With no Cinderella story last night, as of October 1, 2013 at
12:01 AM, the Federal Government is officially shut down. As a
result, all "non-essential" federal workers will be
furloughed and federal agencies cannot continue their routine
operations. However, not all agency operations will cease. Agencies
can continue to provide essential services and those funded outside
the appropriation process. While the length of the shutdown still
remains uncertain, there will be a clear impact on trade operations
both domestically and around the globe.
The shutdown will have varying effects on each government agency.
For importers, Customs and Border Protection (CBP) will retain up
to 90 percent of its existing employees, while for exporters, the
Commerce Department's Bureau of Industry and Security (BIS)
will retain only 40 percent of its personnel.
U.S. Customs and Border Protection (CBP)
The following examples are illustrative of U.S. import
trade-related activities that will continue during a lapse of
appropriations:
- Passenger processing and cargo inspection functions at ports of
entry;
- CBP revenue collection; and
- Securing the nation's border by maintaining criminal law enforcement operations, including drug and illegal alien interdiction.
CBP further indicates non-exempt activities that will be curtailed
during the shutdown:
- Planning (strategic, business, budgetary, etc.), research and
development, auditing, and training activities;
- Most policy functions, administrative as well as programmatic,
unless those functions can be justified by an exception; and
- Regulatory, legislative, public, and intergovernmental affairs.
Food and Drug Administration (FDA)
FDA will continue to review imports offered for entry into the
U.S., but will cease certain safety activities, including some
compliance and enforcement activities, as well as the monitoring of
imports. Agency staff who conduct sample analyses on products will
continue to work, which is good news for companies whose products
have been or may be detained by FDA on import pending the outcome
of sample testing.
Department of Commerce
Bureau of Industry and Security (BIS): The
Department of Commerce's contingency plan outlines BIS
activities that will continue during a funding lapse. Commerce
notes that all Office of Export Enforcement (OEE) personnel are
considered essential for national security operations. Therefore,
the agency will continue investigations, prosecutions, and other
activities with DOD, DOJ, FBI, ICE, and other law enforcement and
intelligence agencies. In terms of export administration, BIS will
keep certain minimal activities in operation, such as:
- Processing export licenses essential to protecting the U.S.
national security;
- Evaluating transactions involving U.S. export-controlled items
to ensure they are exported in accordance with export control
requirements;
- Drafting amendments to the Export Administration Regulations to
address emergency foreign policy issues that warrant changes to
dual-use export control policies;
- Negotiating changes to international export control lists;
and
- Hosting international inspectors pursuant to U.S. non-proliferation treaty obligations.
International Trade Administration (ITA): ITA
would retain only 3 percent of its staff during the shutdown. ITA
has six officers who are based overseas to conduct pre-licensing
and post-shipment checks. According to Commerce's contingency
plan, these officers will continue to perform these
functions.
Department of State
The Department of State is less clear on which activities will
remain unaffected. However, the agency will continue to perform
functions necessary for "emergencies" involving the
safety of human life or the protection of property, including the
conduct of foreign affairs and other activities essential to
national security. The agency will be minimally staffed for the
duration of the shutdown.
Department of the Treasury, Office of Foreign
Assets Control (OFAC)
OFAC will continue to perform the following functions:
- Administering the Specially Designated Nationals (SDN) list and
enforce economic and trade sanctions;
- Implementation of and administering any new sanctions through
newly issued Executive Orders; and
- Limited handling of incoming inquiries via its telephone hotline.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.