dismissed L-1A Case: Import/Distribution

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U.S. Department of Homeland Security
20 Massachusetts Ave., N.W., Rm. 3000
Washington, DC 20529
u.S. Citizenship
and Immigration
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JUN 202001
FILE: LIN 05 139 52520 Office: NEBRASKA SERVICE CENTER Date:
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.
j~4PL-!
Robert P. WIemann, Chief
Administrative Appeals Office
www.uscis.gov
LIN 05 139 52520
Page 2
DISCUSSION: The Director, Nebraska 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 president 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 corporation organized in the State of Oregon,
claims to be the subsidiary of _ocated in Khabarousk, Russia. The petitioner identifies itself as an
importer and distributor of stereo headsets. 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 three years.
The director denied the petmon concluding that the petitioner did not establish that (1) a qualifying
relationship existed between the petitioner and a foreign organization; (2) the petitioner had been doing
business during the previous year; or (3) the beneficiary will be employed in the United States in a primarily
managerial or executive capacity. On appeal, counsel for the petitioner contends that the director erroneously
denied the petition and in support of this assertion submits a brief and additional evidence.
To establish eligibility for the L-l 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 (1)(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 himlher 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.
LIN 05 139 52520
Page 3
In addition, the regulation at 8 C.F.R. § 214.2(l)(l4)(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)(l)(ii)(G) of this section;
(B) Evidence that the United States entity has been doing business as defined in 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;
(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 basis for the denial in this matter is the question of whether the petitioner and the foreign organization
are qualifying organizations as defined by 8 C.F.R . § 214.2(1)(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 defmitions 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.
On the L Supplement to Form 1-129, the petitioner claimed that the U.S. entity was the subsidiary of the
foreign entity . Specifically, the etitioner indicated that the foreign entity owned 52% of the petitioner , and
that that the beneficiary and ach owned 240/0 of the petitioner. No additional
documentation was submitted. Consequently, the director issued a request for evidence on September 28,
2005, which specifically requested that the petitioner submit evidence, in the form of stock certificates , stock
ledgers, and other corporate documentation to substantiate the petitioner's claim that a qualifying relationship
existed.
LIN 05 13952520
Page 4
In a response dated December 20, 2005, the petitioner, through counsel, addressed the director's request.
Included ~ewas a letter from the president of the foreign entity dated December 12,2005, which
stated tha_ still owned 51% of the petitioner. Also submitted were three stock certificates, which
demonstrated the following ownership distribution of the petitioner:
520/0
24%
24%
The director subsequently denied the petition on the basis that the record contained conflicting evidence regarding
the ownership of the petitioner. On appeal, counsel submits additional documentation in support of the claim that
the foreign entity owns 520/0 of the petitioner and thus is the majority owner. On review of the evidence
submitted, the AAO concludes that the petitioner failed to demonstrate that a qualifying relationship existed
between the petitioner and the foreign entity.
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 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, stock certificate registry, corporate bylaws, and the minutes of relevant
annual shareholder meetings 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 of Siemens Medical Systems, Inc., supra. Without full disclosure of all
relevant documents, Citizenship and Immigration Services (CIS) is unable to determine the elements of
ownership and control.
In the petition, the petitioner claimed that the foreign entity, _ owned 52% of the petitioner and,
therefore, the petitioner was its subsidiary since it was the majority owner. In response to the director's
request to submit additional evidence in support of the claim, the petitioner submitted: (1) a letter from the
foreign entity, referring t~claiming that it still owned 51% of the petitioner; and (2) a
stock certificate showing _president of the foreign entity, owned 52% of the petitioner.
There are several problems as a result of this documentation. First, the petitioner has not clarified the actual
name of the foreign entity, since it initially referred to it as _ yet in response to the request for
LIN 05 139 52520
Page 5
evidence, it is referred to a Second, the foreign entity's letter dated December 12, 2005 claims
that the foreign entity owns 51% of the petitioner, not 52% as it originally claimed. Finally, stock certificate
number 1 issued 52 shares of the petitioner to Alexander Ryjov, an individual, and not to the foreign entity.
