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  • Writer's pictureMatthew Galati

Filing I-829s During a Coronavirus Economic Downturn

For the past two weeks, I’ve been flooded with queries from investors who have questions about the viability of their future I-829 condition removal petitions given what appears to be an assumed significant economic downturn due to the cessation of most facets of modern life as countries seek to “flatten the curve” of ongoing COVID-19 infections.

For the purposes of this article, let’s assume that a weak economy has no effect on the I-829 requirements that a New Commercial Enterprise be created and in good standing. We can also assume (perhaps more than we want to) that the EB-5 investments remain at risk. Thus, approval is a matter of job creation.

Let’s first look at the I-829 regulatory requirements relating to job creation. At the time of I-829 adjudication, USCIS must decide whether the investor “created or can be expected to create within a reasonable period of time ten full-time jobs to qualifying employees.” 8 CFR 216.6 (C)(iv). Note that like the I-526, the I-829 can be approved from a prospective standpoint – the jobs need not necessarily be in place at the time of filing. We’d sure hope that they were, and for the better part of the past decade, most projects have been able to create the jobs on time.

But what if the jobs aren’t in place yet? The USCIS Policy Manual interprets the prospective nature of the job creation requirement further as follows:

Within a Reasonable Time Standard
A petitioner may demonstrate that jobs will be created within a reasonable period of time after adjudication of the Form I-829 petition. This permits a degree of flexibility to account for the realities and unpredictability of starting a business venture, but it is not an open-ended allowance. The business plan submitted with the Form I-526 immigrant petition must establish a likelihood of job creation within the next 2 years, demonstrating an expectation that EB-5 projects will generally create jobs within such a timeframe.
USCIS may determine, based upon a totality of the circumstances, that a lengthier timeframe is reasonable. USCIS has latitude under the law to request additional evidence concerning those circumstances. Because 2 years is the expected baseline period in which job creation will take place, jobs that will be created within a year of the 2-year anniversary of the immigrant investor’s admission as a conditional permanent resident or adjustment to conditional permanent resident may generally be considered to be created within a reasonable period of time.
Jobs projected to be created more than 3 years after the immigrant investor’s admission in, or adjustment to, conditional permanent resident status usually will not be considered to be created within a reasonable time unless extreme circumstances10 are presented.
Not all of the goals of capital investment and job creation need to be fully realized before the conditions on the immigrant investor’s status have been removed. The investor must establish that it is more likely than not that the investor is in substantial compliance with the capital requirements and that the jobs will be created within a reasonable time.

Thus, USCIS interpretive guidance allows the I-829 petitioner to leverage, by right, jobs that will be created within a year of the expiration of the initial 2-year conditional Green Card. An updated business plan (or a detailed narrative) and economic analysis could be incredibly helpful in this regard. By proving that its more likely than not that there are 10 jobs per investor within a year of the expiration of conditional permanent residence, the I-829 should be approved.

That said, although the regulation allows for approval where the project “can be expected to create” the jobs, the illegally lengthy I-829 processing times may invite an RFE a year (or more) after filing to check on the actual job creation.

That’s not what the controlling regulation mandates. They only require the expectation of job creation as stated above. Might there exist a way to facially attack the Policy Manual as deviating from the prospective nature of the regulations against the retrospective nature of an RFE against a long-pending case? The adjudicator should decide the case as filed, and at most 90 days thereafter. Is it proper for them to consider facts occurring after filing? I would argue no.

Setting aside that hypothetical, one must also note that the Policy Manual allows for jobs to be created after three years of conditional residency to be credited to investors where there is the presentation of “extreme circumstances.” The footnote to that passage (fn10) gives the example of a force majeure as being such an extreme circumstance.

We should count our blessings that lawyers need to explain the meaning of force majeure. I and others fear that this phrase will become all too commonplace after the fallout of COVID-19 on modern society and contract law. Indeed, force majeure may become commonplace in elementary school vocabulary curricula by the time we can move past the economic fallout of the 2020 coronavirus outbreak. A great many contracts could be invalidated through force majeure clauses and inherent principles of contract interpretation.

Let’s break it down. Black’s Law Dictionary defines force majeure as “An event or effect that can neither be anticipated or controlled. The term includes both acts of nature (e.g. floods and hurricanes) and acts of people (e.g. riots, strikes, and wars).” We expect a full body of caselaw over the coming years, perhaps decade, on whether the coronavirus was indeed a force majeure.

So what does this cataclysmic event mean for investors? Certainly many will have invested in projects that have not performed to expectations at the time of the I-829 filing. The Coronavirus outbreak does not, in and of itself, excuse the EB-5 job creation requirements. However, an investor whose project has not created the requisite jobs at the time of condition removal would be well-advised to present evidence of the force majeure event that has delayed the construction of a project (such information would typically be available from a project’s developers which would have invoked a force majeure clause in their agreements), as well as documentation and a plan for ongoing job creation in the coming year thereafter. Where necessary, evidence of further job creation beyond three years post-conditional residency may be appropriate given the effects of the coronavirus on virtually every aspect of modern life and the global economy.

Again, the I-829 filing need not necessarily prove the requisite jobs were created. The investor must only prove that he or she “can be expected to create” the jobs “within a reasonable period of time.” The effects of the coronavirus will probably extend the window of that reasonable period of time, which determination is fact specific as different projects may be impacted by the current events in different ways. But, and I cannot stress this enough, the approval of the I-829 should accordingly turn on the “expectation” of job creation as per the controlling regulations.

We have been through this before. Many I-829s filed during the 2008 Great Recession and its ensuing economic downturn were approved. Investors need effective advocacy from immigration counsel and ongoing loyalty from their project issuers to ensure adequate job creation – whenever that may be.

For more information on the I-829 Petition by Investor to Remove Conditions on Permanent Resident Status or general EB-5 information, contact us today.

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