Sequestration: How it Will Affect Your Supply Chain
Thursday, February 28, 2013
If our Congress does not act on a budget by close of their business day today, sequestration will be in affect beginning tomorrow, March 1. Under sequestration, all government agencies will evenly take a budget cut. Included in those agencies affected are the U.S. Customs and Border Protection; who is the enforcer and facilitator of its regulations as well as all those government agencies that impact your supply chain on imports and exports.
While notifications of furloughs do not go into affect until 30 days from notice, we will see on both imports and exports immediate impact on exams of all types, wait time at border crossings, and document and data review on standard transactional shipments. Secretary Napolitano states that it could take an additional five days on standard transactions for exams and clearances.
In comments made today by CBP, there will be a slow down in the processing of ruling requests. The agency is going to utilize a risk-based approach to more of their discretionary functions such as programming, enforcement of intellectual property rights, and anti-dumping/countervaling.
The Animal and Plant Health and Inspection Service (APHIS) is unlikely to need to furlough its employees, but will shift responsibilities to other employees. This is also true of the Food and Drug Administration (FDA). Still, the import process relies heavily on conditional releases from CBP, meaning that delay will create delays elsewhere in processing.
Mallory Alexander is monitoring the progess made by Congress and its affect on trade. We will communicate any updates as soon as received.
*Sources: LACBFFA, speech by Secretary Napolitano to the Senate Appropriations Committee, and speech by Al Gina at the International Consumer Product Health and Safety Organization.