Temporary Entry of Business Persons Under the North American Free Trade Agreement (NAFTA)

DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

8 CFR Parts 103, 212, 214, 235, and 274a

[INS No. 1611-93]

RIN 1115-AB72

Temporary Entry of Business Persons Under the North American Free

Trade Agreement (NAFTA)

AGENCY: Immigration and Naturalization Service, Justice.

ACTION: Final rule.

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SUMMARY: This rule implements provisions of the North American Free

Trade Agreement (NAFTA) by amending the Immigration and Naturalization

Service (Service) regulations establishing procedures for the temporary

entry of Canadian and Mexican citizen business persons into the United

States. This rule will facilitate temporary entry on a reciprocal basis

among the United States, Canada, and Mexico, while recognizing the

continued need to ensure border security and to protect indigenous

labor and permanent employment in all three countries.

EFFECTIVE DATE: January 9, 1998.

FOR FURTHER INFORMATION CONTACT:

Helen V. deThomas, Adjudications Officer, Immigration and

Naturalization Service, 425 I Street, NW., Room 3214, Washington, DC

20536, telephone (202) 514-5014.

SUPPLEMENTARY INFORMATION: On December 17, 1992, the Presidents of the

United States and Mexico and the Prime Minister of Canada entered into

the North American Free Trade Agreement (NAFTA). Implementation of this

agreement has been provided for by the North American Free Trade

Agreement Implementation Act (NAFTA Implementation Act), Public Law

103-182. The NAFTA Implementation Act was signed into law by the

President of the United States on December 8, 1993. The NAFTA entered

into force on January 1, 1994.

This final rule pertains to Canadian and Mexican citizen temporary

visitors for business seeking classification under section

101(a)(15)(B) of the Immigration

[[Page 1332]]

and Nationality Act (Act), to Canadian and Mexican citizen treaty

traders and treaty investors seeking classification under section

101(a)(15)(E) of the Act, to Canadian and Mexican citizen intracompany

transferees seeking classification under section 101(a)(15)(L) of the

Act, and to Canadian and Mexican citizens engaging in activities at a

professional level seeking classification under section 214(e) of the

Act, as amended by section 341(b) of the NAFTA Implementation Act.

This rule sets forth the procedures for the temporary entry of

Canadian and Mexican citizen business persons as provided in Chapter 16

of the NAFTA and Subtitle D of Title III of the NAFTA Implementation

Act. Chapter 16 of the NAFTA, Subtitle D of Title III of the NAFTA

Implementation Act, and this rule reflect the special trading

relationship now established among the United States, Canada, and

Mexico, and recognize the desirability of facilitating temporary entry

on a reciprocal basis and of establishing transparent criteria and

procedures for such temporary entry. At the same time, full recognition

is given to the continued need to ensure border security while

protecting the domestic labor force and permanent employment in all

three countries.

On December 30, 1993, the Service published an interim rule with

request for comments in the Federal Register at 58 FR 69205,

implementing the NAFTA. Interested persons were invited to submit

comments to the Service on or before February 28, 1994.

Discussion of Comments

The Service received comments from three commenters relating to the

interim rule. One of the commenters requested that additional medical

occupations be added to the list of professions contained in Appendix

1603.D.1. Although the Service appreciates this comment, this final

rule is not the proper forum in which to discuss whether an occupation

should be added to the list of professions contained in Appendix

1603.D.1. The determination as to whether an occupation should be added

to Appendix 1603.D.1 is made in a separate procedure apart from this

final rule and involves consultations, on the domestic side, with other

government agencies belonging to the NAFTA Temporary Entry Working

Group. See Article 1605 of the NAFTA. In addition, the process involves

consultation with representatives of the Canadian and Mexican

governments and appropriate U.S. Congressional subcommittees. See NAFTA

Implementation Act Statement of Administrative Action at page 183. If a

decision is made to add occupations to the Appendix 1603.D.1, the

Service will notify the public by publishing a notice of proposed

rulemaking in the Federal Register.

