dismissed L-1A Case: Arts And Crafts Import/Retail

U.S.Department of Homeland Security
20 Mass. Ave., N.W., Rm. A3000
Washington, DC 20529
u.S. Citizenship
and Immigration
Services
File: SRC 05 030 52069 Office: TEXAS SERVICE CENTER Date: FEB~' 1 2007
IN RE: Petitioner:
Beneficiary:
Petition: Petition for a Nonimmigrant Worker Pursuant to Section 101(a)(l5)(L) of the Immigration
and Nationality Act, 8 U.S.C. § 1101(a)(l5)(L)
IN BEHALF OF PETITIONER:
INSTRUCTIONS:
This is the decision of the Administrative Appeals Office in your case. All documents have been returned to
the office that originally decided your case. Any further inquiry must be made to that office.
r: - --=~.:=:;~.- _--::.£-
Robe?rP:-wiemann, Chief
Administrative Appeals Office
www.uscis.gov
SRC 05 030 52069
Page 2
DISCUSSION: The Director, Texas Service Center, denied the petition for a nonimmigrant visa. The matter
is now before the Administrative Appeals Office (AAO) on appeal. The AAO will dismiss the appeal.
The petitioner filed this nonimmigrant visa petition seeking to extend the employment of its executive vice
president and general manager as an L-l A nonimmigrant intracompany transferee pursuant to section
101(a)(15)(L) of the Immigration and Nationality Act (the Act), 8 U.S.C. § 1101(a)(15)(L). The petitioner is
a corporation organized under the laws of the State of Florida and is allegedly engaged in the business of
importing and selling African arts and crafts. The petitioner claims a qualifying relationship wit~
, located in South Africa. The beneficiary was granted a two-year period of stay in 2002.
The petitioner now seeks to extend the beneficiary's stay for an additional two years.
The director denied the petition concluding that the petitioner did not establish that the beneficiary will be
employed in the United States in a primarily managerial or executive capacity.
The petitioner filed an appeal. The director declined to treat the appeal as a motion and forwarded the appeal
to the AAO for review. On appeal, the petitioner asserts that the director erred and that the record establishes
that the beneficiary will be primarily employed in a managerial or executive capacity.
To establish eligibility for the L-1 nonimmigrant visa classification, the petitioner must meet the criteria
outlined in section 101(a)(15)(L) of the Act. Specifically, a qualifying organization must have employed the
beneficiary in a qualifying managerial or executive capacity, or in a specialized knowledge capacity, for one
continuous year within three years preceding the beneficiary's application for admission into the United
States. In addition, the beneficiary must seek to enter the United States temporarily to continue rendering his
or her services to the same employer or a subsidiary or affiliate thereof in a managerial, executive, or
specialized knowledge capacity.
The regulation at 8 C.F.R. § 214.2(1)(3) states that an individual petition filed on Form 1-129 shall be
accompanied by:
(i) Evidence that the petitioner and the organization which employed or will employ the
alien are qualifying organizations as defined in paragraph (l)(1)(ii)(G) of this section.
(ii) Evidence that the alien will be employed in an executive, managerial, or specialized
knowledge capacity, including a detailed description of the services to be performed.
(iii) Evidence that the alien has at least one continuous year of full time employment
abroad with a qualifying organization within the three years preceding the filing of
the petition.
(iv) Evidence that the alien's prior year of employment abroad was in a position that was
managerial, executive or involved specialized knowledge and that the alien's prior
education, training, and employment qualifies him/her to perform the intended
services in the United States; however, the work in the United States need not be the
SRC 05 030 52069
Page 3
same work which the alien performed abroad.
The primary issue in the present matter is whether the beneficiary will be employed by the United States
entity in a primarily managerial or executive capacity.
Section 101(a)(44)(A) of the Act, 8 U.S.C. § 1101(a)(44)(A), defines the term "managerial capacity" as an
assignment within an organization in which the employee primarily:
(i) manages the organization, or a department, subdivision, function, or component of
the organization;
(ii) supervises and controls the work of other supervisory, professional, or managerial
employees, or manages an essential function within the organization, or a department
or subdivision of the organization;
(iii) if another employee or other employees are directly supervised, has the authority to
hire and fire or recommend those as well as other personnel actions (such as
promotion and leave authorization), or if no other employee is directly supervised,
functions at a senior level within the organizational hierarchy or with respect to the
function managed; and
(iv) exercises discretion over the day to day operations of the activity or function for
which the employee has authority. A first line supervisor is not considered to be
acting in a managerial capacity merely by virtue of the supervisor's supervisory
duties unless the employees supervised are professional.
