Federal Register, Volume 75 Issue 243 (Monday, December 20, 2010)

[Federal Register Volume 75, Number 243 (Monday, December 20, 2010)]
[Rules and Regulations]
[Pages 79264-79278]
From the Federal Register Online via the Government Publishing 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), http://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 http://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

[[Page 79266]]

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 http://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 http://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 http://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.
CNMI administration of an immigration system outside U.S.
immigration law led to visa system abuses in the CNMI. Sen. Rep. No.
110-324, at 3 (2008). Given this abuse, there are concerns not only for
the well being of foreign employees working in the CNMI, but also for
the potential abuse of the visa system by those seeking to illegally
emigrate from the CNMI to Guam or elsewhere in the United States. Id.
at 3-5. This reduces the integrity of the U.S. immigration system by
increasing the ease by which aliens may unlawfully enter the United
States through the CNMI. Federal oversight and regulation of CNMI
foreign investors should help reduce abuse by foreign investors in the
CNMI and the opportunity for aliens to exploit the CNMI as an entry
point into the United States. Id. at 2, 4-5. The Federal Government's
assumption of responsibility for immigration enforcement in the CNMI
reduces the opportunity for abuse of the CNMI immigration regime for
illegal access to the United States.
(9) Conclusion.
This rule responds to a Congressional mandate that requires the
Federal Government to assume responsibility for all immigration to the
CNMI by foreign investors, whether temporary or permanent and to
implement the special E-2 investor provisions of the CNRA in the CNMI.
This rule will implement this mandate and thus contribute to U.S.
homeland security. USCIS concludes that the alternative chosen for this
rule represents the most cost-effective means of implementing its
Congressional mandate while having the least possible negative impact
on the CNMI economy.

C. Regulatory Flexibility Act--Final Regulatory Flexibility Analysis

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended by the Small Business Regulatory Enforcement Fairness Act of
1996, Public Law 104-121, requires Federal agencies to consider the
impact of their regulatory proposals on small entities whenever an
agency must publish a notice of proposed rulemaking. Recently, new data
concerning the CNMI were made available by the U.S. Census Bureau. DHS
also examined a recent U.S. Department of the Interior (DOI) report;
however the data in that report did not apply to this analysis. DHS did
incorporate some of the overall

[[Page 79273]]

DOI conclusions later in this analysis.\14\ Accordingly, DHS has
updated this analysis to reflect the most recent information. In the
Initial Regulatory Flexibility Analysis (IRFA), DHS primarily utilized
data from the 2005 CNMI Household, Income, and Expenditures Survey
(HIES) to analyze the impacts on small entities. Since 2005, the CNMI
economy has experienced significant changes; new data from the 2007
Economic Census of Island Areas show important differences in the labor
force and business establishments.\15\
---------------------------------------------------------------------------

\14\ U.S. Department of the Interior, The Secretary of the
Interior, A Report on the Alien Worker Population in the
Commonwealth of the Northern Mariana Islands, Washington, DC, April
2010, available at http://www.doi.gov/oia/reports/042810_FINAL_CNMI_Report.pdf.
\15\ The 2007 Economic Census of Island Areas was released by
the Census Bureau on September 1, 2009. The 2007 Economic Census
results for the CNMI are available at http://factfinder.census.gov/servlet/FindEconDatasetsServlet?_caller=geoselect&_ts=291885681264.
---------------------------------------------------------------------------

