E-2 Nonimmigrant Status for Aliens in the Commonwealth of the Northern Mariana Islands With Long-Term Investor Status, 79264-79278 [2010-31652]

Agencies

• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 75, Number 243 (Monday, December 20, 2010)]
[Rules and Regulations]
[Pages 79264-79278]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31652]


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DEPARTMENT OF HOMELAND SECURITY

8 CFR Parts 103, 214, and 274a

[CIS No. 2758-08; DHS Docket No. USCIS-2008-0035]
RIN 1615-AB75


E-2 Nonimmigrant Status for Aliens in the Commonwealth of the 
Northern Mariana Islands With Long-Term Investor Status

AGENCY: U.S. Citizenship and Immigration Services, DHS.

ACTION: Final rule.

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SUMMARY: This final rule amends Department of Homeland Security (DHS) 
regulations governing E-2 nonimmigrant treaty investors to establish 
procedures for classifying long-term investors in the Commonwealth of 
the Northern Mariana Islands (CNMI) as E-2 nonimmigrants. This final 
rule implements the CNMI nonimmigrant investor visa provisions of the 
Consolidated Natural Resources Act of 2008 extending the immigration 
laws of the United States to the CNMI.

DATES: This rule is effective January 19, 2011.

FOR FURTHER INFORMATION CONTACT: Steven W. Viger, Office of Policy & 
Strategy, U.S. Citizenship and Immigration Services, Department of 
Homeland Security, 20 Massachusetts Avenue, NW., 2nd Floor, Washington, 
DC 20529-2140, telephone (202) 272-1470.

SUPPLEMENTARY INFORMATION:

I. Background

    The Commonwealth of the Northern Mariana Islands (CNMI) is a U.S. 
territory located in the western Pacific that has been subject to most 
U.S. laws for many years. However, the CNMI has administered its own 
immigration system under the terms of its 1976 covenant with the United 
States. See A Joint Resolution to Approve the Covenant To Establish a 
Commonwealth of the Northern Mariana Islands in Political Union with 
the United States of America (the Covenant Act), Public Law 94-241, 
sec. 1, 90 Stat. 263, 48 U.S.C. 1801 note (1976). On May 8, 2008, 
President Bush signed into law the Consolidated Natural Resources Act 
of 2008 (CNRA). Public Law 110-229, 122 Stat. 754 (2008). Title VII of 
the CNRA extends U.S. immigration laws to the CNMI with transition 
provisions unique to the CNMI. See 48 U.S.C. 1806; 48 U.S.C.A. 1806 
note. The stated purpose of the CNRA is to ensure effective border 
control procedures, to properly address national security and homeland 
security concerns by extending U.S. immigration law to the CNMI 
(phasing-out the CNMI's nonresident contract worker program while 
minimizing to the greatest extent practicable the potential adverse 
economic and fiscal effects of that phase-out), to maximize the CNMI's 
potential for future economic and business growth, and to assure 
workers are protected from the potential for abuse and exploitation. 
See sec. 701 of the CNRA, 48 U.S.C.A. 1806 note.
    Since 1978, the CNMI has admitted a substantial number of foreign 
workers from China, the Philippines, and other countries through an 
immigration system that provides a permit program for foreigners 
entering the CNMI, such as visitors, investors, and workers. In fact, 
foreign workers under this system represent a majority of the CNMI 
labor force. Such workers outnumber U.S. citizens and other local 
residents in private sector employment in the CNMI. Currently, the CNMI 
faces serious economic challenges, including the total collapse of the 
territory's $1 billion a year garment industry and a substantial 
decline in its tourism industry.\1\ The result has been a decrease in 
the CNMI government budget from $217,964,866 in 2005 to $132,565,000 in 
2011.
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    \1\ GAO, Commonwealth of the Northern Mariana Islands: Pending 
Legislation Would Apply U.S. Immigration Law to the CNMI with a 
Transition Period, GAO-08-466 (Washington, DC: Mar. 2008); GAO, U.S. 
Insular Areas: Economic, Fiscal, and Accountability Challenges, GAO-
07-119 (Washington, DC: Dec. 12, 2006); and GAO, Commonwealth of the 
Northern Mariana Islands: Serious Economic, Fiscal, and 
Accountability Challenges, GAO-07-746T (Washington, DC: Apr. 19, 
2007).
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    Title VII of the CNRA was to become effective approximately one 
year after the date of enactment, subject to certain transition 
provisions unique to the CNMI. On March 31, 2009, DHS announced that 
the Secretary of Homeland Security, in her discretion under the CNRA, 
had extended the effective date of the transition program from June 1, 
2009 (the first day of the first full month commencing one year from 
the date of enactment of the CNRA) to November 28, 2009. DHS Press 
Release, ``DHS Delays the Transition to Full Application of U.S. 
Immigration Laws in the Commonwealth of the Northern Mariana Islands'' 
(Mar. 31, 2009), https://www.dhs.gov/ynews/releases/pr_1238533954343.shtm. The transition period concludes on December 31, 
2014. The law also contains several CNMI-specific provisions affecting 
foreign workers and investors during the transition period. These 
temporary provisions are intended to provide for an orderly transition 
from the CNMI permit system to the Immigration and Nationality Act 
(INA) and to mitigate potential harm to the CNMI economy before these 
foreign workers and investors are required to obtain U.S. immigrant or 
nonimmigrant status. See sec. 701 of the CNRA, 48 U.S.C.A. 1806 note; 
48 U.S.C. 1806(c), (d).
    Among the CNMI-specific provisions applicable during the transition 
period is a provision authorizing the Secretary of Homeland Security to 
classify an alien foreign investor in the CNMI as a CNMI-only ``E-2'' 
nonimmigrant investor under section 101(a)(15)(E)(ii) of the INA, 8 
U.S.C. 1101(a)(15)(E)(ii). 48 U.S.C. 1806(c). This status is provided 
upon application of the alien, notwithstanding the treaty requirements 
otherwise applicable. Id. Eligible investors are those who:
     Were admitted to the CNMI in long-term investor status 
under CNMI immigration law before the transition program effective 
date;
     Have continuously maintained residence in the CNMI under 
long-term investor status;

[[Page 79265]]

     Are otherwise admissible to the United States under the 
INA; and
     Maintain the investment(s) that formed the basis for the 
CNMI long-term investor status. Id.

