It has now become acceptable wisdom that the State Department should have revoked the visa of the Nigerian, Mr. Abdulmutallab, who attempted to detonate a bomb on the flight to Detroit on Christmas Day. Here is an extract from a New York Times editorial, The System Failed (http://tiny.cc/FwCPz), dated December 29, 2009:
"What makes this so much worse is that officials had something they can’t always expect: fair warning. In mid-November, Mr. Abdulmutallab’s father, a prominent banker in Nigeria, went to the American Embassy in Abuja to ask for help and warn them of his son’s increasing “radicalization.” The State Department, working with other agencies, had the power to revoke the son’s visa or put a temporary hold on it. Officials say the warning was insufficient. That seems like a very bad judgment call."
On hindsight, when we have 20-20 vision, it may have been a bad judgment call on the part of the State Department for failing to revoke his visa. But is the State Department to bear the brunt of the blame? I don't think so. Take for example the case of someone, say a national of Nigeria, who possesses an F-1 student visa and is studying at Harvard University. He has a personal feud with his spouse and her family while on vacation in Nigeria. Her spiteful father decides that the best way to nail him is to falsely report to the US Embassy that he has become increasingly radical by associating with extremist Muslim clerics. After the drubbing that the US Embassy got with the Christmas bomber, they will likely take no chances and revoke his visa. He gets stuck and cannot return to study at Harvard even though the report was false and baseless.
In a world that is increasingly fearful of that one individual who can cause mayhem and destruction, it is all too tempting to take away immigration benefits or to deport foreign nationals on mere suspicions. Clearly, there can be other layers of safeguards before revoking immigration benefits on mere suspicions. The New Times editorial goes on to add:
"The embassy did pass on the father’s information, as required, to the National Counterterrorism Center and the son’s name was added to a database of 550,000 people with some alleged terrorist connections. Officials decided that the warning wasn’t enough to put him on the list of 14,000 people subjected to more thorough airport searches or to the 4,000-person “no fly” list. That was clearly a very bad call."
I agree that this was a very bad call. There was that one additional layer, the National Counterterrorism Center, which could have connected the dots and differentiated between the bomber and our hypothetical student at Harvard who got caught up in a family feud and became the victim of a false allegation. Even our hypthetical situation is an extreme case, and one fears that fearful consuls will refuse visas on very flimsy grounds. After all, our government had intelligence that Al Qaeda in Yemen was planning to use a Nigerian to attack the U.S. Clearly, the screening machines at the airports too failed when they could not pick up 80 grams of PETN on Mr. Abdulmutallab. We need smart intellegence to keep out terrorists, and not rely solely on immigration policy to do the job.
While we are all concerned about our safety and security, I urge our government to give pause, even after this incident, and not needlessly revoke visas, take away immigration benefits or refuse to grant immigration benefits on mere hunches and suspicions, and without probing further and connecting the dots.
January 3, 2010
December 19, 2009
BALCA DISREGARDS SEPARATE ENTITY IN MATTER OF PA’LANTE
This post is about a small bore issue. It is about a quibble that I have about a footnote in a decision of the Board of Alien Labor Certification Appeals (BALCA) in Matter of Pa’Lante, 2008 PER 00209 . But I think it is worth pointing out so that a future appellant can remind BALCA that it got it wrong.
I have no dispute with Matter of Pa’Lante in general. It resulted in a good outcome for the employer who was snared by PERM’s hyper-technical rules. The labor certification, filed in 2006, was for an executive pastry chef, and the position required a bachelor’s degree in culinary arts and one year of experience in the job offered. In the alternative, the position required a combination of education and experience, amounting to two years of experience. The sponsored employee had the requisite degree, and only needed to demonstrate one year of experience in the offered position. According to the decision, the labor certification did not list the employee’s prior experience, and the labor certification was denied as the pastry chef did not qualify for the job for which he had been sponsored. It only listed his experience with the employer who was sponsoring him. If one reads carefully, the decision states that “the only jobs listed in Section K. involved prior experience by the Alien in the job offered with the restaurant at which he currently works for the petitioning Employer, or what appears to be other restaurants owned by the Employer it only listed his experience with this employer or with restaurants owned by the same employer from 2002 to 2006.” With respect to experience gained with the same employer, 20 C.F.R. 656.17(i) clearly requires the employer to state its actual minimum requirements and that it has not hired people below these actual minimum requirements. So if the employer hired someone at an entry level, it cannot list one year as a minimum requirement as the sponsored employee was not hired with that experience.
But in Pa’Lante the pastry chef had substantial prior experience before 2002, which was introduced in response to the audit notification by way of a detailed evaluation of an educational consultant that was prepared in 2000. BALCA correctly applied HealthAmerica, 2006-PER-1, which held that a mere typographical error on the form should not result in a denial if there was actual evidence of compliance and reversed the CO’s denial. In HealthAmerica, an incorrect date on the application as to when the Sunday advertisement ran was not fatal when it could be proved that the actual advertisement ran on a Sunday. According to BALCA, Pa’Lante involved more than a typographical error as there was a wholesale omission of the required experience. On the other hand, BALCA reasoned that since the employer was able to introduce detailed evidence in its audit response and motion for reconsideration that was not fabricated or prepared after the filing, it would forgive the omission of experience and applied HealthAmerica.
Pa’Lante is essentially a good decision as it broadened the HealthAmerica doctrine beyond typographical errors. But in footnote 2 of its decision, BALCA stated:
"The record is not clear whether the restaurants listed in Section K of Form 9089 are all owned by he same business entity. They appear to be, possibly making that experience (from March 2002 to the date of filing of the PERM application) ineligible for consideration as experience gained prior to hire by the sponsoring employer. See generally Inmos Corp., 1988-INA-326 (June 1, 1990) (en banc). The Employer seems to acknowledge that it in its reply brief. Nonetheless, the audit documentation clearly establishes that the Alien had the requisite qualifications for the job as early as 2000 - well before he started work for one of the Employer's restaurants."