1. Objectives of, and Legal Basis for, the Final Rule
On May 8, 2008, President Bush signed into law the Consolidated
Natural Resources Act of 2008 (CNRA), Public Law 110-229. Title VII of
the CNRA extends U.S. immigration laws to the CNMI with transition
provisions unique to the CNMI. 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, and to maximize the CNMI's potential for
future economic and business growth. 48 U.S.C. 1801 note.
The law also contains several CNMI-specific provisions affecting
foreign workers and investors during the transition period. 48 U.S.C.
1806(b), (c). This rule establishes procedures for foreign investors in
the CNMI to obtain nonimmigrant status within the E-2 treaty investor
classification, in accordance with the CNRA. Additionally, this rule is
intended to provide a smooth transition for existing CNMI investors and
to mitigate potential adverse consequences of the CNRA to the CNMI.
2. Significant Issues Raised by Public Comments in Response to the IRFA
DHS received a number of comments relating to the economic
analysis. These comments have been addressed in section IV(B)(5)
(Economic Impact), above.
3. Description and Estimate of the Number of Small Entities to Which
the Rule Will Apply
a. Regulated entities.
This rule will directly affect foreign investors in the CNMI. As
previously stated, foreign investors in the past could apply for the
following CNMI entry permits: Foreign investor permits, long-term
business permits, and retiree investor permits. These investors are
small business owners and this rule does not regulate small nonprofits
or small governmental jurisdictions.
b. Number of small entities to which the final rule will apply.
This analysis is most concerned with the number of business
establishments owned by foreign investors, the number of workers they
employ, and the revenue levels of those entities. This analysis is
based on data from the 2007 Economic Census of Island Areas as we
believe they are the best data publicly available.\16\
---------------------------------------------------------------------------

\16\ The 2007 Economic Census data for the CNMI is available at
http://factfinder.census.gov/servlet/FindEconDatasetsServlet?_caller=geoselect_ts=291885681264.
---------------------------------------------------------------------------

According to the 2007 Economic Census of Island Areas, there were
1,191 business establishments in the CNMI, and 365 of these
establishments were owned by foreign investors.\17\ Table 1 outlines
the pertinent statistics on these foreign-owned businesses.
---------------------------------------------------------------------------

\17\ This number is smaller than the 500 long-term permit
holders identified by the GAO report referenced earlier. This likely
is due to data reporting restrictions of the Census Bureau.

Table 1--Foreign-Owned Businesses in the CNMI
----------------------------------------------------------------------------------------------------------------
Avg sales/
Industry name (NAICS) Est. Emp. Avg emp. receipts SBA guideline
----------------------------------------------------------------------------------------------------------------
Total CNMI (all sectors & est.)...... 1191 22,622 19 $1,078,243 ........................
Total Foreign-owned Est.............. 365 9,663 26 1,149,214 ........................
----------------------------------------------------------------------------------------------------------------
Foreign-owned by sector
----------------------------------------------------------------------------------------------------------------
Construction (23).................... 17 165 10 379,941 $7 to $33 million.
Manufacturing (31-33)................ 23 3,121 136 2,831,696 500-1,500 employees.
Wholesale (42)....................... 18 168 9 1,104,444 100 employees.
Retail (44-45)....................... 77 785 10 660,727 $7 to $29 million.
Real Estate (53)..................... 29 103 4 178,517 $7 to $25.5 million.
Prof Services (54)................... 16 88 6 169,063 $4.5 to $27 million.
Admin/Support Services (56).......... 23 245 11 414,043 $4.5 to $35.5 million.
Educational Services (61)............ 28 83 3 76,500 $7 to $35.5 million.
Arts & Entertain (71)................ 20 268 13 482,850 $7 million.
Accomm. & Food Services (72)......... 68 2,661 39 1,367,735 $7 to $20.5 million.
Other Services (81).................. 25 256 10 259,280 $7 to $25 million.
----------------------------------------------------------------------------------------------------------------

Table 1 illustrates the fact that all foreign-owned businesses in
the CNMI are small entities by comparing the average number of
employees per establishment or the average receipts/sales/revenue per
establishment to the size guidelines outlined by the Small Business
Administration.
It is important to note that the manufacturing numbers reported in
Table 1 are certainly changed today. The 2007 data indicated that the
apparel sector of the manufacturing industry in the CNMI accounted for
42% of the entire manufacturing industry. Now that apparel
manufacturing in the CNMI has ceased operations, we estimate that 10
foreign-owned apparel manufacturing establishments have ceased
operations and this results in a decrease of about 1,311 employees.\18\
One promising development in the CNMI was highlighted by a recent
Department of the Interior study that reported a number of the
industries listed above are now forecasting employment growth

