EB5 Investors Magazine Volume 3 Issue 3 | Page 43

The most noteworthy changes to the EB-5 Regional Center Program through this Act would have been significant increases in the amount of capital necessary to invest in the United States and to file an EB-5 petition, limitations on the immigrant investors who can apply, new provisions requiring compliance with U.S. Securities laws, limitations on the sources of funds for investment, the creation of an EB-5 integrity fund, and the redefinition and substantial restriction of ‘targeted employment areas.’ Premium and Timely Processing: Under the Immigrant Investor Pilot Program, a qualified EB-5 regional center investor was required to submit a $6,230 filing fee for the I-924 petition. Under the proposed Act, this filing fee would be increased by $10,000—making the new filing fee $16,230, in addition to the increase in the minimum capital for investment in the regional center. Premium Processing would be available, for the first time, for the expeditious processing of immigrant investor petitions for a $1,000 fee, subject to adjustment. In addition to the filing fee payments, each regional center petition would also be required submit a $2,000 integrity fund fee. Limitations on Who Can Apply: In general, any individual wishing to participate as an investor under the Regional Center Program proposed in this Act would be required to pass a background check to verify that they do not have any criminal or civil violations involving deceit within the previous ten years, any civil violations resulting in a liability in an excess of $1 million- involving fraud or deceit, or a crime resulting in a conviction with a term of imprisonment of more than one year. Any person subject to a final order of a State securities commission or the SEC, or another similar body, based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct, or bars the person from association with an entity regulated by such as commission, engaging in the business of securities, insurance or banking would not be eligible for admission. Finally, any person who has engaged in the trafficking of any illicit or controlled substance, espionage, sabotage, intellectual property theft, money laundering, terrorist activities, facilitating human trafficking and human rights offenses, or violation of any regulations regarding foreign financial transactions would not be eligible for admission. The Secretary would retain the authority to suspend or terminate the designation of any regional center, or participation under this program, of any new commercial enterprise or job creating entity that knowingly engages a person in violation of the program based on the aforementioned bars to eligibility. Compliance with Securities Laws: The United States has jurisdiction over the purchase or sale of any security offered or sold by any regional center or any party associated with a regional center. A regional center and affiliated parties would not be precluded from offering or selling a security pursu ant to Regulation S under the Securities Act to the extent that the offering or selling is in compliance with the regulation. Participating regional centers would be required to provide certifications that, after a due diligence investigation, determine that the regional center is in compliance with the securities laws of the United States, and has implemented policies and procedures internally to ensure its continued compliance with those laws. Regional centers would be required to reissue this certification annually. Where regional centers have violated securities regulations, the certifier for the regional center would describe the noncompliance and the actions taken to remedy the noncompliance. The Secretary would then maintain the discretion to suspend or terminate the regional center’s designation, or impose sanctions. Effective Dates: Effective upon the date of enactment, the amount of capital necessary to invest in a regional center project in a targeted employment area (previously $500,000) would be increased to $800,000, and $1 million for non-targeted employment areas. Continued to page 42 WWW.EB5INVESTORS.COM 41