dismissed L-1A Case: Cleaning Services

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PUBLIC COpy
U.S. Department of Homeland Security
20 Massachusetts Ave., N.W., Rm. 3000
Washington, DC 20529
u.s.Citizenship
and Immigration
Services
FILE: WAC 06 037 52040 Office: CALIFORNIA SERVICE CENTER Date: JUl 2 7 2007
INRE: 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)
ON 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.
17'
Robert P. Wiemann, ief
1Administrative Appeals Office
www,uscis.gov
WAC 06 03752040
Page 2
DISCUSSION: The Director, California Service Center, denied the petition for a nonimmigrant visa. The
matter is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed.
The petitioner filed this nonimmigrant petition seeking to extend the employment of its director 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, a California corporation, claims to be the subsidiary
of Shopping Das Noivas, Ltda., located in Goias, Brazil.' The petitioner claims to be engaged in the cleaning
of windows, skylights, and gutters. The beneficiary was initially granted a one-year period of stay to open a
new office in the United States, and 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 petitioner and the
foreign employer were not qualifying organizations as defined by the regulations.
The petitioner filed an appeal in response to the denial. On appeal, counsel for the petitioner alleges that the
director's decision was erroneous and that, due to an error by the petitioner's accountant, erroneous evidence
was in the record that suggested that a qualifying relationship did not exist between the parties. In support of
this contention, counsel submits a brief and additional evidence.
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(l)(14)(ii) provides that a visa petition, which involved the opening of a
new office, may be extended by filing a new Form 1-129, accompanied by the following:
(a) Evidence that the United States and foreign entities are still qualifying organizations
as defined in paragraph (l)(1)(ii)(G) of this section;
(b) Evidence that the United States entity has been doing business as defined III
paragraph (l)(1)(ii)(H) of this section for the previous year;
(c) A statement of the duties performed by the beneficiary for the previous year and the
duties the beneficiary will perform under the extended petition;
I On Form 1-129, the petitioner listed the foreign entity as "Bridal Shop." Further review of the record
indicates that this name was a loose translation of the actual name of the foreign employer, Shopping Das
Noivas, Ltda.
WAC 06 037 52040
Page 3
(d) A statement describing the staffing of the new operation, including the number of
employees and types of positions held accompanied by evidence of wages paid to
employees when the beneficiary will be employed in a managerial or executive
capacity; and
(e) Evidence of the financial status of the United States operation.
The primary issue in the present matter is whether the petitioner and the foreign organization are qualifying
organizations as defined by 8 C.F.R. § 214.2(l)(1)(ii)(G). The regulation defines the term "qualifying
organization" as a United States or foreign firm, corporation, or other legal entity which:
(1) Meets exactly one of the qualifying relationships specified in the definitions of a parent, branch,
affiliate or subsidiary specified in paragraph (l)(l)(ii) of this section;
(2) Is or will be doing business (engaging in international trade is not required) as an employer in the
United States and in at least one other country directly or through a parent, branch, affiliate, or
subsidiary for the duration of the alien's stay in the United States as an intracompany transferee; and
(3) Otherwise meets the requirements of section 101(a)(l5)(L) of the Act.
Additionally, the regulation at 8 C.F.R. § 214.2(l)(1)(ii) provides:
(1) "Parent" means a firm, corporation, or other legal entity which has subsidiaries.
(J) "Branch" means an operating division or office of the same organization housed in a different
location.
(K) "Subsidiary" means a firm, corporation, or other legal entity of which a parent owns, directly or
indirectly, more than half of the entity and controls the entity; or owns, directly or indirectly, half of
the entity and controls the entity; or owns, directly or indirectly, 50 percent of a 50-50 joint venture
and has equal control and veto power over the entity; or owns, directly or indirectly, less than half of
the entity, but in fact controls the entity.
