dismissed L-1A Case: Import/Export

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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:
INRE:
WAC 06140 50618
Petitioner:
Beneficiary:
Office: CALIFORNIA SERVICE CENTER Date: AUG 032001
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.
[obert P. Wiemann, ief
(U'dministrative Appeals Office
'\\oWW.uscis.gov
WAC 06140 50618
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 employ the beneficiary as an L-1A 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, a California limited liability company, operates as a tequila importer
and distributor. The petitioner states that it is an affiliate of Tequila Las Americas S.A. de C.V., located in
Mexico. The beneficiary was granted a one-year period of stay in L-IA status to open a new office in the
United States, from March 7, 2005 until March 6, 2006, and the petitioner's subsequent request for an
extension was denied. The petitioner now seeks to employ the beneficiary as its president for a three-year
period.
The director denied the petition, concluding that the petitioner had failed to establish that there is a qualifying
relationship between the U.S. petitioner and the beneficiary's previous foreign employer.
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 the director's
decision contains errors of fact, and contends that the evidence submitted "overwhelmingly demonstrates"
that the U.S. company is both a qualifying subsidiary and branch of the foreign entity. Counsel submits a brief
in support of the appeal.
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 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 the director's
decision contains errors of fact, and contends that the evidence submitted "overwhelmingly demonstrates"
that the U.S. company is both a qualifying subsidiary and branch of the foreign entity. Counsel submits a brief
in support of the appeal.
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.
WAC 0614050618
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(l)(l4)(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 (l)(1)(ii)(G) of this section;
(B) Evidence that the United States entity has been doing business as defined III
paragraph (1)(l)(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 sole issue addressed by the director is whether the petitioner has established that a qualifying relationship
exists between the U.S. company and the beneficiary's overseas employer. To establish a "qualifying
relationship" under the Act and the regulations, the petitioner must show that the beneficiary's foreign
employer and the proposed U.S. employer are the same employer (i.e. one entity with "branch" offices), or
related as a "parent and subsidiary" or as "affiliates." See generally section 101(a)(15)(L) of the Act; 8 C.F.R.
§ 214.2(1).
The pertinent regulations at 8 C.F.R. § 214.2(l)(l)(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)(l)(ii) of this section;
WAC 06 14050618
Page 4
(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 [.]
* * *
(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.
At the time of filing, the petitioner stated on Form 1-129 that it has an affiliate relationship with the foreign
entity. Specifically, the petitioner stated the following where asked to describe the stock ownership and
control of each company:
- 33% stock ownership and managerial control
[The U.S. petitioner] - 80% ownership and managerial control
The petitioner submitted a copy of the foreign entity's "contract of incorporation" dated February 24, 1999,
which described the ownership of that company as follows:
TOTAL:
Shares
17 shares
17 shares
17 shares
51
Value
$17,000
$17,000
$17000
$51,000
WAC 06 14050618
Page 5
The petitioner also provided the operating agreement for the U.S. company, dated October 20, 2003, which
indicates the following ownership structure:
Distribution Percentage
Eighty percent (80%)
Fifteen percent (150/0)
Five percent (5°1<»
The operating agreement includes a schedule intended to document the capital contributions of each member,
but it has not been completed. The petitioner also submitted a copy of its 2005 IRS Form 1065, U.S. Return of
Partnership Income, with Schedules K-1, indicating that the beneficiary owns 75% of the U.S. company,
while owns the remaining 25% interest in the company.
On April 13, 2006, the director issued a request for additional evidence, in part requesting evidence of
ownership of the foreign entity, as well as documentation to establish that the U.S. company and the foreign
company have a qualifying relationship. Specifically, the director requested proof of stock purchase of the
U.S. entity, copies of all of the U.S. company's stock certificates, stock ledger, and a detailed list of owners
for both companies.
