lawandborder.com

The American Chamber of Commerce-China has just released its 2009 White Paper on the state of business in China. It was my pleasure to this year again draft the chapter on U.S. Visa Policy.

The White Paper is based on the views and experiences of AmCham members working and living in China. It gives recommendations on improving the business environment in China to promote economic growth in the midst of the current global downturn. The White Paper includes a chapter on visa policy because for U.S. businesses to succeed in China they need to be able to send Chinese employees back to the U.S. for meetings, training, and project work.

The White Paper is here, and the chapter on U.S. Visa Policy is here.

South China Morning Post
Kristine Kwok in Beijing 
Updated on Apr 29, 2009 

Chairman Mao proclaims the founding of the PRC (Oct. 1, 1949)

Mainland authorities have once again tightened visa procedures for foreigners in the run-up to the 60th anniversary of the founding of the People’s Republic, travel industry sources said yesterday.

The latest curbs have raised concerns that the central government is reintroducing the draconian visa policy enforced before and during the Beijing Olympics last year.

Under the policy introduced two weeks ago, all new business visas issued recently will expire on September 15, three mainland visa agents confirmed.

Applications for the business visas, also called F visas, beyond September 15 would be put on hold, pending further government clarification, the agents said. “We don’t know what is going to happen after September 15. More policies will probably be introduced as National Day approaches. We’ll have to wait and see,” Marcy Shen Lijun, a visa consultant based in Shanghai, said.

Existing F visas that expired after September 15 would not be affected as they were issued before the introduction of the new policy, agents said. Visa procedures for tourists and students had not been affected yet, they said.

However, information remained sketchy. Foreign applicants have had different experiences in obtaining new visas, with some saying that they had already had problems in applying before September 15.

At least one international conference to be held in Beijing next month had been forced to postpone to November as a result, said Shanghai-based American writer Adam Minter, who registered for the event. He said that he had been told by the organisers the conference could not go ahead as many foreign participants were unable to secure visas.

Foreign Ministry spokeswoman Jiang Yu said she was not aware of the new restrictions, but many expatriates on the mainland said they had found it more difficult to secure new visas.

The tightening of the procedures echoes similar arrangements mainland authorities put in place during the Olympics.

A ceremony is to be staged in Beijing on October 1 to mark the 60th anniversary of the founding. All state leaders will be attending the celebration, which will also feature a military parade. Beijing will be taking no chances on anything ruining the celebration. It earlier announced that security measures for the anniversary would be similar to those operating during the Olympics.

Ms Shen and two other Beijing-based visa agents said the new policies were introduced to control the influx of foreigners, and the authorities believed this could improve stability and security.

One visa agent in Beijing said: “It’s just like the Olympic Games. The government wants to control the number of [foreign] people in China. The smaller the size, the easier it is to control.”

Last year, Beijing imposed a series of entry restrictions in the run-up to the Olympics in August, dealing serious blows to the capital’s tourism industry and some in the business sector. Most of the regulations were lifted after the Games, while some have remained in place. The visa agents said it had been much easier to obtain visas after the Games.

The American Chamber of Commerce and European Union Chamber of Commerce said they had yet to receive any complaints about visa problems from their members.

I previously reviewed a September 2008 USCIS report, entitled H-1B Benefit Fraud & Compliance Assessment, finding that small companies are more likely than large companies to violate the rules related to employing workers with H-1B visas.

In January 2009, I reported that USCIS had implemented the report’s recommendations by closely scrutinizing small companies filing H-1B petitions, including asking for extremely detailed financial information, zoning records, payroll data, evidence of business contracts, and much more.

Now, USCIS has inadvertently leaked an internal “H-1B Petition Fraud Referral Sheet” showing that all petitions for small companies are automatically referred for special fraud investigations. Specifically, any petition that meets 2 of the 3 following criteria must be referred: (a) gross income less than $10 million; (b) less than 25 employees; and (c) company established for less than 10 years.

I continue to believe that cracking down on small business owners is the wrong strategy. It seems to me that the main problem is that the H-1B rules are hyper technical. They consist of hundreds of pages of regulations from USCIS, the U.S. Department of Labor, and the U.S. Department of State. Large companies hire outside immigration lawyers llike our firm, have in-house immigration specialists, and perform periodic compliance audits. Small businesses don’t command such resources. To improve compliance rates among small businesses, the best thing to do is to simplify the bewildering maze of rules.

In August 2008, I reported that the U.S. Consulate in Ciudad Juarez, Mexico, planned to outsource part of the U.S. visa application process—fingerprinting would be done by private contractors at a separate facility.

This began on April 6. Before going to the visa appointment at the U.S. Consulate in Ciudad Juarez, applicants must first make a separate fingerprint appointment at an Application Support Center (ASC) facility across town.  While the goal is to allow applicants to schedule the ASC in the morning before the consular interview in the afternoon, currently the appointments must be on separate days.

This arrangement may save the State Department money and may reduce crowding in one of the busiest consulates in the world.

But what about customer service? It seems that the State Department forgot to take into account the convenience to the hundreds of thousands of applicants served each year. They now need two appointments in different locations on separate days. For applicants who don’t live in Ciudad Juarez, an extra night’s hotel stay is also needed.

The State Department envisions using this model at other Consulates worldwide. OK. But make sure the ASC is next door to the Consulate so an applicant needs just one appointment to both get fingerprinted at the ASC and then attend the consular interview next door.

U.S. Citizenship and Immigration Services (USCIS) announced yesterday that the annual H-1B visa cap of 65,000 new H-1B petitions had not yet been reached. In fact, USCIS has only reached “about half” that number of petitions, according to a USCIS spokesman.

As background, H-1B visas are temporary work visas for professionals. There is an annual cap of 65,000 new H-1B petitions that can be approved, 20,000 of which are set aside only for persons with at least a U.S. master’s degree. H-1B petitions are accepted by USCIS beginning on April 1 of each year for work to begin on October 1 of the same year.

Blame it on the economy. Last year, within one week of April 1, USCIS received requests for about double the visas that could be issued for the fiscal year. Two years ago, the cap on H-1B petitions was reached in two days before the agency stopped accepting the applications. In fact, for each of the five previous years, the H-1B cap has been filled before October 1.

Many companies have complained about the artificially low cap on H-1Bs. ”U.S. employers deserve better than a random lottery to determine if they can hire the highly educated candidates they need,” Robert Hoffman, vice president for government and public affairs at Oracle.

There’s no way to calculate when this year’s H-1B cap will be reached.