding rural areas are not getting processed.
• 58:37
  SPEAKER_06: Um, if you're worried about enforcement, look, this agency is not even opening the files to do any enforcement for years.
• 58:44
  SPEAKER_06: And I hope that pressure will start to go to improve that situation.
• 58:49
  SPEAKER_04: For sure.
• 58:51
  SPEAKER_04: Let's change uh gears a bit and also talk about some of the integrity measures in this bill.
• 58:55
  SPEAKER_04: Um, you know, obviously a lot of functional issues that we're raising up.
• 59:00
  SPEAKER_04: But there are some provisions of this bill that I think um will shine a light on, um especially for future investors, so they can see you know who they're dealing with, what they're dealing with, uh, with regards to the regional centers and people affiliated with them.
• 59:16
  SPEAKER_04: So one of the interesting things that the RIA provides is pretty comprehensive background uh background examinations of people that are involved with regional centers.
• 59:31
  SPEAKER_04: Um that's somewhat defined in the statute, but it certainly needs some additional discussions uh from the agency.
• 59:38
  SPEAKER_04: Uh disclosure of fees, disclosure of agreements with agents.
• 59:44
  SPEAKER_04: And then, of course, with the migration agents themselves, I know a lot of them listen to this podcast, there is a requirement to register with USCIS that registration could be in the discretion of USCIS director, be made public.
• 1:00:03
  SPEAKER_04: Uh, I would be interested.
• 1:00:05
  SPEAKER_04: We don't have a representative of a foreign migration agent with us today, but I certainly would be interested in that perspective.
• 1:00:12
  SPEAKER_04: Uh, Sean, what what are your thoughts about the heightened scrutiny um involving regional center operators, people affiliated with it?
• 1:00:20
  SPEAKER_04: You know, presumably you yourself might now even need to make an attestation regarding um, you know, your history um and that that that you are complying with all kinds of securities laws and things of that nature.
• 1:00:35
  SPEAKER_04: I know with with the company you work with, you know, they've had a sterling reputation.
• 1:00:38
  SPEAKER_04: I don't think it's an issue so much there, but not everybody is like that.
• 1:00:43
  SPEAKER_04: So give me your thoughts on these new integrity measures and background searches involving persons associated with regional centers.
• 1:00:52
  SPEAKER_01: So I think it's great.
• 1:00:54
  SPEAKER_01: Um I'm I'm really happy to see that.
• 1:00:56
  SPEAKER_01: And I think that it's important that you know, as an investor, if you're about to give your hard-earned money to an issuer, you want to know all the folks that you're dealing with.
• 1:01:07
  SPEAKER_01: Um and I think this this is a push towards greater transparency, and I think that's really, really positive.
• 1:01:13
  SPEAKER_01: Um, the fact that agents now have to register with USCIS is also another positive thing.
• 1:01:19
  SPEAKER_01: Yes, I could understand that some foreign migration agents may not like that, but I, you know, I think it's I think it's just a it's a step in the right direction.
• 1:01:29
  SPEAKER_01: Um and you know, just looking at some of the other golden visa programs and the issues they've had to face, uh I think we'd be, I think the the US is just you know strengthening their own pro immigration by investment program in a way.
• 1:01:43
  SPEAKER_01: With regards to also now fees being disclosed by agents, I think that's another important thing as well.
• 1:01:50
  SPEAKER_01: Um, you know, I know that, for example, a lot of folks in India when they invested, they were working with foreign agents and they didn't quite understand the role of that said agent.
• 1:02:00
  SPEAKER_01: Um, now I think many of them, the existing investors, are getting affected by this because as many of their investments are not turning out in a positive fashion, there are folks who have lost money, who aren't getting their approvals, um, and their investment issue is going dark.
• 1:02:16
  SPEAKER_01: And a lot of times these folks are turning to their agents, but the agents don't know enough.
• 1:02:21
  SPEAKER_01: And the agents, of course, picked up a nice little paycheck and are are that that's their only interest.
• 1:02:26
  SPEAKER_01: Now, with fees being disclosed upfront, with registration being required, I think that it forces everyone across the industry to be more compliant, to be more wary, to for agents especially to pick and choose who they work with now.
• 1:02:43
  SPEAKER_01: So I would hope that for foreign agents, you know, listening to this, that you know, things change for everyone.
• 1:02:49
  SPEAKER_01: It's now it shouldn't just be the project that's giving out the highest commissions, for example, that should be the right people.
