Is the CNMI ready for June 1?

With just 93 days remaining before the June 1 start of federalization, uncertainty is the word the Fitial administration and some lawmakers are using to define the sentiment within the Commonwealth.

Although top CNMI officials have already submitted a request for a 180-day delay to the Department of Homeland Security, there is no guarantee that it will take place. Any decision on that issue must be made and Congress must be notified no later than 30 days prior to the start of the transition period, which would be May 2.

Is the CNMI ready if no delay occurs?

“I don’t think we’re comfortable” with a June 1 start, said Charles Reyes, press secretary for the Governor’s Office.

There are many regulations that have still not been released, he added.

“We still need more clarity. I don’t think all of the regulations have been finalized. We’ve seen some of them,” he said, referring to the proposed Guam-CNMI visa waiver program, which, he said, was not very encouraging. Under the proposed program, China and Russia—two emerging tourism markets in the CNMI—were left off the list.

A six-month delay would allow for more time for citizens from those countries to enter the CNMI without a visa, Reyes said.

Rep. Diego T. Benavente, chairman of the U.S. and Foreign Relations Committee, said he is also concerned about the loss of the two markets if the Act pushes through on June 1.

“There are concerns with issues about uncertainty. We haven’t even seen regulations for the transition period. Even if all the language in the transition regulations accommodate what we asked for, the biggest concern we have is how it will affect the Russia and China markets,” he said. “Those two markets are so critical. It’s gong to hurt greatly, especially the people of Tinian because of Tinian Dynasty.” Tinian Dynasty caters to the Chinese market.

Regulations regarding foreign investors and nonresident workers are still under development. A spokesperson for the U.S. Citizenship and Immigration Services division of DHS yesterday said the regulations are in the clearance process but there is no set timeframe when they will be issued to the public.

The question, however, is not whether the CNMI is ready for the June 1 start date, according to Rep. Tina Sablan. Rather, it is whether Homeland Security is ready.

“From our side, there’s still a lot of ambiguity and confusion on how we make the transition exactly,” she said.

There are questions regarding local control of the Labor Department once the law goes into effect, the representative said.

“If that’s not clear to us, I’m not sure it’s clear to the Department of Homeland Security or any other federal agencies that are supposed to be involved in this process,” she added.

During a meeting with Interior Secretary Ken Salazar and other federal and insular area officials this week, CNMI Delegate Gregorio “Kilili” Sablan voiced his concerns that there is currently no plan to create visas for immediate relatives of residents. With no visa available, IRs will not be able to re-enter the CNMI if they must leave.

Rep. Sablan said she is also hoping the CNMI’s lawsuit against the federal government seeking to halt the start of the Act will be thrown out before June 1, in order for CNMI officials to work with DHS on developing the regulations.

“We’re in the dark, and of course suing the federal government keeps us in the dark,” she said.

Reyes, for his part, said it is now up to Homeland Security to make their decision. The governor, delegate, House and business community have all expressed their desire for a delay, so it is now up to DHS, he added.

At any rate, some businesses, including tour agencies catering to Chinese and Russian tourists, have started rethinking their marketing strategies and reducing overhead costs in anticipation of a sure cut in revenue come June 1.

Top Development Inc. said that 50 percent of its clients are Chinese tourists who, along with Russian tourists, will soon be required to secure a U.S. visa to enter the CNMI.

“It’s really hard to plan everything until you know what’s going to happen but there are some things we started already. We reduced work hours of employees, and started saving on utility costs and other overhead costs,” said Pete Ladrillo, accountant at TDI.

He said for the past two years, TDI has seen a 10-percent increase in Chinese tourists but this will change once the Guam/CNMI visa waiver program takes effect.

Ladrillo said TDI finds it difficult to focus on Chinese tourists who are green card holders or who already have U.S. visas. He added that TDI may not be able to market in China until September, three months after the June 1 start of federalization.

“We will stick with our Japanese services. We already expect lower revenues when we wouldn’t have that many Chinese tourists anymore. They already know that it will be hard for them to come here by June 1. So we have started preparing for that,” Ladrillo added.

The possible loss of the Chinese market also worries multimillion casino investments proposed on Tinian. Bridge Investment Group, for example, has started re-evaluating its $40 million to $50 million casino and condominium projects on Tinian until the visa waiver program and the federalization regulations are in place. Construction at the project site has halted.

At the local Division of Immigration, Director Melvin Grey has a somewhat different, if practical, concern: Who will pay the salaries of local Immigration staff in case DHS grants the request for the 180-day delay?

“If they grant an extension then, we still have our authority. And then the issue comes in whether the CNMI would fund [the division] or if the feds would fund it until they do take over,” Grey said.

The Immigration director said they don’t have any “Plan A or Plan B” with respect to the implementation of federalization.

“If they [DHS] don’t allow an extension, then the CNMI Immigration has no authority beginning June 1” because the federal government will take over the CNMI’s overall immigration.

“So we just step aside. We walk out the floor at midnight of May 31st,” he said.

Grey said that, just like everybody else, they are just waiting for Homeland Security’s move because they are in control.

“They are the ones with the authority. They’re the ones that made this law and we are just sitting here thinking, ‘Okay, what are you going to do next? How you are going to do the regulations? What are you going to do on the transition? What date are you coming in?’” he said.

Federal immigration officials, Grey said, have been telling them that the implementation will be by June 1, and there has been no hint whether they will delay it.

The director said indications are that there will be an extension because Homeland Security has nothing on the ground yet.

“They have done nothing at the airport,” he pointed out.

Citing news articles that there’s no funding yet for the implementation, Grey said indications are that DHS is not ready by June 1, but they “haven’t told the CNMI for sure.”