Academic journal article American University Business Law Review

The E-2 Treaty Investor Visa Dilemma: Violations of Law and Limitations on Foreign Investment

Academic journal article American University Business Law Review

The E-2 Treaty Investor Visa Dilemma: Violations of Law and Limitations on Foreign Investment

Article excerpt


"Entrepreneurship is as a much a part of the American experience as baseball, jazz, and Disneyland."1 Immigrants have a long history of contributing to the American experience by starting successful businesses in the United States.2 Immigrants founded many of America's most iconic companies, such as: AT&T, Capital One, Colgate-Palmolive, Goldman Sachs, Kohl's, Kraft, Pfizer, and Procter & Gamble.3 In fact, immigrants or children of immigrants founded more than forty percent of Fortune 500 companies in 2010.4 Despite the obvious economic benefits that many immigrants bring to the United States, the treaty requirement of the E-2 treaty investor visa ("E-2 visa")5 has a discriminatory impact that prevents many potential investors from contributing to the United States' economy.6

This Note considers the treaty requirement of the E-2 visa and how it impacts foreign investment in the United States. It begins by discussing the origin and purpose of the E-2 visa and introduces the discriminatory treaty requirement for E-2 visa eligibility.7 Next, it provides a thorough analysis of the treaty requirement to reveal how it is in direct conflict with the Most Favoured Nation ("MFN") obligation of the General Agreement on Trade in Services ("GATS").8 It then discusses ways that exemptions to the MFN obligation cause discrimination within the treaty requirement and evaluates whether the E-2 Visa Improvement Act provides a solution to the problematic impact of the treaty requirement. It also considers the impact that the E-2 Visa Improvement Act, if adopted, could have on the MFN obligation. It recommends that the E-2 Visa Improvement Act be rejected, that the United States remedy the discriminatory component of the treaty requirement by complying with its MFN obligation, and that all members of the World Trade Organization be eligible for E-2 visas.9 Finally, it concludes that the treaty requirement of the E-2 visa, as currently written, is discriminatory, it violates the United States' MFN obligation, and the aforementioned changes should be made to increase foreign investment.10

II.The Discriminatory Nature of the E-2 Treaty Requirement

A.Development of the E-2 Nonimmigrant Visa

The United States offers immigrant and nonimmigrant visas to foreign nationals interested in entering the United States.11 The United States Code defines an "immigrant" as "every alien" except those listed within the various nonimmigrant categories.12 Immigrant visas, which are also known as "green cards," allow foreign nationals to obtain Lawful Permanent Residency ("LPR") status and permanently live and work in the United States.13 Conversely, nonimmigrant visas allow foreign nationals to enter the United States with temporary residency.14 Section 1101 of the United States Code describes the classes of aliens who are specifically excluded from the definition of immigrant.15 To qualify as a nonimmigrant, an individual must fit within one of the nonimmigrant statutory categories outlined in the Immigration and Nationality Act ("INA"), such as: tourists, business visitors, students, temporary workers, and temporary business investors.16

Nonimmigrant visas were incorporated into federal law through the Immigration and Nationality Act of 1924 ("1924 Act").17 The 1924 Act created the numerical categories of nonimmigrant visas and codified the treaty merchant category, which later became known as the E-l visa.18 When the United States began receiving a significant increase in international investment, the Immigration and Nationality Act of 1952 ("1952 Act") expanded the 1924 Act to create an "E" visa category, which includes both E-l (treaty merchant) and E-2 (treaty investor) visas.19

The 1952 Act further established the treaty requirement for E-2 visas.20 The 1952 Act, as amended in 1990,21 states that E-2 visa holders may only enter the United States pursuant to a "treaty of commerce and navigation between the United States . …

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