The Office of the Inspector General (OIG) of the Department of Homeland Security (DHS) recently released a report proposing 10 recommendations to improve the adjudication of L-1 petitions. The report was initiated at the request of Senator Charles Grassley (R-IA) to examine the potential for fraud or abuse within the L-1 visa program. The report echoes many of the concerns of U.S. companies seeking to utilize the L-1 visa to transfer specialized knowledge or managerial talent from overseas. OIG makes specific suggestions to U.S. Citizenship and Immigration Services (USCIS) to ensure that adjudications of L-1 petitions are more consistent and to enhance information sharing and training among the various agencies charged with determining L-1 eligibility.

Background on L-1 Visa Program

The L-1 visa program is intended to enable U.S. companies to temporarily transfer intracompany employees to the U.S. to perform services in a managerial or executive capacity (L-1A) or to perform services as a specialized knowledge worker (L-1B). The L-1 employee must have been employed by a foreign subsidiary or affiliate of the U.S. company for at least 12 months in the preceding three years. The L-1 visa may also be used by foreign companies seeking to establish a U.S. office to transfer an employee to the U.S. to help set up the office.

To obtain an L-1 visa, a petitioning company must file a petition with USCIS requesting a determination that there exists a "qualifying relationship" between the U.S. and foreign entity and that the intended employee meets the requirements of the L-1 category (i.e., that the employee possesses specialized knowledge or that the employee operates in a managerial or executive capacity). USCIS examines the qualifications of the employee and the petitioning company to decide whether or not the L-1 requirements are met. Once a petition is approved, the foreign employee may apply for an L-1 visa at a U.S. consulate abroad.

Alternatively, companies may also file a "blanket petition" with USCIS requesting a determination that the U.S. company and specified foreign affiliates or subsidiaries have a qualifying relationship under the regulations. Once approved, intracompany transferees may apply for L-1 visas directly at a U.S. Consulate abroad without first obtaining an approved individual L-1 petition from USCIS. With a Blanket L application, it is the consular officer's responsibility to determine whether the employee meets the requirements for specialized knowledge or managerial/executive capacity.

Canadian employees may apply for L-1 status at a Canadian point of entry where a Customs and Border Patrol (CBP) officer determines their eligibility. 

Current State of L-1 Visa Program

In the past few years, there has been a sharp drop in USCIS's approval rate of L-1B petitions. In 2006, 94 percent of L-1B petitions were approved. In 2011, only 73 percent were approved. There has also been a corresponding increase in Requests for Evidence (RFEs) on L-1 petitions filed at USCIS service centers, often focusing primarily on a request that the petitioner prove the employee's specialized knowledge. Foreign companies seeking to establish a new office in the U.S. have also found much greater scrutiny of their petitions. 

Problems Defining "Specialized Knowledge"

OIG Recommendations:

  • Publish new guidance to clarify the USCIS interpretation of specialized knowledge. This guidance should be sufficiently explicit to give adjudicators an improved basis for determining whether employees of a petitioning entity possess specialized knowledge.

The OIG's report focuses on the lack of clarity around the definition of "specialized knowledge" for adjudicators examining L-1B petitions and the ensuing lack of consistency in L-1B determinations. U.S. companies seeking to utilize the L-1 program to transfer skilled employees from their foreign affiliates encounter increased scrutiny and routine issuance of RFEs. Since adjudicators have no clear guidance on what constitutes "specialized knowledge" as they examine L-1B petitions, they are forced to rely on gut instinct to determine whether an employee possesses specialized knowledge, according to the OIG report. Notably, many L-1B adjudicators told OIG investigators that the definition of "specialized knowledge" was "constantly changing," "unquantifiable" and "open to interpretation."

