DHS Delays Effective Date of International Entrepreneur Rule (updated with information about litigation)

International Entrepreneur

May 25, 2018 Update: The DHS announced that it will publish a proposed rule to rescind the International Entrepreneur Rule. You may read about the DHS's justification in our blog on the subject [see blog].

December 15, 2017 Update: On December 15, 2017, the DHS announced that it would begin implementing the International Entrepreneur Rule while restating its plans to remove the rule through the administrative process. Please see our full article on the DHS's announcement and the rules for applying for parole under the program [see article].

December 11, 2017 Update: On December 1, 2017, Judge James E. Boasberg of the United States District Court, District of Columbia, issued a decision in National Venture Capital Association, v. Duke [PDF version] wherein he vacated the rule delaying the effective date of the entrepreneur parole rule published at 82 FR 5238 (Jan. 17, 2017) (see article below for more information). Judge Boasberg concluded that the Department of Homeland Security (DHS) had violated 5 U.S.C. 553 by delaying the effective date of the entrepreneur rule without subjecting it to the notice and comment requirements of the Administrative Procedures Act (APA). While the entrepreneur rule remains in effect, in remains likely that the rule will be rescinded in the near future by the DHS.

On August 31, 2016, the Department of Homeland Security (DHS) published a proposed rule titled the International Entrepreneur Notice of Proposed Rulemaking [81 FR 60129] [see blog]. On January 17, 2017, three days before President Donald Trump took office, the DHS published a substantially similar final version of the rule that was slated to take effect on July 17, 2017 [82 FR 5238]. Briefly, the rule would have allowed certain international entrepreneurs who had substantial ownership interests in a start-up entity in the United States to seek immigration parole under section 212(d)(5) of the Immigration and Nationality Act (INA) to grow their start-ups. Under the provisions in the rule, the DHS would have granted parole to those entrepreneurs in cases where it determined that the granting of parole would serve a significant public interest. Essentially, the rule would have constituted a special parole program for certain international entrepreneurs. Please note that this is not to be confused with the recently proposed rules for the EB5 program [see article].

However, on July 11, 2017, the DHS published a notice in the Federal Register temporarily delaying the effective date of the International Entrepreneur Rule [82 FR 31887]. In explaining its decision, the DHS cited to President Donald Trump's January 25, 2017 Executive Order 13767, titled “Border Security and Immigration Enforcement Improvements” [see article]. Specifically, Executive Order 13767 instructed the DHS to take appropriate action to ensure that INA section 212(d)(5) immigration parole authority is exercised only on a case-by-case basis and in accord with the plain language of the parole statute [see section].

After reviewing the text of the proposed International Entrepreneur Rule and Executive Order 13767, Secretary Kelly determined that it was appropriate to delay the effective date of the rule for further consideration of it in light of President Trump's parole directive. The new effective date of the International Entrepreneur Rule will be March 14, 2018. Additionally, the DHS will issue a Notice of Proposed Rulemaking seeking public comments on a proposal to fully rescind the International Entrepreneur Rule.

In one small note, one provision of the International Entrepreneur Rule is not being delayed. This provision is the revision of 8 C.F.R. 274a.2(b)(1)(v)(C)(2), which relates to the Form FS-240, Department of State Consular Report of Birth Abroad and to the “List C” listing of acceptable documents for Form I-9 employment verification purposes. These minor provisions are unrelated to the broader parole provisions of the International Entrepreneur Rule and will take effect on July 17, 2017.

It seems highly likely that the special parole program for entrepreneurs will not take effect under the Trump Administration. This is unsurprising in light of the clear language on immigration parole in President Trump's Executive Order 13767. Fortunately, the INA already contains several programs and provisions to support investment immigration and immigration for entrepreneurs in both the immigrant and nonimmigrant contexts. Please see our website's sections on Investment Immigration [see category] and nonimmigrant work visas [see category] for more information.

Please see the following United States Citizenship and Immigration Services (USCIS) document from January 17, 2017, for a brief overview of what the final rule would have entailed had it taken effect on July 17 [PDF version].