Increasing Intensity in Investor Visa Evaluations

In July 2019 the Government Accountability Office published Actions Needed to Improve E-2 Visa Adjudication and Fraud Coordination. Since then, consular officers in Toronto have been asking some E-2 Non-immigrant Investor Visa applicants for additional evidence following their visa interview. Some applicants had to submit additional evidence of the investment, source and control of invested funds, operations of the US enterprise, and the “more than marginal” income from the business (9 FAM 402.9). Other applicants were asked to provide detailed personal information including address history going back 15 years, and telephone numbers, e-mail addresses, and social media handles for the past 5 years.

The GAO’s report found that approximately 80% of the total applications for E-2 classification submitted between fiscal years 2014 through 2018 were approved. The Department of State adjudicated roughly 43,200 of approximately 54,000 E-2 applications submitted during this time. The rest were adjudicated by US Citizenship and Immigration Services. In addition to assessing the characteristics of foreign nationals who sought E-2 status, and the policies and procedures for confirming that an applicant qualifies for an E-2 visa, the GAO evaluated efforts to assess and address potential E-2 fraud.

According to the report, State officials consider E-2 visa fraud to be lower risk compared to other visa types. By contrast, USCIS considers E-2 fraud to be a significant issue. As a result, USCIS uses fraud assessment technology to determine if a business is financially viable and conducts site visits if fraud is suspected. Although DOS and USCIS hold a quarterly teleconference to discuss fraud risks, this conference “was cancelled 7 out of 8 times in 2017 and 2018.”

As a result of its findings, the GAO recommended that the Department of State:

  • Provide more E-2 training or resources to consular officers,
  • Establish a regular coordination mechanism with USCIS to share information on E-2 fraud risks,
  • Develop minimum standards for E-2 company registration programs (such as standards for how often companies are to be re-vetted),
  • Develop and implement a process to ensure that consular posts maintain required E-2 visa application documentation.

In response, DOS plans to:

  • Increase the frequency and specificity of E-2 content through webinars, workshops, and guidance, and by developing subject matter experts domestically who can provide consultative services on an as-needed basis for business and tax-related documents.
  • Require a minimum 5-year mandatory review of companies registered at any post.
  • Reinforce its E-2 visa documentation retention policy in regular policy guidance to consular managers.
  • Hold regular, high-level coordination meetings with USCIS to include coordination on E visa adjudication standards.

Notably, USCIS maintains a specialized office of five immigration officers that review and adjudicate all E-petitions at the California Service Center (as of July 2018). This office may be the model for the subject matter experts that DOS intends to develop. Subject matter areas may include specific challenges identified by consular officers, such as:

  • corporate ownership structures,
  • source of funds,
  • whether funds were placed “at risk,”
  • the “substantial” nature of an investment,
  • marginality, and
  • skills of essential employees.

Specifically, consular officers expressed challenges determining the licensing requirements for a real and active enterprise, the valuation of a business for a “substantial” investment in a rare or unique business, and the reliability of future projections in evaluating the “marginality” requirement. Although some consular posts consider E-2 applications to pose a lower risk of fraud, consular officers also reported that E-2 visa applications are “complicated and resource-intensive.”

According to the fraud team at one consular post, a 2016 validation study

showed that even prospective E-2 visa enterprises that meet the applicable requirements at the time of application can become unqualified over time, and that adjudicators should take long-term viability into account when determining the marginality of a business.

This same study concluded that “almost one-quarter of food service companies in its study had failed within about three years, and nearly half of E-2 visa holders for those companies did not depart” the US after the company failed.

The Department of State may request that USCIS conduct site visits to help in its adjudication of E-2 visa applications. Between fiscal 2014 and fiscal 2018 USCIS received 10 site visit requests from DOS, and conducted 7 site visits in response. In three cases no fraud was found, three more cases were inconclusive, and one “incidence of fraud” was found involving a restaurant. According to USCIS, the most commonly encountered “fraud or noncompliance issues” are enterprises that are not operational, not engaged in any business activities, or not operating as stated in the petition.

In addition to providing insight into adjudication of E-2 visa applications, the GAO report includes reliable stats on approval rates by consular section, and USCIS procedures for adjudicating E-2 petitions.  E-2 visa applications will need to be more thoroughly prepared while staying within the page constraints. E-2 visa applicants should also be aware of the increased likelihood of a request for detailed personal information related to e-mail, telephone, numbers, social media, addresses, and employment history following their visa interview. Upon visa approval, E-2 visa holders should be prepared for site visits and attempt to notify the consular post that issued the visa of any changes to the company’s US address. In light of the GAO’s relatively favorable opinion of USCIS’s E-2 adjudication procedures, E-2 visa applicants at US should expect similar policies and procedures at US consulates.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s