[[Page 79274]]

by 2014.\19\ As of 2007, the foreign-owned small businesses that will
be impacted by this rule employed about 43% of workers in the CNMI.
This segment certainly represents a substantial number of employers and
business establishments in the CNMI.
---------------------------------------------------------------------------

\18\ 23 est. x 42% = 9.66 fewer establishments and 3,121
employees x 42% = 1,311 fewer employees.
\19\ U.S. Department of the Interior, A Report on the Alien
Worker Population in the Commonwealth of the Northern Mariana
Islands, Wash., DC (Apr. 2010), available at http://www.doi.gov/oia/reports/042810_FINAL_CNMI_Report.pdf.
---------------------------------------------------------------------------

4. Reporting, Recordkeeping and Other Compliance Requirements
a. Significance of Impact.
As discussed above, the average petitioner will be required to
incur annualized fee and paperwork burden costs of $625 ($354 for
investors + $186 for family members' I-539 + $85 for biometrics), and
the CNMI government will not charge its $1,000 fee every two years.
Therefore, at most this rule will raise the foreign investor's
annualized costs by $125 ($625-$500) each year of the transition. The
increased annualized cost for each investor due to this rule represents
less than 0.01087% of average annual receipts in the CNMI for foreign
owned establishments (see Table 1 for average sales/receipt
information).\20\ Therefore, USCIS believes that this additional fee
and paperwork burden should have little to no impact on the decision of
foreign investors to remain in the CNMI.
---------------------------------------------------------------------------

\20\ $125/$1,149,214 (average annual receipts/revenue of
foreign-owned establishments) = 0.01087%.
---------------------------------------------------------------------------

b. Paperwork Reduction Act--new reporting requirement.
Foreign investors who wish to reside in the CNMI will have to apply
in the first year and reapply every two years using USCIS Form I-129,
Petition for a Nonimmigrant Worker. This is a new requirement within
the meaning of the Paperwork Reduction Act. As stated above, Form I-129
results in paperwork burden cost per form of $297. Additionally, a
foreign investor who brings along his or her family will have to
complete Form I-539, Application to Extend/Change Status. The paperwork
cost to complete this form is $81. If the spouse of a foreign investor
chooses to seek employment, he or she must file a Form I-765,
Application for Employment Authorization, which has a paperwork burden
estimated at $35.47 for the spouses taking advantage of this option.
This rule does not require professional skills for the preparation of
reports or records.
5. Steps Taken To Minimize Significant Adverse Economic Impacts on
Small Entities
Throughout the development of the rule, DHS attempted to gather
information regarding the economic impact of the rule's requirements on
foreign investors. DHS considered limiting the categories of investors
under previous CNMI law who would be permitted to become CNMI E-2
Investors. However, in light of the goal of limiting adverse economic
impact on the CNMI, 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.
Since all of the entities directly affected by this rule are small,
this rule provides no different requirements or any exemption from
coverage of the rule based on entity size. It should be noted, however,
that small entities may request a waiver of their fees under this rule,
if they do not have the ability to pay.
Commenters recommended a few alternatives to the proposed rule.
These include: Extension of transition period; elimination of the
$150,000 minimum investment requirement; and change in the definition
of continuous residence.
(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. As previously discussed, the commenter's interpretation of the
CNRA is incorrect. Therefore, DHS is unable to adopt this alternative
approach.
(b) 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. As previously discussed, DHS found that
these comments had merit. The final rule therefore 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
and are otherwise eligible.
This modification of the proposed rule furthers the goal of DHS and
the intent of Congress to minimize potential adverse economic and
fiscal effects of the CNRA on the CNMI and small entities by including
all CNMI long-term investor classifications.
(c) Continuous Residence:
One commenter wrote that the proposed rule's residence requirement
will be unnecessarily rigorous for those investors who do not reside in
the CNMI and proposed reducing the requirement to two months. Another
commenter wrote that the residence requirement should apply at the
start of the transition period. As previously discussed, DHS does not
believe that adopting these suggestions would be consistent with the
CNRA's continuous residence requirement.
D. Executive Order 13132
Executive Order 13132 requires each Federal agency to develop a
process to ensure ``meaningful and timely input by State and local
officials in the development of regulatory policies that have
Federalism implications.'' The phrase ``policies that have Federalism
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.'' USCIS has considered the Federalism implications of this
rule under the Executive Order.
Executive Order 13132 is based upon the role and authorities of
``States'' under the U.S. Constitution. The CNMI is not a ``State'' as
defined by section 1(b) of Executive Order 13132 to include ``the
States of the United States of America, individually or collectively,
and, where relevant, to State governments, including units of local
government and other political subdivisions established by the
States.'' Therefore, USCIS has determined that no actions are required
under Executive Order 13132. USCIS has, however, solicited the input of
the CNMI government and other CNMI stakeholders on issues relating to
treatment of investors under Public Law 110-229.
E. Paperwork Reduction Act
Under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., all
Departments are required to submit to the Office of Management and
Budget (OMB), for review and approval, any reporting or recordkeeping
requirements inherent in a regulatory action. The information
collection requirements contained in this rule, Form I-129, Form I-539,
and Form I-765, have been previously approved for use by OMB. The OMB