• 1:02:56
  SPEAKER_01: It should be the projects that the issuers that actually stick up for the investors, that look out for their clients, that that comply with everything that USCIS wants.
• 1:03:06
  SPEAKER_01: Um, I think that would be positive for everyone going forward.
• 1:03:10
  SPEAKER_01: So I'm pretty happy with that.
• 1:03:12
  SPEAKER_01: I think it's a good thing.
• 1:03:14
  SPEAKER_01: Um and I think that for foreign agents out there, I think you definitely want to be proactive when it comes to this.
• 1:03:19
  SPEAKER_01: So as soon as the rules do come out, if you do wish to continue to work in EB5, which you know obviously is a is a great field to still work in, everybody still wants to move to America.
• 1:03:28
  SPEAKER_01: Like, uh yeah, just be aware, be compliant, and and get it done.
• 1:03:33
  SPEAKER_06: Kristen, what would you say?
• 1:03:35
  SPEAKER_01: No, go ahead.
• 1:03:35
  SPEAKER_01: Go ahead.
• 1:03:36
  SPEAKER_06: I'd say from the perspective of someone who has been reporting on the EB5 program for over a decade now and has spent years trying to get information from the immigration service.
• 1:03:47
  SPEAKER_06: If it says the immigration service may make something public, 100% sure it will not make it public.
• 1:03:53
  SPEAKER_03: Really?
• 1:03:54
  SPEAKER_06: It is extremely difficult to get any information.
• 1:03:57
  SPEAKER_06: I have Freedom of Information Act requests pending since 2016.
• 1:04:02
  SPEAKER_06: Oh, that's right.
• 1:04:08
  SPEAKER_06: And I have written so many letters to the Investor Program Office explaining to them why it's really an integrity issue for the industry to at least know who owns these regional centers if we can't find the name on the internet.
• 1:04:22
  SPEAKER_06: I have gotten no response to that.
• 1:04:24
  SPEAKER_06: Um, same thing with data about who is um using EB5.
• 1:04:29
  SPEAKER_06: It's you just can't get the information.
• 1:04:32
  SPEAKER_06: And so I am I'm a little bit skeptical of all of the integrity measures where the teeth in them is that something is going to get reported to USCIS because the high likelihood is that whatever is reported to USCIS will go into a box and stay in a box that no one will ever open up and look at.
• 1:04:51
  SPEAKER_06: So that is something to keep in mind.
• 1:04:53
  SPEAKER_06: But that there are some personally, my favorite integrity measure in this bill is the provision for availability of annual statements to investors, which says that investors have the right to request the annual statement that the regional center reports to USCIS to find out what the regional center is saying to USCIS about their performance.
• 1:05:14
  SPEAKER_06: And that is something that I think is actually an integrity measure because unlike the immigration service, which is not necessarily motivated to spend a lot of time reviewing all the things that are reported to them.
• 1:05:26
  SPEAKER_06: Investors do want to know information about the regional center's activities and performance and what the regional center is saying to the immigration service.
• 1:05:35
  SPEAKER_06: So I think that is a good integrity measure.
• 1:05:38
  SPEAKER_04: The statute says 20 business days to get back to you and your requests, by the way.
• 1:05:41
  SPEAKER_04: So we can talk about litigation on that later.
• 1:05:43
  SPEAKER_04: Christian, what are your thoughts though?
• 1:05:45
  SPEAKER_04: I I know you don't have the bill in front of you, but if you could look at this from a comparative kind of lens, you know, you're you're certainly fluent in a lot of the citizenship and residency by investment programs are.
• 1:06:00
  SPEAKER_04: Around the world.
• 1:06:00
  SPEAKER_04: Are you aware?
• 1:06:01
  SPEAKER_04: I mean, I I have some idea of how this works in the Caribbean, but are you aware of other countries requiring agents to be registered, making those registries public, performing background checks, or at least requiring certifications on behalf of agents?
• 1:06:19
  SPEAKER_04: And do you think that might have a chilling effect for agents to be involved in EB5?
• 1:06:24
  SPEAKER_02: Well, what we've seen in the Caribbean, so so I guess the Caribbean is the best thing to compare here, uh, because obviously they're very small countries, uh, small jurisdictions.
• 1:06:36
  SPEAKER_02: They have uh pretty strict local regulations for who can be a locally accredited agent.
