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Law 360 | Expert Analysis: Common Challenges Associated With B-1 Visa Compliance

June 1, 2018

By Xavier Francis, Erickson Immigration Group Attorney

The B-1, or business, visa is perhaps the most widely used and easily accessible visa for companies seeking to have their global workforce enter the United States. Many companies rely on this visa to facilitate commercial activities and transactions in the U.S. However, the B-1 visa is also susceptible to misuse as demonstrated by a series of investigations and charges levied against several companies in recent years. Misuse can also be attributed to the lack of clarity in current regulations, specifically as it relates to distinguishing “business” from “work”. Although the distinction between business and work can be black and white in some cases, many instances fall within a grey area that potentially expose companies to compliance issues. Given the current immigration climate and the administration’s continued effort to restrict the movement of highly skilled migrants, it might only be a matter of time before other types of nonimmigrant visas are targeted; the B-1 visa program is no exception. Thus, companies and professionals that rely on the B-1 visa should take extra measures to ensure compliance with current regulations.

Companies Exposed for Fraud

In recent years, several companies have been exposed for facilitating B-1 fraud by having foreign workers enter the U.S. to engage in productive work. In 2017, an information technology firm agreed to pay the government $1 million in settlement in response to allegations of B-1 visa fraud.[1] The firm had its foreign national employees apply for B-1 visas with the intended purpose of participating in “training” and “knowledge transfer.” It was later discovered the employees were performing information technology work in the U.S., which is impermissible under the B-1 visa. Additionally, in 2013, an Indian technology company agreed to pay a record $34 million fine to settle allegations of B-1 visa fraud.[2] The government discovered that the company used the B-1 visa program to allow its foreign population to enter the U.S. to perform skilled labor.[3]

Despite the obvious cases of misuse, in some instances the line between permissible B-1 activities and productive work can be obscure, potentially exposing companies to unwanted compliance issues. In order to remain compliant and avoid a similar fate, companies must be well informed and have a clear understanding of the regulations and nuances associated with the B-1 visa program. Specifically, stakeholders must be able to properly distinguish between business activities and productive work.

Legal Standard

The Immigration and Nationality Act allows business visitors to enter the U.S. “temporarily for business.”[4] Under current regulations, business refers to “conventions, conferences, consultations and other legitimate activities of a commercial or professional nature.”[5] In other words, business can be construed as soft activities, not typically performed on a daily basis and peripheral or tangential to the main job duties. On the other hand, work refers to skilled or unskilled salaried labor and services for hire on an independent basis.[6] Work can be construed to be hands-on or productive labor that is core to the individual’s job duties. The Foreign Affairs Manual outlines a list of permissible business activities, some of which are negotiating contracts, engaging in commercial transactions and consulting with business associates.[7] Business visitors can also participate in training sessions.[8]

Although the regulations provide general guidance, they fall short of detailing the nuances associated with business. Does business include taking measurements, note-taking or data collection? The Board of Immigration Appeals, or BIA, answered this question in Matter of Hira.[9] In that case, the court held that a business visitor taking body size measurements of customers in the U.S. then performing the actual work in Hong Kong performed a permissible business activity.[10] The board’s focus was not on the visitor’s actual activity per se, but instead emphasized the totality of the circumstances such as the visitor’s intent to abandon his domicile, his principal place of business and the location of the ultimate accrual of profits.[11] All factors pointed to Hong Kong and the board used that as the rationale for granting the B-1 visa.

On the opposite side of the business versus work spectrum is Matter of Lawrence, which involved a Canadian citizen who frequently entered the U.S. to manage the day-to-day operations of a U.S. enterprise[12]. In that case, the board deemed the visitor deportable given (1) he performed managerial work which generated revenue in the U.S. and not Canada; (2) his activities required him to maintain a continued presence in the U.S.; and (3) his line of work did not call for his immediate return to Canada.[13]

So, under the rationale of Hira, is it accurate to rightfully assume all B-1 visa holders, visiting clients, are compliant as long as they intend to return home and base their business and profits abroad? The short answer is no. The BIA revisited the question of permissible B-1 activity in Matter of Neill.[14] In that case, the court held that a Canadian engineer who makes one or two trips to the U.S. per week to consult with clients and obtain information was exceeding the scope of permissible business activities.[15] The board denied the engineer’s B-1, noting he used the visa to “extend his professional engineering practice to the United States.”[16] Even though the engineer limited his activity to note-taking, drawings and taking measurements (then later performing the actual design work in Canada), the board believed his frequent visits and the scale of his activities exceed the scope of business.