On appeal, the petitioner submits additional corporate documentation in support of the claimed
parent-subsidiary relationship. However, the petitioner was put on notice of required evidence and given a
reasonable opportunity to provide it for the record before the visa petition was adjudicated. The petitioner
failed to submit additional corporate documentation, as requested, and now submits it on appeal. However, the
AAO will not consider this evidence for any purpose. See Matter of Soriano, 19 I&N Dec. 764 (BIA 1988);
Matter of Obaigbena, 19 I&N Dec. 533 (BIA 1988). The appeal will be adjudicated based on the record of
proceeding before the director. 1
The petitioner relies on the fact that 52% of the petitioner's shares are issued to the foreign entity's president,
Alexander Ryjov, as evidence that the foreign entity owns the petitioner. The petitioner, however, overlooks
the fact that a corporation is a separate and distinct legal entity from its owners or stockholders. See Matter of
M, 8 I&N Dec. 24, 50 (BIA 1958, AG 1958); Matter of Aphrodite Investments Limited, 17 I&N Dec. 530
(Comm. 1980); and Matter of Tessel, 17 I&N Dec. 631 (Act. Assoc. Comm. 1980). While Alexander Ryjov
may in fact be the president and owner of the foreign entity, the foreign entity itself is not the owner of the
petitioner. Since the petitioner has submitted no documentation with regard to the ownership of the foreign
entity, the AAO is unable to evaluate the record to determine if an affiliate relationship exists by virtue of Mr.
Ryjov's majority ownership of both entities. 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).
It is evident, therefore, that the foreign corporate entity is not the majority owner of the petitioner, and thus a
parent-subsidiary relationship does not exist. See 8 C.F.R. § 214.2(l)(l)(ii)(K)(defining "subsidiary"). In
addition, there is insufficient evidence in the record to determine whether an affiliation, in the alternative,
exists between the two entities. Moreover, the conflicting evidence in the record, including different corporate
names for the foreign entity, different percentages of ownership claimed, and a stock certificate issued to an
individual rather than the foreign corporate entity, cast doubt upon the validity of the petitioner's claims
overall. It is incumbent upon the petitioner to resolve any inconsistencies in the record by independent
1 It is noted that the petitioner submitted a copy of a U.S. Income Tax Return for an S Corporation (Form
1120S) for 2004. Although a statement attached to the petitioner's U.S. Income Tax Return (Form 1120) for
2005 clarifies that the petitioner did not qualify as an S Corporation in 2004 and that its filing of Form 1120S
was in error, the fact remains that inconsistent information is contained in the record. For example, the
accompanying Schedules K-1 for the petitioner's 2004 return indicates that the beneficiary a~
_ each own 50% of the petitioner, and there is no mention of the foreign corporation 0_
~Schedule K accompanying the 2005 return, the petitioner indicates that a foreign person owns 48%
of the petitioner. Form 5472, entitled Information Return of a 25% Forei~.S. Corporation or a
Foreign Corporation Engaged in a U.S. Trade or Business, indicates that_ is the 250/0 foreign
shareholder. These claims directly contradict each other, and further contradict the claim that the beneficiary
and each own twenty-four shares of the petitioner. This conflicting information has not
been resolved.
LIN 05 13952520
Page 6
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). 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.
Id. at 591. Furthermore, if CIS fails to believe that a fact stated in the petition is true, CIS may reject that fact.
See e.g. Anetekhai v. INS., 876 F.2d 1218, 1220 (5th Cir.1989); Lu-Ann Bakery Shop, Inc. v. Nelson, 705 F.
Supp. 7, 10 (D.D.C.l988); Systronics Corp. v. INS, 153 F. Supp. 2d 7, 15 (D.D.C. 2001).
Based on the discrepancies noted above, it cannot be concluded that a qualifying relationship exists between
the parties. For this reason, the appeal will be dismissed.
The second issue in this matter is whether the petitioner has been doing business for the previous year as
required by the regulations. The regulation at 8 C.F.R. §214.2(l)(l)(ii)(H) defines the term "doing business" as
"the regular, systematic, and continuous provision of goods and/or services by a qualifying organization and does
not include the mere presence of an agent or office of the qualifying organization in the United States and abroad."
