Lane Powell Shareholders Barry Abbott and Diane Butler authored an article in the September/October 2014 issue of Washington Bankers Association’s Issues and Answers magazine titled “Banks and the EB-5 Program: Look Before You Leap.” In the article, Abbott and Butler discussed EB-5 visas, which afford a foreign national the opportunity to seek permanent residence in the United States if the foreign national invests at least $1 million into a new enterprise that creates at least 10 new jobs. They also discussed what bankers should be aware of before proceeding with serving as a lender for an EB-5 project or as an escrow holder to receive EB-5 customer deposits.
Without escrow, the EB-5 investor remits funds directly into the project account at the bank, as if paying an invoice. In this case, and if the depositary bank is using a correspondent international bank as an intermediary in receiving the funds, the local bank would act as little more than the “catcher” recipient of the EB-5 funds. However, even in this case, although the bank should have only a limited obligation to conduct due diligence about the source of funds, the recipient bank still will have obligations to file a Suspicious Activity Report when appropriate.
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