Section 101(a)(44)(B) of the Act, 8 U.S.C. § 1101(a)(44)(B), defines the term "executive capacity" as an
assignment within an organization in which the employee primarily:
(i) directs the management of the organization or a major component or function of the
organization;
(ii) establishes the goals and policies of the organization, component, or function;
(iii) exercises wide latitude in discretionary decision making; and
(iv) receives only general supervision or direction from higher level executives, the board
of directors, or stockholders of the organization.
The petitioner does not clarify whether the beneficiary is claiming to be primarily engaged in managerial
duties under section 101(a)(44)(A) of the Act, or primarily executive duties under section 101(a)(44)(B) of
the Act. A beneficiary may not claim to be employed as a hybrid "executive/manager" and rely on partial
sections of the two statutory definitions. If the petitioner is indeed representing the beneficiary as both an
SRC 05 030 52069
Page 4
executive and a manager, it must establish that the beneficiary meets each of the four criteria set forth in the
statutory definition for executive and the statutory definition for manager.
In a letter dated November 11, 2004 appended the initial 1-129 petition, the petitioner described the
beneficiary's job duties as follows:
• Oversee and direct all business activities of the US entity.
• Direct and develop business expansion activities.
• Oversee financing, marketing and advertising activities.
• Conduct market studies regarding customers' demands and preferences in African
arts and crafts.
• Advise parent company regarding type and quality of merchandise to be purchased
and shipped from Africa to the United States.
• Hire and fire personnel as needed.
• Report to CEO of parent company and President of US company.
On December 20, 2004, the director requested additional evidence. Specifically, the director requested, inter
alia, a copy of the organizational chart for the petitioner, tax returns, and wage reports for the petitioner's
employees. Title 8 C.F.R. § 2l4.2(l)(l4)(i) specifically permits the director to request supporting
documentation in the context of an L-l extension petition.
In response, counsel to the petitioner submitted a letter dated March 16, 2003 explaining that the petitioner is
in a "transitional phase." Counsel explained that the petitioner has ceased operating a retail store facility and
now concentrates on internet retail sales as well as its wholesale customers. Counsel also explained that the
beneficiary is the only employee of the petitioner, although part-time staff is occasionally hired on an as­
needed basis, and that all salaries are paid by the foreign entity. Because the beneficiary is the only
employee, counsel explained that the petitioner does not have an organizational chart. Finally, the petitioner
included a wage report summary indicating that the petitioner has not reported the payment of any wages for
employees, including the beneficiary, since the second quarter of 2003.
On April 15, 2005, the director denied the petition. The director determined that the petitioner failed to
establish that the beneficiary will be employed in the United States in a primarily managerial or executive
capacity.
On appeal, the petitioner asserts that the director erred and that the record establishes that the beneficiary will
be primarily employed in a managerial or executive capacity. Specifically, counsel argues that the
beneficiary has managed staff in the past and will again manage staff once a new retail location is established.
Counsel also asserts that the beneficiary manages the "marketing function" of the organization and that she is
employed in an executive capacity.
Upon review, the petitioner's assertions are not persuasive.
When examining the executive or managerial capacity of the beneficiary, the AAO will look first to the
SRC 05 030 52069
Page 5
petitioner's description of the job duties. See 8 C.F.R. § 214.2(l)(3)(ii). The petitioner's description of the job
duties must clearly describe the duties to be performed by the beneficiary and indicate whether such duties are
either in an executive or managerial capacity. Id. The petitioner must specifically state whether the
beneficiary is primarily employed in a managerial or executive capacity. As explained above, a petitioner
cannot claim that some of the duties of the position entail executive responsibilities, while other duties are
managerial. A beneficiary may not claim to be employed as a hybrid "executive/manager" and rely on partial
sections of the two statutory definitions. If the petitioner is indeed representing the beneficiary as both an
executive and a manager, it must establish that the beneficiary meets each of the four criteria set forth in the
statutory definition for executive and the statutory definition for manager.
The petitioner has failed to prove that the beneficiary will act in a "managerial" capacity. In support of its
application, the petitioner has provided a vague and nonspecific description of the beneficiary's duties that
fails to demonstrate what the beneficiary does on a day-to-day basis. For example, the petitioner states that
the beneficiary's duties include overseeing business activities, directing business expansion, and conducting
marketing studies. However, the petitioner failed to explain what she does to perform these duties and,
equally important, to clarify who actually will do the work that is supposedly being managed given the lack of
a subordinate staff. Going on record without supporting documentary evidence is not sufficient for purposes
of meeting the burden of proof in these proceedings. Matter of Treasure Craft of California, 14 I&N Dec.
190 (Reg. Comm. 1972). Specifics are clearly an important indication of whether a beneficiary's duties are
primarily executive or managerial in nature; otherwise meeting the definitions would simply be a matter of
reiterating the regulations. Fedin Bros. Co., Ltd. v. Sava, 724 F. Supp. 1103 (E.D.N.Y. 1989), aff'd, 905 F.2d
41 (2d. Cir. 1990).