II. Proposed Rule

    In accordance with the CNRA, on September 14, 2009, DHS proposed 
the requirements and procedures for foreign investors in the CNMI to 
obtain nonimmigrant status within the E-2 treaty investor 
classification (``E-2 CNMI Investors''). See 74 FR 46938. DHS provided 
a 30-day comment period in the proposed rule, which ended on October 
14, 2009. The comments received during the comment period are discussed 
below.
    The proposed rule preamble described the CNMI's immigration 
programs for investors that existed before November 28, 2009. Id. at 
46939. The proposed rule also described the current United States E-2 
treaty investor nonimmigrant status. Id. at 46940; see INA sec. 
101(a)(15)(E)(ii), 8 U.S.C. 1101(a)(15)(E)(ii); 8 CFR 214.2(e). DHS 
proposed the procedures for foreign investors in the CNMI to obtain 
nonimmigrant status within the E-2 treaty investor classification, 
including the criteria that must be met and the evidence that must be 
submitted in order to be eligible for E-2 CNMI Investor nonimmigrant 
status. See 74 FR 46938, 46949 (Sept. 14, 2009).
    As stated in the proposed rule, the E-2 CNMI Investor program is 
intended to provide a smooth transition for existing CNMI investors and 
to mitigate potential adverse consequences to the CNMI economy if the 
current investments could not otherwise be maintained as a basis for 
immigration status during the transition period. At the end of the 
transition period, the E-2 CNMI Investor classification will cease to 
exist. E-2 CNMI Investors and qualifying spouses and children must 
qualify for and obtain a new immigrant or nonimmigrant status under the 
INA in order to remain in the CNMI or to enter the CNMI after a 
departure.

III. Final Rule

    This rule provides the procedures to obtain status as an E-2 CNMI 
Investor. The final rule adopts most of the regulations set forth in 
the proposed rule. The rationale for the proposed rule and the 
reasoning provided in its preamble remain valid with respect to these 
regulatory amendments, and DHS adopts such reasoning in support of the 
promulgation of this final rule. DHS has modified some of the proposed 
provisions for the final rule in response to the public comments 
received on the proposed rule. These changes are explained in detail in 
the summary of comments and DHS responses below and are briefly 
summarized as follows:
    1. The proposed rule provided that a CNMI Long-Term Business Entry 
Permit holder with a CNMI Long-Term Business Certificate would be 
eligible for a period of two years on the basis of the alien's minimum 
$150,000 investment. The final rule reduces the minimum investment to 
$50,000. New 8 CFR 214.2(e)(23)(iii)(A)(2).
    2. The final rule provides a two-year application period after the 
effective date of the final rule. See new 8 CFR 214.2(e)(23)(v). The 
proposed rule had proposed that applicants be required to apply for E-2 
CNMI Investor status within two years of the beginning of the 
transition period. This change is one of a number of updating changes 
to reflect the fact that the transition program effective date is now 
in the past. Other such changes include: Changing references to the 
transition program effective date and to CNMI-issued immigration 
statuses to the past tense, as those statuses no longer are in effect 
after that date; changing the reference date to CNMI laws in effect 
from May 8, 2008 (CNRA date of enactment) to November 27, 2009 (day 
before transition program effective date); and removing the definition 
of ``transition program effective date'' from new 8 CFR 
214.2(e)(23)(ii) as that definition is now in the general definitions 
section of the immigration regulations at 8 CFR 1.1(bb). See new 8 CFR 
214.2(e)(23)(v).
    3. The final rule adds the phrase ``or any successor body'' to the 
provision describing where a denial may be appealed. The proposed rule 
had proposed that denied petitions may be appealed to the USCIS 
Administrative Appeals Office. See new 8 CFR 214.2(e)(23)(ix).
    4. The final rule clarifies the authority and process by which 
applicants in the CNMI can be granted E-2 CNMI Investor status in the 
CNMI without having to travel abroad to obtain a nonimmigrant visa. See 
new 8 CFR 214.2(e)(23)(xvi).
    5. The final rule adds the term ``continuous'' to clarify the 
period of absence that would break continuity of residence under the 
definition of ``continuously maintained residence in the CNMI.'' See 
new 8 CFR 214.2(e)(23)(ii)(D).
    6. The final rule makes technical changes to the fee waiver 
provisions, in order to conform the rule to the reorganized format of 8 
CFR 103.7 provided in the DHS final rule, ``U.S. Citizenship and 
Immigration Services Fee Schedule,'' 75 FR 58962 (September 24, 2010). 
See new 8 CFR 103.7(c)(3)(xix).

IV. Comments Received on the Proposed Rule

    During the 30-day comment period, DHS received 13 comments from a 
variety of individuals and organizations, including the CNMI Governor's 
Office, the Saipan Chamber of Commerce, a former Senator of the CNMI, a 
Member of Congress, and other interested organizations and individuals.
    DHS considered the comments received and all other materials 
contained in the docket in preparing this final rule. The final rule 
does not address comments that were beyond the scope of the proposed 
rule, including those seeking changes to United States statutes, 
changes to regulations or petitions outside the scope of the proposed 
rule, or changes to the procedures of other DHS components or agencies.
    All comments and other docket material may be reviewed at the 
Federal Docket Management System (FDMS) at https://www.regulations.gov, 
docket number USCIS-2008-0035.

A. Summary of Comments

    Of the 13 comments USCIS received, two comments supported the 
proposals in the rule as a whole and welcomed DHS's efforts to 
minimize, to the greatest extent practicable, potential adverse 
economic and fiscal effects of federalization and to maximize the 
CNMI's potential for future economic and business growth.
    Most commenters expressed concerns over specific provisions in the 
proposed rule, such as: The requirement to obtain a visa to re-enter 
the CNMI; the minimum investment of $150,000 for Long-Term Business 
Investors; and the continuous residence requirement. Several commenters 
wrote that certain investors would be ineligible for the E-2 CNMI 
Investor visa, that the rule will cause severe economic harm to the 
CNMI economy, and that DHS is incorrect in its interpretation of the 
effect of an extension of the transition period.

B. Comments

    The specific comments are organized by subject matter and addressed 
below.
1. Visa Requirement (Travel and Reentry)
    Two commenters disagreed with the proposed requirement that 
investors must obtain a visa to re-enter the CNMI. Commenters stated 
that obtaining a visa is an expensive and time-consuming process. DHS 
is aware of the public's

