By Yeganeh Torbati
WASHINGTON (Reuters) - The Trump administration moved on Friday to end a program that aimed to attract foreign entrepreneurs to the United States, saying the Obama-era effort did not adequately protect American workers and was an inappropriate use of government authority.
The Department of Homeland Security's formal proposal to rescind the international entrepreneur rule, which is set to be published in the Federal Register next week, was widely expected given the administration had stated its intent to do so last year.
The program would have allowed foreign entrepreneurs to stay in the United States for up to five years to manage and grow start-up businesses.
DHS said in a filing on Friday that the program represented an "extraordinary use" of the agency's discretionary authority, that it "does not adequately protect U.S. investors and U.S. workers," and that Congress was better placed to create a special visa for entrepreneurs.
The Obama administration established the international entrepreneur rule in January 2017, shortly before former President Barack Obama left office, with an effective date of July 2017.
But last year the administration of President Donald Trump, which has moved to sharply curtail both legal and illegal immigration, delayed the program's effective date to March 2018, while also indicating it would later rescind it entirely.
Pro-immigrant groups criticized the decision.
"Eliminating this vital policy is a clear step in the wrong direction that will hurt job creation and middle class wage growth in the United States," said Todd Schulte, president of FWD.us, a nonprofit group which advocates for pro-immigration policies and was founded by tech executives including Facebook founder Mark Zuckerberg.
The National Venture Capital Association (NVCA), a trade group, sued DHS over the postponement, and a federal court in December ordered DHS to move forward with the program. That month, U.S. Citizenship and Immigration Services, a DHS agency, began accepting applications.
A USCIS spokesman said on Friday that the agency "has received approximately 12 applications for the IE program, but has not yet issued any final decisions."
This month NVCA filed a motion in federal court demanding to know whether USCIS "has adopted any policies or practices" that circumvent the December court ruling. It claimed that DHS "failed to take action" on the applications.
Jeff Farrah, NVCA's vice president of government affairs, said the group would continue to pursue that motion, regardless of the DHS decision.
(Reporting by Yeganeh Torbati, Editing by Rosalba O'Brien)