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457 and ENS rorts exposed
Let's just get it out there once and for all so that nobody can pretend it isn't happening.
People are buying their way into Australia and no, I don't mean via the SIV $5 million visa.
I am talking about buying their way in on a 457 and, or more importantly, buying their permanent residency visa via employer sponsored migration.
Take one submission to the 457 integrity review that I received today from another senior agent:
"I'm presently travelling in China marketing my services for Business Skills Migration.
I have been told of the existence of a number of schemes promoted by some sort of financial organisations in Australia.
The scheme seems to be;
1. Applicant for a 457 visa deposits a very large amount into the financial organisation's account (said to be AUD1million)
2. The Fund guarantees a 457 visa and subsequent permanent residence for the applicant.
3. The Fund does not seem to have any requirement about the applicant's background or skills, or source of funds.
The rumour is persistent around the migration agent network; I'm sorry I do not have more concrete information to give you.
If the rumour has any substance, I do hope there is something you can catch onto to bring this scam to a prompt ending."
This was my email response today to the migration agent and is my position on '457 and ENS integrity':
"It also happens for ENS.
The employee pays their annual 'executive' salary to the Australian company sponsor up front + say a buffer of $50K.
The sponsor employs the overseas applicant for a 'permanent position'.
PR is granted (no skills assessment, no 2 years with employer due to high salary).
No source of funds required.
No skills required.
Investment visa and distinguished talent visa avoided.
Direct PR.
Employee 'resigns' if they feel like it and when they feel like it, sometimes after 2 days."
I am aware of website which advertises this as a means of entry to Australia. They actively advertise SIV and other visas and then go on to speak negatively about these schemes because it takes too long, requires way too much financial background checking, and investment of way too much money up front.
Organisations are advocating the use of Australian Permanent Residency via the ENS (Employer Nomination Scheme) because processing is faster, if refused there are full appeal rights, the salary can be an 'investment into the business' and is far less than the injection of capital required for other business skills / innovation visas, no skills assessments required, no 'two years with an Australian employer on a 457' required. Direct entry via ENS is seen as a simple and elegant 'work-around' to the other more costly options for business migrants.
Direct-entry via ENS or RSMS requries no business plan, no evidence of innovation, no evidence of anything really except show 'genuineness of the position' (easy enough to concoct for motivated applicants) and a $250K base salary.
The spirit of the 457 and ENS visa classes is lost to what I call 'white collar organised immigration crime'. Australian businesses stand to make huge profits out of persons who invest money into their companies in return for permanent residency. Investors from overseas can avoid having their source of funds scrutinised by the DIBP and ASIO etc. Any financial crimes committed overseas, any non-payment of taxes can all be avoided. It doesn't take much to make up a convincing story about 'intention to work for the Australian business'.
Finally the overseas visa applicant does not need to stay in Australia for any specific length of time (ie 2 years on a 457) to be granted Permanent Residency.
An email I received today from a migration agent is titled 'bogus ENS salary claims' and states as follows:
"Yes, I'm aware of that ENS salary scam. I have always suggested that DIBP should look at industry benchmarks when approving ENS. ATO has many such norms, see http://www.ato.gov.au/Business/Small-business-benchmarks/
It is easy to see that small businesses cannot afford to pay the ENS salary claimed, just click on the "benchmarks A-Z" tab and plenty of material can be seen, including total salary to turnover ratios.
Claims that small business can afford to pay huge salaries are dubious. If the salary claim is outside of industry norms, then investigations are warranted."
If the DIBP wants to talk about 457 visa integrity then it first needs to clean up it's legislation and policy to remove the $250,000 base salary option. That cuts off the 'criminal entrepreneurs' using the ENS as a back door to Australia whilst leaving their dirty pasts overseas.
Obviously there are well-intentioned visa applicants under the direct-entry employer sponsored migration scheme, but seriously, it's being rorted. It needs to be fixed. It's nothing short of an immigration scam.
Comments
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Monday, 14 April 2014
Alan, what about just removing the $250K base salary? If the applicant for ENS is that good they will employ the person via another method. Surely the applicants coming here should be able to demonstrate skills and commitment? A high salary doesn't demonstrate that at all.
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Monday, 14 April 2014Alan, it isn't hard to address at all. Get rid of the $250K executive salary option. Why is it there? If someone is on $250K then the Australian business will sponsor them anyway using a skills assessment or 2 years on 457 channel. The $250K is a dumb concept. It's basically a cheap, fast, SIV but with direct PR.