The petitioner also failed to prove that the beneficiary will supervise and control the work of other
supervisory, professional, or managerial employees, or manage an essential function within the organization.
As explained above, the beneficiary is the only person providing services to the petitioner. Without a
subordinate staff, the beneficiary cannot be said to be supervising and controlling the work of other
employees and, consequently, must be performing the tasks necessary to the business. An employee who
"primarily" performs the tasks necessary to produce a product or to provide services is not considered to be
"primarily" employed in a managerial or executive capacity. See sections 101(a)(44)(A) and (B) of the Act
(requiring that one "primarily" perform the enumerated managerial or executive duties); see also Matter of
Church Scientology Int!., 19 I&N Dec. 593, 604 (Comm. 1988). Therefore, the record does not prove that the
beneficiary is employed in a managerial capacity.
On appeal, counsel to the petitioner specifically argues that the beneficiary manages the "marketing function"
of the organization and, thus, is employed primarily in a managerial capacity. The term "function manager"
applies generally when a beneficiary does not supervise or control the work of a subordinate staff but instead
is primarily responsible for managing an "essential function" within the organization. See section
101(a)(44)(A)(ii) of the Act. The term "essential function" is not defined by statute or regulation. If a
petitioner claims that the beneficiary is managing an essential function, the petitioner must furnish a written
job offer that clearly describes the duties to be performed in managing the essential function, i.e., identify the
function with specificity, articulate the essential nature of the function, and establish the proportion of the
beneficiary's daily duties attributed to managing the essential function. See 8 C.F.R. § 214.2(l)(3)(ii). In
SRC 05 030 52069
Page 6
addition, the petitioner's description of the beneficiary's daily duties must demonstrate that the beneficiary
manages the function rather than performs the duties related to the function. .
In this matter, the petitioner has not provided evidence that the beneficiary manages an essential function.
The petitioner's vague job description fails to document what proportion of the beneficiary's duties would be
managerial functions and what proportion would be non-managerial. Moreover, without any subordinate staff
available to perform the non-qualifying administrative and operations tasks inherent in operating any
business, the petitioner must establish that a majority of the beneficiary's time is dedicated to performing
managerial duties. Absent a clear and credible breakdown of the time spent by the beneficiary performing her
duties, the AAO cannot determine what proportion of her duties would be managerial, nor can it deduce
whether the beneficiary is primarily performing the duties of a function manager. See IKEA US, Inc. v. Us.
Dept. ofJustice, 48 F. Supp. 2d 22, 24 (D.D.C. 1999).
Similarly, the petitioner has failed to prove that the beneficiary will act in an "executive" capacity. The
statutory definition of the term "executive capacity" focuses on a person's elevated position within a complex
organizational hierarchy, including major components or functions of the organization, and that person's
authority to direct the organization. Section 101(a)(44)(B) of the Act. Under the statute, a beneficiary must
have the ability to "direct the management" and "establish the goals and policies" of that organization.
Inherent to the definition, the organization must have a subordinate level of employees for the beneficiary to
direct and the beneficiary must primarily focus on the broad goals and policies of the organization rather than
the day-to-day operations of the enterprise. An individual will not be deemed an executive under the statute
simply because they have an executive title or because they "direct" the enterprise as the owner or sole
managerial employee. The beneficiary must also exercise "wide latitude in discretionary decision making"
and receive only "general supervision or direction from higher level executives, the board of directors, or
stockholders of the organization." Id. As indicated above, the petitioner has failed to prove that the
beneficiary, who is the petitioner's sole employee and who apparently must perform the tasks necessary to
produce a product or provide a service, will be acting primarily in an executive capacity.
It is appropriate for Citizenship and Immigration Services (CIS) to consider the size of the petitioning
company in conjunction with other relevant factors, such as a company's small personnel size, the absence of
employees who would perform the non-managerial or non-executive operations of the company, or a "shell
company" that does not conduct business in a regular and continuous manner. See, e.g. Systronics Corp. v.
INS, 153 F. Supp. 2d 7,15 (D.D.C. 2001).
Accordingly, the petitioner has not established that the beneficiary will be employed in a primarily managerial
or executive capacity as required by 8 C.F.R. § 214.2(1)(3).
Beyond the decision of the director, a related matter is whether the petitioner established that it has a
qualifying relationship with the foreign entity of South Africa.
The regulation at 8 C.F.R. § 214.2(1)(3) states that an individual petition filed on Form 1-129 shall be
accompanied by:
SRC 05 030 52069
Page 7
(i) Evidence that the petitioner and the organization which employed or will employ
the alien are qualifying organizations as defined in paragraph (l)(l )(ii)(G) of this
section.
