On Thursday, the U.S. House of Representatives passed a stopgap bill to fund the federal government, avoiding a shutdown just before the weekend deadline. The measure will fund the government through early March.
The Senate passed the bill 77-18, while the House passed the measure 314-108, with 106 Republicans and two Democrats in opposition. Party leadership statements were varied. Freedom Caucus Chairman Bob Good told reporters: “It’s a loss for the American people…” Senate Majority Leader Chuck Schumer said on the Senate floor: “We have good news for America. There will not be a shutdown on Friday.” The lack of consensus signals that there is much work to be done to avoid a shutdown in March.
While many employees in key agencies for international trade will be deemed “essential,” meaning they will continue working through a shutdown, agencies will still experience operational changes that will cause delays.
Below is a breakdown of how key agencies will be impacted by a future shutdown.
U.S. Customs and Border Protection
According to the Department of Homeland Security’s contingency plan, cargo security and port of operations will remain active during a shutdown. However, certain activities such as training and auditing are not required to be carried out during this time. In addition, back-office support positions are not likely to be deemed essential and will be furloughed. Refunds, audits, ruling requests, etc. would be delayed until the shutdown ends.
There remains uncertainty around which specific offices will be deemed essential. For example, Forced Labor Communications may be furloughed, resulting in delays in reviewing Enforce and Protect Act (EAPA) and Uyghur Forced Labor Prevention Act (UFLPA) allegations.
U.S. Department of Commerce
According to the Department of Commerce’s contingency plan, some International Trade Administration (ITA) activities such as trade policy negotiations will be considered necessary for national security and will operate during a shutdown.
However, many other activities are not likely to be deemed essential. For example in the last shutdown in 2019, the ITA and the Bureau of Industry and Security operated with a significantly reduced staff and budget. All antidumping and countervailing duty (AD/CVD) investigations and administrative proceedings will stop.
U.S. Department of Treasury
Under the Department of Treasury’s contingency plan, administration and enforcement of economic and trade sanctions will continue. However, the Office of Foreign Assets Control (OFAC) licensing is explicitly listed as an agency activity that will cease during a shutdown.
U.S. Department of State
Many offices and activities under the Department of State are considered critical national security functions and will not be significantly disrupted. However, according to the department’s contingency plan, many administrative functions will be subject to furloughs which will result in a delay in licensing and other regulatory functions.
Food and Drug Administration (FDA)
Unlike many other agencies that are funded solely by government appropriations, the majority of FDA staff (64%) is funded by other revenue (agency fees) and is therefore exempt from a government shutdown. According to the agency’s contingency plan, an additional 17% of FDA staff are considered essential and will continue work through a shutdown. Entry reviews and exams will continue as well as high risk investigations. However, importers should expect delays in the processing of import transactions.
While many agencies and employees critical to international trade will not be subject to furloughs during a shutdown, companies should still expect delays and disruptions. Diaz Trade Law will continue to monitor developments and provide updates when they become available.