• 1:06:42
  SPEAKER_02: And then they so they have they have different kinds of agents.
• 1:06:45
  SPEAKER_02: They have the locally accredited agents in the Caribbean.
• 1:06:47
  SPEAKER_02: That has to be someone who's physically there, uh typically a lawyer who will submit the applications.
• 1:06:54
  SPEAKER_02: But then you have the marketing agents, which are your latitudes, your henle and partners, your art and capitals of the world.
• 1:07:04
  SPEAKER_02: Uh these guys are multi-jurisdictional.
• 1:07:07
  SPEAKER_02: Uh often they're also local agents, but that's a different story.
• 1:07:10
  SPEAKER_02: But they market internationally the programs, and and they in turn will have sub-agents that uh market, like the lack to sort of feeder companies uh to drum up business.
• 1:07:24
  SPEAKER_02: Now, what the the CIUs, the citizenship by investment units in the Caribbean do is they obviously they first of all strictly regulate who can be a locally accredited agent, but then they also regulate who can be an international marketing agent.
• 1:07:39
  SPEAKER_02: Now, I think in recognition of the limited capacity they have to enforce uh their regulations internationally, what they've done is they've tied the good behavior of uh so if if you are, let's say you're Latitude, for example, right?
• 1:08:00
  SPEAKER_02: One of the bigger uh citizenship by investment companies out there, if they appoint a subagent uh to market the uh say Grenada citizenship by investment program on on the behalf of Latitude and then feed those clients into the latitude system, then latitude is responsible for uh the behavior of that company.
• 1:08:20
  SPEAKER_02: So if if if if some subagent in say Iraq is uh speaking out of turn, maybe they're you know uh using marketing methods that are considered vulgar or or not permissible, such as the um, you know, not recently we've seen a lot of Caribbean jurisdictions object to the the use of Schengen access uh as a uh as an explicit selling point.
• 1:08:47
  SPEAKER_02: So let's say that this subagent of latitudes in uh Iraq uh behaves in a way that it's unacceptable, latitude will be held responsible for that.
• 1:08:59
  SPEAKER_02: Uh now we do see you know there are lots of there are there's lots of behavior that strictly speaking isn't permitted but nonetheless goes unpunished.
• 1:09:09
  SPEAKER_02: But that that I think is a uh is a consequence of the limited capacity these these tiny um island jurisdictions have at enforcing it.
• 1:09:19
  SPEAKER_02: Uh so they kind of rely on other people uh you know informing them of mischief.
• 1:09:25
  SPEAKER_02: Um in the United States, of course, it's very different because the arm of the law is extremely long and it's you know international.
• 1:09:35
  SPEAKER_02: So um I could totally see that having uh I mean maybe not a chilling effect, but maybe you would just weed out a lot of unserious actors, people who are not willing to you know go go through the jump through the hoops that you need to jump through or get the qualifications necessary, the people who want to I mean, because there's a there's a cost of compliance involved here, right?
• 1:09:56
  SPEAKER_02: So um you would you would have uh probably smaller outfits would you know might might decide against uh promoting the EB5 program internationally just because of the regulatory implications of that.
• 1:10:10
  SPEAKER_04: Yeah, and subjecting themselves to U.S.
• 1:10:12
  SPEAKER_04: jurisdiction, which I think a lot of them wouldn't want to do.
• 1:10:16
  SPEAKER_04: Are you aware of any other program that would provide the degree of transparency between the relationships between the agents and the projects themselves?
• 1:10:25
  SPEAKER_04: So, for example, you brought up Grenada.
• 1:10:27
  SPEAKER_04: If I wanted to get a Grenadian passport and I, you know, reached out to ABC Company, which is a registered marketing agent of Grenada.
• 1:10:39
  SPEAKER_04: Um, do I necessarily know how much of a commission ABC Company is making off of my Grenadian investment?
• 1:10:47
  SPEAKER_04: Do I get to see the contract between ABC Company and XYZ?
• 1:10:52
  SPEAKER_04: No?
• 1:10:53
  SPEAKER_02: Absolutely not, Matt.
• 1:10:58
  SPEAKER_04: I mean, we don't really see this other play.
• 1:11:01
  SPEAKER_01: Which is which is why it's good.
• 1:11:02
  SPEAKER_01: I mean, this is securing us for the future.