BALCA cited law that has been overturned. Current 20 C.F.R. 656.17(i)(5)(i) refers to “employer” as an entity with the same Federal Employer Identification Number (FEIN). Thus, if two entities, even if owned by the same person, or where one is a subsidiary and the other a parent, have two FEINs, then experience with one entity can be used as a job requirement by another entity. This change was brought about by the new Program Electronic Review Management (PERM) rule (see 69 Fed. Reg. at 77354 (Dec. 27, 2004)), which rejected the pre-PERM law that considered entities owned by identical shareholders or a parent-subsidiary as the same employer even if they had different FEINs. Pre-PERM, if the sponsored employee gained experience with one restaurant and was sponsored by another, and both had identical shareholders and corporate officers, that experience was considered on-the-job experience and could not be used as a job requirement in the labor certification. See e.g. Salad Bowl Restaurants, 90-INA-230 (BALCA June 12, 1990). BALCA in Salad Bowl Restaurants held that for the DOL to consider on-the-job experience gained with the other employer, the sponsoring employer “must demonstrate that its ownership and control are separate and distinct from the company where the employee gained his qualifying experience,” and if distinction can be shown, it must also show that the two employers have “distinct operational independence.”
Pa’Lante involved a filing after the PERM rule took effect, and any experience gained at a different entity may have still qualified. It appears that the experience of the pastry chef listed from March 2002 may have been eligible for consideration as experience gained prior to hire by the sponsoring employer, contrary to BALCA’s assertion in footnote 2. BALCA itself acknowledged that some of the experience may have been gained by other restaurants owned by the same entity. To be fair, nothing in the BALCA decision indicates whether these restaurants had different FEINs. They may not have been separate entities and may have been branches or divisions of one entity. Yet, BALCA did not analyze it this way by distinguishing between the rule prior to PERM and after. BALCA instead cited Immos Corp, supra, which held along the same lines as Salad Bowl Restaurants that experience gained by an employee at a parent corporation was counted as on-the-job experience when it’s wholly owned US subsidiary filed the labor certification. Immos along with Salad Bowl Restaurants have been overturned after PERM and should not have been relied upon by BALCA.
While many of the rules under PERM have complicated the labor certification process further, one exception was 20 C.F.R. 656.17(i)(5)(i), which elegantly and simply suggests that two entities with different FEINs are not the same employer for purposes of on-the-job experience prohibition. With this rule, there is no longer any need to analyze whether two entities owned by the same shareholder or shareholders had “distinct operational independence.” The rule also reflects modern day realities involving corporate reorganizations. To illustrate, if the worker was working for an employer with a different FEIN number that was acquired or merged into the sponsoring employer, the experience gained by this worker for the predecessor entity would not be considered prohibited “on-the-job” experience, as the experience was gained with an entity with a different FEIN. There was no need for BALCA in Pa’Lante to resurrect old ghosts that have long since been exorcised.
I have no dispute with Matter of Pa’Lante in general. It resulted in a good outcome for the employer who was snared by PERM’s hyper-technical rules. The labor certification, filed in 2006, was for an executive pastry chef, and the position required a bachelor’s degree in culinary arts and one year of experience in the job offered. In the alternative, the position required a combination of education and experience, amounting to two years of experience. The sponsored employee had the requisite degree, and only needed to demonstrate one year of experience in the offered position. According to the decision, the labor certification did not list the employee’s prior experience, and the labor certification was denied as the pastry chef did not qualify for the job for which he had been sponsored. It only listed his experience with the employer who was sponsoring him. If one reads carefully, the decision states that “the only jobs listed in Section K. involved prior experience by the Alien in the job offered with the restaurant at which he currently works for the petitioning Employer, or what appears to be other restaurants owned by the Employer it only listed his experience with this employer or with restaurants owned by the same employer from 2002 to 2006.” With respect to experience gained with the same employer, 20 C.F.R. 656.17(i) clearly requires the employer to state its actual minimum requirements and that it has not hired people below these actual minimum requirements. So if the employer hired someone at an entry level, it cannot list one year as a minimum requirement as the sponsored employee was not hired with that experience.
But in Pa’Lante the pastry chef had substantial prior experience before 2002, which was introduced in response to the audit notification by way of a detailed evaluation of an educational consultant that was prepared in 2000. BALCA correctly applied HealthAmerica, 2006-PER-1, which held that a mere typographical error on the form should not result in a denial if there was actual evidence of compliance and reversed the CO’s denial. In HealthAmerica, an incorrect date on the application as to when the Sunday advertisement ran was not fatal when it could be proved that the actual advertisement ran on a Sunday. According to BALCA, Pa’Lante involved more than a typographical error as there was a wholesale omission of the required experience. On the other hand, BALCA reasoned that since the employer was able to introduce detailed evidence in its audit response and motion for reconsideration that was not fabricated or prepared after the filing, it would forgive the omission of experience and applied HealthAmerica.
Pa’Lante is essentially a good decision as it broadened the HealthAmerica doctrine beyond typographical errors. But in footnote 2 of its decision, BALCA stated:
"The record is not clear whether the restaurants listed in Section K of Form 9089 are all owned by he same business entity. They appear to be, possibly making that experience (from March 2002 to the date of filing of the PERM application) ineligible for consideration as experience gained prior to hire by the sponsoring employer. See generally Inmos Corp., 1988-INA-326 (June 1, 1990) (en banc). The Employer seems to acknowledge that it in its reply brief. Nonetheless, the audit documentation clearly establishes that the Alien had the requisite qualifications for the job as early as 2000 - well before he started work for one of the Employer's restaurants."
