Waivers of Immigration Fees for Investors?

By David North on February 12, 2011

Can an alien, somewhere in the USA, be simultaneously so rich that he gets immigration benefits as an investor and simultaneously so poor that USCIS will waive a $325 immigration application fee?

The question seems absurd, but the underlying situation suggests three useful lessons for U.S. immigration policy, generally. More on that later.

The answer to the initial question is, amazingly, yes, but only in the Commonwealth of the Northern Mariana Islands, which lie just north of Guam in the Western Pacific.

The explanation of the ruling, issued by the Mainland USCIS on December 17, is primarily a reflection on the way the CNMI used to run its own immigration policies, but it also is an indication of how generous USCIS is with the taxpayers' money. (When USCIS fees are waived, the services involved are funded out of the U.S. Treasury.)

A little background is needed. The Mariana Islands have no natural resources other than the "nearest warm beaches South of Tokyo." Several years ago, because of international trade agreements, the islands lost their disgraceful garment-making sweatshops that once helped fund an ultra-expensive local government. Further, obtaining money from Uncle Sam had become more difficult with the passage of time.

Meanwhile the lush agricultural economy which once flourished when these islands were under German and then Japanese rule has disappeared, because, frankly, the locals don't like farm work. Though there are plenty of fish in the ocean, the locals don't engage in much commercial fishing, either; there is a similar lack of interest in retailing and in teaching in the schools (so school teachers are imported from the Mainland). I saw all this when I was there several times on assignments for the U.S. Department of the Interior, about a dozen years ago.

What the local population likes to do is to work in the non-educational branches of the local government which, at one point, gave them full pensions after 20 years on the official payroll.

Given the lack of natural resources and a less-than-vibrant workforce, what could be done to boost the local economy?

Then local politicians decided – and this is all too familiar – let's expand immigration to try to solve our economic problems. They, then, had the power to do so.

The CNMI government offered visas to overseas investors, primarily those in Japan. But, as noted above, there is not much to invest in. They had few bites. What to do?

Then the CNMI government got a little creative. Why not grant nonimmigrant visas to people (primarily Japanese) who would invest in a house in the CNMI, and then move into that house during their retirement years? The CNMI also granted investor visas to aliens who did not even buy a house, but had rented one! Housing is not expensive in the CNMI by Mainland standards; local census data showed a territory-wide median price of a house as $104,574 and the median monthly rental at $277, both in 2005.

So, if you define investors carefully enough, for immigration purposes, you can include $250-$350-a-month renters in the class.

It was this sort of casual dispensation of visas that caused the population of the Marianas to explode eightfold in the years 1970-2005. The local pols, by the way, saw to it that all the guestworkers coming to the CNMI could never get to be voting citizens, so the people who did the actual work in the islands never got near a ballot box. Neither did the "investors."

Eventually, the Congress extended the Immigration and Nationality Act to cover the Marianas, and in doing so, it wrote in lots of transitional arrangements, giving the tens of thousands of nonimmigrants in the islands years to convert, or try to convert, to the Mainland visa system. (See an earlier blog on this.) This will not be an easy process for either the nonimmigrants or the federal system, as most of the nonimmigrants in the CNMI, such as the routinely-exploited, low-skilled guest workers, do not (and should not) fit into easily into the INA categories.

One of the many classes of locally-created nonimmigrants that USCIS had to cope with was those who held "long-term investor" status under the old CNMI law. These individuals had either invested $50,000 or $100,000 in locally-approved investment schemes or who had been "a retiree investor over the age of 55 years who was issued a foreign retiree investment certificate based upon a qualifying investment in an approved residence in the CNMI . . ."

The Mainland provision that a would-be immigrant investor and his or her family must invest $500,000 seems draconian by comparison. The USCIS document cited earlier does not offer any clues as to the minimum value or the house, or the level of the rent, that had to be to be approved by the local CNMI authorities, but given the housing market, and the eagerness of the government to issue these visas, these values could not have been much.

These arrangements then define the population of "long-term investors" whose best chance of staying in the islands is to convert to the brand-new CNMI-only E-2 nonimmigrant investor category, a temporary status due to expire on December 31, 2014. By definition some people with quite modest incomes, and no investment besides the house they occupied, were to be covered by the new category. Incidentally, according to USCIS, there are only about 500 people in the various CNMI-only investment categories.

Apparently anticipating the question at the head of this blog, the USCIS offered this explanation: "The fee waiver provision is limited to those who show inability to pay. USCIS understands that some CNMI-E2 Investor eligible retiree investors [the USCIS's own words] may have invested the majority of their savings in their investment residences, may be living on fixed incomes, and may qualify for the waivers."

Happily for these individuals, if not for U.S. taxpayers, USCIS on Mainland has just created a handy little form to receive such requests, thus making it easier for the government to lose money on these applications. For more on the new fee waiver form see here.

What can we learn from this that may apply to Mainland immigration policies? I would suggest the following:

  • If the government is going to give away visas to investors (basically a terrible idea) let's see to it that the price is steep enough to be useful to the broader American economy, and not extend it to aliens whose "investment" is something like $250-$350 a month in rent payments.

  • USCIS probably should stop leaning over backwards, with its fee waivers, making it too easy for people to apply for immigration benefits. Under some circumstances, of course, fee waivers are appropriate, but for investors?

  • Above all, the government should not farm out immigration policy making to other entities, be they tiny island governments or U.S.-based advisory commissions. (The dangers of such indirect immigration policy making are the subject of a recent CIS backgrounder.)