Matter of Schick

NYC-N--31276

Decided by Regional Commissioner December 15, 1970

Since the petitioning American company—which has signed a contract with

a French company giving the American firm exclusive license to buy and

import into the United States machinery manufactured by the French

company for 10 years—is not bound to such foreign firm through common

ownership and management but has only a contractual relationship with

the foreign company, subject to termination, petitioner is not connected

with the French company within the contemplation of section

101(a) (15) (L) of the Immigration and Nationality Act, as amended, and

the beneficiary, an employee of the French firm, is ineligible for classifica-

tion as an intra-company transferee under section 101(a) (15) (L) of the

Act since he would not be entering the United States to continue to per-

form services for the same employer or a subsidiary or affiliate thereof.

ON BEHALF OF PETITIONER: Abraham Kaufman, Esquire

521 Fifth Avenue

New York, New York 10017

This matter is before the Regional Commissioner on appeal

from the denial of a request to classify an alien as an intra-com-

pany transferee under section 101 (a) (15) (L) of the Immigration

and Nationality Act.

The petitioner is a manufacture of nylon zippers seeking to ob-

tain the services of a technical consultant who is familiar with

the manufacture of specialized equipment needed to produce this

type of slide fastener. The petitioner is an American corporation

established in 1965 and it has no known branches or subdivisions

in Europe or any ether country. The beneficiary is an alien em-

ployed since 1967 by a French corporation which has developed a

new nylon slide fastener. The French Company and the petitioner

have entered into an agreement whereby the petitioner will man-

ufacture this slide fastener under a license and royalty agreement

and have exclusive rights to sell the product in the United States.

There is no joint ownership or investment between the two corn-

terim Decision #2068

vies, the only connection being the manufacturing and market-

g agreement between them.

The District Director denied this request on two grounds, the

.st one being that the two companies do not possess the proper

lationship to confer eligibility for "L" status and the other

!ing that the alien was not employed in a managerial capacity.

connection with the relationship of the two companies, the

istrict Director stated:

In the matter at hand, the petitioning firm seeks to use the services of an

nployee of a firm which is described as an "affiliate". Blacks' Law Dic-

onary, Fourth Edition, defines an affiliate as follows: "Signifies a condi-

on of being united, being in close connection, allied, or attached as a

ember or branch". Johanson v. Riverside County Select Groves, 4 Cal.

.pp. 2d 114, 40 P. 2d 530, 534. The evidence of record, however, does not

itisfactorily establish that a proprietary relationship, by reason of own-

rship or substantial investment, exists between the two firms. Documenta-

.on submitted in support of the instant petition merely establishes that

he petitioning firm was granted a license for a period of ten years plus

ertain renewal periods, to manufacture and sell the foreign firm's prod-

cts in the United States, its territories, dependencies, and possessions.

Article 1 of the agreement between these two companies de-

cribes the basic purpose of it and states:

(1) (a) FFLB warrants that it has full right to grant and hereby grants

o RICHFORD, the exclusive right and license for the life of this Agree-

nent and any renewals and extensions thereof, to the "know-how" and ethnical information which FFLB has the right to tr a nsmit, to enable

lICHFORD to manufacture the article, hereinafter defined, in the United

states, its territories, dependencies and possessions (hereinafter called the

'Territory").

Article 11 of the agreement provides for the supplying of tech-

iical information to the American company for the purpose of in-

mring the proper manufacture of the licensed article. Further

:tomment on the nature of the agreement was provided by counsel

in his appeal brief which contained the following:

The French company, therefore, made a contract with the petitioner, by

which they gave the petitioner a 10-year exclusive license to buy from

Prestil and import to the United States these special machines, which

Richford would then use for the manufacture of nylon zippers. Pursuant

to that contract, the petitioner has purchased over $300,000 worth of these

machines, has spent over $1,000,000 in setting up its manufacturing plant

at Carle Place, Long Island, N.Y. and is actually engaged in the manufac-

ture of the zippers.

Among other things, the contract provides for the payment by Richford

Industries to Prestil of a royalty of 1/20 for each yard of the nylon "coil

type chain" which is produced by these machines. The contract further

provides for certain guaranteed minimum annual royalties, which are sub-

stantial.

The contract with Prestil, a copy of which was submitted as an exhibit

with the visa petition, also obligates Prestil, at the request of Richford,

and at Richford's expense, to send to the United States one or more tech-

nicians to train and instruct employees of the petitioner, to assist in set-

ting up the operation, making modifications where appropriate, and pro-

viding the special "know-how" of the manufacturer of the machines to the

petitioner, the user of them.

The foregoing has been quoted to bring out the nature of the

connection between the two companies to determine if the rela-

tionship between them is of the type contemplated by section

101(a) (15) (L) of the Immigration and Nationality Act. In this

regard, the statute confers eligibility of an alien who:

... has been employed continuously for one year by a firm or corporation

or other legal entity or an affiliate or subsidiary thereof and who seeks to

enter the United States temporarily in order to continue to render his services

to the same employer or a subsidiary or affiliate thereof. . . .

Counsel for the petitioner submits that an affiliation exists be-

tween the two companies by reason of the fact that there is a

unity of interest and a meaningful association to further the com-

mon interests of both parties. Reference has been made to defini-

tions of the term "affiliation" contained in other sections of the

Immigration and Nationality Laws, but they do not appear appli-

cable here inasmuch as the term is used in a different context.

It is evident from a review of the agreement between the two

companies and the material submitted on appeal that there are

two completely independent companies involved in this matter.

The relationship between them is purely contractual, subject to

cancellation if conditions are not fulfilled. It is true that large

sums of money are involved, but the existence of such sums does

not imply an interrelationship based on a common parentage. The

relationship existing here can be terminated as opposed to one in

which the domestic and foreign organizations are permanently

tied together, not limited to a single, specific venture of unknown

duration.

Counsel has indicated that the statute here was not limited to

American companies having branches abroad but may apply to

foreign companies which have branches here. It should be pointed

out that when a foreign company establishes a branch in the

United States, that branch is authorized to do business under

American laws and becomes, in effect, part of American industry.

That branch is bound to the parent company through common

ownership and management, conditions which are not present in

the matter before us. The District Director accurately quoted the

intent of Congress as explained in House Report, Committee of the Judiciary, No. 91-851, February 24, 1970, to accompany S.

2593. Originally, it was intended that only American companies

should receive the benefit of this legislation and it was specifically

restricted to transfers within the organization. However, before

final passage, the wording was changed so that as finally enacted,

it includes other than American businesses.

The statute which became section 101 (a) (15) (L) as first

drawn was intended to meet a specific problem being encountered

by American businesses, namely, the inability to freely transfer

high level alien employees from the foreign offices of a United

States concern to the United States because of the limitations on

availability of visa numbers. In the case at hand, the legislation

was not needed since a remedy already existed. The alien could

have been admitted as a visitor for business—not as a visitor for

pleasure as is his present status—provided he is employed and

paid by the foreign firm he represents, or as the beneficiary of a

petition under section 101 (a) (15)H) of the Immigration and Na-

tionality Act.

In view of the foregoing, it is concluded that the two companies

involved in this matter are not connected in the manner contem-

plated by section 101 (a) (15) (L) of the Immigration and Nation-

ality Act and the beneficiary would not be entering the United

States temporarily to continue to perform services for the same

employer or a subsidiary or affiliate thereof. That being the case,

it is not necessary to pass on the validity of the other ground for

Jenial used by the District Director. The appeal will be dismissed.

It is ordered that the appeal be and the same is hereby dis-

nissed.