(L) "Affiliate" means
(1) One of two subsidiaries both of which are owned and controlled by the same parent or
individual, or
(2) One of two legal entities owned and controlled by the same group of individuals, each
individual owning and controlling approximately the same share or proportion of each entity, or
(3) In the case of a partnership that is organized in the United States to provide accounting
services along with managerial and/or consulting services and that markets its accounting
WAC 06 037 52040
Page 4
services under an internationally recognized name under an agreement with a worldwide
coordinating organization that is owned and controlled by the member accounting firms, a
partnership (or similar organization) that is organized outside the United States to provide
accounting services shall be considered to be an affiliate of the United States partnership if it
markets its accounting services under the same internationally recognized name under the
agreement with the worldwide coordinating organization of which the United States partnership
is also a member.
In this case, the petitioner initially claimed, on the L Supplement to Form 1-129, that the U.S. entity was a
branch of the Brazilian entity, which was identified as "Bridal Shop." Also on Form 1-129, the petitioner
claimed that 60% of the stocks of the foreign entity were held by those who owned 60% of the U.S. entity,
thereby simultaneously suggesting an affiliate relationship. The petitioner submitted a copy of its 2005 IRS
Form 1120S, U.S. Income Tax Return for an S Corporation, which shows that the beneficiary owns a 34%
interest in the U.S. company, while two other individuals, and
each own 33% of the petitioner's stock. The petitioner did not submit evidence of ownership of the foreign
company.
The director found that the initial evidence was confusing and inconsistent, and consequently issued a request
for evidence on February 28, 2006. In the request, the director specifically required the petitioner to submit
evidence that definitively established its qualifying relationship with the Brazilian company. Requested
documents included but were not limited to annual reports, corporate ledgers, stock certificates, articles of
incorporation and proof of stock purchase. The director also noted that on Schedule L, Line 22 of the
petitioner's 2005 IRS Form 1120S, U.S. Income Tax Return for an S Corporation, a significant increase in the
petitioner's capital stock was indicated. An explanation with regard to its affect on the petitioner's ownership
and stock interests was thereby requested.
The petitioner responded on March 22, 2006. The petitioner submitted a document entitled "Contrato
Social," which was not translated from the Portuguese language. The petitioner also submitted three share
certificates for the petitioner dated May 4, 2004, showing that the beneficiary and
each owned 990 shares of the petitioner, whereas owned 1020 shares. The petitioner
also submitted copies of cancelled checks as evidence of payment for these shares, in addition to a letter dated
March 20, 2006 from its accounting firm, which explained that the increase in the petitioner's capital stock
from $22,800 to $69,155 would not affect the ownership of the company. Furthermore, the petitioner
submitted IRS Form 2553, Election by a Small Business Corporation, which indicated that as of the tax year
ending December 31,2004, the petitioner's ownership was as follows:
333.33
333.33
333.34
No evidence of the ownership of the foreign entity was submitted.
WAC 06 037 52040
Page 5
Upon review of the evidence submitted, the director concluded that the record was devoid of evidence to
establish that the entities maintained a qualifying relationship. The director cited these deficiencies, and cited
the petitioner's failure to provide the requested evidence needed to properly examine the relationship between
the two entities. The director subsequently concluded that the petitioner's claim of affiliation with the foreign
entity was invalid, and as a result, the petition was denied on April 3, 2006.
The petitioner appealed the decision, asserting that at the time of filing, two of the petitioner's three
shareholders shared 50/50 ownership of the foreign entity and owned a majority of the petitioner. In addition,
counsel claimed that by virtue of newly-submitted proxy agreements controlled the
petitioner. Counsel concluded, therefore, that this evidence combined established common ownership and
control and thereby satisfied the regulatory requirements. Finally, counsel also relies on the fact that an
accounting error led to the discrepancies in the record, but failed to assert what information was incorrect.
As cited by counsel on appeal, the regulation 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 (BIA 1988); see also Matter of Siemens Medical Systems, Inc., 19 I&N Dec. 362 (BIA 1986);
Matter of Hughes, 18 I&N Dec. 289 (Comm. 1982). In 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 ofChurch Scientology, 19 I&N Dec. at 595.