BALCA cited law that has been overturned. Current 20 C.F.R. 656.17(i)(5)(i) refers to “employer” as an entity with the same Federal Employer Identification Number (FEIN). Thus, if two entities, even if owned by the same person, or where one is a subsidiary and the other a parent, have two FEINs, then experience with one entity can be used as a job requirement by another entity. This change was brought about by the new Program Electronic Review Management (PERM) rule (see 69 Fed. Reg. at 77354 (Dec. 27, 2004)), which rejected the pre-PERM law that considered entities owned by identical shareholders or a parent-subsidiary as the same employer even if they had different FEINs. Pre-PERM, if the sponsored employee gained experience with one restaurant and was sponsored by another, and both had identical shareholders and corporate officers, that experience was considered on-the-job experience and could not be used as a job requirement in the labor certification. See e.g. Salad Bowl Restaurants, 90-INA-230 (BALCA June 12, 1990). BALCA in Salad Bowl Restaurants held that for the DOL to consider on-the-job experience gained with the other employer, the sponsoring employer “must demonstrate that its ownership and control are separate and distinct from the company where the employee gained his qualifying experience,” and if distinction can be shown, it must also show that the two employers have “distinct operational independence.”
Pa’Lante involved a filing after the PERM rule took effect, and any experience gained at a different entity may have still qualified. It appears that the experience of the pastry chef listed from March 2002 may have been eligible for consideration as experience gained prior to hire by the sponsoring employer, contrary to BALCA’s assertion in footnote 2. BALCA itself acknowledged that some of the experience may have been gained by other restaurants owned by the same entity. To be fair, nothing in the BALCA decision indicates whether these restaurants had different FEINs. They may not have been separate entities and may have been branches or divisions of one entity. Yet, BALCA did not analyze it this way by distinguishing between the rule prior to PERM and after. BALCA instead cited Immos Corp, supra, which held along the same lines as Salad Bowl Restaurants that experience gained by an employee at a parent corporation was counted as on-the-job experience when it’s wholly owned US subsidiary filed the labor certification. Immos along with Salad Bowl Restaurants have been overturned after PERM and should not have been relied upon by BALCA.
While many of the rules under PERM have complicated the labor certification process further, one exception was 20 C.F.R. 656.17(i)(5)(i), which elegantly and simply suggests that two entities with different FEINs are not the same employer for purposes of on-the-job experience prohibition. With this rule, there is no longer any need to analyze whether two entities owned by the same shareholder or shareholders had “distinct operational independence.” The rule also reflects modern day realities involving corporate reorganizations. To illustrate, if the worker was working for an employer with a different FEIN number that was acquired or merged into the sponsoring employer, the experience gained by this worker for the predecessor entity would not be considered prohibited “on-the-job” experience, as the experience was gained with an entity with a different FEIN. There was no need for BALCA in Pa’Lante to resurrect old ghosts that have long since been exorcised.
November 24, 2009
IS AN IMMIGRATION AGENCY A TRIBUNAL UNDER NEW YORK'S ETHICAL RULES?
In preparing for the ethics panel for the AILA 2009 New York Chapter Immigration Symposium on December 1, 2009, I came across an interesting connundrum with my co-panelists. Are the offices within the Department of Homeland Security, such as United States Citizenship and Immigration Services (USCIS), or other governmental agencies that deal with immigration matters, such as the Department of Labor or Department of State considered tribunals?
A lawyer has a duty of candor before a tribunal. New Rule 3.3 of the New York Rules of Professional Condcut prohibits a lawyer from making a false statement to a tribunal or to knowingly assist a client in making a false statement on an application that if submitted to a tribunal. This rule is similar to the same ABA Model Rule, which has been adopted by most states.
Rule 3.3 also requires that a lawyer who comes to learn of the false statement after submission take reasonable remedial measures, including if necessary, disclosure to the tribunal. The proper course is to first remonstrate with a client confidentially, and seek the client's cooperation with respect to the withdrawal or correction of the false statement. Most clients will hopefully understand that taking such a measure is also in their best interests, and that a lawyer is likely to take steps that is least damaging to the client. For instance,if an asylum claim otherwise includes truthful elements, the withdrawal of the damaging evidence may be presented at the same time as part of a packet of evidence that is otherwise truthful and supportive of the client's claim. If the client is uncooperative and withdrawal from the representation cannot remedy the false statement, the lawyer, under Rule 3.3(b), must make disclosure to the tribunal as is reasonably necessary to remedy the situation, even if such disclosure if protected under the attorney client rule of confidentiality.
The term “tribunal” is broadly defined in Rule 1.0(w) to encompass not just a court but even an “administrative agency or other body acting in an adjudicative capacity.” But the definition of “tribunal," and its reference in Rule 3.3 with respect to an administrative agency still connotes a court-like adversarial proceeding involving two parties. At issue is whether the USCIS, along with the Department of Labor and Department of State, would be considered “tribunals” under this definition. The definition of tribunal goes on to state: “A legislative body, administrative agency or other body acts in an adjudicative capacity when a neutral official, after the presentation of evidence or legal argument by a party or parties, will render a legal judgment directly affecting the party’s interests in a particular matter.” There is no question that a proceeding before an Immigration Judge or the Board of Immigration Appeals would be before a “tribunal,” but there is ambiguity as to whether it would extend to the above governmental agencies too as it is unclear whether there is a neutral official who will render a legal judgment "after the presentation of evidence or legal argument by a party or parties" when one files an application with the USCIS or with a U.S. Consulate.
As a practical matter, though, whether an immigration-related agency is a tribunal or not should not matter. If an attorney knowingly assists a client in filing a false application, such conduct may trigger criminal liability regardless of whether the application was made to a tribunal or not. An attorney is also required to be truthful to third persons, governmental or otherwise, under Rule 4.1. Moreover, Rule 1.6(b)(3), while not mandating it, allows a lawyer to withdraw a written or oral opinion or representation relied upon by a third person (even if not with a tribunal), where the lawyer belatedly learns of its falsity. Finally, a similar duty of candor applies to immigration agencies under parallel ethical rules in 8 C.F.R. §1003.102(c) and 8 C.F.R. 292.3(b), governing the conduct of private immigration attorneys, although the requirement is to “take appropriate remedial measures” without a specific requirement to disclose to the tribunal.
