New World, New Policy: Entrepreneurial Money Produces Residency Permits

A successful Chinese entrepreneur, showed me a news article. It reported that wealthy Chinese could buy an American passport and become US citizens. Is this really true? What are the implications of this visa program?

The US Employment Based Fifth Preference (EB-5) program was established by the U.S. Congress in 1990, to link investment, employment and residency. Three years later, the program language was relaxed from “to create ten direct employment opportunities”, to “directly or indirectly create 10 job opportunities.” This is broad and flexible wording. It is designed for entrepreneurial and wealthy investors outside the US, who fund a new commercial enterprise of  at least $500,000 for investments. Under the program, those entrepreneurs, their spouses and their unmarried children under 21 years old can apply for green cards permitting residency.The objective is to attract foreign investments to the U.S., and to stimulate economic development and job creation.

EB-5 demand has increased rapidly. In 2012, President Obama extended the program. In May of 2017, Congress extended the EB-5 Program until September 2017. There are many supporters.

In 2014, 10 thousand EB-5 petitions were filed with the United States Citizenship and Immigration Services (“USCIS”). Overall, 5,115 have been approved. Over $2.5 billion investments were attracted. An additional $6.2 billion are awaiting federal adjudication. EB-5 capital is also an attractive low cost funding tool for project developers in the U.S. It offers foreign investors a way to permanent residency that is not backlogged by other applications and does not require sponsorship by a US employer.

Throughout the world today,  numerous programs like the EB-5 have been established. In Australia for example, foreign investors are granted the opportunity to immigrate, but only receive temporary residency for four years. An investment of AUD $1.5 million in an Australian company ( U.S $1.2 million) is required. France allows foreign investors to obtain residency for 10 years by making a “long term  and non-speculative investment of at least € 10 million (U.S $11.8 million) in industrial or commercial assets.”

There is a standard moral objection to the EB-5 program: The United States should not be in the business of selling the right to live there. This claim suffers from a slight misunderstanding. In effect, the government gives the visas away — to profit-making businesses that have jumped through the program’s requisite bureaucratic hoops. Then the companies can solicit investment based on the promise of permanent residency. In spite of ten thousand slots a year, 40,000 investors still wait for a green card. Obviously investor needs have not been met.

Investment immigrants are in high supply. The U.S government should use the opportunity and open the gates to them. The U.S. has an immigration culture, with a spirit willing to absorb both elites and  refugees of the world.

However, change must come; the program needs to be refined in terms of size of investment, number of jobs generated, industry direction, geographic location, and job recipients. I believe that the investment minimum should be $2.5 million, and the American job creation shall be at least 25. Then we can continue this program helping both investors and employees; a noble outcome!

Radical Islam’s Latin American Connection

By Jerry Haar

In the aftermath of the barbarity inflicted by Islamic terrorists in France, five Syrians heading to the United States with fake Greek passports were arrested in Honduras. When queried, one of them stated they were “students.” At that point, it became alarmingly clear that Latin America could well serve as a launch pad for Islamic terrorists to attack the United States.

In his March testimony before Congress, General John Kelly, head of the U.S. Southern Command, warned lawmakers that Islamic extremists are radicalizing converts and other Muslims in Latin America, and that the Islamic State could exploit trafficking organizations in the region to infiltrate the United States.

Additionally, it has been increasingly common for Muslims from Mexico to change their Islamic surnames to Hispanic-sounding names to facilitate moving across the border.

Islamic terrorism is not new to Latin America. In 1992 Islamic Jihad bombed the Israeli Embassy in Argentina, killing 29 and injuring 250. In 1994, Iran and its proxy, Hezbollah, were responsible for bombing AMIA, a Jewish community center in Buenos Aires, killing 87 and injuring over 100 people.

Beginning in 1999 with the rise to power of Hugo Chávez, the locus of terrorist-supported activity gravitated northward from Argentina to Venezuela. The Venezuelan leader and Iran’s then president, Mahmoud Ahmadinejad, quickly forged a close relationship between their two countries and ramped up their adversarial campaign against the United States.

Venezuela became a de facto subsidiary for Iranian terrorism in the Western Hemisphere through Hezbollah’s Rabbani and Nasseredine networks and has established more than 80 “cultural centers” to promote their brand of Islam in the region.

While Iran’s Shi’a Islamists have had “first mover” advantage over Sunnis in penetrating Latin America, both are actively spreading their reach in the region, which is home to 4 million Muslims, more than half residing in Brazil and Argentina and the rest primarily in Central America, Ecuador, Chile, Mexico and Trinidad and Tobago.

Radical Islamists are especially active in the Tri-Border area (Argentina, Brazil, Paraguay), a notorious locale known for smuggling, piracy, money laundering and drug dealing. Strategic alliances abound between radical Islamists and criminal networks such as Colombia’s FARC and Mexico’s Zetas.

Unfortunately, Latin America’s horrendous prison system is a breeding ground for jihadists, via conversion to Islam among prisoners; and far too often governments take a stance of neutrality toward Islamic terrorism, thereby making the region a safe haven for them. While counterterrorism and surveillance efforts, including bilateral and multilateral cooperation, have improved in recent years, the lack of sufficient financial resources and highly trained personnel remains a critical issue.

For Islamic terrorists to target the United States, the best foreign region from which to operate is Latin America. Intelligence agencies report that there are sleeper cells in the Tri-Border area; and it is conceivable that they could link up with their counterparts in U.S. cities such as Dearborn, Michigan, and Paterson, New Jersey.

In the wake of the Paris bombings and shootings, I queried several U.S. intelligence experts about the chance of an ISIS attack on the U.S. homeland, emanating from Latin America. Their uniform response? “Highly likely.”

With porous borders, transnational criminal organizations, sophisticated smuggling networks and the dubious ability of Latin American governments to detect and intercept terrorists, it is imperative that the U.S. government double or even triple its efforts in aiding our neighbors to the south to prevent radical Islamists from conducting heinous activities in the Western Hemisphere. “Not in our backyard” should be the watchwords of the day.

This article is originally published in the Miami Herald.

Jerry Haar is a business professor at Florida International University and a Global Fellow of the Woodrow Wilson International Center for Scholars in Washington, D.C. He is also a research affiliate at Harvard University’s David Rockefeller Center for Latin American Studies.

 

Episode 22: Getting and Keeping the International Job

In this segment of “Thoughts on International Business, Marketing, and Strategy,” Professor Michael Czinkota of Georgetown University’s McDonough School of Business is joined by Paul Kollmer-Dorsey, international attorney. They discuss the new, changing globalized job market and converging international attitudes.