• 1:11:04
  SPEAKER_01: I mean, when when there's ill-informed members of the press or or Congress who say, you know, EB5 is bringing in a lot of bad actors and things like that, then maybe we'd be able to, you know, show them the proof and be like, all right, we'll take a look at any other golden visa program and compare to what the current EB5 program looks like now.
• 1:11:23
  SPEAKER_01: Like, do you see how I mean it's already was pretty stringent from the past.
• 1:11:27
  SPEAKER_01: I at least I think so.
• 1:11:28
  SPEAKER_01: I think it's just becoming even more stringent now.
• 1:11:30
  SPEAKER_01: So and that's good.
• 1:11:31
  SPEAKER_01: And look, I uh Christian, I really appreciate the point that you brought up earlier about you know marketing agents and agents using unscrupulous methods to um market said program or product.
• 1:11:44
  SPEAKER_01: Um, I think that's really good to remember because I've seen that firsthand.
• 1:11:48
  SPEAKER_01: You know, I I I've seen agents using the name of a uh like some celebrity like Bill Gates and say, oh look, Bill Gates invested in a project.
• 1:11:58
  SPEAKER_01: Oh, you should invest in this too.
• 1:12:00
  SPEAKER_01: Like, come on, you know, like you have to be realistic with folks.
• 1:12:05
  SPEAKER_01: And same thing with like say promising, uh giving unrealistic expect expectations to investors about how long it's gonna the process is gonna take them.
• 1:12:13
  SPEAKER_01: I mean, I witnessed so many investors now that that have been misled, who feel misled because they were promised a certain timeline and it didn't happen.
• 1:12:23
  SPEAKER_01: And I think I I would hope now the industry starts taking that effort of being more transparent with the investors seriously, especially those, especially those investors who do not speak English and come from countries which rely, fully rely on these agents to bring the projects and make everything happen for them.
• 1:12:42
  SPEAKER_02: So so I would say uh as I've mentioned, uh I think regular listeners will remember me mentioning this in the past here on the show, um, that there are three chief criticisms that are levied against investment migration.
• 1:12:57
  SPEAKER_02: And so number one is the the moral ideological argument, which goes uh people with money shouldn't be able to buy privileges.
• 1:13:07
  SPEAKER_02: Um that's it that's an ideological argument.
• 1:13:10
  SPEAKER_02: Uh I disagree with it.
• 1:13:12
  SPEAKER_02: Uh it would mean you know, we can't have business class flights or better hotel rooms for people who can pay.
• 1:13:18
  SPEAKER_02: Uh but anyway, that's a moral argument.
• 1:13:20
  SPEAKER_02: The second one is uh the national security argument, which is oh, here is a backdoor into Europe.
• 1:13:27
  SPEAKER_02: It's usually Europe.
• 1:13:28
  SPEAKER_02: Um, you know, we we can't let you know scary Russian oligarchs in with their money.
• 1:13:34
  SPEAKER_02: Um I think that that argument doesn't hold water because investor migrants are kind of the most tightly controlled, most closely scrutinized category of immigrants.
• 1:13:46
  SPEAKER_02: Um virtually any other category uh is is subject to less scrutiny.
• 1:13:52
  SPEAKER_02: But then there's the third argument, and this goes to transparency, right?
• 1:13:55
  SPEAKER_02: Uh there's some um there is some uh warranted criticism uh of the opacity that we see in the industry.
• 1:14:03
  SPEAKER_02: And I think that there are plenty of investment migration jurisdictions, including the United States, that's not sufficiently transparent about you know um how the money is raised, who raises the money, who are the beneficiaries, how is the money distributed, um, and so on.
• 1:14:22
  SPEAKER_02: And so if if the United States, I mean, there are some countries that do this really well.
• 1:14:26
  SPEAKER_02: I would like to kind of highlight Malta, for example, they do a tremendous job of disclosing exactly uh who's coming in.
• 1:14:34
  SPEAKER_02: Uh what are they?
• 1:14:36
  SPEAKER_02: Maybe a little too much in Malta, because you okay, you you you have you have you have this uh you have a conflict between um transparency, which is a valid concern, and privacy, which is an equally valid concern, right?
• 1:14:52
  SPEAKER_02: And there's you know, I don't know exactly where you should draw the line between each of those.
• 1:14:57
  SPEAKER_02: But um but Malta obviously is also another very small jurisdiction and they don't have a tremendous amount of international influence.
