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DHS Proposes the Removal of the International Entrepreneur Rule

The International Entrepreneur Rule is Finally on the Chopping Block

The Department of Homeland Security (DHS) long wished to delay implementation of the International Entrepreneur Rule (IER), an immigration policy initiative of the the prior administration, until it could officially remove it this year. While that delay was upended by the courts, the DHS is now officially proposing an outline for its intended removal of the rule, a decision it is making in order to better comply with the current administrative agenda. Specifically, it wishes to comply with Executive Order (E.O.) "Border Security and Immigration Enforcement Improvements," which was issued on January 25, 2017.

DHS Removing International Entrepreneur Rule

As such, the DHS has given a broad explanation of its reasons for terminating the program and just how that termination may take place. It is also accepting public comment as to why or why not the program should be rescinded and what its terms should be. 

International Entrepreneur Rule Background

The IER was a policy initiative by the prior administration intended to attract innovation and investment to the U.S. through the parole program for talented international entrepreneurs having startups with the potential to benefit the American economy as well as its workers and investors.

The IER amended DHS regulations for the inclusion of guiding criteria for the Secretary’s discretionary parole authority regarding international entrepreneurs capable of demonstrating that their temporary parole into the United States under section 212(d)(5) of the Immigration and Nationality Act (INA) would provide significant public benefit to the United States. This could be conveyed by evidence that the start-up entity in question received significant capital investment from U.S. investors with established records of successful investments or obtained significant awards or grants from certain Federal, State or local government entities.

Furthermore, the IER established a period of initial parole for up to 30 months with a possible 30 month extension for facilitating the entrepreneur's ability to oversee and grow the start-up in the U.S. 

However, under Section 11(d) of the executive order mentioned above the Secretary of Homeland Security is required to “take appropriate action to ensure that parole authority under section 212(d)(5) of the INA (8 U.S.C. 1182(d)(5)) is exercised only on a case-by-case basis in accordance with the plain language of the statute, and in all circumstances only when an individual demonstrates urgent humanitarian reasons or a significant public benefit derived from such parole.”

The DHS thus decided that the IER was too broad in its discretionary authority and decided to dismantle it, first by delaying its implementation, a decision that was vacated on December 1, 2017 by the U.S. District Court for the District of Columbia (see Nat’l Venture Capital Ass’n v. Duke, No. 17-1912, 2017 WL 5990122 (D.D.C. Dec. 1, 2017)). DHS thereby began accepting applications in compliance with the court ruling, but is now proposing an official end to the program. 

DHS's Justifications for Ending the IER Parole Program

While DHS has stated that it stands by its previous statement that foreign entrepreneurs make valuable contributions to the U.S. economy, but it believes that the IER governing regulation should be removed as inadvisable, impracticable and an unwarranted use of limited agency resources in addition to being the inappropriate mechanism for such an immigration objective. 

In its address to eliminating the role, the DHS provided a detailed outline of these criticisms.

Parole as an Inappropriate Mechanism for Implementing and Administering an Entrepreneur Immigration Program

The DHS has expressed its opinion that the framework of the rule does not adequately promote the current administration’s agenda of attracting and retaining the world's most talented entrepreneurs while encouraging investment and innovation in the U.S. It criticizes the discretionary character of the program in contrast to other immigration benefits such as the EB-5 immigrant investor visa, under which if all applicable statutory and regulatory eligibility requirements are met, the agency must approve the petition.

It is for these reasons that the DHS believes that parole doesn't provide the entrepreneur or the qualifying source of capital investment with the certainty or predictability necessary to ensure that a start-up company is a success, thereby ultimately failing to provide a significant public benefit to the United States. Even if all the statutory criteria for the program are met, it states, the discretionary process is inherently too flexible to guarantee its thorough completion. 

