dismissed L-1A Case: Educational Media

U.S. Department of Homeland Security
20 Mass Ave. N.W., Rm. 3000
Washington, DC 20529
PUBLIC COpy
u.s.Citizenship
and Immigration
Services
File: WAC 05 082 51718 Office: CALIFORNIA SERVICE CENTER Date: AUG 03 z007
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)
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.
--"~'--~~~ ----=~Robett-P:-Wiemann, Chief
Administrative Appeals Office
www.uscis.gov
WAC 0508251718
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 AAO will dismiss the appeal.
The petitioner filed this nonimmigrant petition seeking to extend the employment of its chief executive officer
as an L-IA nonimmigrant intracompany transferee pursuant to section 101(a)(l5)(L) of the Immigration and
Nationality Act (the Act), 8 U.S.C. § 1101(a)(l5)(L). The petitioner is a corporation organized in the State of
California that claims to be engaged in the sale and distribution of educational videos and literature. The
petitioner also claims that it is the affiliate of Roman Instructional Media Resources, Inc., located in Quezon
City, the Philippines. 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.
The director denied the petition concluding that the petitioner has failed to establish that (1) the beneficiary
would be employed in the United States in a primarily managerial or executive capacity, or (2) a qualifying
relationship exists between the U.S. and foreign entities.
The petitioner subsequently filed an appeal. The director declined to treat the appeal as a motion and
forwarded the appeal to the AAO for review. On appeal, counsel for the petitioner asserts that, even though
the petition is for an extension of L-l A status, the beneficiary's eligibility should be considered based on the
standards for a "new office" petition since the company had been in operation for only five months when the
petition for extension was filed. Counsel also asserts that the beneficiary performs in an executive capacity
because she directs the management of the entire organization. With respect to the qualifying relationship
between the U.S. and foreign entities, counsel claims that the two entities have common ownership in that
they are owned and controlled by the same group of stockholders each of whom owns approximately the
same share or proportion of each company. In support of these assertions, the petitioner submits additional
evidence.
To establish eligibility for the L-l nonimmigrant visa classification, the petitioner must meet the criteria
outlined in section 101(a)(l5)(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)(l )(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.
WAC 05 082 51718
Page 3
(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
same work which the alien performed abroad.
The regulation at 8 C.F.R. § 214.2(1)(14)(ii) also 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 (1)(l)(ii)(G) of this section;
(B) Evidence that the United States entity has been doing business as defined III
paragraph (1)(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;
(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 first issue in the present matter is whether the beneficiary would 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
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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.
In an undated letter accompanying the Form 1-129, Petition for a Nonimmigrant Worker, counsel for the
petitioner stated the following regarding the beneficiary's job duties in the U.S. entity:
Promptly upon her assuming the duties of CEO, [the beneficiary] organized the office, hired
employees, established a marketing network, established company policies, set up business
objectives and goals, established credit and finance facility for the company, drew up the
company budget, obtained and negotiated contracts. In the 4 months of operations of the
company it has been able to generate approximately $56,000 in sales. [The beneficiary's]
continued employment with the U.S. company is critical to the success of the projects and
contracts that it has committed to. [The beneficiary] has actually worked in the company for
less than 4 months and her services are needed to complete the company's start up operations
and bring the company to full operations within one year.
On February 28, 2005, the director issued a request for further evidence (RFE). Specifically, the director
requested an organizational chart of the U.S. entity, which should (1) include the names of all executives,
managers, supervisors, and the number of employees within each department or subdivision; (2) identify the
beneficiary's position and list all employees under the beneficiary's supervision by name and job title, and (3)
include a brief description of job duties, educational level and annual salaries/wages for all employees under
the beneficiary's supervision. The director also requested Federal Forms 941 and California Quarterly Wages
Reports (Forms DE-6) for all employees for the preceding four quarters as well as copies of the U.S.
company's payroll summary, Forms W-2, and Forms 1099 evidencing wages paid to employees. In
connection with the beneficiary's managerial or executive capacity, the director requested (1) a list of the
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specific goals and policies that the beneficiary has established and specific discretionary decisions that the
beneficiary has exercised over the previous six months; (2) evidence that the beneficiary receives only general
supervision from the higher level executives, the board of directors, or stockholders of the company, and (3) a
specific day-to-day description of the duties the beneficiary has performed over the previous six months.
