As of October 1, 2025, the US government partially shut down as federal funding lapsed for numerous US government agencies, including those engaged in export controls, sanctions, and foreign investment. As a result, companies should expect licensing processing and reviews to be significantly delayed. Investigative activity and enforcement actions related to US national security, however, will continue as agencies and federal workers deemed “essential” will continue to carry out such operations. Below is an overview of the relevant agencies and potential impacts.
Department of Commerce – Bureau of Industry and Security
The Department of Commerce, Bureau of Industry and Security (“BIS”) is responsible for export license applications, advisory opinions, and commodity classification requests covered by the Export Administration Regulations. BIS operations were affected in prior shutdowns. BIS will likely suspend regular services, such as processing for export license applications, commodity classification requests, encryption reviews and registrations, and advisory opinion requests, except in extraordinary circumstances essential to national security. While companies should anticipate potential delays in securing export licenses or other determinations from BIS, export controls enforcement activities are expected to continue.
Department of State – Directorate of Defense Trade Controls
The Department of State, Directorate of Defense Trade Controls (“DDTC”) is responsible for US registrations, export licenses, and renewal requests covered by the International Traffic in Arms Regulations. The DDTC’s activities were impacted in prior shutdowns. DDTC will likely experience significant delays in its operations as a result of the downsized staffing, and will prioritize only license application requests pertaining to urgent causes, such as military and humanitarian aid needs. Exporters of defense articles and defense services should anticipate delays for less urgent requests. DDTC services requiring interagency review, such as Commodity Jurisdiction determinations, will likely cease or be substantially reduced. While licensing activities may be halted, exporters are expected to maintain access to ACE in order to submit mandatory Electronic Export Information to the Automated Export System, as required by the Census Bureau.
Department of the Treasury – Office of Foreign Assets Control
The Department of the Treasury, Office of Foreign Assets Control (“OFAC”) is responsible for oversight and enforcement of US sanctions and embargos. OFAC operations were affected in prior shutdowns. OFAC will likely prioritize sanctions enforcement activities, including administering the Specially Designated Nationals List (SDN List”), issuing new sanctions designations, and handling sanctions-related inquiries on a limited basis. While enforcement activities will continue, companies should be prepared for longer wait times or the full suspension of OFAC’s review of voluntary disclosures, license applications, petitions for removal from the SDN List, and other communications. During previous shutdowns, OFAC noted that its reduced staffing impacted the agency’s ability to communicate with financial institutions and other key sectors for sanctions compliance and enforcement. In addition to reduced sanctions licensing and compliance activities, Treasury will likely have impaired regulatory activity related to anti-money laundering and counter-terrorism operations.
Committee on Foreign Investment in the United States
The Committee on Foreign Investment in the United States (“CFIUS”) is responsible for oversight, approval, and mitigation for Foreign Ownership Control or Influence on non-US investments in US businesses with certain controlled technologies, real estate, or critical infrastructure, or sensitive personal information. CFIUS will likely delay the formal acceptance of new filings until after the shutdown to avoid the tolling of statutory review deadlines. As a result, those intending to submit either a mandatory notice or voluntary declaration should expect CFIUS to extend the review period and delay clearance. Filings that have already been submitted with CFIUS will toll until the government shutdown ends. For example, if the government is shut down for 10 days, an additional 10 days will be added to any 30-day declaration assessment or 45-day notice review or investigation period. Enforcement should not be impacted by the shutdown.
