On June 24, 2022, the Federal District Court for the Northern District of California ruled on Friday June 24, 2022 on a motion for a preliminary injunction on the deauthorization of all formerly designated EB-5 regional centers.
The Court ruled against the United States Citizenship and Immigration Services (USCIS) and approved the motion granting the preliminary injunction. The Court stated that USCIS is “preliminarily enjoined from treating as deauthorized the previously designated regional centers based on its almost certainly erroneous interpretation of the [Reform and] Integrity Act. Of course, the agency may do whatever is reasonably necessary to ensure that existing regional centers comply with the [Reform and] Integrity Act, but those centers must presently be permitted to operate within the regime of the [Reform and Integrity] Act.”
As a result of this ruling, EB-5 investors will be able to subscribe to an EB-5 investment and file their Form I-526 as soon as Monday, June 27. USCIS is still allowed to take the necessary steps to ensure that all new regional center applications still comply with the requirements of the Reform and Integrity Act (the “Act”), but all regional centers have been provided with their previous designations. As a result, regional centers that were designated as such prior to the Act, are allowed to process new Form I-526 petitions from EB-5 investors.
Pursuant to the Act, an EB-5 Regional Center must only submit a specific “application for a particular investment offering” with USCIS prior to subscribing new EB-5 investors. Furthermore, USCIS’s pre-approval of such application is not a prior requirement for new EB-5 investors to invest and file Form I-526 in an EB-5 regional center investment offering.
It is important to remember that the Court granted a “preliminary” injunction. As a result, regional centers and investors should move swiftly to benefit from this possibly temporary windfall. While we hope that USCIS will accept the Court’s decision, USCIS will only be enjoined while the litigation is pending or until it engages in a “reasoned decision-making process” regarding how to treat existing regional centers under the Act as proposed by the Court.
Our EB-5 team at CLG will continue to monitor this litigation and keep you informed of any new developments. Should you wish to schedule a call with one of our attorneys, please contact us today.