In a letter dated May 26, 2005 responding to the RFE, counsel for the petitioner stated:
The position of President/Gen. Manager is occupied by [the beneficiary] as intra-company
transferee f es. The position of Executive Assistant to the Gen. Manager is
occupied b a U.S. citizen. The company, having operated less than a year,
the organization is not completely staffed at this time [sic]. The functions of the different
departments are ad hoc positions filled by consultants and other officers of the company. For
example, the Finance/Accounting is handled for now by the company's tax consultant and
Accountant, The position of Sales and Marketing is hand_
[the~ell with [sic] account executive functions handled b_
[an_ who are officers of the corporation but not officially employed on a
payroll for the company [sic]. They are merely assisting [the beneficiary] set up the company
until full staffing is ready. The organization of the U.S. business is parallel to the
organization of the Philippine parent company. Thus, the Department for International
Relations with distributors and suppliers are still performed by the Philippine office
temporarily until the U.S. office is completely organized.
In the same letter, counsel stated the following in regards to the beneficiary's executive capacity:
For the last six months, [the b]eneficiary has been acting as Chief Executive Officer of the
company. She is organizing the corporation, renewed the office lease, installed computer and
other necessary business equipments, set up a marketing network for the company. In the
first four months of operations, [the b ]eneficiary has generated $52,000 sales for the company
and renewed and negotiated other contracts for the Philippine office. At this time all decision
making, business planning, financial decisions and administrative decisions are exercised by
[the b]eneficiary alone. The company is still at a start up stage and is not completely staffed.
Other officers of the company contribute their efforts by providing leads and contacts for
marketing. They also assist in the physical set up of the office.
The petitioner also stated that the beneficiary was negotiating various real estate loans and leases for the
company. The petitioner submitted an organizational chart for the U.S. entity that lists only the positions
within the company without naming any individuals occupying those positions. The petitioner also submitted
federal and state quarterly wage reports for the quarters ending September 30, 2004, December 31, 2004 and
March 31, 2005, and its payroll summary from September 1,2004 through May 15,2005, which show that
the beneficiary was the only employee of the company, until she was joined in January 2005 by the executive
assistant.
On August 5, 2005, the director denied the petition. The director determined that given that there appears to
be only one other employee on the payroll, the record does not establish that the U.S. entity has the
WAC 0508251718
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organizational complexity to support an executive or managerial position. The director found the evidence
has not established that the beneficiary supervises a subordinate staff of professional, managerial or
supervisory personnel who will relieve her from performing non-qualifying duties, and as such, the
beneficiary's activities will not be primarily managerial or executive.
On appeal, counsel for the petitioner asserts that, even though the petition is for an extension of L-1A status,
the beneficiary's eligibility should be considered based on the standards for a "new office" petition since the
company had been in operation for only five months when the petition for extension was filed. Counsel also
asserts that the beneficiary performs in an executive capacity because she directs the management of the
entire organization. Counsel also indicates that the beneficiary is in the process of setting up a new restaurant
business for the company which is to start operation in October 2005; counsel submits on appeal various
documents in connection with this new business.
On reviewing the petition and the evidence, the petitioner has not established that the beneficiary would be
employed in the United States in a managerial or executive capacity.
When examining the executive or managerial capacity of the beneficiary, the AAO will look first to the
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 will be primarily employed in a managerial or executive capacity.
Overall, the description of the beneficiary's duties that the petitioner has provided is vague and nonspecific
and fails to demonstrate what the beneficiary will do on a day-to-day basis. In the letter accompanying the
initial petition, the beneficiary's responsibilities were described as "organized the office, hired employees,
established a marketing network, established company policies, set up business objectives and goals,
established credit and finance facility for the company, drew up the company budget, obtained and negotiated
contracts." As previously noted, the director then requested more specific details regarding the beneficiary's
role in the U.S. entity, including a specific day-to-day description of the duties the beneficiary has performed
over the previous six months. However, instead of providing specific details and a day-to-day description of
the beneficiary's duties over the previous six months as requested, counsel for the petitioner merely stated that
the beneficiary "organiz[ed] the corporation, renewed the office lease, installed computer and other necessary
business equipments, set up a marketing network for the company." Similarly, there was no evidence to
substantiate counsel's statement that "at this time, all decision making, business planning, financial decisions
and administrative decisions are exercised by [the b]eneficiary alone." 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 of Obaigbena, 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). Moreover, reciting the beneficiary's vague job responsibilities or broadly-cast business objectives is
not sufficient; the regulations require a detailed description of the beneficiary's daily job duties. The
petitioner has failed to answer a critical question in this case: What will the beneficiary primarily do on a
daily basis? The actual duties themselves will reveal the true nature of the employment. Fedin Bros. Co., Ltd.
v. Sava, 724 F. Supp. 1103, 1108 (E.D.N.Y. 1989), affd, 905 F.2d 41 (2d. Cir. 1990). Further, failure to
WAC 05 082 51718
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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, the AAO notes that the beneficiary's job description include tasks such as "install[ing] computer
and other necessary business equipments," "obtain[ing] and negotiate[ing] contracts," and "set[ting] up a
marketing network for the company." These are tasks that are necessary to provide the company's service or
product and, as such, will not be considered managerial or executive in nature. The petitioner gave no
indication as to what percentage of the beneficiary's time is spent engaging in these non-qualifying tasks. 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 ofChurch Scientology Int 'l., 19 I&N Dec. 593, 604 (Comm. 1988).
