The mainland Chinese EB-5 backlog has caused consternation among the entire industry, particularly among those who invested for their derivative children who may now age out by reaching age 21 before receiving a green card. However, thanks to a bold immigration strategy enacted two and a half years ago, Wolfsdorf Rosenthal LLP recently earned a significant victory for one of our clients – an immigrant visa for a 24 year old derivative child.
The Child Status Protection Act (“CSPA”) allows a derivative child to subtract only the time the immigrant visa petition (Form I-526) was pending from his or her actual age. However, the CSPA does not provide “age-out” relief for the time after the I-526 petition is approved unless the child’s age was frozen by taking steps to “seek to acquire” permanent resident status when a visa was available.
Our client filed Form I-526 in April 2014 – just 20 days before his derivative child’s 21st birthday – and was approved in December 2014. Before May 2015 there was no waiting line for mainland born Chinese EB-5 applicants, so a visa was available for anyone with an approved I-526 petition. Therefore, on April 22, 2015, just days before the EB-5 waiting line was established, we “sought to acquire” permanent resident status for the petitioner and each derivative family member, pursuant to the Department of State’s Foreign Affairs Manual (“FAM”).
The FAM provides a few different options to satisfy the “sought to acquire” standard, one of which is filing Form DS-260 within one year of a visa becoming available. At the time (before the FAM underwent significant reorganization and editing), 9 FAM 42.42 N12.6 included a parenthetical, specifically allowing applicants to file the “old” Form DS-230, the paper-based precursor to Form DS-260. This proved to be a vital life-line since the National Visa Center (“NVC”) typically takes months to issue a fee bill and allow the filing of Form DS-260. In fact, our firm filed dozens of DS-230 applications to protect children from aging out based on this guidance. Just to be safe, we filed dozens of Form I-824 applications for these clients as well.
Fast forward to November 2017 when the family was finally scheduled for their immigrant visa interview at the U.S. Consulate in Guangzhou. The case was delayed by the issuance of a Notice of Intent to Revoke, which took over two years to overcome. Despite our efforts to lock in the derivative child’s age, the U.S. Consulate denied the derivative child’s immigrant visa, stating, “The Consulate has thoroughly reviewed your case and determined that neither the provisions of the Child Status Protection Act nor the PATRIOT Act are applicable.”
We were allowed to submit a legal brief to appeal this decision. In our brief we argued that she was in fact protected under CSPA because she had timely sought to acquire lawful permanent residence and therefore, she had locked in her age. After pointing to the regulations in effect at the time, the Consulate reversed its decision and issued the immigrant visa. Two and a half years later, at age 24, our strategy paid off.
Although this client was successful, it is only because she locked in her age while a visa was still available in April 2015, days before the May 2015 Visa Bulletin was published establishing a cut-off date for Chinese EB-5. For CSPA to protect a child, one’s visa must be “available” when one seeks to acquire lawful permanent resident status. Therefore, very few Chinese derivative children remain eligible for protection under CSPA because of the backlog. Also, filing Form DS-230 is no longer an option according to the FAM, although court cases have held that almost any steps can be used to argue this point, including hiring an attorney to take steps.
As we look to the future of the EB-5 program, investors from other countries should heed this important lesson. Based on current filing volume, we expect a cut-off date to be established late in FY 2018 (maybe in August or September 2018) for EB-5 investors born in Vietnam, and it is possible that a cut-off date could be established for India and Brazil in FY 2019. If there is no backlog or cut-off date, filing a Form I-526 petition even one day before a child’s 21st birthday may be sufficient. However, if the investor is subject to a backlog, CSPA protection may be unavailable. The good news is the NVC will now open the file to allow for payment of the visa fees, even if a visa is not available. This allows the applicant to take steps to seek to acquire permanent residence, however, if the visa is not available, such steps may not provide protection.
It is critical that Congress protect children from aging out, especially since so many EB-5 applicants only invested so their children can be educated in the U.S. Many solutions have been proposed, including correcting the program to allow for a maximum of 10,000 investors, rather than counting both investors and their family members. Another proposal which urgently needs attention is to allow the derivative child to be substituted for the principal applicant, without losing his or her place in the waiting line.
If your child is in danger of aging out, it is imperative to properly plan for any available CSPA protections as part of a comprehensive immigration strategy.