Testimony – Impact of Visa Delays on Businesses

Testimony of Randel K. Johnson, Vice President of Labor, Immigration and Employee Benefits of the U.S. Chamber of Commerce before the House Committee on Government Reform Hearing on the Impact of Visa Delays on Businesses

July 10, 2003

Chairman Davis, Members of the Committee, I would like to thank you for the opportunity to testify today on the issue of the current and projected problem of delayed entry for foreign nationals traveling to the United States for legitimate business purposes, with a particular focus on visa issuance problems. I am Randel K. Johnson, Vice President for Labor, Immigration and Employee Benefits at the U.S. Chamber of Commerce. While my biographical information is attached to my written testimony, let me note that I represent the Chamber on the Data Management Improvement Act (DMIA) Task Force, which was established by Congress to study and recommend suggestions on how to implement an entry-exit process at our nation’s borders, chair the Americans for Better Borders Coalition and am a member of the Board of Directors of the National Immigration Forum.

The U.S. Chamber of Commerce is the world’s largest business federation, representing more than three million businesses of every size and in every business sector. The Chamber’s membership also includes 95 American Chambers of Commerce abroad (AMCHAMs) located in 83 countries, which represent American companies and individuals doing business overseas as well as foreign companies with significant business interests in the United States. Because of their role at the crossroads of international business, we believe the AMCHAMs are excellent barometers of the strength of our international relationships.

We are all aware of the new environment in which not only business, but all of us must live. The need for security to protect us from another horror such as September 11 is very real. The U.S. Chamber has pledged its support for the broad ranging efforts to secure our homeland, was involved in the shaping of the legislation which created the Department of Homeland Security, and “key voted” in support of the legislation in both the House and the Senate.

Among the provisions we worked on were two that created a special office which was charged to reach out to the private sector, a particularly important function as the Department became up and running, and a provision which made clear that part of the Department’s mission is to include consideration of America’s economic security as the Department strives to also protect our national security.  These provisions, along with those in title IV of the implementing legislation relating to border and transportation which reflect the need, consistent with national security, to “ensure the speedy, orderly, and efficient flow of lawful traffic and commerce,” I believe went a long way in addressing concerns among the business community and others that the new Department would pursue a “fortress America” without weighing the negative economic impact on the country as a whole which could result from significant increases in barriers and delays at our borders. As Chamber President and CEO Tom Donohue has said, we need to ensure “that in the pursuit of security we don’t lose our mobility and our economic freedom. Mobility and security must go hand-in-hand. Sacrifice one for the other and we’ll pay a horrific price.”

And, indeed, the decision makers within government, at the Department of Homeland Security, the State Department and the White House, certainly have repeatedly reassured those on the outside that the government will continue to search for ways to both improve security and to expedite, or at least not significantly hinder, legitimate international commerce, travel and immigration.

However, I believe the common concern, or thread, you will hear today is a growing perception among the private sector, the traveling public, and local communities, that these words are not matching the new policies, present and impending. There is a sense that the concerns of the business community are perceived as relatively unimportant. With current policies pyramiding upon fast approaching deadlines for other changes, such as the August 1 deadline for visa interviews, the October 1 deadline for Machine Readable Passports for Visa Waiver visitors, the December 31 deadline for the US VISIT system at air and seaports, new requirements for biometrics by October of next year, and full implementation of US VISIT at the 50 busiest land borders in 2004 and the remaining land ports in 2005 , this concern has reached a new urgency.

For example, I just returned from a trip to El Paso, as part of my work on the DMIA Task Force, where we met with various federal, state, and local government and private sector stakeholders. The general feeling was that the local communities and businesses had made their very serious concerns about entry/exit procedures known to various people in the government (and us) but really were wondering: “Is anybody listening?” or were they being ignored because it is “easy to ignore border communities.”  Now that the deadlines for actually putting into place the entry/exit system are fast approaching, this concern has taken on a panic. This feeling was not too different than the ones I experienced in McAllen, Texas and at the northern borders, particularly in the Buffalo and Detroit areas. There is a sense that those within the government may not be carefully evaluating the degree to which their decisions will actually advance security, much less understanding that their decisions will impact, not just dollars and cents, but a way of life, jobs, the environment, and the fabric and future of a community. It may be a communication issue, but the perception is there, and it’s a serious communication issue.

