The United States took control of the Northern Mariana Islands from Japan during the latter part of World War II. After the war, the U.S. Congress approved a trusteeship agreement making the United States responsible to the United Nations for the administration of the islands. In 1976, the District of the Mariana Islands entered into a covenant with the United States establishing the island territory’s status as a self-governing commonwealth in political union with the United States. The covenant granted the CNMI the right of self-governance over internal affairs and granted the United States complete responsibility and authority for matters relating to foreign affairs and defense affecting the CNMI. The covenant also preserved the CNMI’s exemption from certain federal laws that had previously been inapplicable to the Trust Territory of the Pacific Islands, including certain federal minimum wage provisions and immigration laws, with certain limited exceptions. In 2008, the CNRA amended the joint resolution approving the U.S.– CNMI covenant to generally apply federal immigration law, including the INA, to the CNMI, with a transition period for foreign workers and investors. In addition, the INA provides DHS with discretionary authority to grant parole to certain noncitizens, on a case-by-case basis, allowing them to be temporarily present in the United States, including the CNMI. To provide for an orderly transition from the CNMI immigration system to the U.S. federal immigration system under the immigration laws of the United States, DHS, through USCIS, established the CNMI-Only Transitional Worker program in 2011. Through the program, employers petition for nonimmigrant CW-1 permits that allow foreign workers who meet certain requirements to work temporarily in the CNMI. The CNRA limits the number of permits DHS may issue annually and reduces that number each year until the end of the transition period. Since 2008, Congress has amended the CNRA several times, with provisions that affected the length of the transition period, the number of CW-1 permits allocated, and the distribution of permits (see table 1). Figure 1 shows the past numerical limits on CW-1 permits established by DHS and the current and future numerical limits for permits specified in the Northern Mariana Islands U.S. Workforce Act of 2018, Pub. L. No. 115-218. The limits shown are the maximum number of permits available for each fiscal year through the end of the transition period and may not reflect the number of permits for which employers would petition and that DHS would approve. In addition, the INA provides authorization for several types of visas for nonimmigrant workers and their families—for example, H-2B visas for temporary nonagricultural workers—that became applicable to the CNMI with the passage of the CNRA. The CNRA allows CNMI employers to bring temporary workers to the CNMI under the H-2B program without counting against the numerical restriction for H-2B visas. The CNRA and its implementing regulations established E-2 CNMI Investor (E-2C) status, a classification for certain foreign investors who previously had been lawfully admitted to the CNMI under the territory’s immigration system and who met certain eligibility requirements. Such investors could petition for E-2C status prior to January 18, 2013, according to USCIS. Eligibility criteria include, among others, providing evidence of maintaining financial investments in the CNMI of at least $50,000. DHS may grant E-2C status for up to 2 years, and such status can be renewed. Under the INA, DHS has discretionary parole authority to allow certain noncitizens, on a case-by-case basis, to be temporarily present in the United States. DHS has used this authority to grant parole to individuals who may be inadmissible or otherwise ineligible for admission to allow them to remain in the CNMI, according to DHS. In 2017, the President issued Executive Order 13767, calling for, among other things, the Secretary of Homeland Security to take appropriate action to ensure that parole authority is exercised only on a case-by-case basis in accordance with the plain language of the statute and, in all circumstances, only when an individual demonstrates urgent humanitarian reasons or a significant public benefit derived from such parole. Proposed bill H.R. 560 includes several provisions, among others, that would provide CNMI resident status to eligible individuals. To be eligible for CNMI resident status under H.R. 560, an individual must have been lawfully present in the CNMI under U.S. immigration laws on the date of enactment or on December 31, 2018; be admissible as an immigrant to the United States under the INA, although no immigrant visa is required; have resided continuously and lawfully in the CNMI from November 28, 2009, through the date of enactment; and not be a citizen of the Federated States of Micronesia, Republic of the Marshall Islands, or Republic of Palau. Individuals who meet each of these four criteria would be eligible to apply for CNMI resident status if they fall into one of the categories shown in table 2. As figure 2 shows, the number of CW-1 permits approved by USCIS remained well under the annual numerical limits established by DHS for fiscal years 2012 through 2015 and exceeded or neared the annual limits for fiscal years 2016 and 2017. According to USCIS data, most individuals with approved CW-1 permits for fiscal years 2015 through 2018 were born in the Philippines or China. In addition, as table 3 shows, four times more CW-1 permits were issued to Chinese nationals for fiscal years 2016 and 2017 than for fiscal year 2015. As we