BIS, DDTC, OFAC to Suspend Most Licensing During Government Shutdown
Processing of most export license applications, as well as sanctions licenses, will pause during the government shutdown that began Oct. 1, although export enforcement operations and national security-related investigations will continue, the Commerce, State and Treasury departments said this week.
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Commerce’s shutdown plan said the agency will review and process “emergency license applications and draft regulations” involving U.S. and allied military activity and the “protection of U.S. property and human life.” The Bureau of Industry and Security has suspended the processing of most other export license applications during previous government shutdowns (see 2309280081).
The State Department’s Directorate of Defense Trade Controls also said export licenses won’t be processed, nor will other services offered by the Defense Export Control and Compliance System, such as submissions for registrations, speaker requests, customer support, advisory opinions and commodity jurisdiction determinations. Any requests “currently in process” at DDTC as of Sept. 30 “will remain in that status,” the agency said, adding that “further review of actions that do not fall under ‘excepted’ functions will be delayed until after the restoration of funding and resumption of operations.”
Those "excepted" functions include activities “necessary to respond to emergencies involving the safety of human life or the protection of property, and those necessary for activities essential to national security, including the conduct of foreign affairs essential to national security,” DDTC said.
Exporters and other members of industry that believe they have a submission under review or a new submission that should be excepted should email the DDTC Response Team at DDTCCustomerservice@state.gov. The subject line must read "Request for Emergency Submission," and the message must include the case number (if the case is already pending with DDTC), the applicant name and registration code, the end use and end user for licenses and agreements, and the “justification for needing an emergency license,” the agency said. “DDTC will contact the requestor with guidance on how to proceed.”
Treasury said sanctions licensing at the Office of Foreign Assets Control will “cease” during the government funding lapse. The agency's OFAC licensing portal was shut down as of Oct. 1 with a message informing users: "The Federal Government is currently closed. Applications submitted through the Office of Foreign Assets Control (OFAC) online License Application System during this time will NOT be processed. You may submit your application online upon the re-opening of the Federal Government, and it will be processed at that time."
In a Sept 30 client alert, Foley Hoag said companies seeking specific licenses or regulatory guidance "should expect significant delays except for urgent requests related to U.S. national security and foreign policy priorities or humanitarian assistance." The law firm also said OFAC’s communications with banks and other financial institutions may be "delayed."
But Treasury said it will continue certain investigations to “ensure continuity of key regulatory and enforcement actions,” including through the “administration and enforcement of economic and trade sanctions, and monitoring and dissemination of terrorism and financial intelligence reporting.” The agency will also continue to “administer” OFAC’s Specially Designated Nationals List and put in place new sanctions on countries, people or entities.
Commerce also said all export enforcement operations within BIS will continue during the shutdown, including the “ongoing conduct of criminal investigations and prosecutions and coordination with other law enforcement and intelligence agencies in furtherance of national security.” BIS special agents will continue to conduct investigations, and BIS headquarters and field offices will continue “monitoring open investigations, opening new cases, and responding to all contingencies, including actions to prevent or stop illegal exports that might arise during a lapse of appropriations.”
BIS officials will also continue to review “intelligence and export transactions, providing bona fides analyses of any emergency license applications received, targeting end-use checks to support the work of” overseas export control officers and analysts, and providing “analytical investigative support to BIS special agents to prevent or stop illegal exports that might arise during a lapse of appropriations,” Commerce said.
Commerce's shutdown plan indicates BIS will "remain heavily staffed," Brownstein said in a client alert, noting that more than three-quarters of its personnel is excepted.
Foley Hoag also said the Census Bureau likely will continue to allow access to the Automated Commercial Environment, so exporters should be prepared to continue to submit mandatory Electronic Export Information. Enforcement by Census "will also likely continue during the shutdown," the firm said.