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Statement of Need: This proposed rule responds to a Congressional mandate that requires the Federal Government assume responsibility for visas for entry to CNMI by foreign investors. This proposed rule will reduce the degree of fraud in visas to CNMI and the threat to homeland security posed by terrorists trying to enter CNMI with fraudulent visas as a gateway to the continental United States.

Summary of the Legal Basis: This proposed rule is based upon a Congressional mandate to publish regulations to implement the nonimmigrant investor visa provisions of the Consolidated Natural Resources Act of 2008 ( Pub.L. 110-229). This public law extends the immigration laws of the United States to the CNMI. Public Law 110-229 authorizes the Secretary of Homeland Security to classify an alien as a CNMI-only nonimmigrant under section 101(a)(15)(E)(ii) of the Immigration and Nationality Act (Act) (8 U.S.C. 1101(a)(15)(E)(ii)) if the alien meets the requirements of the Act.

Alternatives: In light of the potential adverse economic impact of such limitations and the goal of limiting adverse economic impact on the CNMI, such limiting options were not chosen. DHS chose the broadest interpretation possible, whereby long-term business investors, perpetual foreign investors and foreign retiree investors would be eligible for CNMI E-2 Investor status, because it believes such an interpretation is most in keeping with the mandate to limit adverse economic impact.

Anticipated Costs and Benefits: Public Costs: This rule reduces the employer’s annual cost by $200 per year ($500 - $300), plus any further reduction caused by eliminating the paperwork burden associated with the CNMI’s process. In 2006 – 2007, there were 464 long-term business entry permit holders and 20 perpetual foreign investor entry permit holders and retiree investor permit holders, totaling 484, or approximately 500 foreign registered investors. The total savings to employers from this rule is thus expected to be $100,000 per year ($500 x $200). Cost to the Federal Government: The yearly Federal Government cost is estimated at $42,310. Benefits: The potential abuse of the visa system by those seeking to illegally emigrate from the CNMI to Guam or elsewhere in the United States reduces the integrity of the United States immigration system by increasing the ease by which aliens may unlawfully enter the United States through the CNMI. Federal oversight and regulations of CNMI foreign investors should help reduce abuse by foreign employees in the CNMI, and should help reduce the opportunity for aliens to use the CNMI as an entry point into the United States. Conclusion: This proposed rule responds to a Congressional mandate that requires the Federal Government to assume responsibility for all immigration to the CNMI by foreign investors, whether temporary or permanent. This proposed rule will implement this mandate and thus contribute to U.S. homeland security.

Risks: This proposed regulation attempts to mitigate potential harm to the CNMI economy before the CNMI foreign investors are required to convert into United States immigrant or nonimmigrant visa classifications. The regulation is intended to assist CNMI investment permit holders to convert from their current status to a status covered under the Act during the transition period while considering their contributions to the well-being of the CNMI economy. Data gathered by the GAO suggests that perpetual foreign investors and long-term business permit holders invested at least $72 million in the CNMI in 2006 and 2007. The proposed regulation attempts to reduce the risk of losing substantial investments by including a majority of CNMI’s current investor categories under the new E2 CNMI classification.