Regardless of the ambiguity in the definition of tribunal, it behooves a lawyer to ensure at the outset of the representation, and prior to filing an immigraiton application, that there is no false, misleading or inaccurate statement. For example, it always makes sense to meet with both the spouses, and run some typical questions by them, to ascertain that the marriage is bona fide prior to taking on the case and filing the applications.
A lawyer has a duty of candor before a tribunal. New Rule 3.3 of the New York Rules of Professional Condcut prohibits a lawyer from making a false statement to a tribunal or to knowingly assist a client in making a false statement on an application that if submitted to a tribunal. This rule is similar to the same ABA Model Rule, which has been adopted by most states.
Rule 3.3 also requires that a lawyer who comes to learn of the false statement after submission take reasonable remedial measures, including if necessary, disclosure to the tribunal. The proper course is to first remonstrate with a client confidentially, and seek the client's cooperation with respect to the withdrawal or correction of the false statement. Most clients will hopefully understand that taking such a measure is also in their best interests, and that a lawyer is likely to take steps that is least damaging to the client. For instance,if an asylum claim otherwise includes truthful elements, the withdrawal of the damaging evidence may be presented at the same time as part of a packet of evidence that is otherwise truthful and supportive of the client's claim. If the client is uncooperative and withdrawal from the representation cannot remedy the false statement, the lawyer, under Rule 3.3(b), must make disclosure to the tribunal as is reasonably necessary to remedy the situation, even if such disclosure if protected under the attorney client rule of confidentiality.
The term “tribunal” is broadly defined in Rule 1.0(w) to encompass not just a court but even an “administrative agency or other body acting in an adjudicative capacity.” But the definition of “tribunal," and its reference in Rule 3.3 with respect to an administrative agency still connotes a court-like adversarial proceeding involving two parties. At issue is whether the USCIS, along with the Department of Labor and Department of State, would be considered “tribunals” under this definition. The definition of tribunal goes on to state: “A legislative body, administrative agency or other body acts in an adjudicative capacity when a neutral official, after the presentation of evidence or legal argument by a party or parties, will render a legal judgment directly affecting the party’s interests in a particular matter.” There is no question that a proceeding before an Immigration Judge or the Board of Immigration Appeals would be before a “tribunal,” but there is ambiguity as to whether it would extend to the above governmental agencies too as it is unclear whether there is a neutral official who will render a legal judgment "after the presentation of evidence or legal argument by a party or parties" when one files an application with the USCIS or with a U.S. Consulate.
As a practical matter, though, whether an immigration-related agency is a tribunal or not should not matter. If an attorney knowingly assists a client in filing a false application, such conduct may trigger criminal liability regardless of whether the application was made to a tribunal or not. An attorney is also required to be truthful to third persons, governmental or otherwise, under Rule 4.1. Moreover, Rule 1.6(b)(3), while not mandating it, allows a lawyer to withdraw a written or oral opinion or representation relied upon by a third person (even if not with a tribunal), where the lawyer belatedly learns of its falsity. Finally, a similar duty of candor applies to immigration agencies under parallel ethical rules in 8 C.F.R. §1003.102(c) and 8 C.F.R. 292.3(b), governing the conduct of private immigration attorneys, although the requirement is to “take appropriate remedial measures” without a specific requirement to disclose to the tribunal.
Regardless of the ambiguity in the definition of tribunal, it behooves a lawyer to ensure at the outset of the representation, and prior to filing an immigraiton application, that there is no false, misleading or inaccurate statement. For example, it always makes sense to meet with both the spouses, and run some typical questions by them, to ascertain that the marriage is bona fide prior to taking on the case and filing the applications.
November 11, 2009
RARE GESTURE OF REASONABLENESS TO H-1B FILERS
So USCIS has at long last heard and understood about the hardships that the new iCERT system of DOL was causing H-1B workers. Normally, the USCIS does not care what the DOL does and vice verse, and so this gesture comes as a pleasant surprise.
The new iCERT system consistently denies Labor Condition Applications if it cannot verify the employer's Federal Employment Identification Number (FEIN) even if it is valid, and the employer has been routinely using this number for years on its tax forms. If one's H-1B status was about to expire, and iCERT denied the LCA due to an "invalid" FEIN, the employer's H-1B petition also got denied if it could not be filed with a certified LCA. The poor H-1B worker fell out of status.
USCIS issued today a news bulletin, but dated November 5, 2009, http://tiny.cc/pYEyl, that it would accept an H-1B petition with an uncertified LCA between November 5, 2009 till March 4, 2010. Such a filing, though, will only be accepted if the LCA was filed at least 7 days before the H-1B petition is filed, and there is evidence of such a filing. After the filing, the USCIS will issue a Request for Evidence asking for submission of the certified LCA within 30 days.
We need further clarification. It makes no sense that the LCA should be pending for 7 days. If an LCA is filed, within 2 days, iCERT denies it erroneously for an allegedly invalid FEIN. One then needs to submit proof of the employer's FEIN such as a document issued by the IRS. After 2-3 days, iCERT indicates that it has verified the FEIN and invites the employer to submit an LCA. Once a new LCA is submitted, it gets certified after another 2-3 days. None of these individual steps take 7 days, but the whole process of filing and receiving an initial denial, submission of proof of the FEIN, and re-submission of the LCA can take longer than 7 days. Hopefully, USCIS should accept an H-1B petition even after the initial LCA was denied and the employer has submitted proof that it has a valid FEIN.
Also, what happens to the unfortunate filers whose H-1Bs were denied because they could not file with a certified LCA prior to this policy change on November 5?
Clearly, the ability to file H-1Bs without a certified LCAs will also increase the number of H-1Bs. As of last count on October 30, 2009, USCIS had received 53,800 H-1B petitions towards the 65,000 cap.
The new iCERT system consistently denies Labor Condition Applications if it cannot verify the employer's Federal Employment Identification Number (FEIN) even if it is valid, and the employer has been routinely using this number for years on its tax forms. If one's H-1B status was about to expire, and iCERT denied the LCA due to an "invalid" FEIN, the employer's H-1B petition also got denied if it could not be filed with a certified LCA. The poor H-1B worker fell out of status.