The second commenter, the U.S. Coast Guard, recommended that a

provision for the temporary entry of spill response specialists and

laborers be added as a new class of business activity under 8 CFR

214.2(b)(4)(i). Such a provision, the Coast Guard stated, would allow

pollution response workers lawful entry to the United States in

conjunction with an actual response or response preparedness exercise

under the Joint Marine Pollution Contingency Plans in effect among the

NAFTA parties. The Service's regulations at 8 CFR 214.2(b)(4) provide

for the entry in B-1 nonimmigrant classification of citizens of Mexico

and Canada pursuant to Section A of Annex 1603 of the NAFTA. Although

Appendix 1603.A.1 to Annex 1603 of the NAFTA provides a detailed list

of specific types of activities in which a B-1 business visitor seeking

entry under the NAFTA may engage, it is not intended to be exhaustive.

As stated in the existing provision already available at 8 CFR

214.2(b)(4)(ii), nothing precludes a citizen of Mexico or Canada from

seeking entry to engage in business activities which are not included

within Appendix 1603.A.1, provided he or she meets all requirements for

entry as a business visitor under section 101(a)(15)(B) of the Act.

Whether a particular type of activity falls within this provision,

however, will depend on the specific facts, and will require an

analysis of the precise activities the alien intends to perform in this

country. For this reason, the Service cannot determine in advance

whether a Canadian or Mexican citizen wishing to engage in the

activities described by the commenter would be consistent with section

101(a)(15)(B) of the Act. Accordingly, the Service will not adopt the

commenter's suggestion because no special amendment is needed to 8 CFR

214.2(b)(4) for entry in B-1 nonimmigrant classification.

The third commenter was the American Immigration Lawyers'

Association (AILA), a bar association representing over 3,600 lawyers

and law professors practicing and teaching in the field of immigration

and nationality law. The following discussion addresses the six issues

raised by AILA in its comments and provides the Service's position on

those issues. The discussion also indicates the revisions adopted in

the final rule based on the comments.

Effect of a Strike on a Treaty Trader or Investor Admitted Under

the Provisions of the NAFTA--8 CFR 214.2(e)(22)

AILA suggested that the Service adopt regulatory language which

would provide E nonimmigrant aliens with the same safeguards which both

the L-1 and TN nonimmigrant aliens enjoy regarding labor disputes or

work stoppages. Specifically, AILA noted that the regulations relating

to the L-1 and TN nonimmigrant classifications state that the alien's

participation in a labor dispute or work stoppage is not violative of

his or her nonimmigrant classification. The Service agrees with this

suggestion and will amend the language at 8 CFR 214.2(e)(22) to reflect

that E nonimmigrants admitted under the NAFTA are subject to the same

labor dispute and work stoppage rules as TN and NAFTA L-1

nonimmigrants.

Engage in Business Activities at a Professional Level--8 CFR

214.6(b)

AILA suggested that the definition of the term ``engage in business

activities at a professional level'' should be amended to allow self-

employed individuals (that is, individuals who are self-employed in

Canada or Mexico) to obtain TN classification even if the alien will be

employed by a U.S. corporation which is wholly-owned by the alien,

``where such employment is not for self-subsistence and a true

employment situation exists.'' AILA argued that the NAFTA does not

preclude such a modification and that these aliens were admitted to the

United States in the past under the United States-Canada Free-Trade

Agreement (CFTA).

The Service cannot adopt this comment because its adoption would

clearly conflict with the intent of the NAFTA Implementation Act. Annex

1603, section D, provides for the entry of a citizen of a Party country

seeking to render professional-level services for an entity in another

Party country. As stated in the NAFTA Implementation Act Statement of

Administrative Action at page 178, ``Section D of Annex 1603 does not

authorize a professional to establish a business or practice in the

United States in which the professional will be self-employed.'' It is

the position of the Service that a professional may not avoid the bar

to self-employment merely by adopting the corporate form. The test in

all cases is whether the alien, in substance, is seeking admission for

the purpose of establishing, or performing work for a business or

practice that the alien has already established, in which he or she

will be self-employed.

[[Page 1333]]

It should be noted that the bar on establishment of a business or

practice in which the Canadian or Mexican citizen will be self-employed

is in no way intended to limit a Canadian or Mexican citizen who is

self-employed abroad from entering this country in, changing status to,

or extending nonimmigrant stay in, TN classification pursuant to a pre-

arranged agreement with a third party that is not substantively the

same as, or de facto controlled by, the alien. On the other hand, a

Canadian or Mexican citizen is precluded from entering this country in

TN classification for the purpose of rendering pre-arranged services

for a U.S. corporation or entity of which he or she is the sole or

controlling shareholder or owner.

