Interi mDecisio n #300 8

MATTE RO FSIEMEN S MEDICA LSYSTEMS , INC .

I n Vis aPetitio n Proceeding s DEN-N-854 0 Decide dby Commissione r Marc hS2 , 198 6 (1 ) Wher e eac hof

tw o corporation s (parents ) own s an dcontrol s 5 0 percen t of athir d corporatio n (join t

venture) , th e join t

ventur e i s asubsidiar y of eac hof th e parent s for purpose s o f

sectio n 10l(aX15KL

) of th e Immigratio n an dNationalit y Act , 8 U.S.C . § 110KaX15KL

) (1982) . Matte r

o f Hughes , 1 8 I& N Dec . 28 9 fComm . 1982) clarified . (2 ) Eac hparent , throug hownershi p an dcontro l of 5 0 percen t

of th e votin g share s o

f th e join t venture , ha s th e powe r

t o preven t

actio n b y tha t

compan y throug h exer cis e o f it s vet o power ; hence , eac h paren t "negatively " control s tha t company . (3 ) Al l agreement s betwee n th e parent s relatin g t o votin g of th e shares , distributio n of profits , managemen t

an ddirectio n o f

Hi e subsidiary , an dsimila r factor s whic h affec t actua l contro l ove r

5 0 percen t

of th e subsidiar y mus t

b e identified . Unles s suc hagreement s restric t th e actua l contro l of

on e parent , th e 50-percen t owner shi p wil l b e deeme dpe r

s e control . O N BEHAL FO FPETITIONER : Marti n R . Greenberg , Esquir e 6 0 Eas t 42n dStree t Ne w York , Ne w Yor

k 1016 5 Thi s appea l i s befor e th e Commissione r fro mth e Februar y 27 , 1985 , decisio n of

th e distric t

directo r denyin g th e vis apetitio n t o classif y th e beneficiar y unde r sectio n 101(aX15KL

) of th e Immigra

tio n an dNationalit y Act , 8 U.S.C . § 101(aX15)(L ) (1982) . Th e distric t directo r foun dtha t

th e petitione r

ha dfaile dt o establis ha n affili

atio n wit hth e beneficiary' s foreig n employer . Th e appea l wil l b e sustained . I . FACT S Th e petitioner , Siemen s Medica l Systems , Inc. , seek s t o classif y th e beneficiar y a s a n intracompan y transfere e unde r sectio n 101(a)(l5XL) o

f th e Ac t t o enabl e th e beneficiar y t o provid e service s a s asenio r

technica l representativ e fo r medica l x-ra y equipmen t fo r it s operatio n i n th e Unite dStates . Sectio n 101(aX15XL ) require s th e beneficiar y t o b e comin g t o th e Unite dState s t o continu e em 36 2Interi mDecisio n #300 8 ploymen t i n amanagerial , executive , o r specialize dknowledg e ca pacit y wit hth e sam e employer , it s parent , branch , subsidiary , o r affiliat e wit hwhic hth e beneficiar y wa s continuousl y employe d abroa dfo r

th e immediat e prio r

year . Th e petitione r

i s aUnite dState s wholly-owne dsubsidiar y of Sie

men s AG , amultinationa l corporatio n headquartere di n Wes t Ger

many , an di s involve di n th e developmen t an dsal e of

medica l an d denta l equipmen t

an dsystems . Th e beneficiar y wa s employe da s a n x-ra y enginee r

b y wholly-owne dsubsidiarie s of Siemen s A Gfro m 197 5 unti l 1982 . I n Jul y 1982 , th e beneficiar y wa s transferre dt o Hospitali aInternationa l GmbH , a50-5 0 join t ventur e betwee n Sie

men s A Gan dPhillip s International , t o wor k o n a n x-ra y mainte

nanc e projec t

a t Kin g Hussei n Medica l Center , Amman , Jordan . Afte r th e projec t

terminate di n Januar y 19S5 , h e wa s reassigne dt o Siemen s A Gheadquarters .

