Operating an EB-5 regional center at scale requires a deep-rooted compliance culture focused on integrity, accountability, and transparency – the three pillars of EB-5 compliance.
Compliance is a risk-mitigation practice that helps firms avoid legal liability, reputational damage, and loss of revenue. It is an integral part of the success of any enterprise, especially in the EB-5 program.
Healthy compliance programs demonstrate that EB-5 regional center operators are focused on the security and sustainability of the investments they sponsor. This helps establish a foundation for trust between regional centers and EB-5 investors.
In the end, compliance programs make EB-5 investments offered by regional centers more secure, clearing the path to success.
EB-5 Reform and Integrity Act of 2022 Compliance Requirements
EB-5 compliance requirements have changed significantly in recent years following the enactment of the EB-5 Reform and Integrity Act of 2022.
Under the 2022 reform law, regional centers must file annual reports, submit annual integrity fees, conduct internal financial audits (or engage with a fund administrator), and submit to periodic audits by USCIS.
In addition to USCIS requirements, regional centers are subject to a wide range of rules and oversight. Regional centers contend with legal frameworks governed by the Securities and Exchange Commission, the Small Business Administration, and other state and local regulators.
Compliance, however, does not end with checking the boxes of filing annual reports and adhering to regulations and statutes.
A solid compliance program is fundamental to an organization; it is a culture that incorporates and values integrity, accountability, and transparency.
Three Pillars of EB-5 Regional Center Compliance
- INTEGRITY
Integrity is an important principle. It means that a company conducts itself in accordance with its values.
For EB-5 regional center compliance teams, integrity means ensuring that the regional center, its principals and employees, and investment projects adhere to all relevant standards. These standards are set by federal, state, and local laws, regulations, and policies, and by the regional center’s own values.
This starts with firmly stating your firm’s core values and identifying relevant rules and regulations. Then you must formulate policies, procedures, and a training program that allows your team to move forward in a way that reflects your core values.
Integrity is also not static. It requires a constant reaffirmation of values, and a re-examination of policies and procedures over time.
Rules change and markets shift, so to maintain integrity, companies must also look beyond the current regulatory horizon to anticipate policy changes.
Integrity Best Practice:
Establish a mission-based value statement and communicate that to everyone in the organization as well as to your customers and stakeholders.
Encourage discussion about the organization’s values and highlight those values in meetings.
This will help establish the foundation for compliance from the ground up and influence future decisions.
2. ACCOUNTABILITY
No matter how well an organization is led, staffed, funded, or operated, errors occur. In a company of any size, there is always a chance that someone will make a mistake, have a slip in judgment, or move too hastily.
It is important for a company to take responsibility for its mistakes, flaws, and unintended consequences and seek to correct them. This is accountability.
In many cases, accountability is an opportunity for a company to learn and improve.
Accountability involves diagnosing problems, determining whether there are needs for new or updated training, changes in policies, data collection and reporting, new or changed resource requirements, and any other elements of the organization that might need to be reviewed.
Accountability requires honesty and clarity, both internally and with partners and regulators.
For EB-5 regional centers, it also means responding to investors who have questions and providing updates and documents to support immigration petitions.
A company that shows that it is aware of its challenges and takes active steps to correct or mitigate those concerns is one that develops trust and can avoid continued liabilities or future missteps.
Accountability Best Practice:
Employees must be free to report issues, and teams must be able to openly discuss challenges and solutions.
It is important to establish a reporting channel for employees at all levels of the organization to use. For any issues discovered, the company must ensure adequate steps are taken to follow up on any issues uncovered.
3. TRANSPARENCY
In a competitive market, many companies do not want to share any more information than they need to. However, increased transparency builds trust, which in turn can increase market share.
In EB-5, trust does so much work for a company in terms of attracting and retaining clients and investors, but it also helps to set regulators at ease in times of audits or investigations. In addition, regulators do not like surprises—proactively sharing information helps resolve potential problems before they arise.
As a former EB-5 Adjudicator, I know firsthand how transparency can have a real-world impact.
When reviewing EB-5 applications at the USCIS, if I found some adverse news about a project I was reviewing, the first thing I would check is to see if the regional center had interfiled an update on the project that addressed the identified concerns. Regional centers that provided updated information established more confidence that the regional center was engaged and managing their project effectively.
Sharing information shows investors, partners, and government regulators that you are delivering on your core obligations.
Transparency Best Practice:
Transparency is best achieved through proactive and generous sharing of information with regulators, investors, and stakeholders.
Regional centers with good transparency may publish regular reports on their activities and share those reports with their investors or with the public.
They should also be ready to amend or update any forms they have filed with USCIS, providing up-to-date information on projects and sponsorships so that they can get ahead of any questions that might arise during adjudication.
Conclusion
EB-5 regional centers that understand the value of compliance and keep a focus on the three pillars of integrity, accountability, and transparency will rest easier knowing that their business activities are de-risked while their reputation builds trust in the marketplace.
Andrew Diroll-Black – Chief Compliance Officer
Andrew Diroll-Black is the Chief Compliance Officer at American Lending Center, where he oversees regulatory integrity and compliance across ALC’s EB-5 operations. With more than a decade of experience in immigration policy and regulatory oversight, he brings deep expertise in program integrity and compliance leadership.
He previously served in senior roles at U.S. Citizenship and Immigration Services (USCIS) within the Immigrant Investor Program Office (IPO), including as Branch Chief and Acting Division Chief of IPO Division 1 (Compliance), where he directed multidisciplinary teams and helped implement key integrity measures under the EB-5 Reform and Integrity Act of 2022.
