[Federal Register Volume 70, Number 170 (Friday, September 2, 2005)]
[Rules and Regulations]
[Pages 52292-52295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-17622]


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DEPARTMENT OF STATE

22 CFR Part 41

RIN 1400-AC12

[Public Notice 5181]


Visas: Treaty Trader, Treaty Investor, or Treaty Alien in a 
Specialty Occupation

AGENCY: State Department.

ACTION: Final rule.

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SUMMARY: This rule expands the definition of treaty trader and treaty 
investor contained at 22 CFR 41.51 to include a new nonimmigrant 
category (E-3) for nonimmigrant treaty aliens coming to the United 
States solely to perform services in a specialty occupation. It also 
reorganizes existing regulatory language pertaining to treaty traders 
and treaty investors to make this information clearer and easier to 
read.

DATES: This rule is effective September 2, 2005.

FOR FURTHER INFORMATION CONTACT: Charles Robertson, Legislation and 
Regulations Division, Visa Services, Department of State, 2401 E 
Street, NW., Room L-603D, Washington, DC 20520-0106; telephone 202-663-
1221; e-mail [email protected].

SUPPLEMENTARY INFORMATION:

Why Is the Department Promulgating This Rule?

    Because of the passage of a new law amending the Immigration and 
Nationality Act (INA). The Emergency Supplemental Appropriations Act 
for Defense, the Global War on Terror, and Tsunami Relief, 2005, Public 
Law 109-13, 119 Stat. 231 was signed into law by the President on May 
11, 2005. Division B, Title V, Section 501 of the Act adds a new 
nonimmigrant visa classification for certain treaty aliens who are 
coming to the United States solely to perform services in a specialty 
occupation. The classification will hereafter be designated the ``E-3 
visa.''

Who Qualifies for the E-3 Visa?

    The new E-3 visa classification currently applies only to nationals 
of Australia as well as their spouses and children. E-3 principal 
nonimmigrant aliens must be coming to the United States solely to 
perform services in a specialty occupation.

Are There Other Requirements for Qualifying for an E-3 Visa?

    The E-3 visa classification is numerically limited, with a maximum 
of 10,500 visas available annually. Spouses and children do not count 
against the numerical limitation nor are they required to possess the 
nationality of the principal. A Labor Condition Application (LCA), 
containing attestations by the sponsoring employer related to wages and 
working conditions, must be filed with and approved by the Department 
of Labor (DOL). At the time of visa application, the visa applicant 
must present the consular officer with the original or copy of the 
approved LCA. However, if the applicant cannot provide the original, 
the consular officer, at his/her discretion, may accept a certified 
copy of the approval. The approved LCA represents DOL's certification 
that the employer has met the attestation requirements of the E-3 
statute.

What Is a Specialty Occupation?

    In general, a specialty occupation is one that requires theoretical 
and practical application of a body of knowledge in professional fields 
and at least the attainment of a bachelor's degree, or its equivalent, 
as a minimum for entry into the occupation in the United States. The 
Department's regulations governing E-3 visas incorporate the 
definitions contained in section 214(i)(1) of the Immigration and 
Nationality Act (INA). In order to determine what constitutes a 
``specialty occupation,'' consular officers abroad will be guided by, 
and will apply, regulatory criteria already developed by the Department 
of Homeland Security for the H-1B classification.

Is It Necessary To File a Petition With the Department of Homeland 
Security as a Prerequisite to Visa Issuance?

    No petition to the Department of Homeland Security is necessary. 
Instead, in the case of an employee seeking a visa, the employee will 
present the necessary evidence for classification directly to the 
consular officer at the time of visa application. Such evidence will 
include the original or copy of the Labor Condition Application signed 
by the prospective employer and approved by the Department of Labor. 
Procedures for the E-3 visa are similar to those established for 
obtaining H-1B1 classification under the U.S.-Chile and U.S.-Singapore 
Free Trade Agreements.

May Spouses Work?

    Yes. INA 214(e)(6) permits the spouse of a principal E nonimmigrant 
to engage in employment in the United States. As is the case for the 
spouse of a principal E-1 and E-2 nonimmigrant, the spouse of a 
qualified E-3 nonimmigrant may, upon admission to the United States, 
apply for an employment authorization document, which an employer could 
use to verify the spouse's employment eligibility. Such spousal 
employment may be in a position other than a specialty occupation.