None of this is to demean those within the government agencies that are struggling with the very difficult questions of how to ensure that the next terrorist cannot penetrate our border protections—whether at the consulates overseas or at the ports of entry. And in the end, it is the quintessential job of government to protect its citizens.  But I think we can all acknowledge that sometimes those within government, and I spent over half of my career within government, can isolate themselves from the real impact of their decisions, and accept that impact as an acceptable cost (to them) of reaching a goal. That Congress, in some cases, imposes perhaps unrealistic deadlines on these same agencies, needless to say, makes this rationale all the easier.

Of course the business community, and others in this environment, hesitate to be critical because we will likely be accused by some of not being sensitive enough to national security. So I think the fact that we are here today and openly discussing these problems in and of itself is an indication of how important we feel about these issues. But let me be clear — we are not just here to complain. That will ultimately get us nowhere. We present our complaints only to illustrate the need for solutions. We are willing to work together with the agencies to advance solutions, and have offered to do so. However, to date, we sense that while the doors appear open and many are hearing, few are listening.

It is in that spirit that I come before you to share with you the concerns raised by the business community, by Chamber members, with the changes to visa and border policies implemented over the last year.

America’s trade relationships, our diplomatic relationships, our cultural relationships and our academic relationships with the rest of the world depend a great deal on the ability of people to travel to the United States.

  • U.S. companies exporting their goods and services abroad depend on the ability of customers and potential customers to visit, inspect the products and services they are purchasing and “seal the deal.”
  • Multinational businesses depend on the ability to bring key personnel to the U.S. from overseas to facilitate management, executive decisions, research and development teaming, training and integration of far-flung subsidiaries and affiliates.
  • Our entertainment industry relies on talent from around the world, and our arts and cultural communities give the U.S. public exposure to some of the finest in international arts and entertainment.
  • Our world-class medical facilities are the envy of the world, and depend not only on international collaboration for many medical breakthroughs but also on patients from around the world who flock to our facilities to receive the best in medical care.
  • Our educational institutions not only are crucibles of learning, but also create the diverse and international community of students, teachers and researchers that continues to make the United States the leader in innovation and the location of choice for international scholars.
  • Our hospitality and travel industries generate over 18 million jobs for Americans to support millions of international tourists and visitors annually.
  • Employers in the United States count on their ability to hire from overseas when necessary to meet desperate workforce needs for specific skills, abilities or due to shortages of available U.S. workers.

The ability of any of these transactions to happen depends on the timeliness, predictability and efficiency of our visa and immigration system. Unfortunately, these qualities have been sorely lacking. Specifically, the changes to the visa system over the last year have strained many of our business and international relationships, and have created problems and costs for our economy.

Let me reiterate that we understand the concern for security. And the Chamber fully supports efforts to improve our screening of persons who wish to come to this country. However, as stated above, we must look for those processes that can achieve that objective without sacrificing the efficiency of our system. Our largest concern is that these new policies seem to have been put in place with very little if any consideration of the need for coordination and communication with the private sector, or the real resource needs to efficiently carry out these changes. Finally, while State Department officials have acknowledged that there are adverse impacts to the private sector, they have offered little in the way of options for improving the situation. As the recent State Department cable on visa interviews indicates, the Department “expects and accepts … processing backlogs for the indefinite future.”  Members of the Committee, it is unacceptable for a government agency to accept delays and backlogs as the normal course of business; we should continue to search for solutions and more resources may, in fact, be necessary.

We know that the State Department has tried to downplay the impacts of these changes, stating that their data do not show significant problems. Members of the Committee, I will shortly share with you some of the problems that have been brought to our attention as a result of these various changes, but the private sector is not responsible for collecting data on visa issuance, nor can we feasibly do so on a broad basis. That is the responsibility of the State Department. Their own data should show what consular posts are telling the business and traveling community in too many places around the world — “you must wait longer.”  And in business delays do have an impact on costs and the ability to rationally plan for the future. Finally, I would point out what every association representative here and your own constituent services assistants could tell you — by the time we hear about an issue, it has gone beyond just a normal delay. Chamber members do not call us until they have exhausted their own (often significant) resources.

The U.S. Chamber began hearing about this issue from its members almost one year ago. It began with requests for assistance in specific visa cases that seem to have been delayed or “fallen into a black hole” at an embassy or consular office. While the Chamber gets these requests occasionally (but rarely intervenes in individual cases) the increase in the number of requests was notable. Soon the requests on specific cases became a general concern that too many cases seemed to be falling into this “black hole,” and a pattern was forming.