8 C.F.R. § 214.2(i)(l)(ii)(G) defines a "qualifying organization" as a firm, corporation, or other legal entity
which "meets exactly one of the qualifying relationships specified in the definitions of a parent, branch, affiliate
or subsidiary specified in paragraph (l)(I)(ii) of this section." A "subsidiary" is defined, in part, as a corporation
"of which a parent owns, directly or indirectly, more than half of the entity and controls the entity."
In the initial Form 1-129 petition, the petitioner purports that the foreign entity owns 100% of the petitioner,
thus establishing, if true, a parent/subsidiary relationship. In support of this contention, the petitioner
provided a variety of organizational documents including a copy of the petitioner's California articles of
incorporation authorizing 1,000,000 shares of stock; a stock certificate issuing 10,000 shares of stock to the
foreign entity and organizational minutes authorizing this issuance; a Florida certificate of domestication
establishing the petitioner in the State of Florida, and Florida articles of incorporation for the domesticated
entity authorizing 100 shares of stock.
The regulations and case law confirm that ownership and control are the factors that must be examined in
determining whether a qualifying relationship exists between United States and foreign entities for purposes
of this visa classification. Matter of Church Scientology International, 19 I&N Dec. 593; see also Matter of
Siemens Medical Systems, Inc., 19 I&N Dec. 362 (BIA 1986); Matter ofHughes, 18 1&N Dec. 289 (Comm.
1982). In the context of this visa petition, ownership refers to the direct or indirect legal right of possession of
the assets of an entity with full power and authority to control; control means the direct or indirect legal right
and authority to direct the establishment, management, and operations of an entity. Matter of Church
Scientology International, 19 I&N Dec. at 595.
As general evidence of a petitioner's claimed qualifying relationship, stock certificates alone are not sufficient
evidence to determine whether a stockholder maintains ownership and control of a corporate entity. The
corporate stock certificate ledger and/or stock certificate registry must also be examined to determine the total
number of shares issued, the exact number issued to the shareholder, and the subsequent percentage
ownership and its effect on corporate control. Additionally, a petitioning company must disclose all
agreements relating to the voting of shares, the distribution of profit, the management and direction of the
subsidiary, and any other factor affecting actual control of the entity. See Matter ofSiemens Medical Systems,
Inc., supra. Without full disclosure of all relevant documents, CIS is unable to determine the elements of
ownership and control.
In this case, the petitioner failed to supply any evidence of ownership and control other than a stock certificate
and organization minutes resulting from the petitioner's original incorporation in the State of California. The
petitioner's failure to provide documentation such as stock ledgers or registries is especially important in this
matter given the petitioner's domestication in the State of Florida which resulted in the filing of a new set of
articles of incorporation. As explained above, these new articles of incorporation greatly reduced the number
of shares available for issuance by the petitioner. Without full disclosure, CIS is unable to ascertain the
SRC 05 030 52069
Page 8
current ownership and control of the petitioner, especially in view of the significantly altered ownership
structure established upon the petitioner's domestication in the State of Florida.
Accordingly, the petitioner has not established that the petitioner and the foreign entity are qualifying
organizations as required by 8 C.F.R. § 214.2(1)(3), and the petition may also not be approved for this reason.
Despite any number of previously approved petitions, CIS does not have any authority to confer an
immigration benefit when the petitioner fails to meet its burden of proof in a subsequent petition. See section
291 of the Act, 8 U.S.C. § 1361. The prior approvals do not preclude CIS from denying an extension of the
original visa based on a reassessment of petitioner's qualifications. Texas A&M Univ. v. Upchurch, 99 Fed.
Appx. 556, 2004 WL 1240482 (5th Cir. 2004). Therefore, even though the petitioner was successful in the
past in petitioning for the beneficiary, the director properly denied the petition in this case.
An application or petition that fails to comply with the technical requirements of the law may be denied by
the AAO even if the Service Center does not identify all of the grounds for denial in the initial decision. See
Spencer Enterprises, Inc. v. United States, 229 F. Supp. 2d 1025, 1043 (E.D. Cal. 2001), affd, 345 F.3d 683
(9th Cir. 2003); see also Dor v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989) (noting that the AAO reviews
appeals on a de novo basis).
The petition will be denied for the above stated reasons, with each considered as an independent and
alternative basis for denial. When the AAO denies a petition on multiple alternative grounds, a plaintiff can
succeed on a challenge only if it is shown that the AAO abused its discretion with respect to all of the AAO's
enumerated grounds. See Spencer Enterprises, Inc., 229 F. Supp. 2d at 1043.
In visa petition proceedings, the burden of proving eligibility for the benefit sought remains entirely with the
petitioner. Section 291 of the Act. Here, that burden has not been met. Accordingly, the appeal will be
dismissed.
ORDER: The appeal is dismissed.