Regulatory Findings

Administrative Procedure Act

    This final rule involves a foreign affairs function of the United 
States and, therefore, is not subject to the procedures required by 5 
U.S.C. 553 and 554. It is exempt from review under Executive Order 
12866 but has been reviewed internally by the Department to ensure 
consistency with the purposes thereof. This rule does not require 
analysis under the Regulatory Flexibility Act or the Unfunded Mandates 
Reform Act. It has been found not to be a major rule within the meaning 
of the Small Business Regulatory Enforcement Fairness Act of 1996. It 
will not have substantial direct effects on the States, the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. Therefore, it is determined that this rule does not have 
sufficient federalism implications to warrant application of 
consultation provisions of Executive Orders 12372 and 13132. This rule 
does not impose any new reporting or recordkeeping

[[Page 52293]]

requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 
35.

Regulatory Flexibility Act/Executive Order 13272: Small Business

    This rule is not subject to the notice-and-comment rulemaking 
provisions of the Administrative Procedure Act or any other act, and, 
accordingly it does not require analysis under the Regulatory 
Flexibility Act (5 U.S.C. 601, et seq.) and Executive Order 13272, 
section 3(b).

The Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UFMA), 
Pub. L. 104-4, 109 Stat. 48, 2 U.S.C. 1532, generally requires agencies 
to prepare a statement before proposing any rule that may result in an 
annual expenditure of $100 million or more by State, local, or tribal 
governments, or by the private sector. This rule will not result in any 
such expenditure, nor will it significantly or uniquely affect small 
governments.

The Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by 5 U.S.C. 804, for 
purposes of congressional review of agency rulemaking under the Small 
Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-
121. This rule will not result in an annual effect on the economy of 
$100 million or more; a major increase in costs or prices; or adverse 
effects on competition, employment, investment, productivity, 
innovation, or the ability of United States-based companies to compete 
with foreign based companies in domestic and import markets.

Executive Order 12866

    The Department of State has reviewed this proposed rule to ensure 
its consistency with the regulatory philosophy and principles set forth 
in Executive Order 12866 and has determined that the benefits of the 
proposed regulation justify its costs. The Department does not consider 
the proposed rule to be an economically significant action within the 
scope of section 3(f)(1) of the Executive Order since it is not likely 
to have an annual effect on the economy of $100 million or more or to 
adversely affect in a material way the economy, a sector of the 
economy, competition, jobs, the environment, public health or safety, 
or state, local or tribal governments or communities.

Executive Orders 12372 and 13132: Federalism

    This regulation will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or the distribution of power and responsibilities among the 
various levels of government. Nor will the rule have federalism 
implications warranting the application of Executive Orders No. 12372 
and No. 13132.

Paperwork Reduction Act

    Applicants for E-3 visas will fill out forms that OMB has already 
approved, the DS-156 form (approved OMB 1405-0019) and the DS-157 form 
(approved OMB 1405-0134). A specialized form for E-3 applications may 
be developed in the future.

List of Subjects in 22 CFR Part 41

    Immigration, Passports and visas.

PART 41--[AMENDED]

0
1. The authority citation for part 41 continues to read:

    Authority: 8 U.S.C. 1104; Pub. L. 105-277, 112 Stat. 2681-795 
through 2681-801.

    Additional authority is derived from Section 104 of the Illegal 
Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA), 
PL-104-208, 110 Stat. 3546; as well as the Emergency Supplemental 
Appropriations Act for Defense, the Global War on Terror, and Tsunami 
Relief, 2005, P.L. 109-13, 119 Stat. 231.

0
2. Revise Sec.  41.51 to read as follows:


Sec.  41.51  Treaty trader, treaty investor, or treaty alien in a 
specialty occupation.