It should also be noted that, although the issue of self-employment

was never specifically addressed under the regulations promulgated by

the Service pursuant to the CFTA Implementation Act, the bar on

establishment of a business or practice in which the professional will

be self-employed is consistent with the intent of the United States and

Canada in entering into the CFTA. Since entry into NAFTA was not

intended to substantively change the treatment of professionals, this

explicit bar merely clarifies existing law.

Finally, the Service notes that, under Chapter 16 of the NAFTA,

Canadian or Mexican citizens seeking to engage in self-employment in

trade or investment activities in this country may seek classification

under section 101(a)(15)(E) of the Act. See NAFTA Implementation Act

Statement of Administrative Action at page 178. In this regard, Annex

1603, section B, which deals with ``traders and investors,''

establishes the appropriate category of temporary entry for a citizen

of a Party country seeking to develop and direct investment operations

in another Party country.

Temporary Entry--8 CFR 214.6(b)

AILA suggested that the Service apply the concept of ``dual

intent'' to the TN classification to accommodate business persons who

may be adversely affected by the filing of a permanent residence

petition or an application for a labor certification in their behalf.

The concept of ``dual intent'' allows certain nonimmigrant aliens to

retain nonimmigrant status even where the alien may have made

application for permanent residence or where an employer has filed an

application for a labor certification or employment-based petition in

his or her behalf.

This suggestion cannot be adopted because it is clearly

inconsistent with Article 1608 of the NAFTA. For purpose of Chapter 16

of the NAFTA, Article 1608 of the NAFTA defines ``temporary entry''

specifically as ``entry into the territory of a Party by a business

person of another Party without the intent to establish permanent

residence.'' (Emphasis added)

In order to further explain the temporary nature of a TN alien's

entry into the United States, the definition of ``temporary entry'' has

been clarified in the final rule providing that while there is no

specific limit on the total period of time a citizen of Canada or

Mexico may remain in TN status, the TN classification is nevertheless

for persons seeking temporary entry without the intent to establish

permanent residence. This clarified definition of ``temporary entry''

comports with that used by the Department of State and the intent of

the Article 1608 of the NAFTA. See 22 CFR 41.59(c) (December 28, 1993).

Licensure for TN Classification--8 CFR 214.6(d)(2)(iv)

AILA stated that it appears from the language of the interim

regulation that the licensure requirements at 8 CFR 214.6(d)(2)(iv)

only apply to Mexican citizens and not to Canadian citizens since these

requirements are listed under the heading ``Classification of citizens

of Mexico as TN professionals under the NAFTA.'' AILA stated that in

fairness, the Service should apply equal requirements to both Canadian

and Mexican citizens, and that, therefore, the Service should amend the

interim rule accordingly. The Service agrees with the AILA that the

licensure requirements for Canadian and Mexican citizens for purposes

of temporary entry under the NAFTA should be, and notes that the

requirements are, in fact, the same. In both instances, the Canadian or

Mexico prospective TN professional must be in possession of the

appropriate license, if required by law, to perform the duties of the

profession in the location where the alien will be employed. Compare 8

CFR 214.6(d)(2) with 214.6(e)(3)(ii). The Service's discussion of the

licensure requirements for Mexican citizens in a separate regulatory

provision than those for Canadian citizens should in no way be

interpreted to imply that there exist different licensure requirements

for these two groups of person. The Service discusses classification of

Mexican citizens as TN professionals separately from that of their

Canadian counterparts for clarity of presentation and to reflect the

fact that, at this time, a petition is required for Mexican citizens

seeking TN classification, while no such requirement exists for

Canadian citizens. See NAFTA Annex 1603(D)(5)(b); NAFTA Appendix

1603.D.4. Accordingly, Mexican citizen professionals must present

evidence of licensure, if necessary to perform the intended duties of

the profession, at a different stage of the process than their Canadian

counterparts. For these reasons, the Service will not adopt AILA's

suggestion.