[[Page 79275]]

control numbers for these collections are 1615-0009, 1615-0003, and
1615-0040 respectively. The evidentiary requirements contained in this
rule at 8 CFR 214.2(e)(23)(vi) are not new requirements and are
currently contained on the instructions to Form I-129. Accordingly,
these evidentiary requirements will not add to the burden for
completing Form I-129 and Supplement E.
This final rule requires minor changes to:
Form I-539, Application to Extend/Change Nonimmigrant
Status (OMB Control No. 1615-0003) and
Form I-129, Petition for Nonimmigrant Worker (OMB Control
No. 1615-0009).
Accordingly, USCIS has prepared OMB 83-Cs (correction worksheets)
for both these forms to reflect non-substantive changes, and has
submitted them to OMB with this final rule.
It is estimated that there will be a slight increase in the number
of filings of Form I-129 (due to the new requirement to have foreign
investors who wish to reside in the CNMI submit Form I-129) and Form I-
539. However, the current OMB-approved annual burden hours are
sufficient to encompass the filings added as a result of this rule.

List of Subjects

8 CFR Part 103

Administrative practice and procedure, Authority delegations
(Government agencies), Freedom of information, Immigration, Privacy,
Reporting and recordkeeping requirements, Surety bonds.

8 CFR Part 214

Administrative practice and procedure, Aliens, Employment, Foreign
officials, Health professions, Reporting and recordkeeping
requirements, Students.

8 CFR Part 274a

Administrative practice and procedure, Aliens, Employment,
Penalties, Reporting and recordkeeping requirements.

Accordingly, chapter I of title 8 of the Code of Federal
Regulations is amended as follows:

PART 103--POWERS AND DUTIES; AVAILABILITY OF RECORDS

0
1. The authority citation for part 103 is revised to read as follows:

Authority: 5 U.S.C. 301, 552, 552a; 8 U.S.C. 1101, 1103, 1304,
1356; 31 U.S.C. 9701; 48 U.S.C. 1806; Public Law 107-296, 116 Stat.
2135 (6 U.S.C. 1 et seq.), E.O. 12356, 47 FR 14874, 15557, 3 CFR,
1982 Comp., p. 166; 8 CFR part 2.

0
2. Section 103.7 is amended by:
0
a. Removing the word ``and'' at the end of paragraph (c)(3)(xvii);
0
b. Removing the ``.'' at the end of paragraph (c)(3)(xviii) and adding
a ``, and'' in its place; and by
0
c. Adding a new paragraph (c)(3)(xix) to read as follows:

Sec. 103.7 Fees.

* * * * *
(c) * * *
(3) * * *
(xix) Petition for Nonimmigrant Worker (Form I-129) or Application
to Extend/Change Nonimmigrant Status (Form I-539), only in the case of
an alien applying for E-2 CNMI Investor nonimmigrant status under 8 CFR
214.2(e)(23).
* * * * *

PART 214--NONIMMIGRANT CLASSES

0
1. The authority citation for part 214 is revised to read as follows:

Authority: 8 U.S.C. 1101, 1102, 1103, 1182, 1184, 1186a, 1187,
1221, 1281, 1282, 1301-1305 and 1372; sec. 643, Pub. L. 104-208, 110
Stat. 3009-708; Public Law 106-386, 114 Stat. 1477-1480; section 141
of the Compacts of Free Association with the Federated States of
Micronesia and the Republic of the Marshall Islands, and with the
Government of Palau, 48 U.S.C. 1901 note, and 1931 note,
respectively; 48 U.S.C. 1806; 8 CFR part 2.