In a response dated July 10, 2006, counsel for the petitioner re-submitted the foreign entity's contract of
incorporation, and the U.S. entity's operating agreement and 2005 Form 1065. In response to the director's
request for documentation of the stock purchase of the U.S. company, the petitioner submitted: (1) the U.S.
company's Bank of America account statement dated December 23, 2004, showing a balance of $3,446.41;
(2) a wire transfer receipt dated Janua 7 2005 showin a transfer to the petitioner's checking account in the
amount of $9,000, originating with (3) a receipt for a wire transfer in the amount
of $9,000 dated October 12, 2004, originating WIt deposited into her personal
bank account; and (4) a receipt for a wire transfer in the amount of $4,000, dated December 14, 2004,
ori inatin with , which was deposited into the checking account of
Counsel stated that the wire transfers from in the amounts of $4,000 and $9,000 evidence
the foreign entity's initial investment in the U.S. company. The petitioner submitted additional evidence
pertaining to a home equity loan and line of credit taken out against the beneficiary's home in the United
States. Counsel states that $200,000 was borrowed to be used as "capital infusion" for the U.S. company.
~, counsel reiterated that the members of the U.S. company include the beneficiary,
_,and
The director denied the petition on July 26, 2006, concluding that the petitioner had failed to establish that the
petitioner has a qualifying relationship with the foreign entity. The director observed that the evidence
provided did not support a finding that both organizations are owned and controlled by the same parent,
individual, or by an identical group of individuals who each own and control approximately the same share of
proportion of each organization. The director further found that the evidence did not show that an individual
or an identical group of individuals has effective de jure or de facto control of both organizations. Finally, the
director also noted that there was no evidence of a parent or subsidiary relationship between the two
companies.
WAC 06 14050618
Page 6
On appeal, counsel for the petitioner asserts that the director failed to consider all types of qualifying
relationships defined under 8 C.F.R. § 214.2(l)(l)(ii). Counsel further claims to be "baffled at the
Government's conclusion that the beneficiary owns 80% of the total shares of the U.S. entity when none of its
submissions related to the organizational structure of the U.S. corporation provides such information."
Counsel claims that a qualifying relationship exists between the U.S. and foreign companies "in the corporate
form of a parent, or branch, or subsidiary." Counsel states that the evidence "overwhelmingly demonstrates"
that the U.S. entity is a subsidiary of the Mexican company, and claims that the U.S. company is also a branch
of the foreign entity, as it is "clearly" an operating division of the foreign entity based in San Diego,
California. Finally, counsel asserts that the U.S. entity is a subsidiary of the foreign entity pursuant to 8
C.F.R. § 214.2(l)(l)(ii)(K) because the Mexican company owns less than half of the U.S. entity but in fact
exercises control over the organization.
Counsel's assertions are not persuasive. Upon review, the petitioner has not established that the U.S. company
and the foreign entity have a qualifying relationship.
As noted by the director, 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.
The petitioner's initial statement on Form 1-129 suggested that the petitioner sought to establish an affiliate
relationship between the U.S. and foreign entities based on common control by the beneficiary, who was
claimed to own 33 percent of the foreign entity and 80 percent of the U.S. entity.
The record establishes that three individuals own the foreign company in equal proportions. Although the
petitioner initially suggested that the beneficiary in fact controls this company with his minority interest, there
has been no documentary evidence submitted to support this claim. Control may be "de jure" by reason of
ownership of 51 percent of outstanding stocks of the entity or it may be "de facto" by reason of control of
voting shares through partial ownership and possession of proxy votes. Matter of Hughes, 18 I&N Dec. 289
(Comm. 1982). Absent documentary evidence such as voting proxies or agreements to vote in concert so as to
establish the beneficiary's controlling interest over the foreign entity, the petitioner has not established that the
beneficiary in fact controls that company, and cannot establish an affiliate relationship between the two
companies based on common ownership and control by the beneficiary. 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)).
The record contains inconsistent evidence and claims regarding the ownership of the petitioning company.
The petitioner initially claimed, and the petitioner's operating agreement indicates, that the beneficiary owns
80 percent of the U.S. company. The petitioner's October 2003 operating agreement indicates that the
remaining 20 percent interest in the U.S. company is owned by two individuals, while the petitioner's 2005
WAC 06 14050618
Page 7
Form 1065 indicates that the beneficiary owns a 75 percent interest in the U.S. company, and his spouse owns
the remaining 25 percent interest. On appeal, counsel repudiates the director's conclusion that the beneficiary
owns 80 percent of the U.S. company, and claims that the evidence submitted does not provide this
information. Counsel now claims that the Mexican entity in fact owns less than half of the U.S. entity but in
fact exercises control over the organization. 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). 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. at 591.