USCIS issued today a news bulletin, but dated November 5, 2009, http://tiny.cc/pYEyl, that it would accept an H-1B petition with an uncertified LCA between November 5, 2009 till March 4, 2010. Such a filing, though, will only be accepted if the LCA was filed at least 7 days before the H-1B petition is filed, and there is evidence of such a filing. After the filing, the USCIS will issue a Request for Evidence asking for submission of the certified LCA within 30 days.
We need further clarification. It makes no sense that the LCA should be pending for 7 days. If an LCA is filed, within 2 days, iCERT denies it erroneously for an allegedly invalid FEIN. One then needs to submit proof of the employer's FEIN such as a document issued by the IRS. After 2-3 days, iCERT indicates that it has verified the FEIN and invites the employer to submit an LCA. Once a new LCA is submitted, it gets certified after another 2-3 days. None of these individual steps take 7 days, but the whole process of filing and receiving an initial denial, submission of proof of the FEIN, and re-submission of the LCA can take longer than 7 days. Hopefully, USCIS should accept an H-1B petition even after the initial LCA was denied and the employer has submitted proof that it has a valid FEIN.
Also, what happens to the unfortunate filers whose H-1Bs were denied because they could not file with a certified LCA prior to this policy change on November 5?
Clearly, the ability to file H-1Bs without a certified LCAs will also increase the number of H-1Bs. As of last count on October 30, 2009, USCIS had received 53,800 H-1B petitions towards the 65,000 cap.
November 3, 2009
NEW INDIAN IMMIGRATION REGIME FOR FOREIGN NATIONALS IN INDIA
*By Poorvi Chothani, Esq.
Recently, the Ministry of Commerce and Industry (the MCI), India announced (the MCI Announcement) that business visas cannot be granted to foreign nationals to work on projects or specific contracts in India. The formal announcement also requires all foreign nationals on such visas to leave India and return on employment visas. Initially they were required to leave before the end of September 30, 2009, but the deadline was later extended by the Ministry of Home Affairs by way of a clarification (the MHA Clarification), till October 31, 2009. Individuals who are in India on business visas in connection with investments, joint ventures or buying and selling industrial products can continue to remain in the country. Both the government communications also state that going forward business visas will only be issued for activities specified in their circulars. However, since the circulars were rather ambiguous the Ministry of Home Affairs published a set of frequently asked questions on October 29, 2009 (the FAQs). These provide some clarity but have not resolved all ambiguities.
Companies and expatriates in India are concerned as many of these foreign nationals are currently in India on business visas and are expected to remain in India for short periods usually to train local personnel, hold meetings or supervise the working of the Indian affiliate.
In addition, hundreds of expatriates have received letters from the Indian Government asking them to leave the country before the deadline and return on appropriate employment visas. Even individuals who have not received such letters but are here on project or contract work were required to leave the country. It is important to note that the Indian company or organization that has engaged foreign nationals to execute projects or contracts will be held responsible for the conduct of the foreign national during his or her stay in India and for the departure of such a foreign national.
Business Visas
In order to highlight the impact of these recent changes this article provides background information about the older system.
Generally, business visas were issued for short term visits or for long term stay depending on the individual’s circumstances. Short Term Business Visas is a term used in this article to differentiate it from the business visas that permitted an individual to remain in India for long periods, which are referred to, here, as Long Term Business Visas.
Short Term Business Visas were issued with a validity of six months or longer while permitting a stay of a maximum of 180 days on each visit. Short Term Business Visas were also issued to individuals who wanted to visit India on business for short term assignments. Intra-company transferees often used the Short Term Business Visas to remain in India for training, supervision, execution of projects, migration of work to outsourcing service providers and other activities. Since a Short Term Business Visa permitted a foreign national to remain in India for not more than 180 days, individuals who wished to remain in India for longer periods would depart from the country and return after a brief absence enabling them to stay for additional periods of 180 days. Some companies rotated the deputation of their representatives in India to avoid a stay of 183 days, which would establish an individual as a resident in India for tax purposes. Indian residents are required to pay income tax in India on their world wide income.
Long Term Business Visas were issued with a validity of periods up to 10 years to foreign nationals from specific countries or to those who have set up or intend to set up business ventures in India. Individuals on a Long Term Business Visa were permitted to stay for extended periods without any limitations per visit or on the cumulative period in India.
The MCI Announcement states that business visas may be only granted to individuals in connection with the following activities and in strict compliance with the Visa Manual for Business Visas.
1. Establish industrial or business ventures in India;
2. Explore possibilities to establish industrial or business ventures; or
3. Purchase or sell industrial products in India.
Since individuals who seek to travel to India in connection with a project or contract do not meet the above mentioned criteria they are ineligible for a business visa and are required to apply for employment visas. This in effect eliminates the Short Term Business Visa.
Summary of FAQs Regarding Business Visas
The FAQs published by the MHA confirm that Business Visas may be granted to individuals who wish to establish or explore the possibility of establishing an industrial or business venture in India or wish to purchase or sell industrial products in India. Additionally, the FAQS provide that a Business Visa can be granted subject to a set of criteria including the financial standing and relevant expertise of the applicant. It cannot be granted to an individual who wishes to come to India in connection with money lending or petty trading or to undertake full time employment in India.
The FAQs also specify that the grant of Business Visas will be subject to any instructions that may be issued by the government of India, based on reciprocity with foreign countries.
The FAQs also provide an indicative list of situations where applicants may be granted a Business Visa. Some of the situations are described below:
1. Foreign nationals coming to set up or explore the possibility of setting up a business or industrial venture in India.
2. Foreign nationals coming to India for technical meetings or attending board meetings or other general meetings for business services support.
3. Foreign experts/specialists coming on a short duration in connection with an on-going project with the objective of monitoring progress, conducting meetings or providing high level technical guidance.
4. Foreign national trainees of multinational companies or corporate houses who wish to attend in-house training conducted at the regional hub of the company located in India.