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Monday, 14 April 2014
Liana is right. We need to stop pretending that the ENS $250,000 base salary is anything more than a fake job offer with a fake salary given most of the time from one mate to another to get that mate into Australia as a permanent resident asap.
Any migration agent who is part of, or tries to advocate the pathway of ENS via investment of money into the sponsoring business instead of using the SIV process is conniving, deliberately aiding and abetting a crime, knows the people are not genuine ENS applicants, and knows the whole process is about a loophole to get people PR.
I don't know any registered migration agents doing this but I reckon a lot of agents with 'offshore agent IDs' would be getting into this in a big way. -
Monday, 14 April 2014
Well done Liana Allan. You are doing investigations job for them. Surely this is obvious. Maybe this MA website is becoming a check and balance for the Department of Immigration. Someone wrote here about digital era and I agree. It is much harder for any government to pretend they don't know about this kind of thing in the digital 'now' information era. Everything this Department is doing wrong is being exposed somewhere online and it seems that the public and agents are giving this information to Migration Alliance. Migration Alliance has fast become the reality news source for the Australian immigration industry. Regarding this ENS rort story, yes, I agree the Department has buried it's head in the sand too long about the $250,000 salary thing. Heaps of business people from overseas are using this as a way to get them and their families direct PR without using up too much money. If they want SIV to work they need to put this $250,000 ENS pathway in the bin.
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Monday, 14 April 2014
It makes very little sense for migration agents to be making suggestions to DIBP to eliminate relatively obscure pathways. More importantly, although these visas make up a tiny percentage of visas, they are genuinely necessary. There are lots of businesses paying $250K+ to migrant labour. The problems of skill shortage in the hard disciplines will continue until we change our education priorities. Will there be abuse in these visas? Yes, but there is so much abuse in migration, especially from unregistered agents, that it might be better for DIBP to focus on policing the major pathways.
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Monday, 14 April 2014
Michael
This is not a 'relatively obscure pathway'. As a migration agent I know it is happening ALL THE TIME EVERYWHERE. The $250K pathway is used and abused daily. -
Monday, 14 April 2014
IMHO there should be a salary threshold where it is taken as read that an individual has the competencies needed to fill a position, whether that is on a 457 or a 186.
Sorry - I don't agree with you. We should be making it easier for the wealthy to some here and invest, not harder.
Best regards. -
Monday, 14 April 2014
Alan-Collett your comment makes no sense. The ENS is not an investment visa. Investment visa entry is a different scheme and it should not be 'easy' for people to invest. Scott Morrison has said Australia wants the people, their skills, their innovation and their entrepreneurial skills. He has repeatedly said he does not want just the investment of money. I doubt the government wants dodgy investors coming in on ENS visas just to get around the proper investment visa channels.
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Monday, 14 April 2014The integrity issue that arises is at the point where the offer of employment is not genuine.
if the offer of employment is genuine and the position is taken up and the salary is paid then there is no problem.
The decision of DIBP and Parliament to have the "high executive salary" option to operate to in effect bypass the requirements of language and skill assessments reflects the intention of Parliament to have in place that option.
The fact of a candidate having PR is no impediment to an integrity review by DIBP and in the event that the job is bogus and the candidate has not taken up the employment or the offer of employment was not genuine then the visa can be cancelled either through the section 107- 109 pathway.
if the candidate is offshore then section 128 can be used.
The moral panic underpinning the "you are buying a visa" school of thought is misplaced as Parliament in effect permits that pathway and, the observation that the SIV visa is a dud is well placed.
I think that the current numbers reveal that there are about 180 approvals in 18 months.
If the public policy settings are to encourage investment in Australia then there is absolutely no reason why a candidate who is investing in an Australian business should not get PR sooner rather than later.
That capital is retained in the business and the sponsor has access to the financial and human capital in the business which is ultimately expressed back into the community.
this is in direct contrast to the Eddie Kang model which sells sponsorships to bogus jobs to vulnerable consumers. Those jobs and sponsorships may not actually exists.
This is in direct contrast to the high end investor. It is the investment that drives the putting up of the capital and the sponsorship is incidental to that investment.
To the extent that the RMA "knows" of the Loophole is to not to aid and abet any crime. The exploitation of a loop hole is not a crime as it is a loop hole.
The crime, if any, is committed if the RMA aids and abets the commission of an offence which would necessarily arise in the context of section 234 of the Migration Act 1958, this would operate by way of a conspiracy to tell lies to DIBP. -
Monday, 14 April 2014
Rachael: I am well aware that the ENS is not an investment visa.
I am also aware of the difference between an investor and an employee. Please - I have been a qualified accountant for more than 20 years, so you would expect me to understand the distinctions, would you not?