II . CAS E HISTORY , DECISION , AN D APPEA L Th e petitio n wa s filedo n Februar y 14 , 1985 . O n Februar y 27 , 1985 , th e distric t

directo r denie dth e petitio n afte r determining , fol

lowin g Matte r

o f Hughes , 1 8 I& N Dec . 28 9 (Comm . 1982) , tha t th e petitione r

submitte dn o evidenc e tha t Siemen s A Gcontrol s Hospi

tali aInternationa l and , therefore , faile dt o establis htha t affiliatio n exist s betwee n Siemen s Medica l System s an dHospitali aInterna

tional . O n Apri l 15 , 1985 , th e petitione r filed amotio n t o reope n an dreconside r

i n whic hi t

argue dtha t

th e beneficiary' s identit y a s a n employe e of

Siemen s A Gwa s no t

terminate do r

otherwis e af

fecte db y hi s assignmen t t o Hospitalia . Th e distric t directo r denie d th e motion , notin g tha t ther e i s nothin g i n th e recor dt o indicat e tha t th e beneficiar y shoul db e considere da n employe e of Siemen s durin g th e tim e h e wa s a t Hospitalia ; no r

i s ther e evidenc e tha t Siemen s exercise s contro l ove r th e managemen t

o r policie s of

Ho

spitalia , whic hi s require dfo r affiliation . O n appeal , th e petitione r contend s tha t

aqualifyin g affiliatio n unde r th e statut e exist s betwee n itsel f an dHospitali athroug hSie

men s A Gan dmake s th e followin g argument : Contro l doe s no t

no r shoul dno t

mea n tota l control . I n th e cas e a t hand , i t ha s previousl y bee n documente dtha t Siemen s A G supplie s mos t o f th e technica l per sonne l t o Hospitali aInternationa l an down s 60 % of th e asset s an d50 % of th e outstandin g share s o f

stoc k i n Hospitali aInternational . Thes e thre e items , a s indi

cate di n th e abov e section , shoul db e sufficien t t o sho w contro l i n orde r t o estab

lis haffiliatio n a s i s define dunde r th e immigratio n laws . However , i t shoul db e furthe r note dtha t

Siemen s A G als o participate s i n profit s fro mHospitali aInter

nationa l o n a50-5 0 basis ; Hospitali aInternational' s boar dof director s i s comprise db y 50 % of

peopl e fro mSiemen s AG ; Hospitali aInternationa l doe s no t man 36 3Interi mDecisio n #300 8 ufactur e equipment , bu t install s al l necessitie s use di n hospitals—t o wit , beds , x ra y machinery , an dothe r diagnosti c equipment , Th e medica l equipmen t use db y Hospitali aInternationa l i n th e equippin g of thes e hospital s i s manufacture db y Siemen s AG . Th e petitione r

als o note s tha t

th e beneficiary' s identit y a s a n em ploye e o f Siemen s A Gremaine dconstan t despit e th e beneficiary' s assignmen t

t o Hospitalia . Whe n th e beneficiar y wen t t o Hospitali a International , h e wa s assigne db y Siemen s A Gan ddi dno t see k employmen t

wit hHospitali aInternationa l o n hi s ow n volitio n and , a t th e en dof

hi s ter mwit hHospitali aInternational , remaine da n employe e o f

Siemen s AG . III . ANALYSI S AN D CONCLUSIO N Classificatio n unde r

sectio n 101(aX15XL

) of th e Ac t require s con sideratio n of

severa l factor s including , amon g others , whethe r o r no t ther e i s aqualifyin g relationshi p betwee n th e petitione r an d th e entit y fro mwhic hth e beneficiar y wil l b e transferred ; whethe r o r no t th e beneficiar y ha s bee n employe dabroa dcontinuousl y fo r th e immediat e prio r

yea r i n amanagerial , executive , o r specialize d knowledg e capacit y b y aparent , branch , subsidiary , o r affiliat e of th e petitioner ; an dwhethe r th e propose demploymen t i n th e Unite dState s wil l b e i n aqualifyin g capacity . A . RELATIONSHI P BETWEE N TH E ENTITIE S I n thi s case , i t

mus t b e establishe dtha t

ther e i s aqualifyin g rela

tionshi p betwee n Siemen s Medica l Systems , Inc . ( awholly-owne d subsidiar y of