reported in 2017, firms involved in building a new casino in Saipan have primarily employed Chinese workers. About one-third of fiscal year 2018 CW-1 permit holders had maintained continuous employment in the CNMI since 2015 and could be eligible for CNMI resident status under H.R. 560, if they had been admitted every year under CW-1 status and were otherwise eligible. USCIS CW-1 permit data for fiscal years 2015 through 2018 show that, of the 8,995 foreign workers with CW-1 permits approved by USCIS for fiscal year 2018, 2,875 workers (about 32 percent) had maintained continuous employment in the CNMI since fiscal year 2015. (Of this group, 2,287—80 percent—were born in the Philippines.) Under H.R. 560, a foreign national who meets additional eligibility requirements, including having resided continuously and lawfully in the CNMI from November 28, 2009, through the date of enactment, may be admitted to the CNMI under CNMI resident status if that individual was admitted to the CNMI as a CW-1 worker during fiscal year 2015 and during every subsequent fiscal year beginning before July 24, 2018. As a result, according to our analysis of USCIS data, 2,875 workers could be eligible under H.R. 560 to apply for CNMI resident status if they were admitted as CW-1 workers every fiscal year until 2018 and met all other eligibility conditions. Table 4 shows the numbers of foreign workers who received CW-1 permits for fiscal year 2018 and had maintained continuous employment in the CNMI since fiscal years 2012 through 2017. USCIS data show a reduction from fiscal year 2017 to fiscal year 2018 in the number of CW-1 permit holders and a significant increase in the number of H-2B beneficiaries. While the number of approved CW-1 permit holders declined from 12,889 in fiscal year 2017 to 8,995 in fiscal year 2018, the number of H-2B beneficiaries for those years increased from 0 to 3,058. In addition, our analysis of USCIS data found that the number of CW-1 permit holders for the construction trade declined from 2,981 to 545—by 82 percent—from fiscal year 2017 to fiscal year 2018. Meanwhile, the number of H-2B beneficiaries for the construction trade in the CNMI increased from 0 for fiscal year 2017 to 1,801 for fiscal year 2018. In August 2017, Congress amended the CNRA to, among other things, restrict CW-1 permits for workers in construction and extraction occupations (as defined in the U.S. Department of Labor’s Standard Occupational Classification system) by allowing only extensions of CW-1 permits first issued before October 1, 2015. The CNRA allows CNMI employers to petition for H-2 visas to bring temporary workers, such as construction workers, to the CNMI without counting against the numerical restriction for such visas. According to a senior USCIS official, the new casino employer in Saipan began petitioning in 2018 for foreign workers under the H-2B program instead of petitioning for CW-1 permits for its construction workers. The official noted that Pub. L. No. 115-53’s restriction on the use of CW-1 permits for construction trade workers may account for the decrease in petitions for CW-1 permit holders and increase in petitions for H-2B beneficiaries from fiscal year 2017 to fiscal year 2018. Table 5 shows the numbers of approved CW-1 permit holders and H-2B beneficiaries for the construction trade in fiscal years 2016 through 2018. In October 2016, DHS announced the list of countries whose citizens were eligible to participate in the H-2 program from January 18, 2017, to January 18, 2018. Asian countries on the list included the Philippines, South Korea, Taiwan, and Thailand, among others, but did not include China. In January 2019, because of concerns about overstays and human trafficking, DHS removed the Philippines from the list of countries eligible for the H-2B program. CNMI government and Chamber of Commerce officials have voiced concerns that the removal of the Philippines from the list will make it difficult to hire construction workers in the aftermath of two recent typhoons. USCIS began approving 2-year E-2C status for eligible foreign long-term investors and their dependents in the territory in fiscal year 2011. According to USCIS, as of February 5, 2019, 56 investors who had previously resided in the CNMI as investors under CNMI immigration law were residing in the CNMI with E-2C status. Under H.R. 560, foreign nationals who otherwise meet additional eligibility requirements may be granted CNMI resident status if they resided in the CNMI as investors under CNMI immigration law and are presently resident under E-2C status. As a result, under H.R. 560, these 56 investors could be eligible to apply for CNMI resident status if they met all other eligibility conditions. According to USCIS testimony, after the CNRA was passed in 2008, USCIS implemented DHS’s discretionary parole authority by making parole available to groups of individuals residing in the CNMI who would not be covered by INA classifications and for whom the classifications established in the CNRA did not appear to be appropriate. These individuals previously had immigration status under CNMI immigration law that allowed them to potentially remain in the CNMI indefinitely, according to USCIS. Without USCIS action, these individuals would have been deemed unlawfully present in the United States, according to USCIS documents. To provide such individuals with a means to remain temporarily in the CNMI during the transition period, USCIS announced several discretionary parole policies to cover the following groups, among others, which were potentially eligible for parole: CNMI permanent residents, immediate relatives