Consular Troubles for Business Travelers

Consular Troubles for Business Travelers: Limited Availability in Business Class on BAHA Airways*

by Steven D. Heller, James O’Malley, Stephen Pattison, and Karin Wolman

Steven D. Heller is the director of Heller Immigration Law Ltd., a UK-based US immigration law firm established in 2008, and Of Counsel to Chavin Immigration Law Office in London. He currently divides time between the UK and New York. He has been practicing US immigration law since 1992, with particular interest in family matters and inadmissibility issues. Steven has worked in both the public and private sectors, including positions with the US Embassy-London, INS/USCIS, the New York Association for New Americans, and small private law firms in New York, Washington, DC, and London. A graduate of Binghamton University and the Georgetown University Law Center, he has spoken on US immigration matters before various groups and associations, including the American Bar Association, the American Academy of Adoption Attorneys, and AILA. He has been quoted in UK media and appeared on CNN as an expert in US immigration law. He has published articles on US immigration in various journals and is co-author of US Citizenship for Dummies. He is co-chair of the AILA -New York Chapter Consular Liaison Committee and a member of the AILA-EMEA Chapter Consular Liaison Committee.

James A. O’Malley a graduate of the National University of Ireland and New York Law School, has been handling U.S. Immigration matters for over 25 years. Mr. O’Malley is admitted to practice in the State of New York, the Second Circuit Court of Appeals and the U.S. Supreme Court. He is a member of the American Immigration Lawyers Association (AILA). Mr. O’Malley was honored by Irish America Magazine in 1992 as one of the 100 most important Irish Americans and in 2008 as one of the top 100 Irish American Lawyers. Areas of specialization include: executive and managerial transferees, investment visas, professional and specialty occupation visas, outstanding researcher, extraordinary ability, entertainment visas, permanent residence and issues of dual citizenship.

Stephen Pattison is the owner of the Law Offices of Stephen Pattison, LLC in Gilford, New Hampshire and represents clients in complex business immigration and consular processing cases. He is a graduate of Southern Methodist University and the University of Texas Law School. Steve spent 28 years with the Department of State as a consular officer and manager and worked in London for Magrath LLP and in Washington D.C. for Maggio and Kattar before opening his own offices in 2014. He is past president of the Rome District Chapter and serves on AILA’s DOS Liaison Committee.

Karin Wolman is principal of the Law Office of Karin Wolman, PLLC, serving businesses of all sizes, non-profit organizations and individuals, across industries from healthcare and the sciences, academia, finance and technology, to the performing arts and entertainment, fine and graphic arts and new media, culinary arts, fashion and beauty, architecture and design. Ms. Wolman is a frequent speaker at local and national conferences on topics in immigration law ranging from aliens of extraordinary ability to naturalization, for organizations including AILA, the Practising Law Institute, New Jersey Institute of Continuing Legal Education, and New York State Bar Association. Ms. Wolman has been recognized among the top 5% of attorneys in the New York Metro area by SuperLawyers, and has a 10/10 “Superb” rating on Avvo. A graduate of Columbia University and UCLA School of Law, she worked at the Brooklyn Academy of Music when the O & P visa categories were first introduced. She has served since 2002 as moderator of the AILA InfoNet forum on O & P visas, as well as other forums, and numerous local committees for the New York chapter of AILA.

*This article is principally based on the Practice Pointer: Consular Red Flags in E and L Visa Adjudications, by AILA’s Business Immigration Response Team, with additional contributions and perspectives from the authors.

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Consular attitudes toward business visa applicants have become a lot tougher. From readjudications of U.S. Citizenship and Immigration Services (USCIS)-approved petitions to heightened scrutiny of applicant behavior and intentions, the once cherished nonimmigrant worker is now viewed with suspicion and scorn. Visa applicants seeking to do business in the United States are no longer welcome to Business Class treatment, they’ve been downgraded-­ not to Economy Plus, not even Basic Economy, but to Trump Economy: “Buy American and Hire American” (BAHA) (which, by “putting American workers first,” means putting foreign workers last).

Below, we sample some consular attitudes, experiences and outcomes–and offer some helpful tips.