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concerns regarding the cost and time involved in obtaining a U.S. visa. 
However, visa fees and visa processing times are managed by the 
Department of State (DOS). After careful consideration, DHS is 
maintaining the visa requirement for investors who are abroad and seek 
to be admitted to the CNMI. A primary purpose of the CNRA is ``to 
ensure that effective border control procedures are implemented and 
observed, and that national security and homeland security issues are 
properly addressed.'' CNRA sec. 701(a), 48 U.S.C.A. 1806 note. The visa 
process is an important aspect of effective border control. Therefore, 
DHS does not consider it appropriate as a matter of travel security and 
immigration policy to waive visa-based grounds of inadmissibility for 
those E-2 CNMI Investors who travel abroad and wish to return to the 
CNMI.
    However, DHS is able to address to a significant extent the general 
concern reflected in the comments about visas and travel costs by 
clarifying in the final rule the authority and process by which 
applicants who are already within the CNMI may be determined to be 
admissible to the United States and granted E-2 CNMI Investor status. 
For CNMI investors, DHS is providing beneficiaries of an E-2 CNMI 
petition in the CNMI with a grant of E-2 CNMI Investor status without 
requiring that they depart the CNMI in order to obtain a visa. In other 
words, an alien in the CNMI who is eligible for E-2 status will not 
have to make a trip abroad solely for the purpose of obtaining a visa, 
but if the alien is otherwise abroad, he or she will have to obtain a 
visa in order to travel to the CNMI.
    DHS notes that there is a distinct difference between a visa and a 
status. DOS issues a visa at a U.S. Embassy or consulate office abroad. 
A visa, placed in the alien's passport, allows an alien to travel to a 
port of entry and apply for admission to the United States in a 
particular status. While having a visa does not guarantee admission to 
the United States, it does indicate that a consular officer has 
determined that the alien is eligible to apply for admission for a 
specific purpose.
    DHS is responsible for all admissions into the United States. If an 
alien seeking admission to the United States is admissible, DHS admits 
the alien and grants his or her status in the United States. The 
specified status controls the period of stay and conditions of such 
stay. In most cases, DHS grants status at the port of entry. As 
previously indicated, DHS is providing beneficiaries of an E-2 CNMI 
petition in the CNMI with a grant of E-2 CNMI Investor status without 
requiring that they depart the CNMI. The grant of such status is within 
DHS' purview. Visa issuance is handled by DOS.
2. Visa Issuance
    One commenter stated that the Department of State should issue 
visas in the CNMI and allow dependents to be exempt from applying in 
person for their E-2 CNMI Investor visas. Another commenter wrote that 
the E-2 CNMI Investor visa should allow for multiple entries.
    DHS cannot address these particular suggestions in this rule. Visa 
issuance is a function of the Department of State, and thus beyond the 
scope of this DHS rule. In any case, DHS believes that the concerns 
about visa issuance and the need for multiple-entry visas are 
adequately addressed by the waiver provision discussed below.
    The Supplementary Information to the proposed rule discussed the 
fact that E-2 CNMI Investor status could be granted directly to aliens 
present in the CNMI, unlike aliens abroad seeking that status who first 
must be issued an E-2 CNMI Investor nonimmigrant visa by the Department 
of State at a consular post abroad and thereafter seek admission in E-2 
CNMI Investor status. See 74 FR 46940; proposed 8 CFR 
214.2(e)(23)(vii). The proposed regulatory language, however, was not 
explicit about how that would be done consistent with the requirement 
that the alien be admissible to the United States. Thus, in order to 
give additional assurance and direction on this point to the affected 
public and to USCIS adjudicators, the final rule clarifies that a 
waiver of inadmissibility under section 212(d)(3)(A)(ii) of the INA may 
be granted to an eligible alien seeking an initial grant of E-2 CNMI 
Investor status from DHS while in the CNMI. See new 8 CFR 
214.2(e)(23)(xvi). Such aliens will necessarily lack an E-2 CNMI 
Investor nonimmigrant visa issued by the Department of State, and are 
thus inadmissible under section 212(a)(7)(B)(i)(II) of the INA; they 
also by definition will (unless changing to E-2 CNMI Investor status 
from another nonimmigrant status under the INA) be aliens present in 
the United States without admission or parole, and thus inadmissible 
under section 212(a)(6)(A) of the INA. Therefore, the rule allows for a 
waiver of those two grounds of inadmissibility for aliens with 
appropriate documentation.
    This waiver provision is based upon the specific language in 
section 212(d)(3)(A)(ii) that in the case of an alien ``in possession 
of appropriate documents'' who is seeking admission as a nonimmigrant, 
most grounds of inadmissibility may be discretionarily waived. INA sec. 
212(d)(3)(A)(ii), 8 U.S.C. 1182(d)(3)(A)(ii). In the unique situation 
of the CNMI, considering the express application of the nonimmigrant 
investor visa provision of the CNRA to aliens lawfully present in the 
CNMI in a non-INA status and without a previous reason to have needed 
to obtain a U.S. nonimmigrant visa from the Department of State, and 
mindful that the stated goal of the CNRA is to mitigate potential 
adverse consequences of transition to the extent possible, DHS 
concludes that the ``appropriate documentation'' requirement for the 
waiver may be met by aliens who meet the documentary requirements for 
petition approval described in new 8 CFR 214.2(e)(23)(vi). Those 
requirements include, but are not limited to, evidence of prior 
admission in CNMI investor status. As a conforming change, new 8 CFR 
214.2(e)(23)(vi) has been titled ``Appropriate documents'' instead of 
the previous ``Accompanying evidence,'' and a valid unexpired passport 
is required as necessary evidence. Id.
    In the case of spouses and children present in the CNMI who are 
seeking a derivative grant of E-2 Investor nonimmigrant status based 
upon a principal investor's approved petition, to satisfy the 
``appropriate documents'' requirement for a section 212(d)(3)(A)(ii) 
waiver of inadmissibility under INA sections 212(a)(6)(A)(i) and 
212(a)(7)(B)(i)(II), the applicant must present (1) a valid unexpired 
foreign passport and (2) evidence that the spouse or child is lawfully 
present in the CNMI under section 1806(e) of title 48, U.S. Code (the 
so-called ``grandfather provision'' applicable until not later than 
November 27, 2011 to aliens issued ``umbrella permits'' or other 
authorization by the CNMI government prior to November 28, 2009). Such 
evidence may include evidence of a grant of parole by USCIS or a grant 
of parole by DHS pursuant to a grant of advance parole by USCIS under 
DHS policy in furtherance of the grandfather provision (in other words, 
parole granted to aliens residing in the CNMI as of November 28, 2009, 
rather than parole granted to arriving aliens for other reasons). See 
new 8 CFR 214.2(e)(23)(xvi). The intended beneficiaries of this 
discretionary waiver are spouses and children lawfully residing in the 
CNMI under the grandfather provision. The reference to parole documents 
is included in the final rule because of uncertainty about what type of 
CNMI documentation may

[[Page 79267]]