0
2. Section 214.2 is amended by adding a new paragraph (e)(23) to read
as follows:

Sec. 214.2 Special requirements for admission, extension, and
maintenance of status.

* * * * *
(e) * * *
(23) Special procedures for classifying foreign investors in the
Commonwealth of the Northern Mariana Islands (CNMI) as E-2 nonimmigrant
treaty investors under title VII of the Consolidated Natural Resources
Act of 2008 (Pub. L. 110-229), 48 U.S.C. 1806.
(i) E-2 CNMI Investor eligibility. During the period ending on
January 18, 2013, an alien may, upon application to the Secretary of
Homeland Security, be classified as a CNMI-only nonimmigrant treaty
investor (E-2 CNMI Investor) under section 101(a)(15)(E)(ii) of the Act
if the alien:
(A) Was lawfully admitted to the CNMI in long-term investor status
under the immigration laws of the CNMI before the transition program
effective date and had that status on the transition program effective
date;
(B) Has continuously maintained residence in the CNMI;
(C) Is otherwise admissible to the United States; and
(D) Maintains the investment or investments that formed the basis
for such long-term investment status.
(ii) Definitions. For purposes of paragraph (e)(23) of this
section, the following definitions apply:
(A) Approved investment or residence means an investment or
residence approved by the CNMI government.
(B) Approval letter means a letter issued by the CNMI government
certifying the acceptance of an approved investment subject to the
minimum investment criteria and standards provided in 4 N. Mar. I. Code
section 5941 et seq. (long-term business certificate), 4 N. Mar. I.
Code section 5951 et seq. (foreign investor certificate), and 4 N. Mar.
I. Code section 50101 et seq. (foreign retiree investment certificate).
(C) Certificate means a certificate or certification issued by the
CNMI government to an applicant whose application has been approved by
the CNMI government.
(D) Continuously maintained residence in the CNMI means that the
alien has maintained his or her residence within the CNMI since being
lawfully admitted as a long-term investor and has been physically
present therein for periods totaling at least half of that time.
Absence from the CNMI for any continuous period of more than six months
but less than one year after such lawful admission shall break the
continuity of such residence, unless the subject alien establishes to
the satisfaction of DHS that he or she did not in fact abandon
residence in the CNMI during such period. Absence from the CNMI for any
period of one year or more during the period for which continuous
residence is required shall break the continuity of such residence.
(E) Public organization means a CNMI public corporation or an
agency of the CNMI government.
(F) Transition period means the period beginning on the transition
program effective date and ending on December 31, 2014.
(iii) Long-term investor status. Long-term investor status under
the immigration laws of the CNMI includes only the following investor
classifications under CNMI immigration laws as in effect on or before
November 27, 2009:
(A) Long-term business investor. An alien who has an approved
investment of at least $50,000 in the CNMI, as evidenced by a Long-Term
Business Certificate.

[[Page 79276]]