Unknown to many is a narrow exception, which allows employees from foreign companies to visit the U.S. to install, service or repair machinery and train U.S. workers pursuant to a contract of sale. The Foreign Affairs Manual confirms:

An alien coming to the United States to install, service, or repair commercial or industrial equipment or machinery purchased from a company outside the United States or to train U.S. workers to perform such services [is permissible]. However, in such cases, the contract of sale must specifically require the seller to provide such services or training and the visa applicant must possess specialized knowledge essential to the seller’s contractual obligation to perform the services or training and must receive no remuneration from a U.S. source.[17]

This rule should be interpreted very narrowly. It only allows foreign national commercial and industrial workers to perform installation and repair services under a preexisting service contract. The visitor must limit his activities to working on the equipment and machinery listed in the contract of sale and the service must occur within a year of executing the contract.[18] Furthermore, the exception applies to products manufactured outside the U.S.[19] Although attractive on its face, the chances of consular officers granting business visas under the sales contracts exception are slim. Furthermore, document collection can be unduly burdensome and extensive, which makes it unpopular to companies that would otherwise use it for their global employees.

How to Distinguish Business From Work

As mentioned above, the B-1 visa permits visitors to participate in a variety of activities. Trainings and consultations are perhaps the most ambiguous and ill-defined. Given the lack of clarity in the regulations, companies often have difficulty understanding when trainings and consultations blur the line between business and work.

Trainings

The scope of trainings is not properly defined by the statute, regulations or Foreign Affairs Manual. For instance, although visitors can participate in trainings, can they train U.S. workers to install, repair, fix or maintain various products? U.S. Customs and Border Protectionconfirmed business visitors may (1) provide trainings to U.S. workers in B-1 status, or (2) receive training while in the U.S. [20] This is particularly crucial to professionals who visit to train U.S. workers. Thus, in practice, the trainings should only be an educational exercise. Consider the following scenarios:

  • Scenario Number 1 (Business): B-1 visitor, a software engineer, visits client site in the U.S. to train clients on how to install a special software developed by her company. The visitor provides a Power Point presentation detailing a step-by-step method for installing and using the software.
  • Scenario Number 2 (Work): B-1 visitor, a software engineer, visits client site in the U.S. to train clients how to install a special software developed by her company. After the trainings, someone approaches the visitor and asks for help with the installation. The visitor takes the laptop and decides to install the software for the trainee. This is impermissible and qualifies as productive work.

Consultations

Another ill-defined business activity is “consulting” with business associates. Although consulting is listed in the regulations and U.S. Citizenship and Immigration Services’ website, there has never been a precise definition of what consulting entails for B-1 purposes[21]. Thus, professionals whose main job function is to consult with clients often have difficulty distinguishing consulting from productive work. As best practice, professionals in this category should limit their consulting to meetings and discussing project goals, road maps and timelines. The visitor can return to her home country to begin productive work and next steps involved with her consultation.

The following illustration of concentric circles captures the distinction between business and work.

As mentioned above, business can be described as activities peripheral or tangential to the main job duties. This is illustrated by the activities listed in outer concentric circle. The closer the activities get to the outer edge of the outer circle, the more it appears as business. In contrast, work can be construed as activities core or essential to the main job duties as demonstrated by the inner circle. The closer the activities get to the most inner center of the inner circle, the more it appears as work. Activities that border the orange line are often ambiguous and must be assessed in its totality.

Companies that remain compliant will always perform activities listed in the outer concentric circle. The closer a visitor gets to the inner circle the more his activities will resemble work. Activities listed in the inner circle cannot be performed without work authorization.

Policy Considerations

Other countries have business visa programs that allow foreign nationals to enter for short periods of time for various business activities. However, to reduce the ambiguity between business and work and stimulate global mobility and international commerce, some countries have created special visa categories that resemble hybrids between business and working visas. These visas are not free tickets for work authorization, but instead allow foreign nationals to visit to work for short periods of time pursuant to a preexisting contract or vendor-client relationship.

Canada

Canada uses a hybrid-like visa known as the “After-Sales Entry as Business Visitor,” or after-sales business visa. It’s a unique hybrid between a business visa and a work permit. The after-sales business visa allows visitors to enter Canada to conduct after-sales services for clients pursuant to a preexisting contract. Visa holders of this category are allowed to fit, install, maintain or repair machines, equipment, computer programs or other technical systems for clients or a branch office of their own company. The duration of time permitted for the after-sales business visa depends on the occupation seeking to work in Canada. In order to qualify for the visa, there must be an existing service agreement or purchase order between the foreign company and the client.