be in the possession of these aliens, since they are not themselves 
investors and may not have ``umbrella permits'' or other CNMI-issued 
work authorization documents. Furthermore, USCIS has used parole and 
advance parole broadly with respect to lawfully present aliens in the 
CNMI since the transition date for humanitarian reasons, and thus DHS 
parole documents may be the best way to identify some members of the 
``grandfather'' provision group.
3. Eligible Long-Term CNMI Investors
    Six comments opposed or offered suggestions on the proposed list of 
CNMI investor categories that would be eligible for the E-2 CNMI 
Investor visa.
(a) High Level Managers
    One commenter stated that the proposed regulation omits high level 
managers from the eligible categories of CNMI long-term investors. The 
commenter also stated that these managers may not be eligible for L 
visas. If granted upon petition by an employer, the L-1A Intracompany 
Transferee Executive or Manager nonimmigrant classification enables a 
U.S. employer to transfer an eligible executive or manager from one of 
its affiliated foreign offices to one of its offices in the United 
States. INA sec. 101(a)(15)(L), 8 U.S.C. 1101(a)(15)(L); 8 CFR 
214.2(l). The commenter suggested that high level managers be eligible 
for E-2 CNMI Investor status.
    The final rule includes all CNMI investors who meet the long-term 
investor requirement under the CNRA. See new 8 CFR 214.2(e)(23)(iii). 
If a high-level manager is also an investor eligible for E-2 CNMI 
Investor status, the individual may obtain that status, but the final 
rule does not provide E-2 CNMI Investor status to employees who are not 
the actual investors in the approved investment. The final rule cannot 
go beyond the statute, which specifically provides that CNMI E-2 
Investor status is limited to those investors described in 48 U.S.C. 
1806(c), and therefore the comment cannot be adopted. High level 
managers likely are ineligible for long-term investor status because 
they are not the actual investors. Although high level managers may be 
ineligible for the E-2 CNMI Investor visa, they may be eligible for 
either an H-1B or a transitional worker visa. Thus no change is made in 
the final rule in response to this comment.
(b) Ineligible CNMI Investors
    One commenter wrote that hundreds of investors would be left out 
under the proposed regulation. The comment did not identify which types 
of investors would not be included in the proposed regulation. Certain 
categories used by the CNMI, including the short-term business entry 
permit, the long-term business entry permit, and the 2-Year Japanese 
Retiree classification, are not eligible for E-2 CNMI Investor status 
because these categories do not relate to long-term investors, as 
required by the CNRA. Based upon a review of CNMI investor 
classifications, DHS has included all long-term CNMI investors, 
including retiree investors, in the list of investors eligible for the 
E-2 CNMI Investor classification. See new 8 CFR 214.2(e)(23)(iii).
(c) Grandfathering Long-Term CNMI Investors
    One commenter suggested that DHS ``grandfather'' long-term permit 
holders for a period of four years without adding new enforcement 
criteria in order to avoid economic disruption. While grandfathering 
long-term CNMI permit holders arguably could lessen economic 
disruption, grandfathering is not an option under the CNRA. Section 
702(c) of the CNRA provides for a CNMI investor classification with 
specific eligibility requirements, to be provided only ``upon the 
application of an alien.'' 48 U.S.C. 1806(c)(1). In accordance with the 
eligibility requirements under the CNRA, the E-2 CNMI Investor visa is 
available to all CNMI investors with valid long-term investor permits. 
The final rule has been drafted to minimize the potential adverse 
economic and fiscal effects by applying standards similar to those used 
by the CNMI government in approving long-term investors in the CNMI. 
Thus DHS is not adopting this comment.
(d) Minimum Investment for Long-Term Business Investors
    Three commenters wrote that the $150,000 minimum investment 
requirement for Long-Term Business Investors will exclude investors who 
were granted Long-Term Business Certificates by the CNMI at a lower 
investment minimum of $50,000. In response to these comments, and in 
view of the fact that the CNMI government has previously granted Long-
Term Business Certificates with a minimum investment of $50,000, the 
final rule has been amended to include those investors who were granted 
long-term business certificates with a minimum investment of $50,000, 
as long as they continued to hold that status on the transition program 
effective date. DHS decided to reduce the general minimum investment 
requirement rather than creating a separate eligible investor category 
in order to minimize any potential confusion in the adjudication 
process. See new 8 CFR 214.2(e)(23)(iii)(A).
    This modification of the proposed rule furthers the goal of DHS to 
minimize the potential adverse economic and fiscal effects of this 
rulemaking on the CNMI by including all CNMI long-term investor 
classifications. It is consistent with the CNRA's references to aliens 
previously admitted to the CNMI in long-term investor status as 
eligible for the E-2 CNMI Investor nonimmigrant program.
4. Continuous Residence
    One commenter wrote that what the commenter described as the six-
month residence requirement will be unnecessarily rigorous for those 
investors who do not reside in the CNMI, proposing instead to reduce 
the requirement to two months. Another commenter wrote that the 
residence requirement should apply at the start of the transition 
period.
    The rule does not in fact specifically require six months of 
residency; rather, the investor is required to have resided in the CNMI 
since he or she was lawfully admitted as a long-term investor (which, 
given the passage of time since the last date that such an admission 
could have taken place under the former CNMI immigration laws--November 
27, 2009--is necessarily longer than six months), and to have been 
present in the CNMI for half the time that he or she has resided in the 
CNMI A continuous absence of six months or more may be considered to 
break the continuity of residence. New 8 CFR 214.2(e)(23)(ii)(D). DHS 
therefore interprets the comment to raise in general a concern about 
required residence time, and to request a reduction in the residence 
time to two months. DHS understands the concern but is unable to agree 
with the suggestion to reduce the residency requirement to two months 
or otherwise to modify it substantively. The CNRA requires that the 
investor have ``continuously maintained residence in the Commonwealth 
under long-term investor status.'' Therefore, by definition, the status 
is unavailable to those who do not reside in the CNMI. While reasonable 
absence is not incompatible with maintaining residence, DHS does not 
believe that the lengths of absence suggested by the commenter, 
amounting essentially to absentee investment, are consistent with the 
statute. DHS has made a technical amendment to further clarify that the 
reference to an absence of six months or more as breaking the 
continuity of

[[Page 79268]]