(B) Foreign investor. An alien in the CNMI who has invested either
a minimum of $100,000 in an aggregate approved investment in excess of
$2,000,000, or a minimum of $250,000 in a single approved investment,
as evidenced by a Foreign Investment Certificate.
(C) Retiree investor. An alien in the CNMI who:
(1) Is over the age of 55 years and has invested a minimum of
$100,000 in an approved residence on Saipan or $75,000 in an approved
residence on Tinian or Rota, as evidenced by a Foreign Retiree
Investment Certification; or
(2) Is over the age of 55 years and has invested a minimum of
$150,000 in an approved residence to live in the CNMI, as evidenced by
a Foreign Retiree Investment Certificate.
(iv) Maintaining investments. An alien in long-term investor status
under the immigration laws of the CNMI is maintaining his or her
investments if that alien investor is in compliance with the terms upon
which the investor certificate was issued.
(v) Filing procedures. An alien seeking classification under E-2
CNMI Investor nonimmigrant status must file an application for E-2 CNMI
investor nonimmigrant status, along with accompanying evidence, with
USCIS in accordance with the form instructions before January 18, 2013.
An application filed after the filing date deadline will be rejected.
(vi) Appropriate documents. Documentary evidence establishing
eligibility for E-2 CNMI nonimmigrant investor status is required.
(A) Required evidence of admission includes a valid unexpired
foreign passport and a properly endorsed CNMI admission document (e.g.,
entry permit or certificate) reflecting lawful admission to the CNMI in
long-term business investor, foreign investor, or retiree foreign
investor status.
(B) Required evidence of long-term investor status includes:
(1) An unexpired Long-Term Business Certificate, in the case of an
alien in long-term business investor status.
(2) An unexpired Foreign Investment Certificate, in the case of an
alien in foreign investor status.
(3) A Foreign Retiree Investment Certification or a Foreign Retiree
Investment Certificate, in the case of an alien in retiree investor
status.
(C) Required evidence that the long-term investor is maintaining
his or her investment includes all of the following, as applicable:
(1) An approval letter issued by the CNMI government.
(2) Evidence that capital has been invested, including bank
statements showing amounts deposited in CNMI business accounts,
invoices, receipts or contracts for assets purchased, stock purchase
transaction records, loan or other borrowing agreements, land leases,
financial statements, business gross tax receipts, or any other
agreements supporting the application.
(3) Evidence that the applicant has invested at least the minimum
amount required, including evidence of assets which have been purchased
for use in the enterprise, evidence of property transferred from abroad
for use in the enterprise, evidence of monies transferred or committed
to be transferred to the new or existing enterprise in exchange for
shares of stock, any loan or mortgage, promissory note, security
agreement, or other evidence of borrowing which is secured by assets of
the applicant.
(4) A comprehensive business plan for new enterprises.
(5) Articles of incorporation, by-laws, partnership agreements,
joint venture agreements, corporate minutes and annual reports,
affidavits, declarations, or certifications of paid-in capital.
(6) Current business licenses.
(7) Foreign business registration records, recent tax returns of
any kind, evidence of other sources of capital.
(8) A listing of all resident and nonresident employees.
(9) A listing of all holders of business certificates for the
business establishment.
(10) A listing of all corporations in which the applicant has a
controlling interest.
(11) In the case of a holder of a certificate of foreign
investment, copies of annual reports of investment activities in the
CNMI containing sufficient information to determine whether the
certificate holder is under continuing compliance with the standards of
issuance, accompanied by annual financial audit reports performed by an
independent certified public accountant.
(12) In the case of an applicant who is a retiree investor,
evidence that he or she has an interest in property in the CNMI (e.g.,
lease agreement), evidence of the value of the property interest (e.g.,
an appraisal regarding the value of the property), and, as applicable,
evidence of the value of the improvements on the property (e.g.,
receipts or invoices of the costs of construction, the amount paid for
a preexisting structure, or an appraisal of improvements).
(vii) Physical presence in the CNMI. Physical presence in the CNMI
at the time of filing or during the pendency of the application is not
required, but an application may not be filed by, or E-2 CNMI Investor
status granted to, any alien present in U.S. territory other than in
the CNMI. If an alien with CNMI long-term investor status departs the
CNMI on or after the transition program effective date but before being
granted E-2 CNMI Investor status, he or she may not be re-admitted to
the CNMI without a visa or appropriate inadmissibility waiver under the
U.S. immigration laws. If USCIS grants E-2 CNMI Investor nonimmigrant
classification to an alien who is not physically present in the CNMI at
the time of the grant, such alien must obtain an E-2 CNMI Investor
nonimmigrant visa at a consular office abroad in order to seek
admission to the CNMI in E-2 CNMI Investor status.
(viii) Information for background checks. USCIS may require an
applicant for E-2 CNMI Investor status, including but not limited to
any applicant for derivative status as a spouse or child, to submit
biometric information. An applicant present in the CNMI must pay or
obtain a waiver of the biometric services fee described in 8 CFR
103.7(b) for any biometric services provided, including but not limited
to reuse of previously provided biometric information for background
checks.
(ix) Denial. A grant of E-2 CNMI Investor status is a discretionary
determination, and the application may be denied for failure of the
applicant to demonstrate eligibility or for other good cause. Denial of
the application may be appealed to the USCIS Administrative Appeals
Office or any successor body.
(x) Spouse and children of an E-2 CNMI Investor.
(A) Classification. The spouse and children of an E-2 CNMI Investor
accompanying or following-to-join the principal alien, if otherwise
admissible, may receive the same classification as the principal alien.
The nationality of a spouse or child of an E-2 CNMI investor is not
material to the classification of the spouse or child.
(B) Employment authorization. The spouse of an E-2 CNMI Investor
lawfully admitted in the CNMI in E-2 CNMI Investor nonimmigrant status,
other than the spouse of an E-2 CNMI investor who obtained such status
based upon a Foreign Retiree Investment Certificate, is eligible to
apply for employment authorization under 8 CFR 274a.12(c)(12) while in
E-2 CNMI Investor nonimmigrant status. Employment authorization
acquired under this paragraph is limited to employment in the CNMI
only.
(xi) Terms and conditions of E-2 CNMI Investor nonimmigrant status.

