New Delhi: Concerned by an apparent rise in business visa fraud cases, the US embassy recently suspended five companies—four Indian and one American—from participating in a programme that allows them to expedite temporary work visas for their employees.

The companies — among them technology giant International Business Machines Corp.’s (IBM) business process outsourcing (BPO) arm, IBM Global Process Services — were suspended from the programme. According to minister counsellor for consular affairs James Herman, consular officials “detected they were committing fraud in some of their applications". Of the five companies, three have been reinstated, while two remain suspended. Herman refused to divulge names of any of the firms. “It’s not releasable," he said.

Three senior industry executives confirmed that IBM Global Services was among those suspended and then reinstated in the programme. None of the executives wanted to be identified.

Mint could not confirm the names of the other firms. The officials said they were much smaller companies.

IBM Global Services refused to comment on the story.

Herman said this is the first time that he was aware of any participating company being suspended since the Business Executive Program (BEP) was launched in the 1990s. The US embassy couldn’t conclusively confirm whether it had ever happened before.

The programme—which expedites business-related visa applications and interviews for certain companies that send large numbers of employees to the US for business purposes—is only available to “major well-established companies" with offices in India that have “demonstrated a need for a significant number of visas per year", according to the BEP website. There are roughly 340 participating BEP companies today, many of which are also members of the Fortune 1000, the S&P 500 or the Sensex 30.

This comes as Indian IT companies have alleged that getting US work visas has become more difficult than ever.

“In the last 10-15 months, our rejection rate has gone up from 10% to 30%. This is covert protectionism on their part," said a senior executive at a large BPO firm in the country, who requested anonymity. Lobby group Nasscom has also been raising the issue at multiple forums.

In a presentation during talks between the two countries, some of the issues raised by Nasscom were use of derogatory language with visa applicants, instances of applicants being coerced/threatened to concede that they were going to the US for reasons other than those mentioned in the application, and a marked increase in rejection rates at all consulates, especially at Chennai for L1 and Delhi for B1 category visa applicants.

The document also referred to “humiliation by handcuffing individual in front of his wife in public and being made to stay in correction facility before deportation".

Immigration attorney Rami Fakhoury, a member of the US-based Fakhoury Law Group, said neither side was blameless. While he acknowledged that the US embassy has been “increasingly difficult" in granting visas, he also said that “companies have to take the immigration issue much more seriously, as it damages the entire industry’s reputation".

However, Nasscom isn’t taking up the issue of suspension of firms under BEP, “as it is company-specific", said Ameet Nivsarkar, vice-president at the lobby group. “We have been taking up the larger industry-wide issues with the embassy."

According to Herman, the number of cases in which Indian and American companies with offices in India “appear to be attempting to circumvent H-1B visa restrictions by sending people from India to the US on Blanket L visas for work that doesn’t qualify under the Blanket L visa category—especially as related to the requirement on “specialized knowledge"—has been on the rise. They report similar abuses regarding business visas.

Accordingly, the refusal rate for Blanket L visas issued to Indian nationals has spiked from 2-3% to 20% within the past two years, according to Herman. The refusal rate for business visas is also on the rise.

The US embassy does not keep statistics on the number of turnarounds—people denied entry into the US at ports of entry due to visa discrepancies—but Herman said he believes it to be “significantly higher than before". While the refusal rate doesn’t by definition indicate fraud, “it’s a concern because it appears that some companies are trying to find a way to circumvent the Blanket L guidelines".

The US embassy will be hosting a meeting in Chennai with BEP companies in Bangalore on Thursday at which visa issues will be addressed.

While Nasscom is aware there is some fraud in the system, it is largely among “fly-by-night" companies and not among its members, said Nivsarkar.

“We are recommending to our companies to be extra vigilant of every single part of the paperwork for all visaholders and applicants so there are no slip-ups," he said. Nasscom companies are also working closely with the embassy to clarify proper use of the visa system, he added.

Immigration lawyer and founder of corporate law firm LawQuest, Poorvi Chothani, said such practices became more prevalent among both Indian and American companies after the cap on H-1B visas was lowered from 195,000 in 2004 to 65,000.

Concerns over losing large deals can cause some companies to “weigh the pros and cons of violating the law or losing the business, and they make an ill-advised choice to send employees on business visas", she said. This happens generally in years when the cap on H-1B visas is quickly reached.

Indian companies face suspension from BEP while American entities—which can be branches or subsidiaries of Indian entities—found guilty of committing visa fraud can be banned from hiring foreign nationals and face heavy fines, she said.

“Some of the behaviour, fraud, misuse of L and B visas is a function of poor access to legal alternatives," he said. “Raising visa limits, dropping country limits, expanding H-1B limits—all those things would ease the pressure on firms to break the rules."

Infosys Technologies Ltd became involved in a lawsuit two months ago on charges of visa fraud following a complaint filed by one of its primary consultants, Jack Palmer, alleging that the company was sending employees to work full time in the US on B visas, intended for temporary visitors on work trips.

Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology and author, testified on 31 March before a congressional committee on immigration and customs enforcement that large outsourcing companies may be exploiting loopholes in the US visa system to “bring in cheaper foreign workers with ordinary skills, who directly substitute for, rather than complement, workers in America". According to Hira, the top three India-based offshoring firms, TataConsultancy Services Ltd, Infosys and Wipro added 57,000 new employees last year—and many of the jobs would have gone to Americans had H-1B loopholes been closed.

He also raised concerns that other temporary visa programmes—such as the L-1 and B-1—are “also badly in need of overhaul and are being used to circumvent the annual numerical limits on H-1B", and that “the opportunities to exploit wage arbitrage using the L-1 is even greater than for the H-1B since the L-1 workers can be paid home country wages".