Moreover, as the director observed, the evidence fails to demonstrate that the beneficiary has a subordinate
staff of professional, managerial or supervisory personnel who would relieve her from performing non­
qualifying duties. The evidence submitted indicates that the company has on staff only one other employee
with the title of executive assistant. The petitioner did not provide a job description for this employee, and it
is unclear based on the record what this employee actually does within the company. Additionally, in her
letter responding to the RFE, counsel for the petitioner claimed that "the functions of the different
departments are ad hoc positions filled by consultants and other officers of the company." However, counsel
claimed that these officers are not officially on the company's payroll. There is no evidence submitted to
substantiate counsel's claim regarding the role of "consultants and other officers" within the company, or to
demonstrate the extent to which these individuals, or the executive assistant, would relieve the beneficiary
from primarily performing non-qualifying duties. Again, without documentary evidence to support the claim,
the assertions of counsel will not satisfy the petitioner's burden of proof. Matter of Obaigbena, 19 I&N Dec.
at 534; Matter ofLaureano, 19 I&N Dec. 1; Matter ofRamirez-Sanchez, 17 I&N Dec. at 506.
The AAO notes that the petitioner indicated more than once in the record that "the company is still at a start
up stage and is not completely staffed." However, the petitioner must establish eligibility at the time of filing
the nonimmigrant visa petition. A visa petition may not be approved at a future date after the petitioner or
beneficiary becomes eligible under a new set of facts. Matter ofMichelin Tire Corp., 17 I&N Dec. 248 (Reg.
Comm. 1978). Along the same lines, the AAO does not find persuasive counsel's assertion on appeal that
"the beneficiary's eligibility should be considered based on the standards for a 'new office' petition since the
company had been in operation for only five months when the petition for extension was filed." The
regulations at 8 C.F.R. § 214.2(1)(3)(v)(C) allows the intended United States operation one year within the
date of approval of the petition to support an executive or managerial position. There is no provision in the
regulations that allows for an extension of this one-year period. If the business is not sufficiently operational
after one year, the petitioner is ineligible for an extension under the regulations. In the instant matter, it
appears the U.S. company simply has not reached the point that it can employ the beneficiary in a
predominantly managerial or executive position.
In light of the foregoing, the AAO concludes that the petitioner has not established that the beneficiary would
be employed in the United States in a primarily managerial or executive capacity, as required by 8 C.F.R.
§ 214.2(1)(3).
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The second issue in this proceeding is whether the petitioner has established that a qualifying relationship
exists between the foreign entity and the U.S. entity.
The pertinent regulations at 8 C.F.R. § 214.2(1)(1)(ii) define the term "qualifying organization" and related
terms as follows:
(G) Qualifying organization means 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)(1)(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)(15)(L) of the Act.
* * *
(I) 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.
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On the L Supplement to Form 1-129, the petitioner stated that "the U.S. entity is a subsidiary of the Philippine
corporation and the majority of the U.S. shares are owned by the Philippine corporation." In the letter
accompanying the petition, counsel for the petitioner stated that the shares of the company are owned by the
foreign parent company and its controlling shareholders. The petitioner submitted certifications by the
corporate secretary of each company that set forth the stock ownership of each company as follows:
The foreign entity:
Shareholder No. of shares 01«.
8,000 30%
8,000 30%
8,000 300/0
500 50/0
500 50/0
The U.S. entity:
Shareholder No. of shares 0/0
14,000 35%
8,000 20%
8,000 20%
6,000 15%
4,000 10%
The petitioner submitted the foreign entity's articles of incorporation, dated April 19, 1999, showing that the
company's stock has been subscribed to and paid for by the shareholders and in the numbers listed above.
With respect to the U.S. entity, the petitioner submitted copies of the company's share certificates numbers 1
through 5, dated May 22, 2003, setting forth the ownership of shares by the shareholders and in the amounts
set forth above. The petitioner also submitted a copy of the U.S. entity's board resolutions dated May 22,
2003, confirming the proposed issuance of shares to the shareholders set forth above.
