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Administration Delay of Foreign Entrepreneur Rule Overturned by Courts

The Department of Homeland Security’s delay in implementing a rule to assist entrepreneurs announced in the last days of the Obama administration has been halted by court order. We first discussed the rule here, the administrations delay in implementation here and the lawsuit to prevent the delay here.

On December 1, 2017, Federal Judge James E. Boasberg of the U.S. District Court for the District of Colombia ruled in favor of a lawsuit brought by the National Venture Capital Association (NVCA), entrepreneurs, and startup companies in early October. The lawsuit claimed that by informally delaying implementation of the Foreign Entrepreneur Rule, the agency violated the Administrative Procedures Act (which requires publishing notice in the Federal Register and seeking public comment before taking regulatory action).

The rule was supposed to go into effect on July 17, 2017, 180 days after the rule’s publication on January 17. However, the administration announced in the weeks before the effective date that they would delay implementation to March 14 of 2018 and seek to rescind the rule.

While on its face the ruling a positive development for entrepreneurs, the future of the rule is still uncertain. While the Department of Homeland Security now must implement the rule and begin accepting applications, nothing prevents the administration from eventually complying with the Administrative Procedures Act by publishing a rule to completely rescind the International Entrepreneur Rule.

This could take some time to accomplish, during which entrepreneurs might seek entry – but it also leaves anyone able to use this in an uncertain place regarding their future in the US and the future of their company here.

The order also does nothing to clear up the ambiguity on the original rule (as discussed in our original post about the rule, it left unclear how certain terms would be defined).

We look forward to further developments.