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Sequestration: How It Will Affect Your Supply Chain

March 01, 2013

If the United States’ Congress does not act on a budget by close of its business day today, sequestration will take effect beginning March 1st, under sequestration, all government agencies will evenly take a budget cut. Included in those agencies affected are the U.S. Customs and Border Protection; the CPB is the enforcer and facilitator of its regulations as well as all those government agencies that impact the supply chain on imports and exports.

While notifications of furloughs do not go into effect until 30 days from notice, we expect to see an immediate impact on both imports and exports including an impact on exams of all types, increased wait time at border crossings and to complete document and data review on standard transactional shipments, etc. U.S. Secretary Napolitano states that it could take an additional five days on standard transactions for exams and clearances.

In comments made today by CBP, if sequestration occurs, there will be a slowdown in the processing of ruling requests.  The agency plans to utilize a risk-based approach on more of their discretionary functions such as programming, enforcement of intellectual property rights, and anti-dumping/countervailing.

Based on the above, we may see longer customs clearance times which could result in some additional fees being assessed from the steamship lines for having to hold onto containers longer than allowed.

Arpin International Group will continue to monitor this situation closely and continue to update as information becomes available.