In this case, the petitioner has provided an abundance of conflicting evidence that renders it difficult to
determine which documentation is correct. It is incumbent upon the petitioner to resolve any inconsistencies
in the record by independent objective evidence. Any attempt to explain or reconcile such inconsistencies will
not suffice unless the petitioner submits competent objective evidence pointing to where the truth lies. Matter
of Ho, 19 I&N Dec. 582, 591-92 (BIA 1988). If CIS fails to believe that a fact stated in the petition is true,
CIS may reject that fact. See e.g. Anetekhai v. IN.S., 876 F.2d 1218, 1220 (5th Cir.1989); Lu-Ann Bakery
Shop, Inc. v. Nelson, 705 F. Supp. 7,10 (D.D.C.1988); Systronics Corp. v. INS, 153 F. Supp. 2d 7, 15 (D.D.C.
2001).
The first problem was that the petitioner claimed to be a branch of the foreign entity. This contention can
easily be disposed of. In defining the nonimmigrant classification, the regulations specifically provide for the
temporary admission of an intracompany transferee "to the United States to be employed by a parent, branch,
affiliate, or subsidiary of [the foreign firm, corporation, or other legal entity]." 8 C.F.R. § 214.2(l)(l)(i)
(emphasis added). The regulations define the term "branch" as "an operating division or office of the same
organization housed in a different location." 8 C.F.R. § 214.2(l)(l)(ii)(J). Citizenship and Immigration
Services (CIS) has recognized that the branch office of a foreign corporation may file a nonimmigrant petition
for an intracompany transferee. See Matter of Kloetti, 18 I&N Dec. 295 (Reg. Comm. 1981); Matter of
Leblanc, 13 I&N Dec. 816 (Reg. Comm. 1971); Matter ofSchick, 13 I&N Dec. 647 (Reg. Comm. 1970); see
also Matter of Penner, 18 I&N Dec. 49, 54 (Comm. 1982)(stating that a Canadian corporation may not
petition for L-IB employees who are directly employed by the Canadian office rather than a United States
office). When a foreign company establishes a branch in the United States, that branch is bound to the parent
WAC 06 037 52040
Page 6
company through common ownership and management. A branch that is authorized to do business under
United States law becomes, in effect, part of the national industry. Matter ofSchick, supra at 649-50.
Probative evidence of a branch office would include the following: a state business license establishing that
the foreign corporation is authorized to engage in business activities in the United States; copies of Internal
Revenue Service (IRS) Form 1120-F, U.S. Income Tax Return of a Foreign Corporation; copies IRS Form
941, Employer's Quarterly Federal Tax Return, listing the branch office as the employer; copies of a lease for
office space in the United States; and finally, any state tax forms that demonstrate that the petitioner is a
branch office of a foreign entity.
If the petitioner submits evidence to show that it is incorporated in the United States, then that entity will not
qualify as "an ... office of the same organization housed in a different location," since that corporation is a
distinct legal entity separate and apart from the foreign organization. See Matter of M, 8 I&N Dec. 24, 50
(BIA 1958, AG 1958); Matter ofAphrodite Investments Limited, 17 I&N Dec. 530 (Comm. 1980); and Matter
of Tessel, 17 I&N Dec. 631 (Act. Assoc. Comm. 1980). If the claimed branch is incorporated in the United
States, CIS must examine the ownership and control of that corporation to determine whether it qualifies as a
subsidiary or affiliate of the overseas employer.
With the petition, the petitioner's U.S. Income Tax Return for an S Corporation was submitted, showing that
the petitioner had incorporated in the United States on May 10, 2004. As a result, therefore, there is no
dispute that the petitioner does not qualify as a branch of the foreign entity.
It is also clear that the petitioner is not a subsidiary of the foreign entity. To qualify as a subchapter S
corporation, a corporation's shareholders must be individuals, estates, certain trusts, or certain tax-exempt
organizations, and the corporation may not have any foreign corporate shareholders. See Internal Revenue
Code, § 1361(b)(1999). A corporation is not eligible to elect S corporation status if a foreign corporation
owns it in any part. Accordingly, since the petitioner would not be eligible to elect S-corporation status with
a foreign parent corporation, it appears that the U.S. entity is owned by one or more individuals residing
within the United States rather than by a foreign entity and, therefore, would be an affiliate of the foreign
entity.
