DALLAS, July 24, 2024 (GLOBE NEWSWIRE) -- The EB-5 Reform and Integrity Act of 2022 (“RIA”) made several key changes to the EB-5 program and instituted several new compliance requirements for regional centers wishing to continue doing business under the RIA. One of these requirements, the Integrity Fund, was established to provide USCIS with the additional capital necessary to among other things, conduct investigations, monitor program-related events both inside and outside of the U.S., ensure overall program compliance, detect and investigate fraud and other crimes, and conduct regional center audits and site visits.
As outlined in the RIA, the Integrity Fund was to be fulfilled by an annual fee due October 1st of each corresponding fiscal year. Failure to pay the fee within 90 days of the due date would result in the termination of the USCIS designation of any non-compliant regional center.
Following the re-authorization of the program, USCIS held stakeholder calls and provided statements discussing the payment of the integrity fee and provided guidance as to questions surrounding the payment of the fee, which per the terms of the RIA, would have come due as early as October 1, 2022 for the 2023 fiscal year. As USCIS worked to provide an organized process for payment of the integrity fee, they also provided additional time for the 2023 fee to be paid. Ultimately, USCIS provided definitive guidance on March 2, 2023 as to when 2023 fees as well as the 2024 fees would become due. USCIS also provided extended time for the 2023 fee to be paid by no later than May 31, 2023 with the 2024 fee becoming due by its normal due date of October 1st. At the same time additional warning was provided noting that regional centers that do not file their I-956G annual report and pay their fees as required in 2023 would be terminated in 2024.
Despite this guidance, it has come to the attention of the industry that numerous regional centers, including regional centers with active projects and ongoing EB-5 capital raises failed to comply with the RIA and pay their Integrity Fees as required for fiscal year 2023 and fiscal year 2024. Of the hundreds of active regional centers, it has been estimated that as many as 25% or more are now facing Notices of Intent to Terminate. Those terminations could significantly impact the immigration pursuits of the investors who have filed or plan to file under those regional center designations.
Proper due diligence on the part of an aspiring EB-5 investor is a crucial step in ensuring a smooth immigration process. Part of that due diligence should focus on the regional center, their leadership, their track record, and their compliance with the requirements of the program. Filing annual reports and paying the required fees is the absolute minimum expectation one could have of any regional center wishing to remain active in the EB-5 industry. Failure to comply with the most basic requirements of the program should be a major red flag to any investor considering a project sponsored by a regional center that is now facing termination.
CMB has complied with the RIA by paying the required Integrity Fee for all 19 CMB Regional Centers for fiscal year 2023 and fiscal year 2024. We encourage prospective investors as well as existing investors to ask regional centers to confirm that they comply with all program requirements, have paid all required fees, and have made the proper annual filings. Additionally, we encourage prospective investors to ask if the regional center they are considering investing in is currently facing a Notice of Intent to Terminate from USCIS. One should also ask themselves, if the regional center cannot maintain compliance with the most basic requirements of the program, what else have they missed and how confident can I be that my regional center will be able to navigate the evolving requirements of the program?
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