By last summer we were made aware of significant delays and problems processing visas in several Asian countries, most notably, China, Vietnam, Malaysia, and Taiwan. (Later Russia was added to this list.)  Many of these problems were caused by the increasing use of “Security Advisory Opinions” or SAOs under the so-called “Visa Mantis” programs relating to technology transfers. It seemed that not only were cases being referred for SAOs that never had been in the past, but that the clearances themselves were taking months, severely straining business relationships and jeopardizing the ability of U.S. companies to export their products.

One such company in the industrial automation industry (who asked that its name not be used because it is fearful its foreign competitors will use the information to their advantage) had three sales engineers from China who were subjected to the Mantis screenings. While not a significant number in and of themselves, these three happened to be critical personnel to their operations. One of the engineers was working on industrial machinery for a mass transportation project in a major Chinese city. Because the Embassy decided this fell under the “URBAN PLANNING” technology field, the case was sent for an SAO. Because the engineer could not attend necessary training in the US, the project was set back a full year. Two other employees, a software sales engineer and the head of the company’s automation research and development center were also delayed. The employer was not able to determine which “critical fields” necessitated the SAO’s in these cases, and therefore was not able to provide any additional explanation or help to the consular officer in determining whether or not an SAO might have even been required, much less help the agencies involved determine whether or not to grant the clearance.

The State Department, FBI and others have acknowledged a glut of clearances last summer that they claim to have eliminated. However, it should be noted that while the numbers of “lost” cases seems to be lower, and there is improvement, delays of 30 to 60 days still appear to be the average, business is still skittish that the backlogs could develop again, and foreign customers are still apprehensive about doing business with American companies because of fears about visa issuance.

Other countries have had difficulty dealing with the additional delays due to the increased security checks under the so-called “Visa Condor” program. For example, a petroleum engineering company based in Texas has had difficulty in obtaining visas for project managers from its client, the Saudi national oil company, Saudi ARAMCO. ARAMCO has told them that they are going to start looking at contractors in the United Kingdom and other countries, potentially costing this U.S. company millions in revenue, and jeopardizing over 2,000 U.S. jobs.

The American Business Council of the Gulf Countries, the organization of AMCHAMs in the Gulf states, has discussed the unintended consequences of the current visa policies in those nations — American companies are facing skepticism by their Gulf partners in doing business, feeling “unwelcome” in the United States and concerned that what they see as visa “restrictions” will hamper their ability to oversee investments or partnerships in the United States. The American Chamber of Commerce in Malaysia reports a similar feeling among Malaysians, who are increasingly turning to the United Kingdom or Australia for business partnerships, study abroad and other activities.

The level of concern over these delays is evidenced by the more than 80 organizations that joined a letter to Secretary of State Colin Powell and Secretary of Homeland Security Tom Ridge in January 2003, including the American Chambers of Commerce in China, Vietnam, Hong Kong, India, Japan, Shanghai, Singapore, and Malaysia among others.

Since last year, the State Department has also phased out programs sponsored by many AMCHAMs to file visa applications on behalf of their members. Many AMCHAM member companies relied on these filing programs to expedite visa issuance for their employees and business customers. It should be noted that these programs NEVER involved any type of preadjudication or prescreening of the cases. The AMCHAM assisted companies with compiling the necessary documentation and filing cases through its agreement with the consular post. The discontinuation of these programs, combined with the increase in visa interviews already implemented in many locations and to be fully implemented on August 1, has resulted in even more delays for visa applicants (in many countries the wait time for a visa appointment can be months), and has created significant issues for many businesses.

While we were informed that a recent rumor that the US Consulate in Chennai had shut down visa applications until September is untrue, the Consulate’s website does indicate, “a sharp increase in demand has reduced the availability of visa slots.”  As a temporary measure, the consulate is referring cases to the Embassy in New Delhi and the Consulate in Calcutta, which would entail at least a day’s travel for a resident of Chennai to appear. The Consulate has stated it is adding more than 900 interview slots to its schedule in the coming weeks — we do not know if these additional slots are due to an increase in personnel, but if not, then we must wonder about the impact of this increased workload on the consular officers.

In the Czech Republic, where visa applicants must call a toll number to arrange an appointment at the consulate, and where those callers are often put on hold and given visa interview dates long after the expected date of departure (even when the caller has called weeks in advance of the trip), one airline company estimated a loss of over $100,000 in the last several months due to cancelled travel plans.

In South Africa, the new interview requirements will often require a domestic trip of several hours travel time or a flight just to obtain the visa, even before traveling to the Untied States, adding additional cost and time out of the office.

