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Risk and compliance

Compliance audit

Also called regional center audit, EB-5 regional center audit, GAGAS audit.

A compliance audit, which USCIS calls a regional center audit, is the review USCIS must conduct on every designated regional center at least once every five years under 8 U.S.C. 1153(b)(5)(E)(vii)(II), examining the records the center must keep and the flow of investor capital into its capital investment projects.

What it decides

The EB-5 Reform and Integrity Act of 2022 added the requirement at 8 U.S.C. 1153(b)(5)(E)(vii)(II). Subclause (I) makes each center preserve the books, ledgers and records behind its annual statements and related investor petitions for the five year period beginning on the last day of the federal fiscal year in which the transactions occurred, and the audit reviews that documentation for the preceding five years plus the flow of alien investor capital into any capital investment project. Where several centers share one site, USCIS may audit them in a single site visit. From 23 April 2024 USCIS generally applies Generally Accepted Government Auditing Standards, and an audit may be virtual or an in person visit covering property verification, internal control walkthroughs, financial review and staff interviews. Results become part of the record. Refusing to consent or deliberately impeding the audit requires termination of designation under subclause (III), and USCIS may treat non-cooperation with a site visit as refusal; otherwise an unfavourable finding carries no automatic consequence. This is not the pre-RIA compliance review, and the audit visit is not the FDNS site visit to a new commercial enterprise or job creating entity.

Governed by 8 U.S.C. 1153(b)(5)(E)(vii)(I) for the five year record keeping period, (II) for the audit, its scope and the single visit to co located centers, and (III) for mandatory termination on refusal or deliberate obstruction; 8 U.S.C. 1153(b)(5)(F)(iv) for the separate site visit duty to each new commercial enterprise or job creating entity. USCIS, EB-5 Regional Center Audits, last updated 9 April 2024, supplies the 23 April 2024 start of Generally Accepted Government Auditing Standards, the auditor tasks, the virtual or in person distinction, the FDNS comparison, the treatment of an unfavourable finding and the separation from the pre-RIA compliance review; none of that is in the statute.

Related terms

  • Regional center terminationRegional center termination is USCIS ending a center's designation, after which the center may not solicit, generate or promote EB-5 investors or otherwise take part in the program, and its investors lose their petitions 180 days after USCIS notifies them unless they move to another center or another new commercial enterprise.
  • Record keeping requirement8 U.S.C. 1153(b)(5)(E)(vii)(I) makes every regional center preserve the books, ledgers, records and other documentation of the regional center, the new commercial enterprise and the job-creating entity for five years beginning on the last day of the federal fiscal year in which the transactions occurred.
  • Form I-956GForm I-956G, Regional Center Annual Statement, is the yearly filing every designated regional center must submit to support its continued eligibility for designation, accounting for investor capital, project progress, fees collected from investors and required compliance certifications.
  • Debarment and suspensionDebarment and suspension are the EB-5 sanctions the USCIS Director imposes on a non-compliant regional center or the individuals behind it: a suspension is temporary and lifts if the violation is cured, while a debarment is a permanent bar, and both sit on one graduated ladder that also carries fines and termination of the regional center's designation.
  • Site visitA site visit is an in person inspection USCIS makes of a regional center, a new commercial enterprise, a job creating entity or a location where claimed jobs are said to sit, and since 15 March 2024 a performed site visit is one of the statutory conditions for removing conditions on residence.

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