OIG - L-1 Visa Program Report

The Department of Homeland Security (“DHS”) Office of Inspector General (“OIG”) recently released its report on the L-1 intracompany transferee visa program, commenced at the request of Senator Charles Grassley (R-IA). OIG’s report concludes that the L-1 visa program has several ongoing limitations, which create the potential for fraud and abuse within the L-1 visa category. The report therefore suggests several recommendations to improve the effectiveness of the program, and includes USCIS’s responses to each conclusion. A summary of the report is detailed below.

Current Limitations & Recommendations

Interpreting and Applying “Specialized Knowledge”

OIG has concluded that the statutory definition of “specialized knowledge” is vague and unclear—and, that this lack of clarity is manifesting itself in the L-1 adjudication process. The report indicates that USCIS is reaching different outcomes in L-1 cases based on the same fact patterns. This will come as no surprise to companies that have been through the process in recent years.

OIG interviews with USCIS adjudicators demonstrate a level of confusion with regard to their understanding of the “specialized knowledge” component of the L-1 regulations. Adjudicators reported that the term “specialized knowledge” is: “unquantifiable,” “open to interpretation,” “extremely risky,” “subjective” and “very difficult to adjudicate,” among other descriptions. Even after receiving specialized knowledge training, adjudicators felt unable to consistently apply the law to L-1B petitions.

As a result, OIG recommends that USCIS publish new guidance on the meaning of specialized knowledge, which is “sufficiently explicit to give adjudicators an improved basis for determining whether employees of a petitioning entity possess specialized knowledge.”

USCIS has responded that it concurs with OIG’s recommendations, and has drafted a policy memorandum that specifically addresses L-1B specialized knowledge adjudications. Nevertheless, USCIS has provided no timetable as to when such a policy statement might issue, and the agency has been promising such a statement for years.

Verifying the Legitimacy of New Office Petitions

OIG has concluded that “new office” L-1 petitions (where the U.S. affiliate has been operating for less than one year) are “inherently susceptible to abuse because much of the information in the initial petition is forward-looking and speculative.” OIG’s report also states that “understaffed, underfunded, and even inactive companies” are both applying for and obtaining approved L-1 visas.

For example, in interviews with OIG staff, USCIS adjudicators stated that, in their view, petitioners often submit speculative and even “imaginary” information, or “simply recite regulatory definitions,” and receive approved new office petitions.

OIG’s report therefore recommends that USCIS conduct a site-visit prior to approving an L-1 employer’s petition filed to extend the initial one-year period of stay granted in new office cases. In response, USCIS did not state that it would do so, but indicated that it “expects to begin conducting post-adjudication domestic L-1 compliance site visits in the First Quarter of FY2014.”

Job Shop Provisions

OIG’s report concludes that the anti-“job-shop” provisions of the “L-1 Visa Reform Act of 2004” (“2004 L-1 Amendments”) are not being applied consistently in L-1 adjudications. These provisions allow employers to place L-1B workers at third-party job sites only when the petitioning employer maintains management control over the employee, and only when the employee’s specialized knowledge relates to the petitioning company and will be used in a project that requires it.

The OIG report criticizes USCIS for failing to issue adequate guidance on the meaning of the anti-“job-shop” provisions of the 2004 L-1 Amendments, concluding that the lack of agency guidance makes the L-1 program more susceptible to fraud and abuse. As a result of the lack of guidance, for example, one USCIS adjudicator told OIG that because he had never received training on the anti-“job-shop” provisions, he had never denied an L-1 petition posing a labor-for-hire issue.

OIG’s report therefore recommends that USCIS issue a regulation concerning the anti-“job-shop” provisions to increase consistency in decision making. In response, USCIS stated that it concurs with the recommendation, is preparing to release policy guidance on job-shop issues, and is considering commencing a rulemaking proceeding. Alternatively, USCIS may use Administrative Appeals Office precedent decisions instead.

Additional Limitations

OIG’s report also expresses concerns over the standards of proof utilized by USCIS and Department of State officers in adjudicating blanket L-1 petitions, as well as the level of L-1 training and guidance offered to Customs and Border Patrol officers working at Canadian ports of entry.

The report recommends increased communication, training, and published guidance to address these concerns. OIG further recommends that USCIS provide CBP with access to the Validation Instrument for Business Enterprises (“VIBE”) database, which USCIS uses to ostensibly confirm companies information using a Dunn and Bradstreet database. OIG’s report emphasizes the usefulness of the VIBE program, finding that it “strengthens USCIS’ ability to detect fraud in L-1 petitions.” (Notwithstanding OIG’s conclusion, in practice, VIBE has proven to be rife with errors).

In response, USCIS has stated that it agrees with each of OIG’s recommendation on these issues. USCIS plans to establish regular meetings with the Visa Office in the Bureau of Consular Affairs regarding Blanket L adjudications, and to provide CBP with access to VIBE. CBP has also advised OIG that it agrees with its recommendations, and plans to “develop and implement solutions that provide an appropriate level of information to CBP officers processing L-1 travelers at the northern border.” CBP has not yet developed a strategy to implement future L-1 trainings, however.