TICKETING-INCLUDE THE COPY FOR THE KCC TO ENSURE PIMS TRANSFER

For petition-based business visas, the good news is that the timing and accuracy of what consular officers may find in the Petition Information Management System (PIMS) have changed for the better. Include a complete copy of the petition and any RFE response for the Kentucky Consular Center. The KCC prefers two-sided copies and a binder clip, but no longer removes or discards any supporting documents; if you put the exhibits in the copy, they will be in PIMS! Timing of uploads varies by Service Center and case type- Hard copies are sent physically from Service Centers to Kentucky, and transmission time is 5 days from the California Service Center; 3 days from Vermont or Nebraska. Thereafter, from receipt at the KCC loading dock until upload to PIMS, time is 1 day for O, P, T, and U cases; three days for H, L, and any Extension of Status (EOS)/Change of Status (COS) petitions. If a week or more has elapsed, client has been interviewed and petition still is not showing up in PIMS, or if something has been sent for revocation and you need to track it, it is possible to contact KCCDirector@state.gov.

CHECK-IN

For all business nonimmigrant visa applicants, prudent counsel will always request the traveler’s Consular Electronic Application Center (CEAC) login and password, and will closely review, edit, and approve the contents of the applicant’s entire Form DS-160. Since these electronic visa applications live on long after supporting documents have been deleted and forgotten, it is critical to alert the applicant to any particular issues that may be of special interest to the interviewing consular officer, or that may come back to haunt them in the future, approving the contents, and either allowing the visa applicant to submit it, or submitting it on the business nonimmigrant visa applicant’s behalf.

EXCESS CONSULAR BAGGAGE

Consular officers are always on the lookout for perceived threats to the homeland. When it comes to business visas, threats are not just about safety and national security, they include U.S. jobs and U.S. job creation. Notwithstanding prior visa issuances, does the visa applicant really deserve the visa for which s/he is applying? Is s/he taking a job away from a U.S. worker? Regardless of whether USCIS approved a petition, does the visa applicant meet my definition of the eligibility criteria? The landscape of business visa adjudications has shifted from one of “trust, but verify” to one of “doubt and obstruct.”

Consular officers have always had specific “red flags” that impact their adjudication of work­ authorizing non-immigrant visa applications. As a general rule, anything that appears to a consular officer to involve a manipulation or distortion of the regulations in an attempt to fit an applicant into a designation that he or she clearly does not merit will be a huge red flag. What follows is a list of some of the most identifiable consular concerns.

E VISAS

Overly Complicated Company Structures

Consular officers take pride in their ability to process complex E visa cases, and many of them have a pretty sophisticated understanding of complicated business structures, but they also have limited time to analyze them. If an E visa application describes a corporate structure that cannot be quickly or easily grasped, this will be an irritant for the E visa unit and will raise questions about the credibility of the arrangement for E-2 purposes. Consuls are aware that the existing work authorizing visa categories are inadequate and that many companies struggle to find a fit within the E category. However, they are also leery of the creative use of business law to craft an elegant, and intricate, ownership structure that stretches the boundaries of ownership and control.

Takeaway: If the structure of the business that is seeking E-2 designation is too complicated to explain in one paragraph, or requires a detailed organizational chart, a favorable visa outcome is less likely.

Show Me the Money: Obscure Money Trails and Cute Fiscal Arrangements

Investment funds provided by E-2 investors must belong to the investor and must be at risk when the visa application is presented. Both of these requirements give consular adjudicators heartburn when the “at risk” funds do not appear to be irrevocably committed, and when the chain of ownership of the funds is obscure.

Escrow arrangements can be a red flag for consuls adjudicating E visas if they are not transparent and straightforward. The E-2 regulations acknowledge that escrowed funds are considered to be at risk when the conditions of escrow have them moving out of escrow once the visa has been approved. But for consuls, the devil is in the details. Does the escrow agreement clearly set forth this contingency? Is the escrow arrangement one that is sensible and irrevocable, such as finalizing the purchase of an investment property, or is it one that involves too many moving parts and contingencies, such as the sale of an asset unrelated to the investment itself that is anticipated to result in sufficient funds for the investment? And, crucially, does the arrangement make sense? Would a prudent buyer and a prudent seller find it acceptable? If a consul doesn’t agree, the arrangement is at risk of being seen merely as an effort to minimally satisfy the E-2 requirements, not a legitimate commercial arrangement.

Similarly, an investor who has only recently obtained the investment funds presented to satisfy the E-2 requirements is likely to face closer scrutiny to confirm that the assets are legitimately her own, and not part of an arrangement to help her application pass muster. This is particularly problematic when a younger investor represents that the funds in her possession came from a recent inheritance or were given or loaned to her by a close family member. Although both gifted funds and family loans can be used to demonstrate investment funds for E purposes, consuls are aware that for many would-be E-2 investors, the principle objective may be to establish themselves in the United States on behalf of a family business or enterprise rather than to support a genuine entrepreneurial endeavor they have launched on their own. If that investor can’t adequately demonstrate that the investment funds arose from their own commercial or investment activity, a consul may well conclude that the origin of the funds lies in a third party, who will ultimately control their utilization in the commercial endeavor, or that the financial arrangement is principally designed to achieve another objective, to create a foothold in the United States, rather than to invest in the United States and create jobs.

