DHS Report Points Out Flaws in L-1 Program (Part 2 of 2)

As explained in Part 1 of this article, the Department of Homeland Security’s Office of Inspector General (OIG) recently released a report with its findings and recommendations regarding the L-1 intracompany transferee program. Part 1 discussed the OIG’s findings of inconsistencies in adjudications. This second and final part summarizes additional concerns found in the report regarding the operation of the L-1 program, as well as plans for initiating site visits to L-1 sponsoring employers.

Concerns of Fraud in New Office L-1 Petitions

The L-1 classification allows a foreign company to send an executive, manager, or specialized knowledge employee to the United States to open a new office on behalf of the foreign entity. In this situation, the L-1 status is granted for only a one-year period. At the end of this initial year, the company may file a petition requesting an extension of the employee’s L-1 status. This petition must be supported by proof that the new office’s business operations have progressed sufficiently to justify the continued presence of the L-1 employee.

The OIG expressed concern that the “new office” L-1 classification is more subject to potential fraud or misrepresentation than an L-1 filed by a company with an established presence in the United States. The OIG cited examples of new office L-1 petitions in which the classification was used as a vehicle by owners of inactive or nonexistent companies to bring family members to the United States, without any expectation that the company would conduct business in the U.S. The OIG also noted instances in which a foreign company would cease operation immediately after the approval of new office L-1 petitions for its employees.

New Office Site Visits to Combat Fraud

To address concern over fraudulent filings, the OIG report recommended a mandatory site visit by the U.S. Citizenship and Immigration Services (USCIS) to confirm the legitimacy of the U.S. entity prior to approving a new office extension petition. In response, the USCIS stated that its Fraud Detection and National Security Directorate (FDNS) planned to begin conducting post-approval site visits of L-1 petitions in the first quarter of 2014. It is unclear from the USCIS response whether all new office petitioners should expect a site visit upon the filing of an extension request, or even whether these site visits will only apply to new office L-1 petitioners. Nonetheless, the OIG appeared to be satisfied with the response from the USCIS.

Increased Access to VIBE by CBP

Validation Instrument for Business Enterprises (VIBE) is a web-based tool that can be used by adjudicating officers to compare company information available in the Dun & Bradstreet database with the company information submitted by petitioners. This helps the officers to verify the existence and legitimacy of companies filing petitions. Currently, the USCIS is the only agency that has unlimited access to VIBE. However, Customs and Border Protection (CBP) officers are responsible for processing L-1 petitions at Canadian ports of entry (POEs) and preclearance (airport) stations. The OIG therefore recommended that these CBP officers be granted access to VIBE. The USCIS and CBP both agreed with this recommendation, and stated that access to VIBE will be provided to CBP inspectors at all Canadian POEs and preclearance stations by the end of 2013.

Expect Guidance Related to L-1 “Job Shop” Provisions, but OIG Pushes for New Regulations

The 2004 Visa Reform Act includes anti-“job-shop” provisions that limit the placement of L-1 employees at third party worksites. These provisions are intended to prevent L-1 workers from being placed at client locations to perform work that could otherwise be performed by U.S. workers. Although these provisions do not necessarily prevent the placement of L-1 workers at third-party worksites, they do limit the types of situations in which such an arrangement would be considered acceptable.

The OIG noted that the USCIS never issued regulations with details regarding the job-shop provisions. As a result, the OIG found inconsistent application of the provisions by USCIS adjudicators. The OIG found some such cases appeared to have been erroneously approved, while others were improperly denied. The OIG concluded that USCIS adjudicators were not receiving sufficient guidance regarding the job-shop provisions, and how the provisions should be applied. The OIG recommended that the USCIS create regulations on the proper application of the job-shop provisions of the Visa Reform Act, and to provide guidance to USCIS adjudicators in the interim, until these regulations can be implemented.

In response, the USCIS stated that guidance regarding L-1 specialized knowledge provisions is currently being drafted, and that this guidance will also address the job shop provisions. The USCIS also noted it would consider drafting formal regulations or issuing binding Administrative Appeals Office (AAO) decisions to provide further guidance. The OIG found this response from the USCIS to be inadequate, insisting that formal rulemaking was a necessity for these provisions.

Conclusion

The L-1 category is vital to multinational companies doing business in the United States for international growth in a global economy. It is therefore important to have clear, reliable standards for the public and for adjudicators. It appears that some changes are underway, including site visits and CBP Vibe access, as well as promises of additional guidance and officer training. The attorneys at the Murthy Law Firm have extensive experience with L-1 cases and are available to advise and provide representation in L-1 matters.

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