Extension of Stay--8 CFR 214.6(h)(1) and (2)

The regulation requires the extensions of stay for TN nonimmigrant

aliens be filed on Form I-129 at the Nebraska Service Center. AILA

suggested that this provision be amended to allow Ports-of-Entry to

adjudicate extensions of stay. The Service will not adopt this

suggestion because the Service has been moving towards the centralized

adjudication of all petitions and applications at service centers in

order to better serve the public. Such centralization will ensure

consistency in the decision-making process, and will ensure that all

applications and petitions are adjudicated in a timely fashion

throughout the country. Although the Service realizes that some aliens

may be required to travel and leave the country on short notice, proper

planning by the alien's employer should minimize disruption of the

alien's employment. In addition, the Service has established a

procedure at the Nebraska Center to expedite the processing of

applications and petitions in those situations where the petitioner

establishes a bona fide need for such action. Ports-of-Entry,

therefore, will remain responsible for processing applicants for TN

admission to the United States, but not for processing applications for

extensions of stay.

Representation and Appearance--8 CFR Part 292

AILA suggested that 8 CFR 214.6 should be amended to specify that

the provisions of 8 CFR part 292, which pertain to the representation

of aliens who are in Service proceedings, apply to foreign consultants

who enter the United States under the NAFTA. AILA stated that such a

change ``would enhance alien consumer protection from unscrupulous

consultants who might seek to take advantage of aliens under the new TN

program.'' The Service will not adopt this suggestion because 8 CFR

part 292 clearly applies to all of Title 8 of the Code of Federal

Regulations, including professionals admitted pursuant to 8 CFR 214.6,

who may represent persons in proceedings before the Service. The

Service believes that the provisions at 8 CFR part 292 are

[[Page 1334]]

fully adequate to protect aliens from the actions of any unscrupulous

legal consultants without needing to restate them in 8 CFR 214.6.

Regulatory Flexibility Act

The Commissioner of the Immigration and Naturalization Service, in

accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has

reviewed this regulation and by approving it certifies that the rule

will not have a significant economic impact on a substantial number of

small entities. This certification is made in light of the fact that

this regulation substantially retained the standards for the admission

of Canadians formerly provided for under the CFTA and those set forth

in the interim rule. Moreover, under this regulation, only 5,500

petitions may initially be approved annually in behalf of citizens of

Mexico seeking classification as TN professionals. Additionally, based

on the Service's experience to date, it is anticipated that only a

limited number of citizens of Mexico will seek classification as treaty

traders and investors pursuant to this regulation.

Unfunded Mandates Reform Act of 1995

This rule will not result in the expenditure by State, local and

tribal governments in the aggregate, or by the private sector, of $100

million or more in any one year, and it will not significantly or

uniquely affect small governments. Therefore, no actions were deemed

necessary under the provisions of the Unfunded Mandates Reform Act of

1995.

Small Business Regulatory Enforcement Fairness Act of 1996

This rule is not a major rule as defined by section 804 of the

Small Business Regulatory Enforcement Act of 1996. This rule will not

result in an annual effect on the economy of $100 million or more; a

major increase in costs or prices; or significant adverse effects on

competition, employment, investment, productivity, innovation, or on

the ability of United States-based companies to compete with foreign-

based companies in domestic and export markets.

Executive Order 12866

This rule is not considered by the Department of Justice,

Immigration and Naturalization Service, to be a ``significant

regulatory action'' under Executive Order 12866, section 3(f),

Regulatory Planning and Review, and the Office of Management and Budget

has waived its review process under section 6(a)(3)(A).

Executive Order 12612

The regulation adopted herein will not have substantial direct

effects on the States, on the relationship between the national

government and the States, or on the distribution of power and

responsibilities among the various levels of government. Therefore, in

accordance with Executive Order 12612, it is determined that this rule

does not have sufficient federalism implications to warrant the

preparation of a Federalism Assessment.

Executive Order 12988 Civil Justice Reform

This final rule meets the applicable standards set forth in

sections 3(a) and 3(b) of E.O. 12988.

List of Subjects

8 CFR Part 103

Administrative practice and procedure, Authority delegations

(Government agencies), Freedom of information, Privacy, Reporting and

record keeping requirements, Surety bonds.

8 CFR Part 212

Administrative practice and procedure, Aliens, Immigration,

Passports and visas, Reporting and recordkeeping requirements.

8 CFR Part 214

Administrative practice and procedure, Aliens, Employment, Foreign

Officials, Health professions, Reporting and recordkeeping

requirements, Students.

8 CFR Part 235

Administrative practice and procedure, Aliens, Immigration,

Reporting and recordkeeping requirements.

8 CFR Part 274a

Administrative practice and procedure, Aliens, Employment,

Penalties, Reporting and recordkeeping requirements.