of CNMI permanent residents, spouses and children of deceased CNMI permanent residents, and immediate relatives of citizens of the freely associated states (November 2009) Certain in-home foreign national caregivers of CNMI residents (October 2011) Immediate relatives of U.S. citizens, especially parents of U.S. citizen children, and stateless individuals in the CNMI (November 2011) In response to Executive Order 13767, on December 27, 2018, USCIS announced the termination of parole for immediate relatives of U.S. citizens and certain stateless individuals; CNMI permanent residents, immediate relatives of CNMI permanent residents, and immediate relatives of citizens of the freely associated states; and certain in-home foreign worker caregivers of CNMI residents. To provide an opportunity for individuals in these categories to prepare to depart or seek a different lawful status, USCIS announced that the affected individuals were allowed to remain in the CNMI with a transitional parole status for up to 180 days, not to extend beyond June 29, 2019. According to a senior USCIS official, from December 2, 2016, through December 14, 2018, USCIS had granted parole until December 31, 2018, to 1,039 individuals in the terminated parole categories. Under H.R. 560, some of these individuals could be eligible to apply for CNMI resident status if they met all other eligibility conditions. Vice Chairman Sablan, Republican Leader Gonzalez-Colon, and Members of the Committee, this completes my prepared statement. I would be pleased to respond to any questions you may have at this time. If you or your staff have any questions about this testimony, please contact David Gootnick, Director, International Affairs and Trade, at (202) 512-3149 or gootnickd@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. GAO staff who made key contributions to this testimony are Emil Friberg (Assistant Director), Julia Ann Roberts (Analyst in Charge), Sada Aksartova, Andrew Kurtzman, Reid Lowe, and Alexander Welsh. Technical support was provided by Kathryn Bernet, Justin Fisher, Christopher Keblitis, Mary Moutsos, and Moon Parks. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

Summary: The 1976 covenant defining the political relationship between the CNMI and the United States exempted the CNMI—a U.S. territory north of Guam—from certain federal immigration laws. However, the covenant preserved the right of the U.S. government to apply federal law in these exempted areas. The CNRA, which amended a joint resolution approving the covenant, generally established federal control of CNMI immigration beginning in 2009. In 2009, DHS began implementing, among other things, a foreign worker permit program to address CNRA provisions specific to the CNMI. DHS also began using its discretionary authority under the INA to parole certain groups of individuals into the CNMI (i.e., allow them to be temporarily present). Congress has amended the CNRA several times with provisions that affected the total number of permits allocated and the distribution of permits. Proposed bill H.R. 560 would further modify the CNRA by establishing a CNMI resident status for certain individuals. Among its other provisions, the CNRA allows CNMI employers to petition for H-2 visas for temporary workers without counting the visas against a numerical restriction. Drawing from ongoing work, this testimony discusses DHS's implementation of (1) selected CNRA provisions regarding foreign workers, among others, in the CNMI and (2) its discretionary parole authority under the INA as applied in the CNMI. GAO updated information from May 2017 ( GAO-17-437 ) and February 2018 ( GAO-18-373T ), reviewed relevant legal documents, and analyzed DHS data. Under the Consolidated Natural Resources Act of 2008 (CNRA), the Department of Homeland Security (DHS) established the nonimmigrant Commonwealth of the Northern Mariana Islands (CNMI)–Only Transitional Worker program in 2011. Through the program, eligible foreign nationals can obtain CNMI-Only Transitional Worker (CW-1) permits to work temporarily in the CNMI. Under H.R. 560, foreign nationals who meet additional eligibility requirements could be eligible to receive CNMI resident status if they were admitted annually to the CNMI as a CW-1 worker in fiscal years 2015 through 2018. GAO's preliminary analysis of DHS data found that 2,875 (about 32 percent) of 8,995 workers with CW-1 permits for fiscal year 2018 had maintained continuous employment each fiscal year since 2015 (i.e., received a CW-1 permit annually). While DHS data show the number of approved CW-1 permit holders declined from fiscal year 2017 to fiscal year 2018 (see figure), the number of H-2B beneficiaries—who often fill construction jobs—increased from 0 to 3,058. In January 2019, DHS removed the Philippines from the list of countries eligible for the H-2B program. In 2009, DHS began granting discretionary parole that authorized temporary stays for certain CNMI residents, such as spouses and children of U.S. citizens. These individuals may have been inadmissible or otherwise ineligible for admission to the United States, according to DHS. However, in December 2018, DHS announced that it was terminating parole for certain categories of residents in response to Executive Order 13767, issued in 2017. The order called on DHS to take appropriate action to ensure that parole authority is exercised only on a case-by-case basis, among other things. According to DHS, 1,039 individuals in the terminated categories had been granted parole until December 31, 2018. Under H.R. 560, some of these individuals could be eligible to apply for CNMI resident status.