5. Foreign nationals coming to India to purchase/sell industrial products or commercial products or consumer durables.
6. Foreign nationals coming to India to recruit manpower.
7. Foreign nationals who are partners in a business or are on the Board of Directors of an Indian company.
8. Foreign nationals who wish to participate in, or render consulting services with regard to exhibitions, trade fairs, business fairs, etc.
9. Foreign buyers who come to transact business with suppliers, potential suppliers or to evaluate or monitor quality, provide specifications, place orders, negotiate further supplies etc., in connection with goods or services procured from India.
10. Foreign nationals coming to India for pre-sales or post-sales activity not amounting to actual execution of any contract or project.
11. Foreign students sponsored by AIESEC as interns on project based work in Indian companies or industries.
Employment Visas
The MCI Announcement specified that Employment Visas should be issued in “strict conformity with the Visa Manual” and described its salient points, briefly set out below. Employment Visa will be issued only to:
1. Skilled and qualified professionals; or
2. Persons employed by an Indian entity, including a company, organization, industry or undertaking on contract or employment basis at senior level, skilled positions in the capacity of:
a. Technical experts;
b. Senior executives; or
c. Managerial positions.
The MCI Announcement emphasized that Employment Visas should not be granted for jobs in positions where large numbers of qualified Indians are readily available. Also, Employment Visas should not be granted to individuals who will be employed in routine, ordinary, secretarial or clerical jobs in India.
Further, the MCI Announcement requires all consular missions abroad to return Business Visa applications in connection with project or contract work in India requiring the applicant to reapply for an employment visa.
Summary of FAQs Regarding Employment Visas
The FAQs confirm what the MHA had specified in its earlier announcement that Employment Visas can only be granted to skilled and qualified individuals to undertake non-routine, ordinary, secretarial or clerical jobs for which there are already a large number of qualified Indians.
Additionally, the FAQs clarify that a foreign company that does not have a base in India, in the form of a project or branch office, a subsidiary or a joint venture, cannot sponsor an applicant’s Employment Visa. Indian companies that have awarded a contract to a foreign company can sponsor an applicant’s Employment visa. It is important to note that according to the FAQs, if an Indian company sponsors an applicant on an Employment Visa, the Indian company is not necessarily the employer of the foreign national.
The FAQs also provide an indicative list of situations where applicants may be granted an Employment Visa. Some of the situations are described below:
1. Foreign nationals coming to execute a project or contract irrespective of the duration of the visit.
2. Foreign nationals on short visits to customer locations to repair plants or machinery as part of a warranty or maintenance contract.
3. Foreign experts coming to impart training or to provide technical support/services or to take up employment as coaches in India.
4. Foreign nationals coming as consultants for a fixed remuneration.
5. Self-employed foreign nationals providing skilled services like engineering, medical, accounting, legal or such other highly skilled services as independent consultants.
6. Foreign, interpreters, teachers, chefs and artists employed in hotels, clubs or other organizations.
7. Foreign engineers or technicians coming to India for installation and commissioning of equipment, machines or tools that have been supplied under a contract.
8. Foreign personnel traveling to India in connection with technical support, technical services or transfer of know-how for which the Indian company pays fees/royalty to the foreign company.
9. Foreign sportsmen under time bound contracts with local clubs or organizations.
A foreign company or organization that does not have any Project Office, subsidiary, joint venture or branch office in India cannot sponsor a foreign national as an employee of a foreign company for employment in India.
An Indian company or organization which has awarded a contract for execution of a project to a foreign company, which does not have any base in India, can sponsor an Employment Visa for an employee of that foreign company.
Where to Apply
A very important stipulation in the MCI Announcement stated that employment visas could only be obtained in the applicant’s country of origin. Earlier, consular posts issued visas to third country nationals who could prove that they were residents of the host country where they were applying for the visa. The MCI Announcement would have posed an immense burden on long term residents who would need to travel to their country of nationality to obtain an Indian Business or Employment Visa Thankfully, the FAQs have solved this problem and applicants who have resided in a country for two years or more can now apply at an Indian Consular Post in the host country.
Miscellaneous Provisions
It is important to note that the MCI Announcement makes Indian companies engaging foreign nationals responsible for the conduct of the employees and for their departure from the country. Additionally, individuals and/or employers who violate the visa regime will face penalties, which currently include monetary fines, blacklisting of the employers, deportment, ban on re-entry for the individual, and/or imprisonment. The enforcement authorities exercise wide discretionary powers when determining penalties.
A foreign national will also have to comply with all statutory requirements and pay taxes.
Indian Consular Posts may grant an ‘X’ or dependant visas to the family members of a foreign national granted who has been issued a Business Visa or Employment Visa at their discretion, subject to usual security checks provided the family members are otherwise eligible for such visas. ‘X’ Visas granted in conjunction with a principal applicant’s Employment Visa is likely to be issued to co-terminate with the principal visa. In some instances it may be granted for a shorter duration.
The FAQs also provide a list of documents that should be presented in support of each of the categories and indicates the duration of each type of visa.
It is important to note that the MCI Announcement also prescribes specific procedures for the application and issue of employment visas to Chinese nationals.
Conclusion
We have been advising our clients that all foreign nationals who are still present in India on a Business Visa, and the purpose of their visit does not conform to the stipulations of the FAQs, should depart from India on or before 31 October 2009.
These new stipulations will have a significant impact on foreign nationals wanting to visit India on short term assignments. As per the announcement some of these individuals will now require an Employment Visa as opposed to a Short Term Business Visa. Further, the issuance of a Business or Employment Visa will continue to depend upon the discretion of the consular officer. The change in the visa category would definitely have tax and social security ramifications for the foreign nationals and their employers during their stay in India. Additionally, these changes may also generate corporate tax ramifications in rare cases, depending on the nature of the individual’s activities in India.
It is important that companies seeking to assign foreign nationals to India on a short term basis should assess their projects to identify and comply with visa requirements and tax implications. It is expected that the outcome of a business or employment visa, which will be based on evidence submitted at the time of application will be subject to severe scrutiny to determine the caliber of the applicant and the nature of the job or business in India.