    (a) Treaty trader. (1) Classification. An alien is classifiable as 
a nonimmigrant treaty trader (E-1) if the consular officer is satisfied 
that the alien qualifies under the provisions of INA 101(a)(15)(E)(i) 
and that the alien:
    (i) Will be in the United States solely to carry on trade of a 
substantial nature, which is international in scope, either on the 
alien's behalf or as an employee of a foreign person or organization 
engaged in trade, principally between the United States and the foreign 
state of which the alien is a national, (consideration being given to 
any conditions in the country of which the alien is a national which 
may affect the alien's ability to carry on such substantial trade); and
    (ii) Intends to depart from the United States upon the termination 
of E-1 status.
    (2) Employee of treaty trader. An alien employee of a treaty trader 
may be classified E-1 if the employee is in or is coming to the United 
States to engage in duties of an executive or supervisory character, 
or, if employed in a lesser capacity, the employee has special 
qualifications that make the services to be rendered essential to the 
efficient operation of the enterprise. The employer must be:
    (i) A person having the nationality of the treaty country, who is 
maintaining the status of treaty trader if in the United States or, if 
not in the United States, would be classifiable as a treaty trader; or
    (ii) An organization at least 50% owned by persons having the 
nationality of the treaty country who are maintaining nonimmigrant 
treaty trader status if residing in the United States or, if not 
residing in the United States, who would be classifiable as treaty 
traders.
    (3) Spouse and children of treaty trader. The spouse and children 
of a treaty trader accompanying or following to join the principal 
alien are entitled to the same classification as the principal alien. 
The nationality of a spouse or child of a treaty trader is not material 
to the classification of the spouse or child under the provisions of 
INA 101(a)(15)(E).
    (4) Representative of foreign information media. Representatives of 
foreign information media shall first be considered for possible 
classification as nonimmigrants under the provisions of INA 
101(a)(15)(I), before consideration is given to their possible 
classification as treaty traders under the provisions of INA 
101(a)(15)(E) and of this section.
    (5) Treaty country. A treaty country is for purposes of this 
section a foreign state with which a qualifying Treaty of Friendship, 
Commerce, and Navigation or its equivalent exists with the United 
States. A treaty country includes a foreign state that is accorded 
treaty visa privileges under INA 101(a)(15)(E) by specific legislation 
(other than the INA).
    (6) Nationality of the treaty country. The authorities of the 
foreign state of which the alien claims nationality determine the 
nationality of an individual treaty trader. In the case of an 
organization, ownership must be traced as best as is practicable to the 
individuals who ultimately own the organization.
    (7) Trade. The term ``trade'' as used in this section means the 
existing international exchange of items of trade for consideration 
between the United States and the treaty country. Existing trade 
includes successfully negotiated contracts binding upon the parties 
that call for the immediate exchange of items of trade. This exchange 
must be traceable and identifiable. Title to the

[[Page 52294]]

