Impact of Government Shutdown

Co Authored by Omar Franco 

The impact of the federal government shutdown, which began October 1, 2013, will be deeply felt by importers and exporters alike. Most government services deemed "essential" by the federal agencies will continue, but “non-essential” services will be discontinued until funding is restored.

This early on, there is no obvious resolution of the budget dispute to tie the FY-2014 government funding to Affordable Care Act (ACA) reforms. Both the House and Senate are entrenched in their positions and they are not scheduled to negotiate any time soon. One side will have to capitulate or bipartisan negotiations will have to lead to a resolution. We feel that negotiations will probably not occur this week as both sides need to assess how the markets and voters will respond to the federal government shutdown. Depending on the public response, we will see movement by one side, probably by Republicans, if the reaction is seen as damaging. As of today, the Dow was up, so the market reaction has been subdued. The reaction from voters is still unknown, but if it is subdued as well, the shutdown will be prolonged. We anticipate the shutdown will last through this week at a minimum.

Some lawmakers are considering broadening the debate by including the debt ceiling. Pressure from resolving the government shutdown could also resolve the debt ceiling issue. The longer the shutdown continues, the more likely the resolution will be tied to the debt ceiling. We do foresee a resolution emerging, however, we do not have any real idea as to what the time frame will be.

To get a glimpse of the impact on the importing and exporting community, we've included updates from the BIS and ITC below.

For example, on the export side, the Department of Commerce's Bureau of Industry and Security (BIS) has this note on its website -- they are completely SHUT DOWN, and not accepting licenses - except for emergencies.  See more here:

The Federal Government is currently shut down due to a funding lapse. As a result, the Department of Commerce's Bureau of Industry and Security (BIS) is no longer accepting export license applications, classification requests (CCATS), encryption reviews, encryption registrations, or advisory opinion requests. Similarly, BIS will not be issuing any final determinations. The SNAP-R application on BIS's Website is not available and will not reopen until the Federal Government shutdown ends. All pending export license applications, commodity classification requests, encryption reviews, encryption registrations, and advisory opinion requests will be held without action by BIS until the shutdown ends.
Applicants may request emergency processing of export license applications for national security reasons by submitting email requests to Deputy Assistant for Export Administration Matthew Borman.

The subject line of the email should read "Request for Emergency License" and the email must identify the applicant (including point of contact), intermediate and ultimate consignees, and end user(s), items, end use, and national security justification for the emergency processing.

On the import side, the impacts are distinctly felt with the U.S. International Trade Commission (ITC).  The interactive HTS that I love is not active - and ADD/CVD investigations are tolled.  CUSTOMS Info Global Data Mining has taken the opportunity to present a PDF copy of the HTSUS during the ITC's hiatus here (note you will have to provide your contact information).
See the latest from the ITC's website:

The U.S. International Trade Commission will shut down its investigative activities for the duration of the absence of appropriation. These activities include, but are not limited to, proceedings conducted under the authority of Title VII of the Tariff Act of 1930, including antidumping and countervailing duty investigations and reviews; investigations and ancillary proceedings conducted under the authority of section 337 of the Tariff Act of 1930; and investigations conducted under the authority of section 332 of the Tariff Act of 1930.

Investigations tolled 

During shutdown, the schedules and deadlines for all investigative and pre-institution activities will be tolled. All hearings and conferences will be postponed, subject to the exceptions described below. Once the Commission receives funding and the period of the shutdown ends, all schedules will resume starting with the day on which the Commission recommences operations. For example, if the shutdown lasts four days (e.g., October 1-4), then the deadline for the filing of any document on October 4 would be extended four days to October 8. If a rescheduled deadline falls on a nonbusiness day, the deadline will be extended to the next business day. The agency may reconsider schedules after resuming operations.

Exceptions

Notwithstanding the general tolling of schedules:
The staff conferences in preliminary phase antidumping and countervailing duty investigations scheduled to take place on October 7, 2013 and October 9, 2013 will take place as scheduled if the Commission resumes operations by October 3, 2013. Should the shutdown not end before October 3, 2013, all conferences will be rescheduled pursuant to the general tolling provisions described above.

The hearing in the Hot-Rolled Steel five-year reviews scheduled for October 3, 2013 will take place as scheduled if the Commission resumes operations by October 2, 2013. Otherwise, this hearing will be rescheduled upon further notice.

The hearing for Investigation No. 332-541, Trade Barriers that U.S. Small and Medium-Sized Enterprises Perceive as Affecting Exports to the European Union, scheduled to take place on October 8, 2013 will take place as scheduled if the Commission resumes operations by October 3, 2013. Otherwise, this hearing will be rescheduled upon further notice.

Website

During shutdown, the online services provided on the Commission's World Wide Web site, at www.usitc.gov, will be unavailable. This includes:

• USITC website
• EDIS
• DataWeb
• HTS Online Reference Tool
• All phone communication with USITC staff
• Restoration of service is expected as quickly as possible after appropriations become available.

If you have an questions on how the shutdown will impact your business contact Omar or me anytime.