[[Page 79277]]

(A) Nonimmigrant status. E-2 CNMI Investor nonimmigrant status and
any derivative status are only applicable in the CNMI. Entry,
employment, and residence in the rest of the United States (including
Guam) require the appropriate visa or visa waiver eligibility. An E-2
CNMI Investor who enters, attempts to enter or attempts to travel to
any other part of the United States without the appropriate visa or
visa waiver eligibility, or who violates conditions of nonimmigrant
stay applicable to any such authorized status in any other part of the
United States, will be deemed to have violated the terms and conditions
of his or her E-2 CNMI Investor status. An E-2 CNMI Investor who
departs the CNMI will require an E-2 CNMI investor visa for readmission
to the CNMI as an E-2 CNMI Investor.
(B) Employment authorization. An alien with E-2 CNMI Investor
nonimmigrant status is only employment authorized in the CNMI for the
enterprise that is the basis for his or her CNMI Foreign Investment
Certificate or Long-Term Business Certificate, to the extent that such
Certificate authorized such activity. An alien with E-2 CNMI Investor
nonimmigrant status based upon a Foreign Retiree Investor Certificate
is not employment authorized.
(C) Changes in E-2 CNMI investor nonimmigrant status. If there are
any substantive changes to an alien's compliance with the terms and
conditions of qualification for E-2 CNMI Investor nonimmigrant status,
the alien must file a new application for E-2 CNMI Investor
nonimmigrant status, in accordance with the appropriate form
instructions to request an extension of stay in the United States.
Prior approval is not required if corporate changes occur that do not
affect a previously approved employment relationship, or are otherwise
non-substantive.
(D) Unauthorized change of employment. An unauthorized change of
employment to a new employer will constitute a failure to maintain
status within the meaning of section 237(a)(1)(C)(i) of the Act.
(E) Periods of admission. (1) An E-2 CNMI Investor may be admitted
for an initial period of not more than two years.
(2) The spouse and children accompanying or following-to-join an E-
2 CNMI Investor may be admitted for the period during which the
principal alien is in valid E-2 CNMI Investor nonimmigrant status. The
temporary departure from the United States of the principal E-2 CNMI
Investor shall not affect the derivative status of the dependent spouse
and children, provided the familial relationship continues to exist and
the principal alien remains eligible for admission as an E-2 CNMI
Investor.
(xii) Extensions of stay. Requests for extensions of E-2 CNMI
Investor nonimmigrant status may be granted in increments of not more
than two years, until the end of the transition period. To request an
extension of stay, an E-2 CNMI Investor must file with USCIS an
application for extension of stay, with required accompanying
documents, in accordance with the appropriate form instructions. To
qualify for an extension of E-2 CNMI Investor nonimmigrant status, each
alien must demonstrate:
(A) Continuous maintenance of the terms and conditions of E-2 CNMI
Investor nonimmigrant status;
(B) Physical presence in the CNMI at the time of filing the
application for extension of stay; and
(C) That he or she did not leave during the pendency of the
application.
(xiii) Change of status. An alien lawfully admitted to the United
States in another valid nonimmigrant status who is continuing to
maintain that status may apply to change nonimmigrant status to E-2
CNMI Investor in accordance with paragraph (e)(21) of this section, if
otherwise eligible, including but not limited to having been in CNMI
long-term investor status on the transition date and within the period
provided by paragraph (e)(23)(v) of this section.
(xiv) Expiration of initial transition period. Upon expiration of
the initial transition period, the E-2 CNMI Investor nonimmigrant
status will automatically terminate.
(xv) Fee waiver. An alien applying for E-2 CNMI Investor
nonimmigrant status is eligible for a waiver of the required fee for an
application based upon inability to pay as provided by 8 CFR
103.7(c)(1).
(xvi) Waiver of inadmissibility for applicants present in the CNMI.
An applicant for E-2 CNMI Investor nonimmigrant status, who is
otherwise eligible for such status and otherwise admissible to the
United States, and who has provided all appropriate documents as
described in paragraph (e)(23)(vi) of this section, may be granted a
waiver of inadmissibility under section 212(d)(3)(A)(ii) of the Act,
including the grounds of inadmissibility described in sections
212(a)(6)(A)(i) (to the extent such grounds arise solely because of the
alien's presence in the CNMI on November 28, 2009) and
212(a)(7)(B)(i)(II) of the Act, for the purpose of granting the E-2
CNMI Investor nonimmigrant status. Such waiver may be granted without
additional form or fee required. In the case of an application by a
spouse or child as described in paragraph (e)(23)(x) of this section
who is present in the CNMI, the appropriate documents required for such
waiver are a valid unexpired passport and evidence that the spouse or
child is lawfully present in the CNMI under section 1806(e) of title
48, U.S. Code (which may include evidence of a grant of parole by USCIS
or by the Department of Homeland Security pursuant to a grant of
advance parole by USCIS in furtherance of section 1806(e) of title 48,
U.S. Code).
* * * * *