*Poorvi Chothani, Esq. is a founder and managing member of LawQuest, a law firm in Mumbai, India. She is admitted to the New York State Bar with an LL.M from the University of Pennsylvania, USA, and is registered as a Solicitor in England and Wales. Poorvi has been practicing law in India since 1984 and is admitted to the Bar Council of Maharashtra and Goa. She can be reached at poorvi@lawquestinternational.com.
Disclaimer:
The contents of this publication are not a comprehensive consideration of the subjects discussed and are designed to provide preliminary, general information. The Business and Employment Visa Manuals are not available for public inspection. Readers should not conclusively rely on the information as legal advice and should seek independent counsel before any action is taken with respect to these or other specific issues.
*By Poorvi Chothani, Esq.
Recently, the Ministry of Commerce and Industry (the MCI), India announced (the MCI Announcement) that business visas cannot be granted to foreign nationals to work on projects or specific contracts in India. The formal announcement also requires all foreign nationals on such visas to leave India and return on employment visas. Initially they were required to leave before the end of September 30, 2009, but the deadline was later extended by the Ministry of Home Affairs by way of a clarification (the MHA Clarification), till October 31, 2009. Individuals who are in India on business visas in connection with investments, joint ventures or buying and selling industrial products can continue to remain in the country. Both the government communications also state that going forward business visas will only be issued for activities specified in their circulars. However, since the circulars were rather ambiguous the Ministry of Home Affairs published a set of frequently asked questions on October 29, 2009 (the FAQs). These provide some clarity but have not resolved all ambiguities.
Companies and expatriates in India are concerned as many of these foreign nationals are currently in India on business visas and are expected to remain in India for short periods usually to train local personnel, hold meetings or supervise the working of the Indian affiliate.
In addition, hundreds of expatriates have received letters from the Indian Government asking them to leave the country before the deadline and return on appropriate employment visas. Even individuals who have not received such letters but are here on project or contract work were required to leave the country. It is important to note that the Indian company or organization that has engaged foreign nationals to execute projects or contracts will be held responsible for the conduct of the foreign national during his or her stay in India and for the departure of such a foreign national.
Business Visas
In order to highlight the impact of these recent changes this article provides background information about the older system.
Generally, business visas were issued for short term visits or for long term stay depending on the individual’s circumstances. Short Term Business Visas is a term used in this article to differentiate it from the business visas that permitted an individual to remain in India for long periods, which are referred to, here, as Long Term Business Visas.
Short Term Business Visas were issued with a validity of six months or longer while permitting a stay of a maximum of 180 days on each visit. Short Term Business Visas were also issued to individuals who wanted to visit India on business for short term assignments. Intra-company transferees often used the Short Term Business Visas to remain in India for training, supervision, execution of projects, migration of work to outsourcing service providers and other activities. Since a Short Term Business Visa permitted a foreign national to remain in India for not more than 180 days, individuals who wished to remain in India for longer periods would depart from the country and return after a brief absence enabling them to stay for additional periods of 180 days. Some companies rotated the deputation of their representatives in India to avoid a stay of 183 days, which would establish an individual as a resident in India for tax purposes. Indian residents are required to pay income tax in India on their world wide income.
Long Term Business Visas were issued with a validity of periods up to 10 years to foreign nationals from specific countries or to those who have set up or intend to set up business ventures in India. Individuals on a Long Term Business Visa were permitted to stay for extended periods without any limitations per visit or on the cumulative period in India.
The MCI Announcement states that business visas may be only granted to individuals in connection with the following activities and in strict compliance with the Visa Manual for Business Visas.
1. Establish industrial or business ventures in India;
2. Explore possibilities to establish industrial or business ventures; or
3. Purchase or sell industrial products in India.
Since individuals who seek to travel to India in connection with a project or contract do not meet the above mentioned criteria they are ineligible for a business visa and are required to apply for employment visas. This in effect eliminates the Short Term Business Visa.
Summary of FAQs Regarding Business Visas
The FAQs published by the MHA confirm that Business Visas may be granted to individuals who wish to establish or explore the possibility of establishing an industrial or business venture in India or wish to purchase or sell industrial products in India. Additionally, the FAQS provide that a Business Visa can be granted subject to a set of criteria including the financial standing and relevant expertise of the applicant. It cannot be granted to an individual who wishes to come to India in connection with money lending or petty trading or to undertake full time employment in India.
The FAQs also specify that the grant of Business Visas will be subject to any instructions that may be issued by the government of India, based on reciprocity with foreign countries.
The FAQs also provide an indicative list of situations where applicants may be granted a Business Visa. Some of the situations are described below:
1. Foreign nationals coming to set up or explore the possibility of setting up a business or industrial venture in India.
2. Foreign nationals coming to India for technical meetings or attending board meetings or other general meetings for business services support.
3. Foreign experts/specialists coming on a short duration in connection with an on-going project with the objective of monitoring progress, conducting meetings or providing high level technical guidance.
4. Foreign national trainees of multinational companies or corporate houses who wish to attend in-house training conducted at the regional hub of the company located in India.
5. Foreign nationals coming to India to purchase/sell industrial products or commercial products or consumer durables.
6. Foreign nationals coming to India to recruit manpower.
7. Foreign nationals who are partners in a business or are on the Board of Directors of an Indian company.
8. Foreign nationals who wish to participate in, or render consulting services with regard to exhibitions, trade fairs, business fairs, etc.
9. Foreign buyers who come to transact business with suppliers, potential suppliers or to evaluate or monitor quality, provide specifications, place orders, negotiate further supplies etc., in connection with goods or services procured from India.
10. Foreign nationals coming to India for pre-sales or post-sales activity not amounting to actual execution of any contract or project.
