As legal professionals, the potential implications of government operations coming to a halt due to a budget standoff in Congress are impossible to ignore. A federal government shutdown arguably holds significant effects on international trade and investment, a topic renowned for its intricate complexity and critical importance.
JdSupra, a reputed law casing and commentary platform recently shared some points about how a government shutdown will ripple through the network of international trade.
In particular, several government agencies tied to the regulation and management of international trade stand to be affected. These include the Department of Commerce’s Bureau of Industry and Security (“BIS”), U.S. Customs and Border Protection (“CBP”), the Census Bureau (“Census”), and the Committee on Foreign Investment in the United States (“CFIUS”).
The government shutdown implies that these agencies may find their work on hold, with wide-reaching impact. For example, BIS, which is instrumental in regulating exports for national security and foreign policy purposes, may cease processing filings during a shutdown.
This could have significant effects for corporations with export requirements. A similar scenario could unfold with CBP which is responsible for facilitating and regulating international trade. It could face delays in handling imported goods documentation, slowing the flow of global trade.
And for those working with investments involving US entities, CFIUS, responsible for reviewing foreign investments for national security concern, may also slow down its operation, potentially delaying or stalling foreign transactions.
In a nutshell, a government shutdown could vastly affect the wheels of international trade, potentially triggering delays, and increasing transaction complexity for domestic and foreign entities.