In this matter, the petitioner claims that it is engaged in website development, particularly three dimensional
imaging, and importation and distribution of stereo headsets. In a letter of support dated December 4, 2005,
counsel explained that several of the petitioner's initial business transactions failed, and as a result, the petitioner
required additional time to recoup its investment and reach its goals. With the petition, minimal evidence of the
petitioner's business practices was submitted. For example, the petitioner submitted a Consulting Agreement
and several Letters of Intent, demonstrating agreements to form long-term cooperative business relationships
with other companies, which were entered into in March 2005. Additionally, the petitioner submitted several
invoices showing the purchase of stereo headphones from late December 2004 and January 2005. The
beneficiary was granted L-1A status on April 4, 2004.
Consequently, in the request for evidence issued on September 28, 2005, the director requested documentation
establishing that the petitioner had been doing business during the previous year as required by the regulations.
In the response filed on December 20, 2005, the petitioner submitted a client list which showed the various
companies with which it had formed contractual relationships. In addition, several other invoices were
submitted which showed the purchase of stereo headphones for August, September, and November 2005.
The director denied the petition on the basis that the evidence in the record failed to show that petitioner had
satisfied the regulatory requirements for doing business. On appeal, counsel for the petitioner submits the
petitioner's 2005 tax return in support of the contention that the petitioner has been doing significant business.
On review of the evidence submitted, the AAO concurs with the director's finding. The record contains copies
of invoices for the purchase and import of stereo headphones; however, the first invoice is from December 29,
2004. Furthermore, although it appears that the petitioner entered into contractual agreements with various
companies in March 2005, none of these contracts, according to its client list, has yet been satisfied. The
record, therefore, contains no documentation with regard to the petitioner's business dealings from April 4,
2004 until December 29, 2004, nor has the petitioner provided an explanation in this regard.
LIN 05 13952520
Page 7
The regulation 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 establish the new office. Furthermore, at the time the petitioner seeks an
extension of the new office petition, the regulations at 8 C.F.R. § 214.2(l)(14)(ii)(B) requires the petitioner to
demonstrate that it has been doing business for the previous year. The term "doing business," as stated above,
is defined in the regulations as "the regular, systematic, and continuous provision of goods and/or services by a
qualifying organization and does not include the mere presence of an agent or office of the qualifying
organization in the United States and abroad." 8 C.F.R. § 214.2(l)(1)(ii). There is no provision in CIS
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 by regulation for an extension.
In the instant matter, while the AAO acknowledges the petitioner's claim that business transactions were not as
successful as they had expected for the first year, the relevant period to examine is April 2004 to April 2005.
While the petitioner on appeal submits its 2005 tax return as evidence that its business dealings have become
more expansive, the fact remains that the record contains insufficient evidence that the petitioner was
conducting business consistently from April 2004 to April 2005. 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 of Michelin Tire Corp., 17 I&N
Dec. 248 (Reg. Comm. 1978).
The record, therefore, contains insufficient evidence that the petitioner was doing business as required by the
regulations in the twelve months from the date of approval until the date of the extension request. While
evidence is submitted to show that goods were acquired in January 2005 and contracts were executed in March
2005, there is no evidence or documentation regarding the petitioner's business dealings from April 2004
through December 2004. For this additional reason, the appeal will be dismissed.
The final 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 sUl?ervisory, 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
LIN 05 139 52520
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(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 lOl(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.
With the initial petition, the petitioner provided no details regarding the beneficiary's duties as president of the
United States company. In the request for evidence, therefore, the director requested additional evidence
regarding the beneficiary's duties and the staffing of the organization. In response, the petitioner provided the
following overview of the beneficiary's duties:
[O]rganization of the wholesale component development;
[C]onducting negotiations with the top-managers of the client compames and
partners;
[S]upervising and control of projects implementation;
Hiring and firing of the personnel for [the petitioner] and subcontracting companies
to perform duties in the wholesale component of our business;
Conducting negotiations and securing strategic alliances with the companies in this
market segment[.]
The petitioner also submitted a statement explaining that the petitioner was run by two executive employees:
the beneficiary and the vice-president. It further explained that other services, including
accounting, insurance, market research, and warehousing and distribution were handled by four different
companies as subcontractors. Despite the director's request for copies of the petitioner's quarterly tax returns,
this evidence was not submitted.
