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"Visa delays have cost US $30bn in 2 years"
by Edward Alden in Washington
Financial Times
June 2, 2004

Corporate America has suffered $30.7bn (£16.8bn) in lost revenue and other costs over the past two years as a result of delays in visas for foreign business travellers, according to eight US business organisations.

The finding marks the first serious effort by US business to quantify the impact of security restrictions put in place since the September 11 terrorist attacks.

A survey, to be published on Wednesday, found that nearly three-quarters of companies had experienced unexpected delays or arbitrary denials of business visa applications, while 60 per cent said the delays had hurt their companies through increased costs or lost sales.

In addition, more than half the 734 companies surveyed said the visa process was worse today than a year ago.

"Our companies have expressed growing frustration to government officials and Congress for nearly two years over the broken business visa system, to no avail," said Bill Reinsch, president of the National Foreign Trade Council, which represents many large US companies. The survey's sponsors include the Aerospace Industries Association and business councils representing US companies in Russia, China and Vietnam.

The findings come as the Bush administration is close to completing a review of visa restrictions that government officials say is likely to result in some streamlining of the procedures to address growing concerns from universities, business, and the travel industry.

In the wake of the September 11 attacks, the US began to require time-consuming security checks of a variety of potential travellers to the US.

The severest impact on business has come from procedures implemented in July 2002 that require background checks of anyone, including potential foreign business customers, who is working with technologies deemed sensitive for national security reasons, such as aerospace, chemicals or advanced computers. About 14,000 visa applicants were reviews under that programme last year.

The US government has acknowledged problems arising from visa delays, but says the situation is improving. Janice Jacobs, deputy assistant secretary of state for consular affairs, said that while serious backlogs occurred in 2002, "we are much, much better than we were".

She said that average processing times for visas that required security reviews had been cut in half, and about 80 per cent were decided within three weeks.

But she said that the technology-related background checks "have figured prominently" in the administration's current review of its visa policies.

The survey showed most delays involved business travellers from China, India and Russia, none of which is considered a potential source of terrorists. The next hardest hit were Malaysia, Indonesia and South Korea.

Of the companies surveyed, the total financial impact was put at $45m. The figure of $30.7bn over nearly two years was reached by estimating the impact across the economy. Medium-sized companies were hit harder than large companies, most likely because many cannot afford to hire immigration lawyers to help expedite visa applications.

This file was updated on June 2, 2004