residence means a ``continuous'' absence of six months or more.
    In response to the commenter who wrote that the residence 
requirement should apply at the start of the transition period (i.e., 
that DHS should not consider whether the investor resided in the CNMI 
during the period of status under CNMI law prior to the transition 
program effective date), DHS does not believe that such a change is 
consistent with the CNRA's requirement that the alien have 
``continuously maintained residence in the Commonwealth under long-term 
investor status.'' 48 U.S.C. 1806(c)(1)(B). By definition, long-term 
investor status was a status provided prior to the transition program 
effective date under the laws of the CNMI formerly in effect. Id. In 
the proposed rule, DHS provided as liberal a construction of the CNRA's 
residence requirements as it reasonably could do under the statute, 
including permitting substantial periods of absence from the CNMI not 
to terminate continuous residence. See new 8 CFR 214.2(e)(23)(ii)(D). 
For these reasons, DHS made no changes in response to this comment, 
other than the technical clarification identified above.
5. Economic Impact
    Some commenters stated that the rule would have a significant 
negative impact on the CNMI economy. More specifically, these 
commenters objected that the analysis ``substantially understated'' the 
adverse effects of the rule and imposed an ``exit requirement'' upon 
investors at the end of the transition period.
    DHS disagrees with the commenters' assertion that this rule 
represents either an ``adverse'' economic impact or an ``exit 
requirement.'' The commenters may be conflating the economic impact of 
the CNRA's imposition of the immigration laws of the U.S. on the CNMI 
with the actual economic impact of this rule. When measuring the costs 
of a regulation, USCIS must measure these costs against a baseline. Per 
guidance from OMB Circular A-4, the baseline should be the best 
assessment of the way the world would look absent the proposed action. 
Without this rule in place, foreign investors who cannot qualify for 
status under the immigration laws of the U.S. would be required by the 
CNRA to leave the CNMI no later than Nov. 27, 2011. With this rule in 
place, foreign investors who cannot qualify for status under the 
immigration laws of the U.S. are allowed to stay until December 31, 
2014. Consequently, this rule allows certain foreign investors to 
remain in the CNMI several years beyond when they would be able to stay 
without this rule in place. In this manner, this rule provides a 
significant economic benefit to the CNMI, and comments expressing 
concern over the economic impacts of this rule are misplaced.
    One commenter wrote that DHS incorrectly determined that the 
proposed regulation does not constitute a major rule under the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). The 
commenter believes that this rule should be considered a major rule and 
therefore subject to disapproval by both Houses of the U.S. Congress 
and the President of the United States.
    DHS does not agree with the commenter. The commenter is apparently 
citing SBREFA's Congressional Review Act, 5 U.S.C. 801 (CRA). The CRA 
delays implementation, and provides a mechanism for congressional 
disapproval, of regulations designated as ``major rules'' by the 
Administrator of the Office of Management and Budget. Such a 
designation is made where OMB finds the rule has resulted in or is 
likely to result in (a) an annual effect on the economy of $100,000,000 
or more; (b) a major increase in costs or prices for consumers, 
individual industries, Federal, State, or local government agencies, or 
geographic regions; or (c) significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
United States-based enterprises to compete with foreign based 
enterprises in domestic and export markets. See 5 U.S.C. 804(2). OMB 
has not determined that this rule is a major rule and, therefore, the 
CRA does not apply.
    One commenter argued that DHS utilized outdated data which led to 
an understated economic impact on foreign-owned businesses.
    As mentioned in the analysis, precise data for the CNMI are 
difficult to obtain. The 2005 CNMI Household, Income, and Expenditures 
Survey data, used in the initial analysis, have been updated with the 
most current publicly-available data from the 2007 Economic Census of 
Island Areas in the final analysis. The analysis required by the 
Regulatory Flexibility Act need not produce statistical certainty; the 
law requires that DHS ``demonstrate a `reasonable, good-faith effort' 
to fulfill [the RFA's] requirements.'' Ranchers Cattlemen Action Legal 
Fund v. U.S. Dep't of Agric., 415 F.3d 1078, 1101 (9th Cir. 2005); see 
also Associated Fisheries of Maine v. Daley, 127 F.3d 104, 114-15 (1st 
Cir. 1997). Also, when conducting a Regulatory Flexibility Analysis, 
the RFA requires consideration only of the direct costs of a regulation 
on a small entity that is required to comply with the regulation. Mid-
Tex Electric Coop. v. FERC, 773 F.2d 327, 340-43 (DC Cir. 1985) 
(holding indirect impact of a regulation on small entities that do 
business with or are otherwise dependent on the regulated entities is 
not considered in RFA analyses); see also Cement Kiln Recycling Coal. 
v. EPA, 255 F.3d 855, 869 (DC Cir. 2001) (observing that, in passing 
the RFA, ``Congress did not intend to require that every agency 
consider every indirect effect that any regulation might have on small 
businesses in any stratum of the national economy'').
6. End of Transition Period
    Two comments opposed the termination of the E-2 CNMI Investor 
classification at the end of the transition period.
(a) Extension of Transition Period
    One commenter objected to the DHS interpretation of the CNRA that 
any extension of the transition period by the Secretary of Labor will 
only extend the transitional worker visa and not the CNMI-only investor 
visa. DHS disagrees with the commenter. The CNRA specifically 
authorizes the Secretary of Labor only to extend ``the provisions of 
this subsection'' beyond December 31, 2014. See 48 U.S.C. 
1806(d)(5)(A). ``This subsection'' is subsection (d), which solely 
addresses the transitional worker program. Id. The CNRA does not 
provide authority to extend subsection 1806(c), the nonimmigrant 
investor program, past the end of the transition period. Id.
(b) Expiration of E-2 CNMI Investor Classification
    One commenter wrote that CNMI investors will be required to apply 
for a standard U.S. investor visa in order to remain in the CNMI after 
the transition period has ended. DHS appreciates the concern but is 
constrained by the CNRA. Although the Secretary of Labor has the 
authority to extend the initial 5-year transition period with respect 
to the transitional worker program, the E-2 CNMI Investor provision 
cannot be extended, as discussed above. The transition period will end 
on December 31, 2014. See new 8 CFR 214.2(e)(23)(xiv). Investors who 
seek to remain in the CNMI must apply and be approved for another 
immigrant or nonimmigrant status on or before December 31, 2014. DHS is 
aware that some CNMI investors may not qualify for another immigration 
classification at the end of the transition period;

[[Page 79269]]

however, DHS does not have authority to extend the E-2 CNMI Investor 
classification beyond its statutory limits.

V. Other Changes

    Since DHS issued the proposed rule before the transition program 
effective date, DHS has made a number of other minor changes to the 
final rule as a result of the timing of the rule. These include:

A. Changes of Tense and Other Timing Matters

    The proposed rule was written and issued before the transition 
program effective date. The fact that the final rule is issued after 
that date requires some wording changes. In particular, as immigration 
statuses are now a matter of Federal rather than CNMI law, including 
the Federal ``grandfathered'' status provided for up to two years past 
the transition program effective date to aliens based on their status 
under CNMI immigration law as of that date (see 48 U.S.C. 1806(e)), 
references in the proposed rule that could have been read to imply that 
CNMI immigration law statuses would continue as such after the 
transition program effective date have been modified accordingly. See 
new 8 CFR 214.2(e)(23)(i)(A) (changing references to admission under 
CNMI law and status as of transition date to the past tense); new 8 CFR 
214.2(e)(23)(i)(B) (removing reference to continuous residence ``under 
such long-term investor status''). These changes are technical rather 
than substantive, as the applicant for CNMI E-2 Investor status must 
still show that he or she has continuously resided in the CNMI since 
admission by the CNMI as a long-term investor, that he or she had long-
term investor status as of the transition program effective date, and 
that he or she has maintained the investment(s) that formed the basis 
for that status, as provided by the proposed and the final rule. See 
new 8 CFR 214.2(e)(23)(i)(A), (B), (D); 8 CFR 214.2(e)(23)(ii)(D).
    DHS has also modified the reference to investor classifications 
under CNMI law in new 8 CFR 214.2(e)(23)(iii). The proposed rule 
referred to CNMI law as in effect on May 8, 2008, the date of the 
CNRA's enactment. As explained in the Supplementary Information to the 
proposed rule, the reason for that date was to provide a practicable 
baseline to the rulemaking. In other words, the proposed rule was 
drafted in such a way so as to take into account the possibility that 
the CNMI government could modify its long-term investor classifications 
under the authority to enact immigration law for the CNMI that it 
possessed prior to November 28, 2009. Such an action could have had 
substantial effects on the rulemaking and the public's ability to 
provide useful comments on it. However, the CNMI government did not 
modify its long-term investor classifications. Therefore it is 
appropriate as a non-substantive technical change to conform date 
references in the final rule to the transition of immigration authority 
on November 27, 2009 (the last day of CNMI immigration authority) 
rather than May 8, 2008.
    DHS has also removed the definition of ``transition program 
effective date'' that the proposed rule had provided as proposed new 8 
CFR 214.2(e)(23)(ii)(G). This definition would have been redundant with 
the definition of transition program effective date in 8 CFR 1.1(bb) 
that was provided by the DHS Interim Final Rule, Application of 
Immigration Regulations to the Commonwealth of the Northern Mariana 
Islands, published on October 28, 2009, 74 FR 55726. The transition 
program effective date in this definition is November 28, 2009, the 
same as had been stated in the proposed rule on the E-2 CNMI Investor 
program. That definition applies to all USCIS programs in the CNMI.

