It’s not just federal employees affected by the current impasse over U.S. government funding authorization, a/k/a the “shutdown.” In addition to air travelers, farmers, national park visitors and the Coast Guard, U.S. industry exporters and foreign investors may also find themselves delayed in obtaining licenses, classification rulings, advisory opinion issuances, national security reviews and other critical approvals. Such delays may jeopardize contract obligations (especially performance and approval times) and financing deadlines. Affected companies – and their counsel – should immediately review existing contracts and pending transactions to determine their obligations and potential liabilities, and where it might be possible (in the latter instance) to negotiate revised terms with counterparties.

As of this writing, the state of play with export- and investment-related agencies and authorities is as follows:

Office of the United States Trade Representative

As of yesterday, the Office of the United States Trade Representative (USTR) had furloughed roughly 2/3 of its staff, including the entire section reviewing Section 301 exclusion petitions. USTR officials indicated that no further action on such exclusions can be expected until funding is restored. In the meantime, senior USTR officials remain on the job in attending bilateral trade conferences aimed at resolving trade disputes and other administrative matters.

U.S. Department of Commerce

As a general matter, the U.S. Department of Commerce (“Department”) is closed; however, there has been varying impact on the operations of other related agencies.

  • Bureau of Industry and Security (BIS): Unlike the rest of the Department, BIS remains fully open and is pursuing enforcement actions, which (unlike licensing) are regarded as a “national security” function.
  • International Trade Administration (ITA): ITA, along with the Bureau of Economic Analysis, is functioning with only a “watchkeeping” and is unlikely to respond to calls or correspondence.

U.S. International Trade Commission

The U.S. International Trade Commission is closed. No economic impact or other reports will be issued for the time being.

U.S. Department of State

The Directorate of Defense Trade Controls (DDTC): DDTC has publicly advised that its services and staffing are currently significantly curtailed, specifically:

  • Electronic submissions to DTrade (the export licensing system) will be rejected and returned. Submissions pending at the time of the shutdown (12/21/18) will remain pending, but further action or review will not resume until after funding is again available.
  • The customary 3:00 p.m. drop-off/pick-up service is suspended.
  • Requests for licenses, advisory opinions and other actions will not receive a response, except for those pertaining to emergency support for military or disaster relief. If an applicant believes a pending or new request is in fact such an emergency, it should email DDTC Response Team, putting “Request for Emergency Response” in the subject line, and await guidance.

U.S. Department of the Treasury

Considerable operating limitations can also be seen within functions managed by the U.S. Department of the Treasury.

  • Office of Foreign Assets Control (OFAC): OFAC has advised that it is operating with limited capacity. All national security-related functions – administration of the Specially Designated Nationals and Blocked/Denied Persons lists and enforcement of currently authorized sanctions regimes – continue, but requests for responses to license applications, waivers, advisory opinions and other such business are likely to face substantial delays, for now. In addition, OFAC advises that its ability to engage with financial institutions and other parties with whom it routinely communicates is presently limited.
  • Committee on Foreign Investment in the United States (CFIUS or “Committee”): CFIUS is currently operating at greatly reduced capacity. The Committee has indicated that “certain national security functions” will continue to be performed; all other activities are “suspended.” Incoming investment reviews initiated prior to August 3, 2018 (the date of enactment of the Foreign Investment Risk Review Modernization Act of 2018) will continue in “caretaker” status. All other applications are tolled.

This may be especially problematic for those involved in investment transactions relating to the “critical technologies” cited in CFIUS’s recently announced pilot program, which requires certain mandatory notice filings. Further guidance may be forthcoming.


At present, there appears to be no clear path to resolution of the funding suspension, nor any timeline for the needed political action. Clients beset by transactional deadline commitments are urged to work with counsel to determine if the provisions in question can be modified, extended or waived.