Switzerland

Switzerland allows companies to use a 120-day work permit for assignees, including EU and non-EU nationals, seeking to perform productive work for short periods of time. The permit is often used by technicians, engineers and consultants who execute short-term projects that would not normally require a work permit.

The 120-day Swiss work permit allocates 120 working days to the organization instead of the individual work permit holder. Tracking companies instead of individuals allows the Swiss immigration authorities to maintain a level of control and tracking over its working population. For example, if a work permit holder spends eight days in Switzerland, the company will have a total 112 days remaining in that calendar year.

The systems used in Canada and Switzerland somewhat mirror the service contract exception in the U.S. However, these countries have figured out how to use these visa categories more effectively and systematically. These visa groups incentivize companies to rightfully seek work authorization instead of circumventing the system. It appears the only way for the U.S. to implement a similar system is to have a new law passed by Congress. However, this is unlikely in our current political climate. Thus, in the meantime, companies must continue to rely on the B-1 visa’s basic functions and take strict measures to remain compliant.

Conclusion

The B-1 visa remains one of the most accessible visas for companies and professionals seeking to enter the U.S. to participate in short-term business activities. The relative ease and accessibility of obtaining the visa should not be seen as an incentive to circumvent the labor certification process. As highlighted above, the penalties for noncompliance are severe and outweigh the short-term benefits associated with misusing the visa program. Thus, companies must take affirmative steps to remain compliant with existing regulations and avoid the fate of companies discovered for B-1 fraud and misuse. Companies can enhance corporate compliance measures by providing more internal training and guidance to their local staff and foreign national workforce. This will minimize the risk of misuse and fraud, save companies millions of dollars in fines and preserve the reputation of all stakeholders.


Xavier Francis is an attorney at Erickson Immigration Group 

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] Dep’t of Justice, Information Technology Firm Pays $1 Million to Settle Allegations of Visa Fraud, https://www.justice.gov/usao-ndtx/pr/information-technology-firm-pays-1-million-settle-allegations-visa-fraud (April 11, 2017).

[2] U.S. Immigration and Customs Enforcement, Indian corporation pays record $34 million fine to settle allegations of systemic visa fraud and abuse of immigration processes, https://www.ice.gov/news/releases/indian-corporation-pays-record-34-million-fine-settle-allegations-systemic-visa-fraud (Oct. 29, 2013).

[3]U.S. vs. Infosys, No. 4:13cv634 (E.D. Tex. Filed Oct. 30, 2013) available at, https://www.ice.gov/doclib/news/releases/2013/131030plano2.pdf.

[4] INA § 101(a)(15)(B).

[5] 22 CFR § 41.31(B).

[6] See 22 CFR § 41.31(B).

[7] 9 FAM 402.2-5(B).

[8] Dep’t of State, Bureau of Consular Affairs, available at https://travel.state.gov/content/dam/visas/BusinessVisa%20Purpose%20Listings%20March%202014%20flier.pdf(last visited March 2014).

[9] Matter of Hira, 11 I. & N. Dec. 824 (BIA), Interim Decision 1647, 1966 WL 14373

[10] Id. at 824.

[11] See id. at 829.

[12] Matter of Lawrence, 15 I. & N. Dec. 418 (BIA), Interim Decision 2418, 1975 WL 31536.

[13] See Id. at 418-21.

[14] Matter of Neill, 15 I. & N. Dec. 331 (BIA), Interim Decision 2392, 1975 WL 31512.

[15] It should be noted that this case predated the North American Free Trade Agreement, which expands the scope of permissible business activities for Canadian and Mexican nationals. NAFTA was ratified on Jan. 1, 1994. This case is still applicable to non-Mexican and Canadian nationals.

[16] Matter of Neill, 331 (BIA).

[17] 9 FAM 402.2-5(E)(1)

[18] Fragomen, Austin T., et. al., Immigration and Procedures Handbook, Thomson Reuters(2017-2018 ed.).

[19] Id.

[20] CBP recommends documenting the intended nature of the training. As best practice, visitors should provide an invitation letter from the host company detailing (1) the topics to be covered, (2) why the B-1 visitor is needed to provide trainings, and (3) expected duration and objectives of the trainings, etc. See AILA/CBP liaison Q&As (April 10, 2014) at 18, AILA Doc. No. 14051241.

[21] USCIS also explains that B-1 visitors may enter to “consult with business associates” without clearly distinguishing consulting from productive work. Available at, https://www.uscis.gov/working-united-states/temporary-visitors-business/b-1-temporary-business-visitor.