trade item must pass from one treaty party to the other.
    (8) Item of trade. Items that qualify for trade within these 
provisions include but are not limited to goods, services, technology, 
monies, international banking, insurance, transportation, tourism, 
communications, and some news gathering activities.
    (9) Substantial trade. Substantial trade for the purposes of this 
section entails the quantum of trade sufficient to ensure a continuous 
flow of trade items between the United States and the treaty country. 
This continuous flow contemplates numerous exchanges over time rather 
than a single transaction, regardless of the monetary value. Although 
the monetary value of the trade item being exchanged is a relevant 
consideration, greater weight is given to more numerous exchanges of 
larger value. In the case of smaller businesses, an income derived from 
the value of numerous transactions that is sufficient to support the 
treaty trader and his or her family constitutes a favorable factor in 
assessing the existence of substantial trade.
    (10) Principal trade. Trade shall be considered to be principal 
trade between the United States and the treaty country when over 50% of 
the volume of international trade of the treaty trader is conducted 
between the United States and the treaty country of the treaty trader's 
nationality.
    (11) Executive or supervisory character. The executive or 
supervisory element of the employee's position must be a principal and 
primary function of the position and not an incidental or collateral 
function. Executive and/or supervisory duties grant the employee 
ultimate control and responsibility for the enterprise's overall 
operation or a major component thereof.
    (i) An executive position provides the employee great authority to 
determine policy of and direction for the enterprise.
    (ii) A position primarily of supervisory character grants the 
employee supervisory responsibility for a significant proportion of an 
enterprise's operations and does not generally involve the direct 
supervision of low-level employees.
    (12) Special qualifications. Special qualifications are those 
skills and/or aptitudes that an employee in a lesser capacity brings to 
a position or role that are essential to the successful or efficient 
operation of the enterprise.
    (i) The essential nature of the alien's skills to the employing 
firm is determined by assessing the degree of proven expertise of the 
alien in the area of operations involved, the uniqueness of the 
specific skill or aptitude, the length of experience and/or training 
with the firm, the period of training or other experience necessary to 
perform effectively the projected duties, and the salary the special 
qualifications can command. The question of special skills and 
qualifications must be determined by assessing the circumstances on a 
case-by-case basis.
    (ii) Whether the special qualifications are essential will be 
assessed in light of all circumstances at the time of each visa 
application on a case-by-case basis. A skill that is unique at one 
point may become commonplace at a later date. Skills required to start 
up an enterprise may no longer be essential after initial operations 
are complete and are running smoothly. Some skills are essential only 
in the short-term for the training of locally hired employees. Long-
term essentiality might, however, be established in connection with 
continuous activities in such areas as product improvement, quality 
control, or the provision of a service not generally available in the 
United States.
    (13) Labor disputes. Citizens of Canada or Mexico shall not be 
entitled to classification under this section if the Attorney General 
and the Secretary of Labor have certified that:
    (i) There is in progress a strike or lockout in the course of a 
labor dispute in the occupational classification at the place or 
intended place of employment; and
    (ii) The alien has failed to establish that the alien's entry will 
not affect adversely the settlement of the strike or lockout or the 
employment of any person who is involved in the strike or lockout.
    (b) Treaty investor. (1) Classification. An alien is classifiable 
as a nonimmigrant treaty investor (E'2) if the consular officer is 
satisfied that the alien qualifies under the provisions of INA 
101(a)(15)(E)(ii) and that the alien:
    (i) Has invested or is actively in the process of investing a 
substantial amount of capital in bona fide enterprise in the United 
States, as distinct from a relatively small amount of capital in a 
marginal enterprise solely for the purpose of earning a living; and
    (ii) Is seeking entry solely to develop and direct the enterprise; 
and
    (iii) Intends to depart from the United States upon the termination 
of E'2 status.
    (2) Employee of treaty investor. An alien employee of a treaty 
investor may be classified E-2 if the employee is in or is coming to 
the United States to engage in duties of an executive or supervisory 
character, or, if employed in a lesser capacity, the employee has 
special qualifications that make the services to be rendered essential 
to the efficient operation of the enterprise. The employer must be:
    (i) A person having the nationality of the treaty country, who is 
maintaining the status of treaty investor if in the United States or, 
if not in the United States, who would be classifiable as a treaty 
investor; or
    (ii) An organization at least 50% owned by persons having the 
nationality of the treaty country who are maintaining nonimmigrant 
treaty investor status if residing in the United States or, if not 
residing in the United States, who would be classifiable as treaty 
investors.
    (3) Spouse and children of treaty investor. The spouse and children 
of a treaty investor accompanying or following to join the principal 
alien are entitled to the same classification as the principal alien. 
The nationality of a spouse or child of a treaty investor is not 
material to the classification of the spouse or child under the 
provisions of INA 101(a)(15)(E).
    (4) Representative of foreign information media. Representatives of 
foreign information media shall first be considered for possible 
classification as nonimmigrants under the provisions of INA 
101(a)(15)(I), before consideration is given to their possible 
classification as nonimmigrants under the provisions of INA 
101(a)(15)(E) and of this section.
    (5) Treaty country. A treaty country is for purposes of this 
section a foreign state with which a qualifying Treaty of Friendship, 
Commerce, and Navigation or its equivalent exists with the United 
States. A treaty country includes a foreign state that is accorded 
treaty visa privileges under INA 101(a)(15)(E) by specific legislation 
(other than the INA).
    (6) Nationality of the treaty country. The authorities of the 
foreign state of which the alien claims nationality determine the 
nationality of an individual treaty investor. In the case of an 
organization, ownership must be traced as best as is practicable to the 
individuals who ultimately own the organization.
    (7) Investment. Investment means the treaty investor's placing of 
capital, including funds and other assets, at risk in the commercial 
sense with the objective of generating a profit. The treaty investor 
must be in possession of and have control over the capital invested or 
being invested. The capital must be subject to partial or total loss if 
investment fortunes reverse. Such investment capital must be the 
investor's unsecured personal business capital or capital secured by 
personal assets. Capital in the process of being

[[Page 52295]]