• 1:15:05
  SPEAKER_02: But I think that if in the United States, if if the EB5 program became um a paragon of uh integrity in terms of program integrity and reporting and transparency, that could have uh implications globally, because then the United States could become sort of a bellwether for where this industry is going in terms of transparency.
• 1:15:29
  SPEAKER_02: And that could do a lot to strengthen the sector as a whole, I think.
• 1:15:36
  SPEAKER_04: That's a very astute point.
• 1:15:38
  SPEAKER_02: Well, it's just that you know the United States has clout, right?
• 1:15:41
  SPEAKER_02: Malta doesn't have a clout.
• 1:15:43
  SPEAKER_02: Yeah.
• 1:15:50
  SPEAKER_04: All right.
• 1:15:51
  SPEAKER_04: So um kind of like bringing this full circle here, I I did want to put a little bit of time into how do we go about navigating this really uncertain time?
• 1:16:02
  SPEAKER_04: I mean, there's there's certainly gonna be a lot of uncertainty between now and May, and then plenty of uncertainty later once this uh the regional center program is due to go live again.
• 1:16:15
  SPEAKER_04: Um let me just kick it over to Oshan real quick.
• 1:16:18
  SPEAKER_04: I mean, uh even with grandfathering, I feel like there's a decent amount of uncertainty right now.
• 1:16:24
  SPEAKER_04: How as the president of an investor-focused organization, how are you navigating that?
• 1:16:33
  SPEAKER_04: How are you keeping your members informed when uh there's only so much that can be said as of today, April 4th, 2022?
• 1:16:44
  SPEAKER_01: So I mean it's just definitely a difficult spot.
• 1:16:47
  SPEAKER_01: I mean, I there are so many investors out there who are so incredibly frustrated that even now, with grandfathering done, even though the law sp says that it's supposed to be in effect immediately, USCIS Department of State are not following that.
• 1:17:04
  SPEAKER_01: They are not resuming processing of petitions.
• 1:17:07
  SPEAKER_01: Um, they are publicly telling us that they're gonna wait until May 15th, uh, which is the end of the 60-day period, to resume processing and issuing of visas, which is incredibly unfair.
• 1:17:17
  SPEAKER_01: Um and it's rough.
• 1:17:19
  SPEAKER_01: I mean, we're doing what we can with our lobbyists, where we're following up with all the staffers that we built relationships with over the last seven months while pushing our agenda.
• 1:17:29
  SPEAKER_01: And uh we're trying to leverage that to the best we can.
• 1:17:33
  SPEAKER_01: I'm really hoping that we can bring forward some positive news, but you know, if we're not able to, we're gonna continue to be honest with our constituents and letting them know that you know this is a difficult time.
• 1:17:44
  SPEAKER_01: And we'll try to find other ways to you know mend the impact of this lapse and this 60-day wait.
• 1:17:52
  SPEAKER_01: You know, one of the things that we're looking at right now is trying to push a serious green card visa recapture uh effort and partner up with other organizations that want the same.
• 1:18:02
  SPEAKER_01: There's going to be a lot of wasted visas because of this lapse, like I mentioned earlier, and because of the 60-day period.
• 1:18:08
  SPEAKER_01: Um, I'm I'm hoping that we can find some ways to mend that impact and make sure that the immigration timelines for a lot of these folks doesn't get even more extended than it already is.
• 1:18:20
  SPEAKER_04: Yeah.
• 1:18:21
  SPEAKER_04: Um, that's a great point.
• 1:18:23
  SPEAKER_04: Uh, Suzanne, what about you?
• 1:18:24
  SPEAKER_04: Um, obviously, you have your day job as a business plan writer.
• 1:18:28
  SPEAKER_04: What goes into those plans is going to significantly change in the near future.
• 1:18:33
  SPEAKER_04: Um you know, I would say a lot more work.
• 1:18:36
  SPEAKER_04: But you're also a prolific writer and commenter.
• 1:18:39
  SPEAKER_04: All of your blog posts I find very sobering, very realistic takes.
• 1:18:45
  SPEAKER_04: You're certainly not putting spin on it, at least that I've seen.
• 1:18:49
  SPEAKER_04: How are you finding, you know, and you know, like your your visa set asides article from last night, again, just absolutely stellar.
• 1:18:57
  SPEAKER_04: Like, how are you dealing with the challenges of everything being so uncertain and being able to present information to your candidacy, to your constituencies, excuse me, whether it's the government, whether it's readers of your blog, about what's going on and what to expect.