B. Reference to Administrative Appeals Office

    The final rule modifies the proposed rule's reference to appeals of 
denials of applications for E-2 CNMI Investor status. See new 8 CFR 
214.2(e)(23)(ix). Rather than refer solely to the ``USCIS 
Administrative Appeals Office'' (AAO), the provision now refers to the 
AAO ``or any successor body.'' This change is not substantive, but 
provides flexibility in case of a future USCIS administrative 
reorganization or the renaming of an office with respect to 
administrative appeals. DHS has found that overly specific references 
to particular officials or offices in regulations can lead either to 
unnecessary future conforming rulemakings, or obsolete regulations, if 
and when names and responsibilities are reorganized or otherwise 
modified.

C. Information Needed for Background Check

    The final rule includes the proposed rule's specific authorization 
to collect biometric information from applicants for E-2 CNMI Investor 
status, with the applicant paying the biometric services fee. See new 8 
CFR 214.2(e)(23)(viii). The final rule clarifies that biometric 
services include reuse of previously provided biometric information 
(typically in an extension of status scenario), consistent with USCIS's 
current practice. Id.

D. Fee Waiver Provisions

    The final rule makes technical revisions in order to conform the 
rule to the reorganized format of 8 CFR 103.7 provided in the DHS final 
rule, ``U.S. Citizenship and Immigration Services Fee Schedule,'' 75 FR 
58962 (Sept. 24, 2010). See new 8 CFR 103.7(c)(3)(xix). The final rule 
also clarifies that the authority to waive fees applies to Forms I-539 
filed by derivative spouses and children, as well as to Forms I-129 
filed by principal applicants. The proposed and final fee rules 
provided generally for need-based application fee waivers for any 
applicant for E-2 CNMI Investor status in new 8 CFR 214.23(e)(xv), but 
the conforming reference in 8 CFR 103.7(c) did not refer specifically 
to the I-539 as well as the Form I-129.

VI. Regulatory Requirements

A. Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. This rule, 
with its impact limited to addressing eligible aliens currently in one 
of the CNMI long-term investor classifications, will not result in an 
annual effect on the economy of $100 million or more; a major increase 
in costs or prices; or significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
U.S.-based companies to compete with foreign-based companies in 
domestic and export markets.

B. Executive Order 12866

    This rule is a significant regulatory action under Executive Order 
12866, section 3(f)(1), Regulatory Planning and Review. Accordingly, 
the Office of Management and Budget has reviewed this rule.
    In accordance with Executive Order 12866, USCIS is required to 
prepare an assessment of the benefits and costs anticipated to occur as 
a result of this regulatory action and to provide the assessment to the 
Executive Office of the President, Office of Management and Budget, 
Office of Information and Regulatory Affairs. The analysis below is the 
DHS Economic Analysis as required by the Executive Order.
1. Public Comments on the Estimated Costs and Benefits of the Proposed 
Rule
    DHS invited the public to comment on the extent of any potential 
economic impact of this rule on small entities, the scope of these 
costs, or more accurate means for defining these costs. As a result, 
DHS received a number of

[[Page 79270]]

comments related to the regulatory analysis performed for the proposed 
rule which is addressed above in the preamble of this rule.
    (1) Background.
    The CNMI lies north of Guam, between the Philippines and Japan. S. 
Rep. No. 110-324, at 2 (2008). The United States captured the islands 
of the CNMI in World War II and they became a district of the U.S.-
administered United Nations Trust Territory of the Pacific Islands. Id. 
Under the Covenant through which the CNMI joined the United States in 
1976, the CNMI was exempted from most provisions of U.S. immigration 
laws and allowed to control its own immigration; however, the Covenant 
gave the U.S. Congress the authority to modify that arrangement through 
Federal legislation. Id.
    The United States enacted the CNRA, amending the level of control 
the CNMI would have over its immigration system to more closely 
harmonize it with the laws and procedures applicable to other U.S. 
jurisdictions, particularly those designed to ensure that border 
control, worker protections, national security, and homeland security 
issues are properly addressed. See CNRA section 701, 48 U.S.C. 1801 
note.
    (2) Changes made by this rule.
    In order to reduce the opportunity for fraud and to improve 
homeland security, this rule requires foreign investors who wish to 
reside in the CNMI to reapply every two years using USCIS Form I-129, 
Petition for a Nonimmigrant Worker. Requiring renewal every two years 
will help USCIS make sure the investor has maintained eligibility and 
provided updated biometrics. The CNRA generally extends Federal control 
of immigration in the CNMI to address national security and homeland 
security issues, and the requirement for renewal within this period is 
consistent with current practice for non-CNMI E-2 treaty investor 
nonimmigrants. See CNRA section 701 (48 U.S.C. 1801 note).
    However, USCIS is aware of and sensitive to the potential economic 
impact of new Federal immigration requirements on the CNMI economy, and 
this rule's requirements have been developed with that in mind. 
According to an economic study performed by the Northern Marianas 
College, employment grew in the CNMI by 12.7 percent annually between 
1980 and 1995, because of expansion of the garment and tourism 
sectors.\2\ During that time, the garment and tourism industries 
accounted for 85 percent of the CNMI economy.\3\ Recently, economic 
conditions have changed dramatically for these two CNMI industries. As 
a result of changes in World Trade Organization agreements, the apparel 
industry in the CNMI was faced with greater international competition. 
Ultimately, this led to a decline in the value of CNMI textile exports 
to the United States, from $1.1 billion in 1998 to $317 million in 
2007.\4\ The number of licensed apparel manufacturers dropped from 34 
to six in 2008.\5\ The remaining three garment factories closed or 
suspended their operations in early 2009.\6\
---------------------------------------------------------------------------

    \2\ Northern Marianas College, Business Development Center, An 
Economic Study of the Commonwealth of the Northern Mariana Islands 
(Saipan, MP: Northern Marianas College 1999).
    \3\ Id.
    \4\ CNMI Comprehensive Economic Development Strategic Plan 2009-
2014. CNMI CEDS Commission Updated 1/29/09.
    \5\ Id.
    \6\ See Walt F. J. Goodridge, The Last Garment Factory is 
Closing, Saipan Tribune (Jan. 14, 2009) (available at https://www.saipantribune.com/newsstory.aspx?cat=3&newsID=86872).
---------------------------------------------------------------------------

    The CNMI tourism industry also has been in decline in recent years. 
The terrorist attacks on the United States on September 11, 2001; the 
Severe Acute Respiratory Syndrome (SARS) epidemic which began in Asia 
in 2003 and led to the death of 774 people worldwide; the downturn in 
many Asian economies; changes in airline service; and other concerns 
have reduced the number of tourists traveling to the CNMI from 736,117 
in 1996 to 389,345 in 2007.\7\ Because of the decline of the CNMI 
economy, USCIS has sought to minimize the potentially negative effects 
of implementing the CNRA, while recognizing that Federal oversight of 
CNMI immigration is necessary to reduce fraud, assure worker 
protections, and ensure U.S. homeland security.
---------------------------------------------------------------------------