invested or that has been invested must be irrevocably committed to the 
enterprise. The alien has the burden of establishing such irrevocable 
commitment given to the particular circumstances of each case. The 
alien may use any legal mechanism available, such as by placing 
invested funds in escrow pending visa issuance, that would not only 
irrevocably commit funds to the enterprise but that might also extend 
some personal liability protection to the treaty investor.
    (8) Bona fide enterprise. The enterprise must be a real and active 
commercial or entrepreneurial undertaking, producing some service or 
commodity for profit and must meet applicable legal requirements for 
doing business in the particular jurisdiction in the United States.
    (9) Substantial amount of capital. A substantial amount of capital 
constitutes that amount that is:
    (i)(A) Substantial in the proportional sense, i.e., in relationship 
to the total cost of either purchasing an established enterprise or 
creating the type of enterprise under consideration;
    (B) Sufficient to ensure the treaty investor's financial commitment 
to the successful operation of the enterprise; and
    (C) Of a magnitude to support the likelihood that the treaty 
investor will successfully develop and direct the enterprise.
    (ii) Whether an amount of capital is substantial in the 
proportionality sense is understood in terms of an inverted sliding 
scale; i.e., the lower the total cost of the enterprise, the higher, 
proportionately, the investment must be to meet these criteria.
    (10) Marginal enterprise. A marginal enterprise is an enterprise 
that does not have the present or future capacity to generate more than 
enough income to provide a minimal living for the treaty investor and 
his or her family. An enterprise that does not have the capacity to 
generate such income but that has a present or future capacity to make 
a significant economic contribution is not a marginal enterprise. The 
projected future capacity should generally be realizable within five 
years from the date the alien commences normal business activity of the 
enterprise.
    (11) Solely to develop and direct. The business or individual 
treaty investor does or will develop and direct the enterprise by 
controlling the enterprise through ownership of at least 50% of the 
business, by possessing operational control through a managerial 
position or other corporate device, or by other means.
    (12) Executive or supervisory character. The executive or 
supervisory element of the employee's position must be a principal and 
primary function of the position and not an incidental or collateral 
function. Executive and/or supervisory duties grant the employee 
ultimate control and responsibility for the enterprise's overall 
operation or a major component thereof.
    (i) An executive position provides the employee great authority to 
determine policy of and direction for the enterprise.
    (ii) A position primarily of supervisory character grants the 
employee supervisory responsibility for a significant proportion of an 
enterprise's operations and does not generally involve the direct 
supervision of low-level employees.
    (13) Special qualifications. Special qualifications are those 
skills and/or aptitudes that an employee in a lesser capacity brings to 
a position or role that are essential to the successful or efficient 
operation of the enterprise.
    (i) The essential nature of the alien's skills to the employing 
firm is determined by assessing the degree of proven expertise of the 
alien in the area of operations involved, the uniqueness of the 
specific skill or aptitude, the length of experience and/or training 
with the firm, the period of training or other experience necessary to 
perform effectively the projected duties, and the salary the special 
qualifications can command. The question of special skills and 
qualifications must be determined by assessing the circumstances on a 
case-by-case basis.
    (ii) Whether the special qualifications are essential will be 
assessed in light of all circumstances at the time of each visa 
application on a case-by-case basis. A skill that is unique at one 
point may become commonplace at a later date. Skills required to start 
up an enterprise may no longer be essential after initial operations 
are complete and are running smoothly. Some skills are essential only 
in the short-term for the training of locally hired employees. Long-
term essentiality might, however, be established in connection with 
continuous activities in such areas as product improvement, quality 
control, or the provision of a service not generally available in the 
United States.
    (14) Labor disputes. Citizens of Canada or Mexico shall not be 
entitled to classification under this section if the Attorney General 
and the Secretary of Labor have certified that:
    (i) There is in progress a strike or lockout in the course of a 
labor dispute in the occupational classification at the place or 
intended place of employment; and
    (ii) The alien has failed to establish that the alien's entry will 
not affect adversely the settlement of the strike or lockout or the 
employment of any person who is involved in the strike or lockout.
    (c) Nonimmigrant E-3 treaty aliens in specialty occupations. (1) 
Classification. An alien is classifiable as a nonimmigrant treaty alien 
in a specialty occupation if the consular officer is satisfied that the 
alien qualifies under the provisions of INA 101(a)(15)(E)(iii) and that 
the alien:
    (i) Possesses the nationality of the country statutorily designated 
for treaty aliens in specialty occupation status;
    (ii) Satisfies the requirements of INA 214(i)(1) and the 
corresponding regulations defining specialty occupation promulgated by 
the Department of Homeland Security;
    (iii) Presents to a consular officer a copy of the Labor Condition 
Application signed by the employer and approved by the Department of 
Labor, and meeting the attestation requirements of INA Section 
212(t)(1);
    (iv) Presents to a consular officer evidence of the alien's 
academic or other qualifying credentials as required under INA 
214(i)(1), and a job offer letter or other documentation from the 
employer establishing that upon entry into the United States the 
applicant will be engaged in qualifying work in a specialty occupation, 
as defined in paragraph (c)(1)(ii) of this section, and that the alien 
will be paid the actual or prevailing wage referred to in INA 
212(t)(1);
    (v) Has a visa number allocated under INA 214(g)(11)(B); and,
    (vi) Intends to depart upon the termination of E-3 status.
    (2) Spouse and children of treaty alien in a specialty occupation. 
The spouse and children of a treaty alien in a specialty occupation 
accompanying or following to join the principal alien are, if otherwise 
admissible, entitled to the same classification as the principal alien. 
A spouse or child of a principal E-3 treaty alien need not have the 
same nationality as the principal in order to be classifiable under the 
provisions of INA 101(a)(15)(E). Spouses and children of E-3 principals 
are not subject to the numerical limitations of INA 214(g)(11)(B).

    Dated: July 14, 2005.
Maura Harty,
Assistant Secretary for Consular Affairs, Department of State.
[FR Doc. 05-17622 Filed 9-1-05; 8:45 am]
BILLING CODE 4710-06-P