If an individual chooses to invest his or her money in a business, becomes a share holder and a director, and that business decides to pay him or her a salary as a director of more than $250k I think you are actively dissuading people with senior executive level competencies.
I acknowledge the concerns expressed, but - again, IMHO - there is a salary threshold at which an executive should not have to demonstrate s/he has the competencies to fill the position.
Best regards. -
Monday, 14 April 2014
The Executive Salary pathway is often being used correctly and as intended. When employees are legitimately being paid these high salaries, it is reasonable to make the pathway quicker to avoid unnecessary delays. If an Australian company is legitimately paying a salary which qualifies, they would have done extensive research to determine that the person is qualified for the position, well beyond any skills assessment.
I don’t see why legitimate business should be stifled because some are exploiting the program. As with any Regulations, it is up to DIPB to vigorously enforce the rules. -
Monday, 14 April 2014
I agree to remove the $180K (or now $250K?) regulation that can waive IELTS and skills assessments etc for ENS. We need overseas migrants coming with some kinds of skills, or work experience for the benefit of the Australian society. If just bringing in money to jump the queue, please go through $5m SIV; if less money, please go through visa 188A and B that need a combination of less money + business skills and experience. DIBP has full range of options to suite different needs. You can even invest or set up a company to sponsor yourself for visa 457 or 186, but we need to see some skills rather than just money which won't last long. Money comes and goes very fast, skills stay with the people.
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Monday, 14 April 2014
Henry Li a man who makes sense. Thank you Henry you are 100% spot on.
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Monday, 14 April 2014
Christopher, you say that this is different to the Eddy Kang issue. It isn't. You wrongly presume that there are genuine job offers for ENS applications under direct entry. There aren't. The only time there is a job offer is to create one for the primary purpose of getting someone PR through direct entry. Once the person is here on PR, the job offer ceases and the person 'resigns'. You are wrong when you say the capital is retained in the business. It isn't. It is spent on the person's salary and given back to the person once they are safely here as a PR. Christopher please understand that nobody is investing anything here in any real terms. These people are putting their money in, and taking it back out again, minus a month or two where the employer paid some of it to them pre-rata to demonstrate 'genuineness'. It is a total rort. I'm an employer who knows other employers doing it so don't try and pretend you don't know.
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Monday, 14 April 2014
Are you suggesting that there are no genuine job offers under the "direct entry" pathway?
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Monday, 14 April 2014
RTS there are genuine job offers but there are also 'fictitious' job offers which are constructed for the primary purpose of getting someone PR.
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Monday, 14 April 2014
Gladys,
I don't think the argument that there are in effect no genuine job offers for ENS under direct entry is sustainable.
I don't know what the refusal rate or the cancellation rate for these visas are but if what you say is correct then there would be plenty of evidence that the scheme is being rorted.
I would prefer to have a strong evidentiary basis to any decision to restrict direct entry ENS. -
Monday, 14 April 2014
Well done Liana Allan,
I also came across another scam this time by Australian Businesses. Here is what I noticed if you wish to further investigate:
An Australian human resource company (AC1) is linked with another Australian Human resource company (AC2). AC1 goes and recruit 457 visa with a Labour agreement ( No English and only 457 Skills assessment overseas).
All fee and other amount transactions will take place overseas -
The visa holders will come to Australia and stay on their own. They are with AC2 pays nothing and informs them that the company is looking for employment for them.
Within 3 to 4 weeks, the company asks the visa holder to go back to their country until they find a job and gives a promise to call them in about 3 months time (no written documents) – Ask to sign a letter by the visa holder stating that he/she is going on leave on personal reasons and going to overseas. Once the visa holder leaves Australia he never was contacted again.
If the visa holder did not agree to sign the letter – he/she will be threatening by saying that they will terminate his/her appointment on the grounds his/her skills are not satisfactory by the employing companies.
I know there were about 24 visa holders arrived (at almost same time) last year recruited by one company and in 2 months time all of them left Australia. -
Monday, 14 April 2014
Why have ENS direct entry at all ? You've got the 457. If they are serious about working then 457 is sufficient to address employment needs, let the ENS be a pathway from the 457 only.
There's enough rorting going on and fixes needed. Abolish the direct entry for ENS and you've got less to clean up. Then you can focus efforts on cleaning up the 457 rorts.
Immigration blog
Liana
It strikes me that this would be very difficult for the Department to address without unworkable burdens being placed on ENS applicants generally.
If an individual wants to invest in a business and that capital is used to meet overheads (including the investor's salary) I say that is fair enough.
Best regards.