The Swiss-American Chamber of Commerce recently wrote to the Department of State stating that visa applicants calling the toll line to set up appointments often spend over 30 minutes on the phone (at $1.50/minute) and the wait time for an appointment in Bern is currently 8 weeks and growing. This is before any additional workload due to changes to the Visa Waiver program. In the words of the Chamber, this situation “adversely affects the image and reputation of the United States.”  The Swiss Embassy in Washington received a copy of this letter and also forwarded it to the State Department to express its concern.

Korea, the 6th largest U.S. export market, second only to Japan in Asia, and the U.S. Consulate in Seoul is the largest nonimmigrant visa issuing post in the world and is among the top five origin countries for U.S. visitors last year. According to an analysis of processing data from the consulate, the American Chamber of Commerce in Korea estimates that the new visa interview requirement will mean an approximate six-month wait for an appointment. When the average U.S. airline ticket from Korea is purchased three weeks before travel, the potential impact is staggering.

Attached to this testimony are some additional case examples from companies and organizations that have been impacted by recent visa changes. As stated above, while we do not have statistics, these anecdotes demonstrate that whether or not significant numbers of cases are affected, in many cases it is key personnel , often essential for the operation of a company that experience delays. Further, the perception of widespread delays is enough to jeopardize trade and business relationships.

My testimony has focused on the impacts to the business community. However, as I stated at the beginning of the testimony, these delays are adversely impacting the education, arts and entertainment, travel and tourism, and medical communities as well.

We have met many times with the State Department, and sent several letters to make our concerns known. However, the response we have received has been less than, well, what we had hoped for. While the Department continues to claim that these changes are required by national security, it is difficult to understand how helpful, for example, an interview of a few minutes by an overloaded consular staff can be to security. Again, perhaps it is a matter of better communicating, but communication is a two-way street.

Finally, I would note, that while the GAO report on strengthening the visa process as an antiterrorism tool in October 2002 did recommend that the State Department create a more comprehensive set of guidelines and standards with regard to such things as visa interviews, it also specifically stated that such standards be “risk-based.” The virtual blanket approach offered by the State Department in its May cable to posts would not appear to meet the risk-based recommendation.

We are also aware of the Congressional deadlines, for example for the biometric collection, but the precipitous requirement for requiring close to 100% interviews more than one year in advance of the deadline, and notably without any effort at obtaining additional resources has not been adequately explained.

Further, we are extremely dismayed at the lack of involvement of the affected stakeholders in the process of making decisions regarding these changes. We have suggested to the State Department that they allow businesses to assist them in their duties by providing additional information necessary to process clearances, and suggestions for phasing in interview requirements and others. To date, the State Department has followed up on few, if any, of these suggestions.

Perhaps most importantly, these changes have been happening at a rapid pace, leaving businesses no time to make adequate adjustments to accommodate the changes. Further, knowing that additional changes are forthcoming in the next year, it appears that no one at the State Department or at the Department of Homeland Security is attempting to manage the slew of changes or mitigate the impacts on the traveling public. As a member of the DMIA Task Force, I am acutely aware of the potential impacts of the proposed US VISIT system to the entry and exit of legitimate travelers to the U.S., and yet there has been very little consideration, from what we can tell, of the combination of the visa and the US VISIT deadlines on the traveling public.

The State and Homeland Security Departments need an aggressive and proactive outreach and communications campaign (perhaps working with the Department of Commerce) to counteract the increasingly negative image the United States is gaining among international business and travelers. U.S. companies are losing export opportunities to other nations because of the visa restrictions, tourism and trade shows that promote U.S. exports are losing to other destinations with easier visa policies, and American medical and higher educational institutions are losing some of their “luster” to foreign students, researchers and patients. In short, the U.S. is losing its competitive advantage in many areas because of its visa policies. This will ultimately impact our economic growth and our global war on terrorism can only be funded through a sound economy.

More resources, better communication, pilot projects, time studies and consultation before implementation or public announcements presented as a fait accompli, are all necessary to a successful effort. While in the end only the government can determine the best method to protect the country, surely there is room for public debate as to whether, e.g., a two or three minute interview will uncover a possible terrorist, and if the answer to that is no, whether, it is rational to require them of nine million visa applicants a year with the current level of resources available. We should examine whether the probable level of chaos at our airports related to the machine readable passport requirement on October 1 will actually enhance security or will it just make our friends around the world continue to see the U.S. as “just too much trouble” to visit or do business with.

The Chamber is willing to work with the State Department, the Department of Homeland Security and other agencies to address these issues, working toward solutions that meet the needs of our economy and our security.

Thank you and I am pleased to take your questions.