Will there be an issue applying for him because of the 10 year bar? Will be the bar ignored, and he just have to wait few years because of the processing time?
The time siblings of U.S. citizens wait for an immigrant visa is about 13 years (natives of Mexico - 18 years, natives of Philippines - 24 years). It is not a processing time but the delay due to the fact that there are many times more immigrant petitions when the quota of visas allocated each year by the Congress. If you file a petition for your sibling now, by the time his or hers wait is over, the 10-year bar for an overstay will be completed and no longer a problem.
Generally, someone who is out of status, such as by overstaying a visa, will be ineligible to adjust status in the U.S., and instead must go abroad to go through Consular Processing. If the foreign national sibling has been unlawfully present in the U.S. for more than a year, he may be subject to a very harsh 10-year bar to re-entering the U.S. Aside from this issue, be aware that there is a very long backlog for visas in the Family-based Fourth Preference category (for siblings of U.S. citizens), and while it is difficult to predict the length of the backlog, it could take 15 - 20 years (or even longer) for a visa to become available, and this is a significant reason why an immigration strategy in this category rarely is a satisfactory plan.
The citizen can certainly file the visa petition for the sibling in Germany and it would normally be approved. The "bar" issues arise when the quota number is reached many years from now.
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