• 1:19:16
  SPEAKER_06: As far as my work as a business plan writer, I tend to I generally work with people who are just starting the process.
• 1:19:22
  SPEAKER_06: And so the major change for me is just that the initial conversation that we have, which is generally a do you really want to do this conversation, has gotten longer.
• 1:19:33
  SPEAKER_06: And just reviewing the um the facts of the uncertainties.
• 1:19:39
  SPEAKER_06: Because the people that I work with are people that don't need the spin.
• 1:19:42
  SPEAKER_06: They need to know they need to have a realistic sense of how things are going to turn out because they've got a business that they're planning and they have timelines that they have to think through.
• 1:19:52
  SPEAKER_06: And so just trying to be real help them think through realistically as far as the timeline, like when are they going to be able to go to market?
• 1:20:05
  SPEAKER_06: When is the immigration service going to be accepting applications?
• 1:20:08
  SPEAKER_06: What are the steps that they're looking forward to?
• 1:20:11
  SPEAKER_06: And then just being sure that they're aware of the areas of uncertainty that pre-existed, this law that are still with us, um, with timing being a major issue, considering the large backlogs that are there and considering the processing challenges.
• 1:20:28
  SPEAKER_04: Got it.
• 1:20:29
  SPEAKER_06: And then as far as um looking at the law and trying to understand and interpret it, I feel that behind the scenes in the government, the people who are trying to figure out the policy informs right now are people who would love to have someone tell them how to do things and figure it out for them.
• 1:20:46
  SPEAKER_06: So I think to the extent that we in the industry can be influencers and can read the law and put out opinion, put out comments that may help those who are thinking through now how do we interpret this, how do we apply it.
• 1:21:03
  SPEAKER_04: Well, do do any of your subscribers have a.usci.gov uh email address?
• 1:21:10
  SPEAKER_04: Maybe I would hope that they're getting some analysis from you and that kind of thing.
• 1:21:15
  SPEAKER_06: Well, I mean, my my personally, if it if anything, it has a trickle-through effect.
• 1:21:20
  SPEAKER_06: But um I I think generally for us in the industry, this is an opportunity to help set the standard.
• 1:21:27
  SPEAKER_06: And for example, one of my regional center clients who is um preparing an application now, I think that they are getting good advice to help set it up the way it should be, considering how the law is interpreted.
• 1:21:41
  SPEAKER_06: And I think that they will help set the standard, just like those of us who were doing regional center applications back in 2009 helped to set the standard that eventually became the Forum I-924.
• 1:21:54
  SPEAKER_04: Yeah, for sure.
• 1:21:55
  SPEAKER_04: I can just say as an attorney, at least during the lapse, I've become much more comfortable saying to my clients, I don't know and nobody knows.
• 1:22:06
  SPEAKER_04: And I think that is the truthful answer to so many EB5 related questions right now.
• 1:22:11
  SPEAKER_04: You know, if if I'm an investor with a pending application that's been grandfathered in, when am I getting my green card?
• 1:22:17
  SPEAKER_04: I don't know and nobody knows, right?
• 1:22:19
  SPEAKER_04: If I'm waiting for a visa interview in Mumbai, I don't know and nobody knows, right?
• 1:22:26
  SPEAKER_04: There's just so many variables out there that we just don't have guidance on.
• 1:22:31
  SPEAKER_04: And I would implore the government, if anybody's listening, that we really need clarity sooner rather than later on this.
• 1:22:39
  SPEAKER_04: Um, you know, so many people have gone through just incredible amounts of anxiety uh during the lapse.
• 1:22:45
  SPEAKER_04: And they were, you know, USCIS was involved with the drafting this bill.
• 1:22:51
  SPEAKER_04: They certainly were involved with the technical elements of it.
• 1:22:54
  SPEAKER_04: They've they've they've been in touch with the relevant congressional offices.
• 1:22:59
  SPEAKER_04: I'm disappointed that we don't have I I wasn't expecting anything comprehensive on day one on March 16th, but I'm a little disappointed that we don't have clear answers on how the grandfathering works.
• 1:23:12
  SPEAKER_04: You know, we don't have clear answers on the visa bulletin.
• 1:23:15
  SPEAKER_04: We don't have clear positions that the government is taking in litigation.
• 1:23:19
  SPEAKER_04: And um, you know, they they really should have done a better job of that.
