EB-5 Integrity Fund Updates for Fiscal Years 2023 and 2024

Department of Homeland Security Implements Measures to Administer EB-5 Regional Center Program

last updated Monday, March 4, 2024
#EB-5 Integrity Fund #EB-5 Integrity Fund eligibility

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John Burson

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CONTENTS

Key points: 

• EB-5 Integrity Fund Deadline Extension
  USCIS extends the FY 2023 Integrity Fund fee payment deadline to October 1, 2023, ensuring fairness for all regional centers.
• Annual Fee Structure
  Regional centers face an annual fee of $20,000 (or $10,000 for those with 20 or fewer investors) for FY 2024, due on October 1, with termination risks for non-compliance.
• Purpose of the EB-5 Integrity Fund
  Established by the RIA, the fund supports DHS in conducting investigations, monitoring program events, and ensuring lawful funds in the EB-5 Regional Center Program.
• Payment Process and Responsibilities
  Regional centers must pay fees online through Pay.gov, with USCIS accepting proof of payment through receipts or notices from credit card issuers or financial institutions.
• Unanswered Questions and USCIS Clarification Call
  Ambiguities persist regarding which regional centers owe the Integrity Fee, emphasizing the need for USCIS to clarify designation criteria and fee obligations for both previously approved and newly designated centers.

An Overview of the New EB-5 Integrity Fund

What is EB-5 Integrity Fund?

EB–5 Integrity Fund (the Fund) is signed the EB-5 Reform and Integrity Act of 2022 (2022 Act) signed by President Biden on March 15, 2022.

Purpose of Funds

EB-5 Integrity Fund serves multiple purposes. The Department of Homeland Security (DHS) will utilize the fund to:

• Conduct investigations outside the United States.
• Monitor and investigate program-related events and promotional activities.
• Ensure lawful sources of noncitizen investment funds.
• Detect and investigate fraud and other crimes.
• Verify compliance with U.S. immigration laws.
• Conduct audits and site visits.

Integrity Fund Reform

The U.S. Citizenship and Immigration Services (USCIS) has issued a critical notice regarding the EB-5 Integrity Fund, outlining key Fiscal Years 2023 and 2024 updates. The alert emphasizes the importance of complying with the EB-5 Reform and Integrity Act of 2022 (RIA) and introduces EB-5 Integrity Fund Charges modifications to the Integrity Fund fee payment schedule.

According to USICS, the EB-5 Integrity Fund is a fee paid by regional centers to the EB-5 Integrity Fund. The fee is

• $20,000 for regional centers with more than 20 investors and
• $10,000 for regional centers with 20 or fewer investors. 

Starting from FY2024 onwards, the annual Integrity Fund fee is due each year between October 1st and October 31st.

Investors in regional centers are impacted as well. The filing fee for Form I-526E, submitted by EB-5 regional center investors, has been increased by $1,000 to cover the Integrity Fund fees. Consequently, the cost to file this petition is now $4,675.

However, specific crucial questions require answers to understand the functioning of the integrity fund process. This article aims to address all your queries thoroughly.

• What was the original and extended FY 2023 Integrity Fund fee deadline?
• What are the annual Integrity Fund fees for designated regional centers in FY 2023 and FY 2024?
• What are the consequences for not complying with Integrity Fund fees, and how does USCIS enforce compliance?
• What are the EB-5 Integrity Fund's purposes under the 2022 Act?
• What are the annual and reduced fees for designated regional centers according to the 2022 Act?
• How does USCIS estimate total investors for determining Integrity Fund fees?
• What's the payment process for Integrity Fund fees, and where should payments be made?
• What penalties apply for non-compliance, and when are late fees imposed?
• How does USCIS plan to terminate regional centers not paying required fees for FY 2023 and FY 2024?
• What outstanding questions exist about designation criteria and fee obligations under the EB-5 Reform and Integrity Act?
• How does the Settlement Agreement impact Previously Approved Regional Centers and their fees?
• What are the key dates and fees associated with the EB-5 Integrity Fund for FY 2023 and FY 2024?
• What clarification is needed on USCIS's stance regarding regional centers obligated to pay the Integrity Fee?
• How can regional centers maintain designation and comply with EB-5 regulations?
• What steps does USCIS suggest for regional centers to prove proper payment and avoid termination?

Deadline Extension for FY 2023 Integrity Fund Fee

By the RIA, the USCIS had initially set a due date of March 2, 2023, for the Integrity Fund fee. However, recognizing potential confusion and to ensure equitable treatment, the USCIS has extended the deadline to October 1, 2023. This extension encompasses all regional centers, including those designated before the enactment of the RIA.

FY 2024 Integrity Fund Fee

As stipulated by the statute and previous federal register notices, the EB-5 Integrity Fund fee for Fiscal Year 2024 and subsequent years will be due annually on October 1. Non-compliance within 90 days of the due date may result in the termination of the regional center's designation, as mandated by INA 203(b)(5)(J)(iv)(II).

Termination Measures

To enforce compliance, the USCIS will take steps to terminate any regional center that has not paid the required fees for FY 2023 and FY 2024 by December 30, 2023. Integrity Fund fee payments received after this date, including those responding to a Notice of Intent to Terminate, will be rejected.

