The Impact of USCIS’ Policy Alert
About EB-5 Redemption
Why USCIS' new policy alert on EB-5 redemption gives USCIS
broad authority to find unfitting redemption agreements in
petitions of immigrant investors.
By Kristal Ozmun
U
.S. Citizenship and Immigration Services (USCIS)
issued a policy alert to “clarify” its policy on EB-5
redemption agreements on Oct. 30, 2018. In fact, USCIS
officially and expressly changed, as opposed to merely
clarified, its policy on EB-5 redemption agreements. The
new policy alert provides USCIS with broad authority to
find improper redemption agreements in connection with
immigrant investor petitions. This article explores the new
policy alert by reviewing its historical context.
redemption agreements in the EB-5 sphere. Izummi held
that an immigrant investor may not execute an agreement
with the new commercial enterprise (NCE) requiring it to
repurchase his or her interest in the company at a set price
before completing payments under a promissory note, or his
or her two-year conditional permanent resident period. The
facts of Izummi involved a sell, or “put,” option set forth in
the NCE’s limited partnership agreement allowing immigrant
investors to require the NCE to repurchase their interests
in the company at a set price. Izummi found that the put
option violated the at risk requirement because it bore the
hallmarks of a debt arrangement. This reasoning, while
sensible, conflates two separate regulatory requirements.
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MATTER OF IZUMMI
Matter of Izummi first officially introduced the concept of
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EB5 INVESTORS M AGAZINE
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