The director denied the petition based on a finding that the beneficiary would be engaged in most of the
day-to-day activities of the business. Specifically, the director concluded that based on the vague description
of duties and the lack of evidence showing wages paid to employees, the beneficiary must be responsible for
LIN 05 139 52520
Page 9
the ordinary tasks associated with the operation of the business. On appeal, counsel for the petitioner contends
that the director's conclusions are erroneous and provides several arguments in support of this position.
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 definitions of executive and
managerial capacity have two separate requirements. First, the petitioner must show that the beneficiary
performs the high-level responsibilities that are specified in the definitions. Second, the petitioner must prove
that the beneficiary primarily performs these specified responsibilities and does not spend a majority of his or
her time on day-to-day functions. Champion World, Inc. v. INS, 940 F.2d 1533 (Table), 1991 WL 144470 (9th
Cir. July 30, 1991).
The description of duties provided is basic and fails to adequately describe the true nature of the beneficiary's
day-to-day duties. It remains unclear, therefore, exactly what the beneficiary will do on an average work day.
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).
Additionally, the petitioner relied on the claim that the beneficiary and the vice-president are both executive
employees, and independent companies, as subcontractors, execute the critical daily tasks associated with the
petitioner's enterprise. The director concluded that, despite the claim that contractors perform most of the
required labor, the lack of subordinate staff to relieve the beneficiary clearly demonstrated that he was
performing non-qualifying tasks. As required by section 101(a)(44)(C) of the Act, if staffing levels are used as
a factor in determining whether an individual is acting in a managerial or executive capacity, Citizenship and
Immigration Services (CIS) must take into account the reasonable needs of the organization, in light of the
overall purpose and stage of development of the organization.
At the time of filing, the petitioner was a one-year-old company that claimed to be engaged in both web design
and import and distribution of stereo headphones. The petitioner claimed to have a projected gross income of
$455,000 for 2005, but the 2004 tax return submitted showed a gross income of merely $22,125. It is also
noted that the return showed no money paid in salaries or as compensation for labor, thereby weakening the
petitioner's claim that various contractors performed the necessary tasks of the business. The petitioner
claimed to employ four companies as subcontractors in addition to a vice-president, yet no evidence of these
employment relationships was submitted. The petitioner, therefore, submitted insufficient evidence to
establish that sufficient staff existed to relieve him from having to primarily perform the actual day-to-day,
non-managerial operations of the company. Going on record without supporting documentary evidence is not
sufficient for purposes of meeting the burden of proof in these proceedings. Matter of Soffici, 22 I&N Dec.
158, 165 (Comm. 1998) (citing Matter of Treasure Craft of California, 14 I&N Dec. 190 (Reg. Comm. 1972)).
Although additional documentation is provided on appeal to overcome the director's conclusions, insufficient
evidence was submitted prior to the director's decision based on the record. The evidence prior to
adjudication, therefore, clearly indicates that a solid organizational structure, with the beneficiary at the top of
LIN 05 139 52520
Page 10
the hierarchy, was not in effect at the time the extension was filed, such that the AAO could find the petitioner
had reached the level that it could support a primarily managerial or executive position.
In the present matter, the regulations provide strict evidentiary requirements for the extension of a "new office"
petition and require Citizenship and Immigration Services (CIS) to examine the organizational structure and
staffing levels of the petitioner. See 8 C.F.R. § 214.2(l)(l4)(ii)(D). The regulation at 8 C.F.R. §
214.2(l)(3)(v)(C) allows the "new office" operation one year within the date of approval of the petition to
support an executive or managerial position. There is no provision in CIS regulations that allows for an
extension of this one-year period. If the business does not have sufficient staffing after one year to relieve the
beneficiary from primarily performing operational and administrative tasks, the petitioner is ineligible by
regulation for an extension. In the instant matter, the petitioner has not reached the point that it can employ the
beneficiary in a predominantly managerial or executive position.
For the reasons set forth above, it cannot be found that the beneficiary is performing primarily managerial or
executive duties. For this additional reason, the appeal will be dismissed.
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 1025, 1043 (E.D. Cal. 2001), affd. 345 F.3d 683 (9th Cir.
2003).
The petition will be denied for the above stated reasons, with each considered as an independent and
alternative basis for denial. 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.