Accordingly, the interim rule amending 8 CFR parts 103, 212, 214,

235, 274a, which was published at 58 FR 69205-69219 on December 30,

1993, is adopted as a final rule with the following changes:

PART 214--NONIMMIGRANT CLASSES

1. The authority citation for part 214 continues to read as

follows:

Authority: 8 U.S.C. 1101, 1103, 1182, 1184, 1186a, 1187, 1221,

1281, 1282; 8 CFR part 2.

2. Section 214.2 is amended by revising paragraph (e) (22), to read

as follows:

Sec. 214.2 Special requirements for admission, extension, and

maintenance of status.

* * * * *

(e) * * *

(22) Denial of treaty trader or treaty investor status to citizens

of Canada or Mexico in the case of certain labor disputes. (i) A

citizen of Canada or Mexico may be denied E treaty trader or treaty

investor status as described in section 101(a)(15)(E) of the Act and

section B of Annex 1603 of the NAFTA if:

(A) The Secretary of Labor certifies to or otherwise informs the

Commissioner that a strike or other labor dispute involving a work

stoppage of workers in the alien's occupational classification is in

progress at the place where the alien is or intends to be employed; and

(B) Temporary entry of that alien may affect adversely either:

(1) The settlement of any labor dispute that is in progress at the

place or intended place of employment, or

(2) The employment of any person who is involved in such dispute.

(ii) If the alien has already commenced employment in the United

States and is participating in a strike or other labor dispute

involving a work stoppage of workers, whether or not such strike or

other labor dispute has been certified by the Secretary of Labor, or

whether the Service has been otherwise informed that such a strike or

labor dispute is in progress, the alien shall not be deemed to be

failing to maintain his or her status solely on account of past,

present, or future participation in a strike or other labor dispute

involving a work stoppage of workers, but is subject to the following

terms and conditions:

(A) The alien shall remain subject to all applicable provisions of

the Immigration and Nationality Act, and regulations promulgated in the

same manner as all other E nonimmigrants; and

(B) The status and authorized period of stay of such an alien is

not modified or extended in any way by virtue of his or her

participation in a strike or other labor dispute involving a work

stoppage of workers.

(iii) Although participation by an E nonimmigrant alien in a strike

or other labor dispute involving a work stoppage of workers will not

constitute a ground for deportation, any alien who violates his or her

status or who remains in the United States after his or her authorized

period of stay has expired will be subject to deportation.

[[Page 1335]]

(iv) If there is a strike or other labor dispute involving a work

stoppage of workers in progress, but such strike or other labor dispute

is not certified under paragraph (e)(22)(i) of this section, or the

Service has not otherwise been informed by the Secretary that such a

strike or labor dispute is in progress, the Commissioner shall not deny

entry to an applicant for E status.

* * * * *

3. Section 214.6 is amended by revising paragraph (b) to read as

follows:

Sec. 214.6 Canadian and Mexican citizens seeking temporary entry to

engage in business activities at a professional level.

* * * * *

(b) Definitions. As used in this section, the terms:

Business activities at a professional level means those

undertakings which require that, for successful completion, the

individual has a least a baccalaureate degree or appropriate

credentials demonstrating status as a professional in a profession set

forth in Appendix 1603.D.1 of the NAFTA.

Business person, as defined in the NAFTA, means a citizen of Canada

or Mexico who is engaged in the trade of goods, the provision of

services, or the conduct of investment activities.

Engage in business activities at a professional level means the

performance of prearranged business activities for a United States

entity, including an individual. It does not authorize the

establishment of a business or practice in the United States in which

the professional will be, in substance, self-employed. A professional

will be deemed to be self-employed if he or she will be rendering

services to a corporation or entity of which the professional is the

sole or controlling shareholder or owner.

Temporary entry, as defined in the NAFTA, means entry without the

intent to establish permanent residence. The alien must satisfy the

inspecting immigration officer that the proposed stay is temporary. A

temporary period has a reasonable, finite end that does not equate to

permanent residence. In order to establish that the alien's entry will

be temporary, the alien must demonstrate to the satisfaction of the

inspecting immigration officer that his or her work assignment in the

United States will end at a predictable time and that he or she will

depart upon completion of the assignment.

* * * * *

Dated: August 13, 1997.

Doris Meissner,

Commissioner, Immigration and Naturalization Service.

[FR Doc. 98-601 Filed 1-8-98; 8:45 am]

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