The initial evidence submitted to establish its affiliation with the foreign entity was, as previously noted,
inconsistent. Form 1-129 claimed that "60% of stocks in the foreign company are held by those who hold
60% in the U.S. company." However, the petitioner's Form 1120S for 2005 indicated, on its attached
Schedules K-l, Shareholder's Share of Income, Deductions, Credits, etc., that the petitioner was owned as
follows:
33%
33%
34%
Even if the shares of two of the three persons listed above were added together, they would not total 60%.
Another discrepancy in the record was an unexplained increase in the petitioner's capital stock, as set forth of
WAC 06 037 52040
Page 7
the 1120S, from $22,800 to $69,155 in 2005. The director requested an explanation with regard to this, along
with definitive evidence of the qualifying relationship between the parties, in the request for evidence.
The response to the director's request created more confusion. The petitioner submitted three share
certificates for the U.S. entity, dated May 4,2004, which broke down the petitioner's ownership as follows:
990 shares (33%)
1020 shares (34%)
990 shares (330/0)
Additionally, the petitioner's IRS Form 2553 indicated that a total of 1,000 shares had been issued, which
directly contradicted the above-reference share certificates, which claim a total of 3,000 shares were
outstanding. No explanation was provided to explain the discrepancies regarding the percentage of ownership
and the number of shares actually issued. As noted above, the Form 1120S indicated that the beneficiary
owned 34% of the petitioner, whereas the share certificates indicated that owned 34%.
Doubt cast on any aspect of the petitioner's proof may, of course, lead to a reevaluation of the reliability and
sufficiency of the remaining evidence offered in support of the visa petition. Matter ofHo, 19 I&N Dec. 582,
591 (BIA 1988).
On appeal, the petitioner submitted a translated copy of the foreign entity's Articles of Association, which
demonstrated that and each own 500/0 of the foreign entity. In
•
. ,counsel provides copies of voting proxy agreements signed by the beneficiary and
on May 30, 2004, which gran proxy powers over their respective 330/0 interests
III t e petitioner.
•• • • . II - •••
• •• ~ •• ' :t .
While a review of the foreign entity's Articles of Association appears to establish tha
and own equal shares of the foreign entity, the question of ownership and control of the
U.S. entity has not been resolv d On I I assert ing, 67% of the shares of
the U.S. entity were owned by and and concludes that, as a
result, the same owners own an est in both entities.
In this matter, however, there are simply too many' contradictions in the record to determine the true nature of
the ownership of the U.S. entity. First, the initial claim of the petitioner was that and
~tioner. However, the K-l Schedules submitted with the initial
petition suggested that_and owned a combined interest of 660/0 in
the petitioner. In response to the request for evidence share certificates were submitted, substantiating the
claim that and owned a combined interest of 33%, by way of
their respective share interests of990 and the beneficiary's 1020 shares. It is noted that according to the stock
certificates, a total of 3000 shares was outstanding. The petitioner's IRS Form 2553, however, presented a
completely different overview. This form, for the tax year ending December 31, 2004, indicated that only
1,000 shares had been issued, and that the breakdown of shares was 333.33, 333.33, and 333.34.
WAC 06 037 52040
Page 8
Despite the questions raised by these inconsistencies, the most important question is whether ownership of
these shares was actually acquired. The petitioner presented evidence of cancelled checks from the three
shareholders in the amounts of $990, $990 and $1020, respectively. However, Line 22 of Schedule L on the
petitioner's 2004 tax return indicate that a total of $22,800 in capital stock was outstanding.