Furthermore, unlike employment-based immigrant and nonimmigrant programs, the DHS complains that parole does not allow for derivative beneficiaries, it resulting that each spouse or child must also demonstrate that accepted entry would serve a significant public benefit. It also follows that individuals granted parole based on a finding of significant public benefit - a decision that can be terminated at any time in the Secretary’s discretion in determining that public benefit no longer warrants the individual’s continued presence - are not considered to have been admitted to the United States and thus cannot simply change to a nonimmigrant status.

The DHS goes on to state that, for paroled entrepreneurs who do not qualify for another status upon the time of their parole's expiration, the likely requirement to depart the U.S. may result in them moving their operations abroad which could eliminate possible further benefit to the U.S. and potentially hurt American investors. 

Entrepreneurs Should Consider Using Alternative Visas or Congress Could Facilitate a Path for the Sought After Investment and Innovation

The DHS states and attempts to persuade as to the existence of visa classifications that can be used by qualifying entrepreneurs or investors coming to the U.S. such as the E-2 treaty investor and EB-5 classifications. While the agency is aware that this would not encompass the entire population of entrepreneurs addressed in the IER, it diverts such authority to Congress in its ability to create a new visa classification to provide legal status to foreign nationals wishing to remain and start businesses in the U.S. through venture capital or other U.S.-sourced funding.

Limited Agency Resources & the DHS’s Current Priorities

The DHS states that President Trump has tasked it with improving existing employment-based  visa programs to ensure their integrity and protect the interests of U.S. workers. In reflection of its current processes for adjudicating parole requests, the agency reasons that it would be inappropriate to continue expending limited agency resources for the administration of a parallel and complex regulatory parole framework.

Furthermore, it states that while the monetary costs associated with continuing the program's administration might be recovered over time, it believes that USCIS won't be able to offset the opportunity costs concerning with the diversion of resources necessary for meeting the current administration’s priorities regarding, for example, the review of other existing immigration programs, developing new proposed regulatory changes and improving the ability to deter and detect fraud and abuse.

Options for Transitioning Away from the IER Program

The DHS has also outlined options for extricating itself from the IER program. USCIS has thus far received 13 IE parole applications and the DHS has not yet granted anyone parole under this program. The agency also delineates that the options it discusses would be assumed to go into effect by the end of June. 

Automatic Termination of the IER Parole Program on the Effective Date of the Final Rule

This is the DHS's preferred option according to its objectives and policy goals in line with the executive order discussed. 

The DHS would amend its regulations to include a provision under which on the effective date of the final rule, parole granted under the IER for all applicable individual entrepreneurs and their dependents would be terminated. This would also include all employment authorizations regardless of expiration dates. Depending on circumstances of the individual whose parole is terminated, including age, the individual may also begin accruing unlawful presence upon the program's termination.

Termination of the Parole on Notice

In this scenario the DHS would authorize the termination of all parole granted under the IER after notice and provide an opportunity for the entrepreneur and any dependents to demonstrate that parole would otherwise be warranted under the other existing framework.

Furthermore, the issuance of a notice of intent to terminate would create a presumption of termination that the affected individual would have to overcome by demonstrating  urgent humanitarian reasons or the continued provision of significant public benefit under 8 CFR 212.5, thus meriting a favorable exercise of discretion. In cases of which this is not the case, there would be no opportunity to appeal a parole termination decision.

Reopening of the IER Parole Determination

Under this option, the DHS would reopen all of the IER parole adjudications itself without fee to the applicant as consistent with 8 CFR 103.5(a)(5) and provide the entrepreneur and his or her dependents with the opportunity to present evidence of eligibility for parole under the existing non-IER parole framework. 

Expiration of Initial Period of Parole

In this set of circumstances the DHS would allow the parole approved under the IER to naturally expire along with any associated employment authorization unless otherwise terminated for unrelated reasons.  

DHS would also provide a later effective date for the removal of the § 212.19(k) termination provisions for the retaining of the specific termination grounds for any individuals who remain paroled under the IER program.