Secrets, Secrets: How to Keep Them Secret
For business persons applying for investment type visas like E’s and L’s, or even H-1B’s, one of the most off-putting aspects of the process is having to disclose confidential information, including trade secrets, to the immigration authorities. For example, applicants for E-visas and L-1 visas (involving new enterprises) often must disclose a company’s business plan. L-visa petitions almost always require the petitioner to disclose information about corporate structure and the financial relationships between and among subsidiaries. Where foreign nationals are sought to be employed in connection with the use of controlled technology, subject to export restrictions, as previously reported, Visa Mantis investigations can require the applicant to provide material disclosure concerning the technology involved. In a very recent and very instructive decision issued by the Administrative Appeals Office (AAO) [File No. WAC 07 277 53214 (7/22/08)], concerning the definition of “specialized knowledge” (in the context of an appeal from a denial of an L-1B petition), the AAO discussed the petitioner’s argument that it decided not to provide information relevant to the issue of “specialized knowledge” because it claimed the relevant information was “confidential” and could not be disclosed. The AAO made short-shrift of the argument, elaborating, in footnote 14 of its opinion, that the Freedom of Information Act and Trade Secrets Act provide adequate “protection of a petitioner’s `confidential business information’ when it is submitted to the USCIS.” Particularly instructive was the AAO’s reference to Executive Order 12600, entitled “Predisclosure Notification Procedures for Confidential Commercial Information” (1987). After defining what constitutes “confidential information,” the Executive Order indicated that agencies would have the opportunity to develop procedures to process confidential information and address issues of disclosure. According to the Executive Order, if in the context of a Freedom of Information Act (FOIA) request, an agency takes issue with the “confidential” designation, it shall notice the submitter of such information and provide it an opportunity to object. Similarly, if a third party seeks to compel disclosure on the basis of a lawsuit filed pursuant to the FOIA, an agency’s procedures shall afford the submitter notice of such lawsuit so that it has the opportunity to intervene and object.
The upshot is that if a petitioner is obliged to disclose “confidential information” to the USCIS, such information should be specifically designated “confidential information” through the use of a “Confidential” legend placed on the document in tandem with an employer’s letter, which includes reference to the confidential information and the basis for the designation. In sum, current law provides that USCIS cannot disclose “Confidential Information” designated as such. The point is to identify such “Confidential Information” and make at least a basic argument as to why such information should be protected. One issue not addressed by the Executive Order is information that is deemed “confidential” on the basis of an agreement between the petitioner and a third party. With respect to this situation, the legal issues can be more complex, unless disclosing “confidential information” as part of an application to the government is an exception to the general rule common in such agreements that disclosure is prohibited. ¼/p>
This entry was posted on Monday, September 1st, 2008 at 9:45 pm and is filed under Investors, Miscellaneous, Professionals and Members of Specialty Occupations. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Edit this entry.

Below is a list of EB-5 Regional Centers active as of October 2007. On June 9, 2008 the U.S. House of Representatives passed a Bill extending the Regional Center Pilot Program to 2013. This measure must now be addressed by the U.S. Senate. For more information on the EB-5 Immigrant Investor Category see C-G’s May 7, 2008 Post.

EB-5 Regional Centers Active as of October 2007

C-G has received in recent months an increasing number of inquiries regarding Immigrant Investor visas (so called EB-5 visas). Qualified EB-5 investors are eligible to receive permanent residency.  For readers interested in our standard summary description of this investor classification we detail it below:

SUMMARY OF EB-5 VISA REQUIREMENTS

There are 10,000 visas allocated each year for this category. Of this number, 3000 visas are set aside for “Targeted Employment Areas,” locations in the country where the government wants to attract investment. The ideal for this immigrant (EB-5) category are foreign nationals with $500,000 to $1 million in cash who are prepared to start a business with realistic expectations of growing it enough to be able to support 10 employees (U.S. citizens, permanent residents or others authorized to work) within 2 years. Ideally, the immigrant investor manages the enterprise. As the situation departs from the ideal model, the application for this visa status can become more challenging. Over the years, the requirements have eased, allowing aliens to qualify for immigrant investor status with respect to an already existing enterprise (as opposed to a start-up operation) and on the basis of holding a limited partnership type interest (as opposed to requiring the investor to function as a day to day manager). If an enterprise was formed prior to November 29, 1990 (which defines it as an “existing” as opposed to “new” commercial enterprise) the immigrant investment must make for a “substantial change” in the existing enterprise defined as increasing revenues or employment by at least 40%.  If the investment is in a “troubled business” (i.e. has incurred a 20% loss in net worth for at least 1 year) the investment must, at minimum, maintain jobs, but does not have to create employment.

 For investors who are interested in reducing the amount of the investment of $1 million required, the limit falls to $500,000 if the investment is in a “Targeted Employment Area” defined as a rural area with under 20,000 in population and unemployment 150% the national average. Alternatively, investors can invest through Regional Centers dedicated to promoting employment in certain regions where there is a Government focus on economic development. There are 3,000 visas currently allocated to this program which has been extended through October 1, 2008. Investing through a Regional Center not only qualifies for a reduction in the minimum amount of the investment required, but jobs can be indirectly as well as directly created, easing the 10 jobs created per investment requirement.            

One of the most important aspects of a presentation for EB-5 status is a detailed business plan showing how the investment will help the enterprise grow both in terms of revenues and employment. Investors also must be comfortable with responding to questions concerning the source of monies for the investment. Very often the requirement for fund source disclosure is a non-starter for many foreign investors who want to keep the source of their funds confidential.   In general, for the right type of investor with the right type of investment, the EB-5 program can provide an opportunity to obtain permanent residency.