How the ongoing federal shutdown is disrupting export licensing, compliance timelines, and your global operations
As the government shutdown drags on, many U.S. exporters, especially in defense, aerospace, and advanced technology, are feeling the ripple effects.
Licensing reviews are stalled, communication from key agencies has slowed, and compliance deadlines are in limbo.
At Maribod Global, we’re helping clients navigate the uncertainty. Here’s what’s actually happening, how it affects your business, and what you can do now to stay compliant and operational.
1. Key agencies have gone quiet
The biggest immediate impact is at the Department of State (DDTC) and the Department of Commerce (BIS) the agencies responsible for issuing export licenses under ITAR and EAR.
During a shutdown:
- Most DDTC and BIS staff are furloughed.
- Only emergency national security and law enforcement functions remain active.
- Licensing, registration renewals, and commodity jurisdiction requests are delayed until funding resumes.
If your export operations depend on these approvals, expect slow or no movement until the government reopens.
2. Expect delays in export licenses, renewals, and agreements
If you’ve submitted an application for an ITAR license, Technical Assistance Agreement (TAA), or Manufacturing License Agreement (MLA), it’s likely sitting in the queue.
BIS and DDTC processing times are already lengthy in normal circumstances; this shutdown compounds that delay. Once operations resume, the agencies will face significant backlogs.
That means exporters should plan for months, not weeks, before seeing new approvals move forward.
3. Compliance obligations don’t pause, even if the government does
It’s important to remember: A government shutdown doesn’t suspend export laws.
Companies must still:
- Maintain all ITAR and EAR compliance procedures.
- Prevent unauthorized exports or transfers of controlled technical data.
- Continue to screen transactions and foreign parties.
- Protect controlled information under your Technology Control Plan (TCP).
Even though licensing and communication are delayed, your compliance accountability continues uninterrupted. Regulators will expect documentation showing that you maintained control during the shutdown period.
4. Enforcement actions may resume suddenly
While active enforcement cases and voluntary disclosures are largely paused, the moment the shutdown ends, investigations and audits will restart, often with renewed scrutiny.
Exporters should:
- Keep internal audit records current.
- Document every communication attempt with government contacts during the shutdown.
- Track license expiration dates closely and be ready to file renewals immediately once systems reopen.
Proactive documentation now can protect your company later when regulators catch up on their caseloads.
5. Contract and delivery impacts for defense & space firms
For companies supporting Department of Defense, NASA, or other federal contracts, expect ripple effects:
- Export-controlled project milestones may slip.
- Delivery schedules tied to export approvals may need formal modification.
- Billing or payment schedules tied to federal milestones could be delayed.
If your export license is pending and your project timeline is tied to it, coordinate with your contracting officer early to mitigate financial and performance risk.
What your company should do now
Here’s how to stay ahead while the government is still partially shut down:
- Identify open filings: Create a list of all pending export licenses, renewals, and agreements.
- Communicate internally: Make sure your engineering, sales, and project teams know what can and cannot move forward.
- Secure your data: Double-check that all export-controlled technical data is properly protected and access is restricted.
- Document everything: Keep a record of submission dates, communications, and the shutdown’s impact on your workflow.
- Plan for the backlog: Once the government reopens, prioritize urgent filings and anticipate multi-week response delays.
Bottom line
The ongoing shutdown underscores a key truth in export compliance: resilience matters. Your ability to maintain compliance under uncertainty is as important as your ability to meet delivery schedules.
At Maribod Global, we help defense, space, and technology firms build compliance programs that stand up to volatility, whether it’s regulatory change, licensing backlogs, or political gridlock.
Need help navigating the shutdown’s impact on your export program?
Maribod Global can help you assess your licensing exposure, document compliance actions, and prepare for post-shutdown resumption. Contact us today to stay ready and confident, in compliance.
Does your company need help with navigating the government shutdown and export compliance? Contact Maribod Global today!
