EB-5 I-526 Processing Delays Continue, Despite Record USCIS Performance in 2018

American Venture Solutions, like all active EB-5 Regional Centers, is getting constant inquiries from its investors regarding USCIS’ continuing delays in processing I-526 petitions.   The sense of frustration on all sides – investors, attorneys, projects, and regional centers – is palpable as all of us have grown weary of seeing USCIS raise fees, promising faster processing, only to fail to deliver.  What’s important to understand is that the issues lie not with the very competent EB-5 adjudication folks (IPO); instead, they are a function of chronic federal underfunding of the agency as well as fluctuations in demand for the EB-5 visa and host of other factors.  Today we are going to look at these factors to try to see where things are headed. 

Last month, USCIS released its I-526 Processing Report for 2018.  [You can find the full report here:2018 USCIS I-526 Processing Statistics (released Feb. 27, 2019) ]  In FY 2017, USCIS received a total of 12,165 I-526 applications and ended the year with 24,992 I-526s pending adjudication.  With the two highest-demand EB-5 countries facing backlogs (China and Vietnam) in 2018, the total number of filed I-526 petitions in FYI 2018 dropped to 6,424, about half of the prior year. That dramatic reduction in new filings allowed IPO to work aggressively on the pending cases, and ended 2018 successfully reducing the number of pending I-526s to about 14,000, some 10,000 less than the prior year.

But let’s begin by asking the basic question:  WHY is there a backlog?  The answer is simple: because demand for EB-5 has been greater than the ability of the USCIS’ IPO office to process the cases as they came in.  Too much work for too few people.  It was only in 2018, when the ever-growing backlog for the China market finally killed the market and Vietnam also became oversubscribed, that IPO began making headway on the backlog.   Many pundits opine regularly on EB-5 processing predictions, but EB-5 business plan expert Suzanne Lazicki’s Lucid Text blog  is without a doubt the most intelligent EB-5 resource on the Web.  Her recent prediction for 2019 is very positive:

“At this rate, the entire backlog of I-526 pending as of year-end 2018 will be adjudicated in 2019, and new I-526 can expect processing times of less than one year.”

While that is reassuring, it does little for folks who are seeing their I-526 filing date pass the current published USCIS adjudication date.  In fact, USCIS is getting SO many inquiries from long-pending I-526 petitioners that it has all but stopped answering.  These are the factors explaining TODAY’S delays:

• Team adjudication:  when USCIS finally acknowledged that I-526s from a particular project or regional center were being grouped and adjudicated by a group of USCIS officers, it was a relief to hear.  It explained the long periods of inactivity and sudden flurries of approvals AVS had seen in the last few years.  Unfortunately, it works both ways: when a particular project’s files are at the TOP of the adjudication team’s pile, those I-526s get handled sooner; when the files are at the BOTTOM…they take longer. 
• Despite how frustrating this can be, team adjudications are the best thing USCIS has done in a while.  Why?  Because once you have reviewed a case file for a given project and have accepted that the project satisfies all requirements for approval, the only difference between files is the specific investor information such as source of funds, etc.  According to what Suzanne reported, DHS estimates that the average Form I-526 gets 6.5 hours of touch time.  If you look at a big, fat I-526 file, the vast majority of information relates to the Job Creating Enterprise, the job creation econometrics, and specific information regarding the investment and offering.  Investor information makes up only a small part of the file.  In team adjudication, the first few cases will take longer, but once they are familiar (and comfortable with) the project, future I-526 files take much less time to adjudicate because they only need to focus on the investor him/herself.
• Quality of the I-526 filing package: as a former consular officer, I can tell you that well organized, indexed, clear files get handled faster (and with a far better attitude) than poorly organized, confusing, and unclear files.  Nowhere is that more true than in I-526 filings.  Smart projects have clear templates which are provided to immigration attorneys, assuring that all filings from the project are consistent and easily identifiable.
• History of approvals:  I remember when we first started filing I-526s for the Lake Point Project in 2011, it was an ETERNITY before we got our first approval.  After that, they came faster and faster.  But you have to remember that each EB-5 limited partnership is a “NEW” project as far as USCIS is concerned.  So if you have Project X and Phase 1 had its 20 investors approved, when Phase 2 comes out, it goes to the bottom of the pile, so to say, as a “new” EB-5 project (even though the business and details may be identical to Phase 1).
• Recently, USCIS has indicated that certain projects are being granted across-the-board “expedited processing”, something which previously could only be granted for a specific I-526 case.  The reality is that whether your I-526 is approved in 4 months or in 2 years is entirely irrelevant to Chinese and Vietnamese investors facing years of backlog.   According to some, these “expedited” projects have dedicated adjudicators, which begs the question:  How can USCIS assign specific adjudicators to one specific project with the backlog it faces?   With no regulatory guidance on how USCIS makes the determination on how it decides are project should be “expedited”, we can only hope that this is just more exaggerated marketing by EB-5 purveyors and not the reassignment of adjudication officers to particular projects to the detriment of other pending petitioners.

In sum, there are numerous factors explaining the current delays in I-526 processing, DESPITE the progress made last year.   I agree with Suzanne that this trend will continue and that it is indeed possible that USCIS will be current on I-526 processing by the end of 2019.  If the final rule pending before OMB becomes law and the new TEA investment amount jumps from $500,000 to $1.35M, then I am CERTAIN that the resulting dramatic drop in EB-5 investments will further reduce IPO’s workload and we’ll be starting 2020 with a zero backlog in I-526 processing.

JEL

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