Annual Integrity Fund Fee for Regional Centers

The annual fee, as outlined in the 2022 Act, is $20,000 for each designated regional center. However, centers with 20 or fewer total investors in their new commercial enterprises in the preceding fiscal year are eligible for a reduced fee of $10,000 to count EB-5 Integrity Fund legal fees.

Method of Approximating Investors

USCIS intends to estimate the total number of investors to determine the applicable Integrity Fund fee by subtracting Form I-829 filings from pending and approved Form I-526 and Form I-526E submissions. While a standardized method is provided, USCIS adjudicators retain discretion to evaluate fees and investor numbers on a case-by-case basis, considering additional evidence provided by regional centers.

Regional centers are urged to adhere to the revised Integrity Fund fee schedule and deadlines to maintain their designation and comply with the EB-5 Regional Center Program regulations.

Table 1: Integrity Fund Fee Structure

Source: https://www.uscis.gov/IntegrityFund

Payment Process and Penalties for EB-5 Integrity Fund Fees

Understanding the Fee Payment Process and Consequences for Non-Compliance

As part of implementing the EB-5 Reform and Integrity Act of 2022 (RIA), the U.S. Citizenship and Immigration Services (USCIS) has provided detailed instructions for the payment process of the annual EB-5 Integrity Fund fees and EB-5 due diligence process. This article aims to guide designated regional centers through the payment procedures, late fees, and potential penalties associated with non-compliance.

Fee Payment Process EB-5 Integrity Fund fee

Designated regional centers must pay the annual Integrity Fund fee before April 1, 2023, and between Oct. 1 and Oct. 31 of each subsequent year. The payment should be made online directly at Pay.gov, a U.S. Department of the Treasury system. Accepted payment methods include valid credit or debit cards and direct debits from a U.S. bank account. A single credit card can be used for up to $24,999.99 in one day.

Official Notice and Responsibility

The Federal Register notice and the USCIS webpage are the official notices to regional centers regarding the amount owed and the due date. Regional centers are responsible for determining their total number of investors and whether they owe the reduced fee of $10,000 or the standard fee of $20,000 EB 5 investment amount. No additional invoices will be sent beyond the official notice.

Proof of Payment

If a regional center is required to provide evidence of fee payment, the USCIS will accept a copy of the Pay.gov receipt or a notice/statement from the payer's credit card issuer or financial institution.

Form I-526E Filing Fee Increase

With the help of EB-5 Integrity Fund fee calculator, Effective Oct. 1, 2022, the filing fee for Form I-526E, Immigrant Petition by Regional Center Investor, will be increased by $1,000 to incorporate the Integrity Fund fees.

Late Fee and Termination

Under the 2022 Act, a reasonable penalty fee will be imposed on a regional center that fails to pay the annual Integrity Fund fee within 30 days after the due date. The late penalty rates will be released later for EB-5 Integrity Fund eligibility.

While late penalties will not be charged for EB 5 funds source due in fiscal year 2023, USCIS will terminate the designation of any regional center that fails to pay the required fee within 90 days after March 2, 2023. Beginning Oct. 1, 2023, steps will be taken to terminate a center's designation if the fee is not paid by Dec. 30. Termination will not be automatic; regional centers will receive a notice of intent to terminate and an opportunity to prove proper payment before receiving a notice of termination.

Table 2: Key Dates and Fees

Source: https://www.federalregister.gov/public-inspection/2023-04295/integrity-fund-fee-regional-center-integrity-fund-fee

(* Reduced fee for centers with 20 or fewer total investors in their new commercial enterprises in the preceding fiscal year.)

Unanswered Questions Surrounding EB-5 Integrity Fee

USCIS Clarification Needed

Ambiguities Persist Regarding Designation Criteria and Fee Obligations for Regional Centers

As the U.S. Citizenship and Immigration Services (USCIS) implements the EB-5 Reform and Integrity Act of 2022 (RIA), questions linger regarding which regional centers must pay the Integrity Fee. A recent Federal Register notice from the Department of Homeland Security (DHS) provided vital details about the annual fee requirements but left a critical question unanswered.

The Integrity Fee Overview

The RIA mandates an annual fee, termed the Integrity Fee, to be collected from designated regional centers. For regional centers with more than 20 investors in the preceding fiscal year, the fee is $20,000; for those with 20 or fewer investors, the fee is $10,000. USCIS aims to collect this fee to finance the EB-5 Integrity Fund.

Table 3: Outstanding Questions and Implications

Source: https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-questions-and-answers-updated-dec-2023

Which Regional Centers Owe the Fee?

The RIA's language specifies that the fee will be collected from "each regional center designated under subparagraph (E)." However, the recent notice does not clarify which regional centers fall under this designation. USCIS suggests that all regional centers, designated before and after the RIA passage, must pay the Integrity Fee.

Settlement Agreement and Previously Approved Regional Centers

Initial USCIS interpretations implied that all regional centers approved before the RIA were categorically deauthorized. However, a Settlement Agreement modified this stance, clarifying that Previously Approved Regional Centers could maintain their designation by filing a Form I-956 by Dec. 29, 2022. This filing was crucial for Previously Approved Regional Centers to operate under the RIA.

Unanswered Questions Persist

The notice fails to clarify whether Previously Approved Regional Centers that filed a Form I-956 by the deadline are indeed "designated under subparagraph (E)." The distinction is vital, as USCIS seeks to collect the Integrity Fee that should have been due on Oct. 1, 2022, with payment expected by April 3, 2023.

 
 
 

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