Contrary to counsel's statements on appeal, the petitioner's operating agreement does in fact show that the
beneficiary owns an 80 percent interest in the U.S. company. Furthermore, there is no documentary evidence
to support counsel's new claim that the foreign entity owns an interest in the U.S. company, as the petitioner's
operating agreement and IRS Form 1065 indicate no such information. 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).
Although the petitioner attempted to establish that the foreign entity invested $13,000 in the U.S. entity, the
only evidence of a wire transfer deposited to the U.S. entity's account was originated by an individual whose
ties to the foreign entity have not been explained. There is no persuasive evidence that the foreign entity
purchased a membership interest in the U.S. limited liability company, and, as noted above, no evidence that
the foreign entity is even acknowledged as a member on the company's corporate documents. Accordingly, as
it has not been establish that the foreign entity owns the U.S. company, in whole or in part, the foreign entity
is not a "parent" and the U.S. company is not a "subsidiary" of the foreign company. See 8 C.F.R. §§
214.2(l)(l)(ii)(I) and (K).
Counsel's claim that the U.S. company is a branch office of the foreign entity is not corroborated by the
record. 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). U.S. Citizenship and Immigration Services (USCIS) has
recognized that the branch office of a foreign corporation may file a nonimmigrant petition for an
intracompany transferee. See Matter ofKloetti, 18 I&N Dec. 295 (Reg. Comm. 1981); Matter ofLeblanc, 13
I&N Dec. 816 (Reg. Comm. 1971); Matter ofSchick, 13 I&N Dec. 647 (Reg. Comm. 1970); see also Matter
ofPenner, 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 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
WAC 06 14050618
Page 8
Revenue Service (IRS) Form 1120-F, U.S. Income Tax Return of a Foreign Corporation; copies of 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, USCIS must examine the ownership and control of that corporation to determine whether it qualifies
as a subsidiary or affiliate of the overseas employer.
Here, the U.S. petitioner is a limited liability company organized in the State of California. As such, it does
not qualify as a branch office of the foreign entity, and the petitioner must instead establish that there is a
qualifying parent-subsidiary or affiliate relationship between the two companies. As discussed above, the
petitioner has not met this burden.
While there is some commonality of ownership between the two foreign and U.S. companies, the record is
insufficient to establish that the companies share the required degree of common ownership and control by the
same individual or by the same group of individuals, with each individual owning and controlling
approximately the same share or proportion of each entity. See 8 C.F.R. § 214.2(l)(l)(ii)(K). The petitioner
has not documented its claimed qualifying relationship with the foreign entity. Accordingly, the appeal will
be dismissed.
Beyond the decision of the director, the petitioner has not established that the beneficiary would be employed
in a primarily managerial or executive capacity under the extended petition, as those terms are defined at
sections 101(a)(44)(A) and (B) of the Act. The record indicates that the beneficiary was the only employee
of the U.S. company at the end of the first year of operations, and the petitioner stated that his duties include
"every aspect [of] business development, including, but not limited to inventory, marketing, vendor contact
and development, light book keeping and accounting and distribution." The petitioner has not identified any
managerial or executive duties to be performed by the beneficiary in his capacity as president of the U.S.
company. Rather, he appears to be solely responsible for the day-to-day operation of the U.S. company,
including all 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 10I(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 'I., 19 I&N Dec. 593,
604 (Comm. 1988).
The fact that the beneficiary manages a business does not necessarily establish eligibility for classification as
an intracompany transferee in a managerial or executive capacity within the meaning of section 10I(a)(l5)(L)
of the Act. See 52 Fed. Reg. 5738, 5739 (Feb. 26, 1987). The record must establish that the majority of the
beneficiary's duties will be primarily directing the management of the organization or a component or
function of the organization, and that someone other than the beneficiary performs the non-managerial and
non-executive duties required to operate the business on a day-to-day basis. Here, that burden has not been
met. Although counsel for the petitioner states that the company will be staffed in the next 12 months, the
WAC 06 14050618
Page 9
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. 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). For this additional reason, the petition cannot 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 Dar v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989)(noting that the AAO reviews
appeals on a de novo basis).
When the AAO denies a petition on multiple alternative grounds, a plaintiff can succeed on a challenge only
if he or she shows that the AAO abused its 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 and the appeal dismissed for the above stated reasons, with each considered as an
independent and alternative basis for the decision. 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.