• 1:23:23
  SPEAKER_04: I hope this does become a priority, and I hope we will have clarity in the coming weeks, especially as we speed closer to May 14th.
• 1:23:31
  SPEAKER_06: And Matt, can I ask you at what point do you say we don't know, nobody knows, therefore I recommend you just not do this?
• 1:23:40
  SPEAKER_04: So a very few conversations with prospective investors.
• 1:23:44
  SPEAKER_04: Yes, there are some.
• 1:23:45
  SPEAKER_04: I I don't think I've really had a whole lot of them um since since March 15th.
• 1:23:54
  SPEAKER_04: We generally had an idea of what the pro what the direct program looked like prior to that.
• 1:24:00
  SPEAKER_04: So that was that wasn't so much uh an issue.
• 1:24:04
  SPEAKER_06: So you wouldn't want to unduly discourage the people who are listening to this call.
• 1:24:09
  SPEAKER_04: I don't necessarily want to discourage it.
• 1:24:11
  SPEAKER_04: I I think EV5 is a visa of last resort for for most people, just because of the opportunity costs associated with the investment, um, as well as the processing time.
• 1:24:24
  SPEAKER_04: The you know, if someone comes into my office and they've got significant international media about them, they're an absolute star in their field, um, recognized experts, and they happen to have a lot of money, I would still probably shoot for EB1 over EB5.
• 1:24:44
  SPEAKER_04: That's a much more stable visa category, relatively straightforward.
• 1:24:47
  SPEAKER_04: Premium processing, get an answer in 15 days.
• 1:24:50
  SPEAKER_04: Uh, we certainly don't have that in EB5.
• 1:24:53
  SPEAKER_04: Um, but there are certain populations that absolutely need the EB5 program.
• 1:25:01
  SPEAKER_04: Backlogged Indian EB2 and EB3 workers that aren't seeing a green card this lifetime unless they go for EB1 or EB5.
• 1:25:09
  SPEAKER_04: And very few people by definition can qualify for EB1.
• 1:25:14
  SPEAKER_04: Um students coming right out of college that maybe have majors in underwater basket weaving or whatever, and not exactly the easiest employable and easiest to get a work visa, EB5 might be the right ticket there.
• 1:25:31
  SPEAKER_04: Um so, like a lawyer, I have to answer that question, Suzanne, with it depends.
• 1:25:37
  SPEAKER_04: Um, but generally speaking, if there's another route available that is going to be easier, of course, you know, steering the clients towards that route has been my MO for my whole career.
• 1:25:50
  SPEAKER_01: Yeah, I would I would agree with everything that Matt is saying.
• 1:25:53
  SPEAKER_01: And especially for folks who are looking to do EB5 or for agents that are looking to get into EP5 or get back into EB5, um, you know, everything that Matt said is correct.
• 1:26:04
  SPEAKER_01: Um, I'd also recommend just waiting to see what USCS comes out with.
• 1:26:09
  SPEAKER_01: And then, you know, do your homework.
• 1:26:11
  SPEAKER_01: Maybe it's, you know, it's the folks like Suzanne said, the ones who are setting the standard are the right people to work with and work alongside to better serve yourself as an investor or better serve your clients as in as a foreign migration agent.
• 1:26:26
  SPEAKER_01: Um, I think it's more important than ever to work with folks that are compliant, that are looking at the future, that are and and are looking to and are willing to adapt to what USCIS says.
• 1:26:38
  SPEAKER_01: Because again, we still don't know the final rules, we don't know what USS USCS is going to expect us to do.
• 1:26:43
  SPEAKER_01: We also don't even know if May 14th or 15th is really going to be the actual start date of the EB5 Regional Center program.
• 1:26:52
  SPEAKER_01: It's not confirmed yet.
• 1:26:55
  SPEAKER_02: That's it for today, folks.
• 1:26:57
  SPEAKER_02: But we'll be back soon with another episode of the Mobility Standard.
• 1:27:01
  SPEAKER_02: In the meantime, I encourage you, the listener, to send us the questions you have about investment migration.
• 1:27:07
  SPEAKER_02: If we're able to answer them, we'll do so during our next episode.
• 1:27:11
  SPEAKER_02: I want to remind you to follow our work on imidail.com, the world's number one publication for investment migration, home to the internet's greatest collection of investment migration data, real estate, expert opinion, and the intelligence you need to be a successful investment migration professional.
• 1:27:30
  SPEAKER_02: Thank you for listening.