Takeaway: If the financial arrangements a client presents to you to demonstrate her ownership and control of at-risk investment funds seem unusual or murky, you can count on them appearing the same way to the adjudicating consul.

Investment Amounts Are Too Small

E regulations do not specify a numerical bottom line below which an investment is not considered to be substantial, but, in general, if the proposal presented to the consul involves a small enterprise, a new office, or a sole proprietorship, the size of the investment proportionate to the value of the business will be key; if your client wants to invest $50,000 in a business valued at $150,000, that may be considered substantial, whereas the investment of the same amount in a business valued at $1 million may not.

Smaller investors also face greater difficulty demonstrating that their investment will enable them to achieve their commercial objectives and, importantly, advance the objectives of the E-2 visa category, which is to encourage and increase investment in the United States and grow jobs. Consuls are not investment advisors; however, they are pretty good at identifying prospective investors who have no realistic prospects of advancing either E-2 objective.

Takeaway: Market research that can compare investment amounts for similar start­-up commercial endeavors can be valuable in addressing consular concerns about substantiality. In some cases, expert opinion letters confirming that the investment amount is credible and proportionate can be helpful. A small investment that is submitted along with ample documentary evidence of how that investment will be used to grow the U.S. business and create jobs can pass consular muster, whereas one that does not will probably fail.

No Job Creation

Many investors consider the E-2 visa principally as a means to establish themselves and their family in the United States. This does not sit well with consular adjudicators, especially in light of BAHA. An E investment vehicle that has no other employees and an investor with no credible business plan explaining how his investment will lead to job creation makes a marginality denial much more likely. Similarly, an E-2 enterprise that seeks to bring in more than a handful of foreign employees in E status is likely to get pushback.

Takeaway: Use the business plan to show U.S. job creation and be cautious in suggesting excessive foreign hires. When seeking E visas for essential employees, be prepared to explain why such knowledge is essential to the company’s business and why a local U.S. worker can not be recruited for this position, and if such recruitment was even considered.

No Storefront

A business enterprise that operates out of a virtual office or a private home pushes a lot of hot buttons. How can such an enterprise effectively employ individuals other than the investor? Is the business actually engaging in commercial activity? Is it viable? Is the enterprise in compliance with local U.S. laws and regulations if operating a business from a non­ commercial-zoned property? The more times a consular officer has to ask herself these questions, the less likely the investment is to pass muster. Even a start up with just one employee, the investor, will have less difficulty demonstrating credibility if the enterprise has actual offices, signage, and a legitimate work space.

E Visa Renewal with No Changes

E Visa Units are like elephants; they never forget. A renewal of E-2 registration and visa will invite scrutiny of the initial business plan in light of the company’s activities at the time of the renewal. If the original submission promised income growth and job creation, and neither took place, the investor faces an immediate hurdle of having to explain why as re-approval is not a given. Similarly, if the initial investment was for one kind of enterprise, but the renewal makes it clear that the commercial activities of the business were of an entirely different, unrelated kind, renewal might be problematic, especially if the consul concludes that the investor never intended to conduct that kind of business in the first place.

Not Enough Bilateral Trade/Intangible Trade

Eighty percent or more of all E visa adjudications are for E-2, not E-1, visas. This means that many consuls may be unfamiliar with the E-1 requirements and may have difficulty identifying the kind of bilateral trading activity requisite for E-1 eligibility. This is particularly true when the trade itself is of limited quantity, and when there is insufficient evidence of ongoing trade over time. An E-1 submission based on a handful of sizeable trades, for example, will need to be accompanied by considerable credible evidence that future trading activity will take place, in the form of signed contracts, for example, to satisfy the consul that the trade is in fact ongoing and was not a one-off.

Another consular concern arises when the trading activity itself involves non-tangible goods, such as services. While consuls understand that the reality of trade in 2018 involves far more than coal and cotton, they are increasingly asked to evaluate sophisticated and esoteric rationales for E-1 eligibility using a regulatory framework that reflects an economic past when most trade involved commodities that could be seen and measured.