In the RFE, the director stated, "[sjince the foreign company owns less than 50% of the petitioner, explain
how the petitioner and the foreign company have a qualifying relationship as defined in 8 CFR
214.2(l)(ii)(G). "
In response, counsel for the petitioner offered the following explanation:
As previously documented and stated in the original filing, the U.S. company is owned by the
Philippine company and by the shareholders of the Philippine company. Exhibit E shows the
U.S. com an owned b P ili i 20%. The other shareholders,
and altogether owning another 45%.
The U.S. company is therefore majority owned by 650/0 of the foreign company and its
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Page 10
shareholders. These same shareholders of the U.S. company own and control 60% of the
Roman Resources, Philippines.
The "Exhibit E" to which counsel referred consists of the certifications of ownership of the companies that
were previously submitted and described above. The petitioner submitted no other evidence in support of its
claims regarding the qualifying relationship between the two companies.
In denying the petition, the director observed that although the ownership of the U.S. entity by the foreign
entity and the foreign entity's controlling shareholders do amount to 65%, the foreign company owns only
20% and there is no evidence that it controls the U.S. entity. In addition, the director found that while there is
commonality of ownership between the two companies, the record does not show that the two companies are
owned and controlled by the same parent or individual, or by the same group of individuals, each owning and
controlling approximately the same share or proportion of each entity.
On appeal, counsel claims that the two entities have common ownership in that they are owned and controlled
by the same group of stockholders each of whom owns approximately the same share or proportion of each
company. Counsel further claims that the U.S. company was in fact established by the foreign company and
intended to be its subsidiary in the United States. Counsel also claims that the foreign entity has assigned its
president as its representative for voting its shares in the U.S. company, and that the shareholders of the U.S.
entity who are not present in the United States have assigned their shares/votes to the foreign entity. Counsel
submits copies of two sets of resolutions of the board of the foreign entity, one showing that the foreign entity
assigned the beneficiary to go to the United States to set up the U.S. company, and the other setting forth the
described designation of representative and assignments of shares.' Counsel asserts that the AAO has
recognized an affiliate relationship where persons own different amounts of shares but vote in block by
agreement. Finally, counsel asserts that other factors exist to show a qualifying relationship between the two
entities, including the same corporate name and the sharing of technical, financial and personnel resources.
In reviewing the record, while the director's analysis is not entirely correct, the AAO agrees with the director's
conclusion that the evidence is insufficient to demonstrate that a qualifying relationship exists between the
U.S. and foreign entities as required under 8 C.F.R. § 214.2(l)(3)(i)? The regulations and case law confirm
1 It is noted that although counsel claims that these board resolutions were previously introduced into the
record, a review of the record shows that they were in fact submitted for the first time on appeal.
2 The director indicates in the denial that the "identical group of individuals" must each own and control
approximately the same share or proportion of each entity. On appeal, counsel takes issue with this language
and cites Sun Moon Star Advanced Power, Inc. v. Chappel, 773 F. Supp. 1373 (N.D. Cal 1990). To the extent
that the director may not have considered indirect ownership, his use of the word "identical" is hereby
withdrawn. The L-1 definition of affiliate at the time of the Sun Moon Star Advanced Power, Inc. decision
read, "Affiliate means . . . 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." 8 C.F.R.
§ 214.2(l)(1)(ii)(L) (1990). The court in Sun Moon Star Advanced Power, Inc., however, did not directly
address this regulation in its decision. See Sun Moon Star Advanced Power, Inc. v. Chappel, 773 F. Supp. at
1373. Instead, it only discussed an apparent mistake in the August 20, 1987 memorandum's interpretation of
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Page 11
that ownership and control are the factors that must be examined in determining whether a qualifying
relationship exists between the U.S. and foreign entities for purposes of this visa classification. Matter of
Church Scientology International, 19 I&N Dec. at 593 (Comm. 1988); see also Matter of Siemens Medical
Systems, Inc., 19 I&N Dec. 362 (BIA 1986); Matter ofHughes, 18 I&N Dec. 289 (Comm. 1982). 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 International, 19 I&N Dec. at 595.
Counsel appears to claim on appeal that the two entities should be considered affiliates in that they are owned
and controlled by the same group of stockholders, each of whom owns approximately the same share or
proportion of each company. Counsel's claim is without merit as it is not supported by the record. The record
indicates that the beneficiary owns directly and indirec~U.S. entity but only 5% of the foreign
entity, and and_ach own directly and indirectly 30%
of the foreign entity but only 26%, 21% and 16%, respectively, of the U.S. entity. Thus, while the evidence
submitted indicates that the same group of individuals directly and indirectly own shares in both companies,
the evidence does not show that each individual owns "approximately the same share or proportion of each
company." C.F.R. § 214.2(l)(1)(ii)(L)(2) (emphasis added). As such, the record does not show that the two
entities have a qualifying relationship as "affiliates" under the regulation at 8 C.F.R. § 214.2(l)(1)(ii)(L)(2).