Siemen s AG) an dHospitali aInternationa l Gmb H ( a 50-5 0 join t

ventur e establishe db y Siemen s A Gan dPhillip s Inter

national) . Th e Servic e wil l accep t

th e interpretatio n tha t a50-5 0 join t

ven tur e create s asubsidiar y relationshi p fo r purpose s o f

sectio n 101(aX15XL

) of th e Act . Wher e eac ho f tw o corporation s (parents ) own s an dcontrol s 5 0 percen t o f athir dcorporatio n (join t venture) , th e join t ventur e i s asubsidiar y of eac ho f th e parents . Ther e i s n o majorit y control , bu t

wher e eac hparen t

throug hownershi p an d contro l of

5 0 percen t

of th e votin g share s of

th e join t

ventur e ha s th e powe r

t o preven t

actio n b y tha t

compan y throug hexercis e of it s vet o power , i t

"negatively " control s tha t company . Tha t

compa n y is , therefore , properl y regarde da s asubsidiar y of eac hparent . Th e petitione r

ha s th e burde n o f

establishin g tha t

th e paren t own s an dcontrol s 5 0 percen t of th e claime dsubsidiary . T o enabl e th e Servic e t o determin e whethe r d e fact o contro l exists , th e peti

36 4Interi mDecisio n #300 8 tio n mus t

identif y al l agreement s betwee n th e parent s relatin g t o votin g of th e shares , managemen t an ddirectio n of

th e subsidiary , an dsimila r

factor s whic haffec t

actua l contro l ove r

5 0 percen t

of th e subsidiary . Unles s suc hagreement s restric t actua l contro l of on e parent , th e 50-percen t ownershi p wil l b e deeme dpe r s e control . Th e petitione r

ha s provide dsufficien t evidenc e t o establis htha t Hospitali ai s asubsidiar y o f Siemen s AC . Th e evidenc e show s tha t Siemen s A Gha s d e fact o contro l ove r 5 0 percen t

of th e votin g shares . I t jointl y manage s th e join t venture , share s equall y i n it s profits , an dmanufacture s th e equipmen t sol dan dinstalle db y Ho

spitalia . Sinc e Siemen s Medica l Systems , Inc . i s asubsidiar y of Sie

men s AG , i t

i s a n affiliat e of

Hospitalia . Th e subsidiar y an daffili

at e relationship s i n thi s cas e conformt o th e holding s o f Matte r o f Hughes , supra , wher e i t

wa s hel dtha t

(1 ) th e ter m"subsidiary " i s a mor e specifi c formof

affiliatio n i n whic hth e compan y s o describe d i s subordinat e t o th e contro l of another , an d(2) th e ter m"affiliate " i s sometime s mor e specificall y use dt o describ e th e relationshi p be

twee n tw o companie s whic hhav e n o direc t linkage , bu t

ar e direct

ed , controlled , an da t

leas t partiall y owne db y th e sam e paren t cor poration . W e conclud e tha t ther e i s aqualifyin g relationshi p fo r purpose s of

sectio n 101(a)(15)C

D of th e Ac t betwee n th e petitione r an dth e beneficiary' s employer s abroad . B . BENEFICIARY' S EMPLOYMEN T I t i s eviden t

fro mth e fact e of

th e cas e tha t

th e beneficiar y ha d bee n employe dabroa dcontinuousl y b y subsidiarie s of th e sam e paren t corporatio n sinc e 197 5 unti l hi s reassignmen t t o tha t paren t i n Januar y 1985 . Hi s employmen t wa s i n aspecialize dknowledg e capacit y an dth e propose demploymen t i n th e Unite dState s wil l b e i n aspecialize dknowledg e capacity . I t ha s bee n establishe dtha t th e beneficiary' s employmen t qualifie s hi mfo r

classificatio n unde r sectio n l0l(aKl5X D o f

th e Act . ORDER : Th e appea l i s sustained . Th e decisio n of th e distric t directo r i s withdraw n an dth e petitio n i s approved .

36 5