Takeaway: Trade in the 21st century does not always fit neatly into 20th century concepts of E-1 trade, so E-1 visa applicant needs to be prepared to describe clearly and succinctly commercial trading arrangements that involve the ongoing exchange of professional expertise; if you have trouble understanding and documenting the activity, so will the consul.

Change of Status in the United States

Someone legally present in the United States can obtain a change of status to E-1 or E-2 status, but that may not always be a good idea. Consular officers, not USCIS adjudicators, are the experts in E adjudications, and for many consuls, the appearance of an E-2 visa applicant following a change of status requires very careful scrutiny. It’s not that consular officers think their USCIS counterparts are not up to the task of determining whether someone qualifies for E status, but they consider the personal interview to be the crucial determining factor in deciding whether an individual qualifies for an E visa. A paper adjudication by USCIS will carry little weight with a consul; consular officers will review the entire case as if it were a first-time submission, and if the visa interview does not go well, or if the submission is deficient, a denial is likely, despite USCIS approval of the change of status request.

Consuls may be concerned about the rationale given by the applicant for having changed status in the first place. Did the applicant obtain a B visa for a short business trip, only to have stayed for almost six months before applying to change status? For a consul, this could point to misrepresentation. If the E-2 enterprise was one that might have encountered some difficulties passing muster at an initial consular adjudication because of questions of marginality, the size of the investment, or the expertise of the investor, the consul will frequently apply more scrutiny to the case and the investor could face a very probing examination. This could lead to a conclusion that the investor opted to change to E status out of concern that a consular adjudication might not succeed. Too often, this becomes a self­ fulfilling prophecy.

Extended Prior Stays in the United States

Consuls may be concerned by prospective trader or investor actions that have little to do with the bona tides of the investment or trade and everything to do with the investor’s motives. If an investor has been spending extended periods of time in the United States, for example, and ultimately pursued E status after learning that this could no longer be done, such as after being denied entry at a U.S. port of entry, at the completion of an extended period of student status, or following the expiration of a five or seven year stay in L status, a consular adjudicator may question the applicant’s intentions in now seeking E status. This can happen even when the E investment or trading activity is well documented, credible, and economically viable. A consul who considers that an E visa applicant’s actions point towards an intention to remain indefinitely in the United States as the primary purpose for the E application will deny the applicant for having immigrant intent.

Immigrant Intent

While the FAM clearly states that an applicant for an E visa does not need to have a residence in a foreign country which the applicant does not intend to abandon (and, in fact, the alien may sell his or her residence and move all household effects to the United States), the consul must discern an applicant’s unequivocal intent to depart the United States upon termination of E status. An applicant who is the beneficiary of an immigrant visa petition will incur strict consular scrutiny and recent changes to the FAM suggest an application to adjust status will likely lead to an automatic refusal.

L VISAS

Between 1997 and 2017, L visa applications doubled. As a result, consular skepticism has increased, too. This is true whether the applicant is applying under an approved blanket L petition or as the beneficiary of an individual petition. Here are some key concerns:

Insufficient Specialized Knowledge

Consular officers who regularly see high numbers of L-IB applicants with the same generic job description being transferred to a U.S. operation will wonder just how specialized a worker can be if every other applicant from that company has the same skill set. Moreover, there has been a clear trend in recent years of consular officers not accepting on face value the employer’s assertions that a specific individual will fill a specialized role. The applicant may find himself compelled to demonstrate just how unusual his skill set is compared to his colleagues, which many are poorly prepared to do.

Takeaway: Successful L-lB applicants should be able to draw clear distinctions between the work they do and that done by their colleagues. They must be able to demonstrate levels of training, experience, and innovation not shared by others in their units or teams, and explain why that expertise is not available in the United States.

Poor English Language Skills

L-1B applicants who are not able to adequately describe in English their job responsibilities and intended work in the United States undercut the credibility of their claimed expertise and specialization. Similarly, an L-1A manager/executive who cannot demonstrate English fluency will have a tough time persuading the consul that she is capable of functioning in a supervisory capacity in the United States.

Low Salaries and Foreign Salaries

Someone claiming specialized professional knowledge who will be receiving a modest salary more commonly paid to administrative or support staff is going to have problems convincing a consular officer they merit visa issuance.

Careful consular scrutiny is also more likely when the applicant is to remain on the foreign payroll and receive only per diem and other allowances while in the United States. For many consuls, such arrangements are simply a way for companies to utilize foreign-based workers, at lower wages, rather than to hire locally. While such “commuter arrangements” are permissible, that doesn’t mean that consular officers like them, and such applicants can expect to be grilled closely about the work that they will be doing in the United States and their pay arrangements, which can be highly embarrassing for them and place them in the untenable position of having to justify their employer’s practices.