Finally, counsel on appeal submits a copy of the foreign entity's June 2, 2003 Board Resolution as evidence of
the actual control of the petitioner. However, absent actual proxy voting agreements, this board resolution
alone is insufficient evidence of the control of the petitioner's issued shares. Even if the board resolution was
sufficient evidence of proxy votes, the petitioner has still failed to demonstrate that it has a qualifying
relationship with the foreign entity. Specifically, the evidence indicates that the foreign entity directly owns
8,000, or 20%, of the shares of the U.S. entity. ~ty's June 2, 2003 board resolution alleges that
(1) I and~ssign and designate their shares in the U.S.
entity (8,000, 6,000, and 4,000 shares, respectively) to the foreign entity "for all intents and purposes,
including receiving dividends, representation at stockholder meetings an~rights and any
and all stockholder benefits, privileges and responsibilities;" and (2) tha_ is "designated,
appointed and authorized to represent [the foreign entity]'s 8,000 shares of [the U.S. entity] at its board
the regulation, in which the then Immigration and Naturalization Service (INS) added the word "exact" to
describe the ownership required. Id. at 1376. When the word "exact" is added, it implies that the ownership
must be "absolutely identical" and that indirect ownership will not be permitted or even considered. See id. at
1376, 1380. Specifically, the court in Sun Moon Star Advanced Power, Inc. stated that, based on the
memorandum's interpretation of the regulation, "a determination of whether companies are affiliates depends
upon finding that the companies are owned by the exact same individuals and excludes the possibility of
indirect ownership of the affiliates by these individuals through a third company." Id. at 1376 (emphasis in
original). Thus, as the word "exact" does not appear in the regulations, the court concluded that indirect
ownership should also be considered when determining whether the same individuals own both entities. At
the same time, by not directly addressing the regulation, the court implied that it did not have an issue with
the plain meaning of "affiliate" in 8 C.F.R. § 214.2(l)(l)(ii)(L) and its requirement that the "same group of
individuals" own and control, whether directly or indirectly, the same approximate share or proportion of each
entity.
WAC 05 082 51718
Page 12
meetings, including the power to vote its shares and represent [the foreign entity] in any and all its capacity."
Whether intentionally or inadvertently, this board resolution shows that while the foreign entity has been
assigned control of 45% of the U.S. entity through the collective shares of the three individual shareholders, it
in turn has designated the power to vote its original 200/0 holding to one of the individual shareholders. Thus,
assuming the continuing validity of the assignments outlined in these resolutions, the foreign entity
effectively controls only 45% of the U.S. entity, and the U.S. entity cannot be considered a subsidiary of the
foreign entity as defined under 8 C.F.R. § 214.2(l)(l)(ii)(K).
In light of the foregoing, the AAO finds that the evidence is insufficient to establish that a qualifying
relationship exists between the U.S. and foreign companies.
Beyond the decision of the director, the record does not contain sufficient evidence that the petitioner has
been engaged in the regular, systematic, and continuous provision of goods and/or services in the United
States for the entire year prior to filing the petition to extend the beneficiary's status. Pursuant to the
regulation at 8 C.F.R. § 214.2(l)(l4)(ii)(B), the petitioner is expected to submit evidence that it has been
doing business since the date of the approval of the initial petition, which, in this case is January 2004. The
petitioner submitted a number of invoices to show that it has been sourcing for materials, making purchases
and transacting business. However, these invoices only date back as far as September 2004. There is no
other evidence to show that the petitioner was doing business from January through September 2004.
Moreover, according to the letter from counsel accompanying the petition for extension, the U.S. entity did
not start up its operations until the beneficiary arrived in the United States in August 2004. Thus, the record
does not show that the petitioner has been engaged in the regular, systematic, and continuous provision of
goods and/or services in the United States for the entire year prior to filing the petition to extend the
beneficiary's status. For this additional reason, the petition may not be approved.
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 she shows that the AAO abused it discretion with respect to all of the AAO's
enumerated grounds. See Spencer Enterprises, Inc. v. United States, 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, 8 U.S.C. § 1361. Here, that burden has not been met. Accordingly, the
director's decision will be affirmed and the petition will be denied.
ORDER: The appeal is dismissed.