    \7\ GAO, Commonwealth of the Northern Mariana Islands: Managing 
Economic Impact of Applying U.S. Immigration Law Requires 
Coordinated Federal Decisions and Additional Data, No. GAO-08-791 
(Aug. 4, 2008) (2008 GAO Rep.), available at https://www.gao.gov/new.items/d08791.pdf.
---------------------------------------------------------------------------

    (3) Alternatives considered.
    USCIS considered a narrow construction for implementation of the 
CNMI-only nonimmigrant investor visa as required by section (6)(c) of 
the Covenant Act, as added by section 702 of the CNRA. Possible 
constructions analyzed included limiting which investor-based 
categories under current CNMI law would be permitted to become CNMI E-2 
Investors. Specifically, DHS discussed options wherein only CNMI 
perpetual foreign investors would be permitted, as well as options 
wherein only long-term business permit holders or a combination of only 
perpetual foreign investors and long-term business permit holders would 
be permitted. However, in light of the potential adverse economic 
impact of such limitations and the goal of limiting adverse economic 
impact on the CNMI, these narrower options were not chosen. USCIS chose 
the broadest interpretation possible, whereby long-term business permit 
holders, foreign investors and retiree investors (other than investors 
under a short term program not judged to qualify under the CNRA) would 
be eligible for CNMI E-2 Investor status, because such an 
interpretation is most in keeping with the mandate to limit adverse 
economic impact.
    (4) The total cost of this regulation to investors.
    (a) Fees.
    This regulation will require all foreign investors wishing to 
remain in the CNMI to reapply for investor registration every two years 
using USCIS Form I-129, Petition for a Nonimmigrant Worker. The current 
application fee for this form is $325. Additionally, this rule will 
require CNMI investors to provide their biometrics and imposes a 
biometrics fee, currently $85. Thus, the total current fees for each 
initial and biennial registration are $410 ($325 + $85). Fee waivers 
for inability to pay are available.
    (b) Paperwork burden.
    It takes approximately 2.75 hours to complete Form I-129, according 
to the instructions to the form. Since most of the respondents under 
this rule will be business investors, their average hourly costs will 
be much higher than the average hourly costs of the average salaried 
worker. Thus, for the purpose of this analysis, USCIS based hourly 
costs on the average hourly salary for ``chief executives'' from the 
Department of Labor's May 2008 National Occupational Employment and 
Wage Estimates to determine the cost associated with the hours 
necessary to complete the Form I-129. The hourly wage for chief 
executives is $77.13. If we multiply $77.13 by 1.4 to account for 
fringe benefits, the hourly cost is $107.98. Multiplying $107.98 by the 
2.75 hours required to fill out the I-129 results in paperwork burden 
cost per form of $296.95 (rounded up to $297). However, because of 
generally lower wage levels in the CNMI and because some CNMI investors 
are retirees, this is a maximum cost estimate and the likely actual 
cost to investors is expected to be lower.
    Additionally, if a foreign investor wishes to bring along his or 
her family they will have to complete Form I-539, Application to 
Extend/Change Status.

[[Page 79271]]

The current application fee for this form is $290 and this form takes 
approximately 45 minutes to complete according to the form 
instructions. If the foreign investor fills out this form himself, the 
paperwork cost to complete this form is $107.98 x .75, or $80.99 
(rounded up to $81) per investor.
    (c) Cost incurred per foreign investor.
    Adding the estimated paperwork burden cost for completing Form I-
129 of $297 to the $410 current application and biometrics fees, the 
total cost incurred for each CNMI foreign investor to submit the I-129 
as required under this rule every two years is $707. Since re-
registration is only required every other year, annualized costs to 
foreign investors are $354 ($707/2).
    In addition, the $81 paperwork cost of completing the I-539 plus 
the $290 application fee equals a total of $371. In this case, Form I-
539 is being used to grant initial status and to extend status every 
two years. This results in an annualized cost of $186 ($371/2) for 
foreign investors to complete and submit Form I-539 every two years for 
their family.
    In addition, spouses and children who wish to receive the same 
status as their foreign investor spouse or parent may be required to 
provide biometrics at a current fee of $85 per person. According to a 
recent GAO report, the average family in the Northern Mariana Islands 
includes two children.\8\ However, biometrics are only required for 
children between the ages of 14 and 21. Therefore, for purposes of 
analysis, we assume that each foreign investor's family will be 
required to provide biometric fees for one spouse and only one child 
for an additional cost of $170. This will be required only every other 
year for an average annualized fee of $85 ($170/2). Adding this fee to 
the above paperwork costs and fees will lead to an annualized cost per 
investor family of $625 ($354 + $186 + $85).
---------------------------------------------------------------------------

    \8\ 2008 GAO Rep., supra note 7.
---------------------------------------------------------------------------

    The above annual estimates represent the costs incurred by those 
investors with a spouse and one child between the ages of 14 and 21. 
For those investors with a spouse and more than one child between the 
age of 14 and 21, these estimates may be too low. For those investors, 
particularly those who are retired, these estimates may be too high. 
Lack of data on foreign investors prevents us from further refining our 
estimates.
    Under the CNMI government's former immigration authority, foreign 
investors were charged $1,000 every two years or $500 per year by the 
CNMI government. CNMI fee setting methodology is unknown to USCIS. For 
this analysis, it is assumed that the CNMI fees resembled U.S. 
Government agency service and user fees in that they were set at the 
amount necessary to recover costs in accordance with Office of 
Management and Budget guidance, and were not intended to generate a 
profit. Thus, while fees collected by the CNMI for the foreign investor 
program will no longer be collected by the CNMI Government, the cost of 
administering that program will not be incurred, resulting in a neutral 
financial effect. To the extent that the CNMI government used such fees 
to raise revenue, such excess will be lost as a result of this rule.
    This final rule replaces the $1,000 fee formerly charged every two 
years by the CNMI government under the legal authority it possessed 
prior to the transition program effective date. Therefore, this rule 
will raise the foreign investor's annualized direct cost by $125 ($625-
$500), through the end of the transition period in 2014.\9\ USCIS did 
not estimate the paperwork burden associated with completing the 
requisite CNMI application forms. Consequently, the $125 annualized 
direct cost for foreign investors is most likely overstated.
---------------------------------------------------------------------------

    \9\ This estimate considers the added time burden costs of the 
new USCIS paperwork but includes no similar cost savings from 
eliminating the paperwork burden associated with the CNMI's current 
program. Thus actual costs savings are likely to be greater than 
estimated here.
---------------------------------------------------------------------------

    Additionally, this rule provides that spouses of foreign investors 
are eligible to apply for employment authorization documents. This 
accommodation is a significant qualitative benefit for an investor's 
spouse who needs or wants to work while living in the CNMI. If the 
spouse chooses to take advantage of this benefit, he or she must file a 
Form I-765, Application for Employment Authorization, which requires a 
current fee of $380 and 3.42 hours to complete. Since the occupation of 
these spouses is unknown, we use fully burdened minimum wage of $10.15 
to estimate the opportunity cost of completing the form at $34.71.\10\ 
DHS is unable to accurately estimate the number of investors who have 
spouses that will request employment authorization, although some CNMI 
E-2 spouses are likely to take advantage of this opportunity.
---------------------------------------------------------------------------