Lack of Coordination Between Various Adjudicating Bodies

OIG Recommendations:

  • Screen L-1 beneficiaries against a list of persons previously denied visas by DOS consular officers.
  • Develop broader working-level communications opportunities between USCIS examiners adjudicating L-1 petitions and consular officers adjudicating L visa applications.
  • Provide thorough L-1 visa training to all CBP officers processing L-1 travelers at ports of entry or preclearance/preflight stations in Canada.
  • Establish fraud fee collection guidelines for CBP officers processing L-1 travelers.
  • Request USCIS to provide CBP officers at the northern border ports of entry and preclearance locations with access to Validation Instrument for Business Enterprises (VIBE) to assist in L-1 petition processing.
  • Grant CBP access to VIBE to assist in L-1 petition processing and promote program integrity.

Another theme highlighted in the OIG report is the disparity between various adjudicating bodies in determining L-1 eligibility. Examiners at USCIS Service Centers, consular officers at U.S. consulates and CBP officers are all responsible for making L-1 eligibility determinations.

Examiners at USCIS service centers are highly trained and examine L-1 petitions daily. CBP and consular officers, on the other hand, may see L-1 applicants only infrequently and are not provided with the same access to USCIS guidance, manuals, training and databases (including VIBE, which provides information on companies' operational and financial viability). Therefore, L-1 eligibility determination is inconsistently applied among these diverse agencies.

The OIG report seems to hint that Service Centers should consider consular denial of an L-1 visa filed under a blanket petition if a subsequent individual petition is then filed with USCIS. For companies that first seek an L-1 visa for an employee using a blanket petition and then file an individual petition for that employee after the visa is denied, this could mean even greater scrutiny. Since this is not law or USCIS guidance, however, it is unclear whether the recommendation will change USCIS Service Center decision-making in these cases moving forward.

Vulnerabilities in New Office Petitions

OIG Recommendations:

  • Make a site visit a requirement before extending one-year new office petitions.

As mentioned above, the L-1 program allows a foreign company to transfer a managerial or specialized knowledge worker to the U.S. to help establish a new office. The OIG report expressed concern that new office petitions are erroneously approved without adequately establishing that the role of the L-1 employee qualifies under the regulations. Since the information in new office petitions tends to be "forward-looking and speculative," they are "inherently susceptible to abuse." Site visits after the one-year period of initial approval would, according to the OIG report, curb abuse of new office petitions.

Inconsistency in Applying Anti "Job Shop" Provisions

OIG Recommendations:

  • Create a regulation on the Visa Reform Act anti "job shop" provisions that will increase consistency in decision making.
  • Update existing guidance on the Visa Reform Act anti "job shop" provisions that USCIS examiners can use in the interim while a regulation is created.

The OIG report expressed concern that the integrity of the L-1 visa program was damaged by inconsistent application of anti "job shop" provisions in the Visa Reform Act (VRA) that have not been translated into regulations. These provisions are intended to prevent L-1 petitioners from using L-1B applicants at third-party worksites that are not related to the petitioning company. The lack of a codified regulation results in inconsistent adjudications of L-1 petitions where "job shop" concerns are raised. Guidance to USCIS examiners may be confusing, resulting in incorrect application of VRA provisions. Any time there is the risk of inconsistent adjudication, the integrity of the L-1 visa program is threatened. Adjudicators should have the same understanding and clarity around how to apply the anti "job shop" provisions to L-1 petitions.

Conclusions

Based on the acknowledged deficiencies in the L-1 visa program and the increased scrutiny of L-1 petitions, it is important for companies to invest time establishing evidence of an L-1 employee's specialized knowledge or managerial capacity. Companies seeking to establish new U.S. offices using the L-1 program must be prepared for increased scrutiny of their financial viability and bona fides and be prepared for a backlog in adjudication of extensions beyond the initial one-year period if on-site visits become a requirement.

Employers seeking to utilize an L blanket petition to bring L-1B intracompany transferees to the U.S. should ensure that their employees are prepared to articulate their specialized knowledge to consular officials. In addition, employers can expect increased scrutiny if, after an employee's L-1 visa under the blanket is denied, the company files an individual petition for that employee with USCIS.