Experts: Cargo Clearance From PGAs May Slow During Shutdown; AD/CVD Investigations to Pause

A group of Venable lawyers in the firm's international trade group wrote earlier this week that the shutdown's effects on partner government agencies (PGAs) that help to process imports, including the FDA, EPA and USDA, could cause "slower clearance of shipments subject to review."

Michael Ford, from TradeBridge Consulting, was more negative about how PGA clearance could be hindered by a shutdown. "Cargo release by PGAs will vary depending on their operational capacity. If an importer receives a 'may proceed' message, the shipment should proceed as planned. If there are ongoing issues, the shipment may need to be redelivered, with CBP handling the redeliveries on behalf of the PGAs," he wrote. However, he does expect FDA trade functions, such as prior notice processing, to continue as normal.

The Venable lawyers wrote, "a shutdown appears more likely by the day...." The U.S. Senate is currently debating a bill that would fund the government at current spending levels from Oct. 1 through Nov. 17, and procedural votes show it has strong bipartisan support, but because of Senate rules, that bill may not get a vote before 12:01 a.m. on Oct. 1. However, the main source of uncertainty is in the House of Representatives, where a short-term continuing resolution is not even on the table. Instead, the House is trying to pass full-year spending bills that cut spending by 8% in all non-defense areas. Even if all Republicans vote for those bills in the House, and they pass that chamber, they would be dead on arrival in the Senate, which is adhering to a deal that House Speaker Kevin McCarthy, R-Calif., made with the administration in May on topline spending numbers.

"Since the length of the impending government shutdown remains uncertain, the trade industry must prepare for impacts on trade operations for importers, exporters, transportation and logistics companies, customs brokers, and all other parties involved in global trade involving the United States," the Venable lawyers wrote.

The National Customs Brokers & Forwarders Association of America is making calls to government agencies to try to prepare its members for a shutdown. However, they noted the situation is fluid and can continue to change. The group is holding a webinar on the shutdown on Sept. 29.

CBP has told them that import specialists, entry specialists, liquidation specialists, FP&F specialists, agriculture specialists, international trade specialists, CBP officers and center directors will all work through the shutdown. At CBP headquarters, the Office of Trade and the Office of Field Operations leaders will also be required to work.

Ford, from TradeBridge Consulting, said some information technology staff and Fines, Penalties, and Forfeitures staff will also work through the shutdown.

"CBP would likely suspend work on rulings (although the eRulings portal would still accept requests), regulatory audits, and refunds (such as drawback, protests, post-summary corrections, although applicable interest will eventually be paid)," he wrote.

He said deadlines for protests and drawback claims, responses to audits and the like will not be loosened, but the agency's "own responses may not adhere to normal timelines."

Antidumping and countervailing duty investigations and reviews will be halted by the shutdown, Venable lawyers wrote, though enforcement of orders would continue.

NCBFAA says that Enforce and Protect Act allegations of trade fraud will also not be investigated. They agreed with Ford that there would be no rulings, and added that there would be no quota monitoring, though quota entries would be accepted.

No new customs broker licenses will be issued during the shutdown, the group said, and commercial requests for ITRAC information will also go unanswered.

In preparation, NCBFAA has downloaded the full Harmonized Tariff Schedule in case there are IT problems at the International Trade Commission that make it impossible to access. "We will also be doing daily blasts to members if the government does experience a lapse in funding. We are also asking our local associations to try and get contact details for all aspects of their local ports so that if we shut down we will at least have a place to start looking for issue resolution. We are doing our best to support our members as they keep trade moving during any trade interruption," NCBFAA Executive Vice President Megan Montgomery said.

Venable said the Federal Maritime Commission will do only emergency assistance. Traders "will be unable to contact the Commission; access the FMC online databases such as the Agreements Notices & Library; or submit new filings or applications, such as ocean transportation intermediary licenses, service contracts, tariff registrations, vessel-operating common carrier and marine terminal operator agreements, certifications of financial responsibility for cruise lines embarking from U.S. ports, and agreement reports. Formal and informal adjudicatory and investigatory proceedings pending before the FMC or the administrative law judges are also expected to be temporarily suspended until the government reopens," the lawyers wrote.

The Office of Management and Budget posted shutdown contingency plans for all agencies, though not all have been updated since the last shutdown.

The Commerce Department will shut down its steel import licensing system during the shutdown, it said in a contingency plan from September 2021. “All steel mill imports into the United States require a license issued by the Steel Import Monitoring and Analysis (SIMA) office. The team needs to inform affected users, set up a temporary import license number, and coordinate with [CBP] to ensure that the flow of imports is not impeded.”

Although AD/CVD administrative processes would be halted, Commerce lawyers will continue to support DOJ lawyers involved in AD/CVD litigation in the Court of International Trade and elsewhere “on an as-needed/limited basis,” and some economic and trade analysts will also be needed to support litigation as well, Commerce said in its plan. “Failing to meet court-ordered deadlines during a lapse in the Department’s appropriations may result in loss of opportunity to defend the agency or findings of contempt to comply with court orders,” Commerce noted.

Commerce also will continue its activities related to a suspension agreement on uranium with Russia, which requires Commerce approval for CBP to release shipments. “Failure to coordinate clearance of uranium shipments with CBP could result in the physical loss of uranium which would create a public safety and national security risk,” Commerce said in its plan.

Food inspections for safety continue during a shutdown, whether through Commerce, for seafood, or the Animal and Plant Health Inspection Service, for fruits and vegetables.

APHIS will continue to provide preclearance and inspection services for fruits and vegetables, which is funded by trust funds, and also will continue its user-fee-funded animal quarantine and inspection activities, including after business hours, as well as its phytosanitary certificate activities, according to a contingency plan from USDA that dates from 2020.

The Agricultural Marketing Service said in the same document that it will continue voluntary and mandatory grading, classing and inspection services, as well as its administration of marketing agreements and orders.