    \10\ Minimum wage totals $7.25/hour x 1.4 (burdened rate) = 
$10.15/hour. See https://www.dol.gov/whd/Flsa/index.htm. $10.15/hour 
x 3.42 hours = $34.71.
---------------------------------------------------------------------------

    (5) Number of filings expected.
    USCIS projects that most foreign investors plan to re-register 
their status, although a small number of foreign investors may be found 
ineligible. For the purpose of this analysis, we assume that all 
current investors will choose to re-register. USCIS does not believe 
the relatively low additional annualized cost of $125 to foreign 
investors will cause foreign investors not to re-register.
    In 2006-2007, there were 448 long-term business entry permit 
holders and 30 foreign investor entry permit holders and retiree 
investor permit holders, totaling 478, or approximately 500 foreign 
registered investors.\11\ In its recent report, the GAO estimates that 
the number of active and valid long-term business and perpetual foreign 
investor entry permits totaled 506 in 2008. In another measure, the GAO 
suggests that 448 businesses were associated with long-term business 
entry permits and additional 56 perpetual foreign entry permits were 
associated with 30 businesses. This analysis assumes that 500 foreign 
investors would be affected because of the constantly changing economic 
environment in CNMI. The annualized costs and fees throughout the 
transition period, as discussed above, would be an additional $125 per 
investor for a total annualized direct cost of $62,500 ($125 x 500) for 
all CNMI foreign investors.
---------------------------------------------------------------------------

    \11\ 2008 GAO Rep., supra note 7.
---------------------------------------------------------------------------

    Foreign investors who travel to and from the CNMI will now be 
required to have visas. USCIS, however, is not requiring foreign 
investors who travel to the United States to have visas in this rule, 
as that requirement will exist irrespective of this rule. Thus the cost 
to obtain a visa is not a cost of this rule but rather the cost of the 
CNRA, and the application of Federal immigration laws in the CNMI.
    (6) The cost to the Federal Government.
    There are no additional costs to the Federal Government, because 
USCIS is generally a fee funded agency. USCIS will recoup its costs 
through the collection of Form I-129 and Form I-539 fees.
    (7) Effects after 2014.
    (a) The CNRA and this rule.
    The CNRA was intended to ensure effective border control procedures 
and to properly address national security and homeland security 
concerns by extending U.S. immigration law to the CNMI, and to maximize 
the CNMI's potential for future economic and business growth under U.S. 
immigration law. This rule establishes temporary regulatory provisions 
to transition the CNMI to U.S. immigration law and to mitigate harm to 
the CNMI economy before investors in the CNMI are required to obtain 
U.S. immigrant or

[[Page 79272]]

nonimmigrant visa classifications. The CNMI investor program 
established by this rule will last until the end of the transition 
program, December 31, 2014, by which time the CNMI E-2 Investor must 
apply and be approved for another immigrant or nonimmigrant status 
under the INA. It is assumed that the data provided by the CNMI and 
other interested parties, gathered by Congress, and considered in 
development and passage of the CNRA showed significant differences in 
the nonimmigrant visa programs under the INA and the visa and 
certificate programs offered by the CNMI. Current foreign workers and 
investors in the CNMI would mostly not be eligible for a status under 
the INA, or else legislation of a transition period and temporary 
mitigating regulations as proposed under this rule would be 
unnecessary. Thus, while one stated goal of the CNRA is the economic 
and business growth of the CNMI, by providing a mitigating transition 
program, the legislation implies that goal will require at least 
through 2014 to be achieved. This rule will operate during that time.
    (b) Effect on investors.
    This rule links investment levels to those required for CNMI status 
for a long-term business investor at $50,000; a perpetual foreign 
investor at $100,000, in an aggregate approved investment in excess of 
$2,000,000, or a minimum of $250,000 in a single investment; and, a 
retiree investor at $100,000 in Saipan, $75,000 in Tinian or Rota, or 
$150,000 elsewhere in the CNMI. To qualify as a U.S. E-2 treaty 
investor with nonimmigrant status, the applicant must invest a 
substantial amount of capital in a bona fide enterprise in the United 
States, must be seeking entry solely to develop and direct the 
enterprise, and must intend to depart the United States when the treaty 
investor status ends. In addition, the treaty investor must be a 
national of a country with which the United States has a treaty of 
friendship, commerce, or navigation and must be entering the United 
States pursuant to treaty provisions.
    There is no accurate way for USCIS to estimate for what other visa 
or nonimmigrant status the 500 foreign registered investors may 
qualify. However, a review of the CNMI eligibility criteria and 
anecdotal evidence indicates that many of them would not meet the 
minimum financial investment necessary to be eligible for U.S. E-2 
status currently. Further, the retiree investor permit holders do not 
qualify as U.S. E-2 Investors in their current status, notwithstanding 
that they may have access to or be able to acquire enough capital to 
invest and qualify. Finally, according to the GAO Report, about 18 
percent of foreign investors in the CNMI are from countries with which 
the United States does not have a treaty of friendship, commerce, or 
navigation.\12\ Thus of the 500 foreign registered investors in the 
CNMI, many of them will need to spend the transition period making 
themselves eligible for another status under the INA. Anecdotal 
evidence indicates that at least a few of the affected investors from 
countries without treaties of friendship, commerce or navigation with 
the United States may be eligible for L-1A executive or managerial 
visas; thus the possibility exists that some of these investors may be 
able to stay in the CNMI in another status after the end of the 
transition program on December 31, 2014.\13\
---------------------------------------------------------------------------

    \12\ 2008 GAO Rep., supra note 7.
    \13\ See INA section 101(a)(15)(L), 8 U.S.C. 1101(a)(15)(L); 8 
CFR 214.2(l).
---------------------------------------------------------------------------

    (c) Effect on the CNMI economy of the CNRA.
    USCIS has not analyzed the precise effect of increased or decreased 
investments in the CNMI caused by the CNRA. Nevertheless, as indicated 
before, the differences between the CNMI foreign investor programs 
before the CNRA took effect and those available afterward under the INA 
are certain to change the mix of foreign investors eligible for a new 
status and maintaining a presence in the CNMI after the end of the 
transition program on December 31, 2014. An immigrant investor program, 
or immigration through investment, seeks to promote economic growth 
through increased export sales, improved regional productivity, 
creation of new jobs, and increased domestic capital investment. The 
presumption is that the investment opportunity coupled with the 
opportunity to live in the country offering the program offers 
advantages, or at least appears to offer advantages, to the investor 
over investments and residence in his or her country of origin. 
Assuming that these goals are generally achieved, withdrawal of the 
alien's investment without substitution of a substantially similar 
investment would, at the least, end what positive results had been 
started, and, at the worst, have the reverse effect and retard growth, 
sales, productivity, jobs, and investment. Thus, if a substantial 
number of the 500 foreign investors in the CNMI are required by the 
CNRA to leave, and their investments are not maintained or replaced by 
another equal or greater investment, then it will likely have a 
negative impact on the CNMI economy. This rule is intended to mitigate 
that impact.
    (8) Benefits.