Functional Managers Who Don’t Manage

Just because a job designation carries the label “manager” does not guarantee consular buy­ in; if a so-called manager has no direct responsibility to manage the work of other individuals, and/or is actually performing some of the purportedly-managed function him/or herself, no direct or indirect reports (whether employees or contractors), and no hire and fire authority, he or she will have a harder time gaining L-1A visa approval no matter what the company says about their managerial role. Consuls are looking for confirmation that the functional manager applicant has authority within the company over decisions and policies governing a key function, and that exercising that authority, rather than carrying out tasks assigned by another manager, forms the lion’s share of his or her responsibilities within the company.

Newly-Minted Executives

Although the regulations allow someone to qualify for an L-1A executive/managerial visa if they were recently promoted or if their position overseas is a specialized knowledge position, such an arrangement raises credibility questions in the consul’s mind both concerning the applicant’s past role with the foreign office (i.e., was the promotion merit- based or merely part of a strategy to demonstrate L-1A eligibility) and his or her intended role in the United States. Such concerns are more likely when the foreign office is a smaller, family-run operation, or where the newly promoted manager has not been with the company very long.

Consuls will expect such applicants to be able to make a persuasive argument why their job performance merited rapid promotion, and why their skill set in the foreign office clearly qualifies them to fill a managerial role in the United States.

Nothing to Manage in the U.S. Enterprise

If a company wishes to transfer someone to manage a newly established start-up in the United States, it must demonstrate that the start-up will have assets and employees to manage within the first year of its operation. A manager tasked with setting up a sales office in the United States, for example, will need to make the case that his or her role is to hire and supervise a staff to carry out those sales, not just to work alongside them in engaging with customers. Someone seeking to obtain another L-lA visa following the first year of a start­ up’s operations who remains the only U.S. employee or supervises only sales representatives will have a harder time qualifying than someone in a similar enterprise who has used the initial L-lA approval period to set up an actual office, hire professional staff to manage, and establish a genuine managerial/executive role for herself.

O-1 VISAS: “I NEVER HEARD OF YOU.”

Under the London Google Standard (™) your client needs to be in the top five hits on Google. Any O-1 in a public-facing role must be prepared to pass this ultra vires and highly subjective test, or else they face a grueling 30-minute interview complete with accusations of falsehood by the Fraud Prevention Unit, with the real threat of having the approved petition sent back to USCIS with a request for revocation.

Takeaway: Prepare your client by making sure they have:1) deep familiarity with the contents and organization of petition materials; 2) a readily-defensible 60-second elevator speech answering ‘exactly what are you famous for?’ 3) Get the applicant’s login & password, and closely review and edit the DS-160 before they submit it. Anything said in that application may later be used against the applicant. Applicants should be mock-interviewed thoroughly by counsel before proceeding to Embassy for visa interview.

B-1 VISAS

Consuls have shown increasing suspicion about the need for B-1 visas for business travel, especially for Electronic System for Travel Authorization (ESTA)-eligible nationals. This often occurs in the context of a US subsidiary of a European company where an L-1 may be the goal.

Takeaway: Visa Waiver nationals should be prepared to explain why they need more than 90 days and be able to describe the work they will be doing for the non-U.S. company– and why that is not considered working for the U.S. company. There is a huge risk issue involved with B-1 applications for otherwise qualified ESTA people. If the B-1 is refused it can then trigger a denial of ESTA registration, the only remedy for which is to apply for a B-1 to enter the US for business purposes.

CONCLUSION

Business visa applicants are no longer granted preferential treatment at consular interviews. To address consular concerns, we need to ensure that the applicants are well prepared: an applicant should understand the purpose of the visa for which he or she is applying, be able describe a credible specialized professional role or a viable business endeavor, and simply making a credible argument why his or her application merits approval. Where a visa applicant is in a business role, particularly any H-1B, any E-1, E-2 or L-1, as well as O-1 business personnel, counsel should confer with both the visa applicant and with Human Resources at the U.S. organization to make sure the applicant is well-versed in the company’s hiring efforts and can defend a BAHA claim by the interviewer (i.e., familiarity with what has the U.S. employer done to try to fill the offered role with a U.S. worker, how long the position was open, why are the foreign national’s credentials special or hard to find, etc.). Business visa applicants may not receive consular lounge access, but if they are well advised and well prepared, they should receive their visa.

 

Copyright© 2018, American Immigration Lawyers Association (AILA).

 

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