On appeal, counsel acknowledges that although the stocks were subscribed at the time of filing, they were not
paid for in full. Counsel claims that full payment has since been made, and submits copies of deposit records
from Citibank, showing three deposits totaling $18,200 into an unidentified checking account over the course
of 2006. This evidence is insufficient for two reasons. First, the copies of the deposit transactions do not
identify the owner of the account into which the funds were received, nor do they identify from where the
funds originated. As a result, there is no evidence to support a finding that these funds represent payment
from the shareholders for their stock interests. Second, and most importantly, The petitioner must establish
eligibility at the time of filing the nonimmigrant visa petition. A visa petition may not be approved based on
speculation of future eligibility or after the petitioner or beneficiary becomes eligible under a new set of facts.
See Matter of Michelin Tire Corp., 17 I&N Dec. 248 (Reg. Comm. 1978); Matter ofKatigbak, 14 I&N Dec.
45, 49 (Comm. 1971). A petitioner may not make material changes to a petition in an effort to make a
deficient petition conform to CIS requirements. See Matter ofIzummi, 22 I&N Dec. 169, 176 (Assoc. Comm.
1998). Merely submitting copies of share certificates, identifying the alleged owners of those shares, is
insufficient to establish ownership without evidence that payment was rendered for that interest. In this
matter, therefore, the petitioner has failed to establish the crucial element of ownership.
Furthermore, the submission of the proxy agreements, for the first time on appeal, is likewise insufficient and
creates further inconsistencies. Specifically, the documents indicate that the beneficiary and
_ both signed over their respective 33% interests to I shortly after the petitioner's
incorporation. The initial evidence submitted to establish the petitioner's affiliation with the foreign entity,
however, contradicts these agreements. For example, the petitioner's Form 1120S for 2005 indicated on its
Schedules K-l, that the beneficiary owned 34% of the petitioner, not 33% as claimed in the voting proxy.
Furthermore, the petitioner claimed on Form 1-129 that "600/0 of stocks in the foreign company are held by
those who hold 60% in the U.S. company." Since the proxy agreements, dated May 30, 2004, precede the
filing of the petitioner's Form 1-129 and Form 1120S, little evidentiary weight can be given to these
documents. Again, it is incumbent upon the petitioner to resolve any inconsistencies in the record by
independent objective evidence. Any attempt to explain or reconcile such inconsistencies will not suffice
unless the petitioner submits competent objective evidence pointing to where the truth lies. Matter ofHo, 19
I&N Dec. at 591-92.
Therefore, based on the petitioner's failure to provide substantiated evidence of the ownership of the
petitioner, coupled with the blatant contradictions with regard to the exact percentages of ownership claimed
by its shareholders, it cannot be determined that a qualifying relationship exists between the two
organizations. The record does not contain persuasive evidence that that two entities were owned and
controlled by the same parent or individual, or owned and controlled by the same group of individuals who
own approximately the same amount of shares in each entity. See 8 C.F.R. § 214.2(l)(l)(ii)(L). Failure to
submit requested evidence that precludes a material line of inquiry shall be grounds for denying the petition.
8 C.F.R. § 103.2(b)(l4). In addition, if CIS fails to believe that a fact stated in the petition is true, CIS may
WAC 06 037 52040
Page 9
reject that fact. See e.g. Anetekhai v. INS., 876 F.2d at 1220; Lu-Ann Bakery Shop, Inc. v. Nelson, 705 F.
Supp. at 10; Systronics Corp. v. INS, 153 F. Supp. 2d at 15.
Despite counsel's assertions on appeal, the conflicting evidence in the record has not been adequately
explained, and counsel's assertions are simply insufficient to establish eligibility in this matter. Without
documentary evidence to support the claim, the assertions of counsel will not satisfy the petitioner's burden of
proof. The unsupported assertions of counsel do not constitute evidence. Matter ofObaigbena, 19 I&N Dec.
533, 534 (BIA 1988); Matter of Laureano, 19 I&N Dec. 1 (BIA 1983); Matter of Ramirez-Sanchez, 17 I&N
Dec. 503, 506 (BIA 1980).
In visa petition proceedings, the burden of proving eligibility for the benefit sought remains entirely with the
petitioner. Section 291 of the Act, 8 U.S.C. § 1361. Here, that burden has not been met.
ORDER: The appeal is dismissed.