11. Foreign students sponsored by AIESEC as interns on project based work in Indian companies or industries.
Employment Visas
The MCI Announcement specified that Employment Visas should be issued in “strict conformity with the Visa Manual” and described its salient points, briefly set out below. Employment Visa will be issued only to:
1. Skilled and qualified professionals; or
2. Persons employed by an Indian entity, including a company, organization, industry or undertaking on contract or employment basis at senior level, skilled positions in the capacity of:
a. Technical experts;
b. Senior executives; or
c. Managerial positions.
The MCI Announcement emphasized that Employment Visas should not be granted for jobs in positions where large numbers of qualified Indians are readily available. Also, Employment Visas should not be granted to individuals who will be employed in routine, ordinary, secretarial or clerical jobs in India.
Further, the MCI Announcement requires all consular missions abroad to return Business Visa applications in connection with project or contract work in India requiring the applicant to reapply for an employment visa.
Summary of FAQs Regarding Employment Visas
The FAQs confirm what the MHA had specified in its earlier announcement that Employment Visas can only be granted to skilled and qualified individuals to undertake non-routine, ordinary, secretarial or clerical jobs for which there are already a large number of qualified Indians.
Additionally, the FAQs clarify that a foreign company that does not have a base in India, in the form of a project or branch office, a subsidiary or a joint venture, cannot sponsor an applicant’s Employment Visa. Indian companies that have awarded a contract to a foreign company can sponsor an applicant’s Employment visa. It is important to note that according to the FAQs, if an Indian company sponsors an applicant on an Employment Visa, the Indian company is not necessarily the employer of the foreign national.
The FAQs also provide an indicative list of situations where applicants may be granted an Employment Visa. Some of the situations are described below:
1. Foreign nationals coming to execute a project or contract irrespective of the duration of the visit.
2. Foreign nationals on short visits to customer locations to repair plants or machinery as part of a warranty or maintenance contract.
3. Foreign experts coming to impart training or to provide technical support/services or to take up employment as coaches in India.
4. Foreign nationals coming as consultants for a fixed remuneration.
5. Self-employed foreign nationals providing skilled services like engineering, medical, accounting, legal or such other highly skilled services as independent consultants.
6. Foreign, interpreters, teachers, chefs and artists employed in hotels, clubs or other organizations.
7. Foreign engineers or technicians coming to India for installation and commissioning of equipment, machines or tools that have been supplied under a contract.
8. Foreign personnel traveling to India in connection with technical support, technical services or transfer of know-how for which the Indian company pays fees/royalty to the foreign company.
9. Foreign sportsmen under time bound contracts with local clubs or organizations.
A foreign company or organization that does not have any Project Office, subsidiary, joint venture or branch office in India cannot sponsor a foreign national as an employee of a foreign company for employment in India.
An Indian company or organization which has awarded a contract for execution of a project to a foreign company, which does not have any base in India, can sponsor an Employment Visa for an employee of that foreign company.
Where to Apply
A very important stipulation in the MCI Announcement stated that employment visas could only be obtained in the applicant’s country of origin. Earlier, consular posts issued visas to third country nationals who could prove that they were residents of the host country where they were applying for the visa. The MCI Announcement would have posed an immense burden on long term residents who would need to travel to their country of nationality to obtain an Indian Business or Employment Visa Thankfully, the FAQs have solved this problem and applicants who have resided in a country for two years or more can now apply at an Indian Consular Post in the host country.
Miscellaneous Provisions
It is important to note that the MCI Announcement makes Indian companies engaging foreign nationals responsible for the conduct of the employees and for their departure from the country. Additionally, individuals and/or employers who violate the visa regime will face penalties, which currently include monetary fines, blacklisting of the employers, deportment, ban on re-entry for the individual, and/or imprisonment. The enforcement authorities exercise wide discretionary powers when determining penalties.
A foreign national will also have to comply with all statutory requirements and pay taxes.
Indian Consular Posts may grant an ‘X’ or dependant visas to the family members of a foreign national granted who has been issued a Business Visa or Employment Visa at their discretion, subject to usual security checks provided the family members are otherwise eligible for such visas. ‘X’ Visas granted in conjunction with a principal applicant’s Employment Visa is likely to be issued to co-terminate with the principal visa. In some instances it may be granted for a shorter duration.
The FAQs also provide a list of documents that should be presented in support of each of the categories and indicates the duration of each type of visa.
It is important to note that the MCI Announcement also prescribes specific procedures for the application and issue of employment visas to Chinese nationals.
Conclusion
We have been advising our clients that all foreign nationals who are still present in India on a Business Visa, and the purpose of their visit does not conform to the stipulations of the FAQs, should depart from India on or before 31 October 2009.
These new stipulations will have a significant impact on foreign nationals wanting to visit India on short term assignments. As per the announcement some of these individuals will now require an Employment Visa as opposed to a Short Term Business Visa. Further, the issuance of a Business or Employment Visa will continue to depend upon the discretion of the consular officer. The change in the visa category would definitely have tax and social security ramifications for the foreign nationals and their employers during their stay in India. Additionally, these changes may also generate corporate tax ramifications in rare cases, depending on the nature of the individual’s activities in India.
It is important that companies seeking to assign foreign nationals to India on a short term basis should assess their projects to identify and comply with visa requirements and tax implications. It is expected that the outcome of a business or employment visa, which will be based on evidence submitted at the time of application will be subject to severe scrutiny to determine the caliber of the applicant and the nature of the job or business in India.
*Poorvi Chothani, Esq. is a founder and managing member of LawQuest, a law firm in Mumbai, India. She is admitted to the New York State Bar with an LL.M from the University of Pennsylvania, USA, and is registered as a Solicitor in England and Wales. Poorvi has been practicing law in India since 1984 and is admitted to the Bar Council of Maharashtra and Goa. She can be reached at poorvi@lawquestinternational.com.
Disclaimer:
The contents of this publication are not a comprehensive consideration of the subjects discussed and are designed to provide preliminary, general information. The Business and Employment Visa Manuals are not available for public inspection. Readers should not conclusively rely on the information as legal advice and should seek independent counsel before any action is taken with respect to these or other specific issues.
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