PART 274a--CONTROL OF EMPLOYMENT OF ALIENS

0
3. The authority citation for part 274a is revised to read as follows:

Authority: 8 U.S.C. 1101, 1103, 1324a; 48 U.S.C. 1806; 8 CFR
part 2.

0
4. Section 274a.12 is amended by:
0
a. Adding a new paragraph (b)(22); and by
0
b. Adding a new paragraph (c)(12) to read as follows:

Sec. 274a.12 Classes of aliens authorized to accept employment.

* * * * *
(b) * * *
(22) An alien in E-2 CNMI Investor nonimmigrant status pursuant to
8 CFR 214.2(e)(23). An alien in this status may be employed only by the
qualifying company through which the alien attained the status. An
alien in E-2 CNMI Investor nonimmigrant status may be employed only in
the Commonwealth of the Northern Mariana Islands for a qualifying
entity. An alien who attained E-2 CNMI Investor nonimmigrant status
based upon a Foreign Retiree Investment Certificate or Certification is
not employment-authorized. Employment authorization does not extend to
the dependents of the principal investor (also designated E-2 CNMI
Investor nonimmigrants) other than those specified in paragraph (c)(12)
of this section;
* * * * *
(c) * * *
(12) An alien spouse of a long-term investor in the Commonwealth of
the Northern Mariana Islands (E-2 CNMI Investor) other than an E-2 CNMI
investor who obtained such status based upon a Foreign Retiree
Investment Certificate, pursuant to 8 CFR 214.2(e)(23). An alien spouse
of an

[[Page 79278]]

E-2 CNMI Investor is eligible for employment in the CNMI only;
* * * * *

Janet Napolitano,
Secretary.
[FR Doc. 2010-31652 Filed 12-17-10; 8:45 am]
BILLING CODE 9111-97-P