India Takes US to WTO Over H1B and L1 Visa Fee Hike in Dec 2015,
Claims MFN and NT Violation
• Nasscom Alleges Annual Injury $400mn
India has brought a WTO challenge (DS503)
against certain measures involving the US’ non-immigrant temporary working
visas, filing a request for consultations on Thursday 3 March.
At issue in the complaint are the increased fees imposed on
certain applicants for two categories of non-immigrant temporary working visas,
specifically “L-1” and “H-1B,” as well as numerical commitments for the latter
visas, according to the consultations request.
(L-1 visas allow a US employer to transfer certain types of
high-level employees from an affiliated foreign office to an American one. The
H-1B visa applies to people who wish to work in a specialty occupation,
including Department of Defence (DOD) projects, or as a fashion model.)
Under
the Consolidated Appropriations Act of 2016, Washington increased fees for L-1
type visas by US$4500 and for H-1B type visas by US$4000 for companies with 50
or more employees in the US, if more than 50 percent of their employees are
non-immigrants employed on such visas. It was signed into law by President
Barack Obama in December 2015, with the measures in place through September
2025.
India claims that these measures, along with earlier fee
increases between August 2010 and September 2015, appear to violate the US’
commitments under its Schedule of Specific Commitments under the WTO’s General
Agreement on Trade in Services (GATS) – the set of global rules involving
services trade- along with being inconsistent with other GATS provisions.
According to India, the above-mentioned visa fee increases
effectively treat Indian services suppliers with a commercial presence in the
North American nation in a less favourable way than US entities providing like
services, in sectors such as “Computer and Related Services.” Also, the
movement of natural persons seeking to supply services is affected in a way
that violates Washington’s commitments under its GATS schedule, while
nullifying or impairing benefits that should accrue to India.
The Indian IT industry is a major user of these types of
temporary visas, with India’s National Association of Software and Services
Companies claiming that the changes may put a burden of up to US$400 million
annually to India’s export-driven IT outsourcing firms.
Furthermore,
New Delhi is also claiming that recent US changes to its numerical commitment
for H-1B visas – specifically due to modifications Washington has made under
FTAs with Singapore and Chile – also are inconsistent with its GATS schedule.
According to the consultations request, the US included under
its horizontal commitments regarding mode 4 – that involving the movement of
natural persons – that it would permit up to 65,000 people annually on a
worldwide basis under the category of fashion models and specialty occupations.
Under the two FTAs mentioned above, these “numerical
commitments” have allegedly been changed. According to India, US homeland
security officials must now set country-specific limits for both countries, with
these numbers taken away from the global total of 65,000 receiving H-1B visas.
Along with allegedly violating the US’ schedule, “these
measures also appear to raise the overall barriers for service suppliers from
India seeking entry into the United States under section 1101(a)(15)(H)(i)(b) of the [Immigration
and Nationality Act], compared to the level applicable prior to the implementation
of the United States’ Free Trade Agreements with Singapore and Chile,” says the
consultations request.
The request also includes a series of other alleged GATS
violations as a result of these measures.
The
US and India must now hold consultations for a minimum of 60 days in an effort
to resolve their differences. Should a mutually agreed solution not be reached
during that process, New Delhi may then request that a WTO panel be established
to hear the case.