The rule explicitly provided the administrator of FEMA with the authority to establish additional exemptions.
On April 21, 2020, the Federal Emergency Management Agency (FEMA) published a notice that establishes a number of exemptions to the rule issued earlier in the month that generally prohibited the exportation of various kinds of essential medical products without FEMA’s approval. As discussed below, these new exemptions make it easier to export the covered medical products under certain circumstances, although several of the exemptions require that a special letter of attestation be submitted to FEMA before the goods can be exported from the United States.
Recap of Rule Generally Requiring FEMA Approval for Exports of Covered PPE
Pursuant to the temporary final rule that FEMA issued on April 10, 2020, certain kinds of personal protective equipment (PPE) generally cannot be exported from the United States without the explicit approval of FEMA. As discussed in our Alert relating to this rule, the following materials are covered by the new regulatory regime (covered materials):
- N95 filtering facepiece respirators, including devices that are disposable half-facepiece, nonpowered, air-purifying particulate respirators intended for use to cover the nose and mouth of the wearer to help reduce exposure to pathogenic biological airborne particulates;
- Other filtering facepiece respirators (e.g., those designated as N99, N100, R95, R99, R100, or P95, P99, P100), including single-use, disposable half-mask respiratory protective devices that cover the user’s airway (nose and mouth) and offer protection from particulate materials at an N95 filtration efficiency level per 42 CFR 84.181;
- Elastomeric, air-purifying respirators and appropriate particulate filters/cartridges;
- PPE surgical masks, including masks that cover the user’s nose and mouth and provide a physical barrier to fluids and particulate materials; and
- PPE gloves or surgical gloves, including those defined at 21 CFR 880.6250 (exam gloves) and 878.4460 (surgical gloves) and such gloves intended for the same purposes.
In accordance with the rule, U.S. Customs and Border Protection (CBP) generally is required to notify FEMA when there is an intended export of covered materials. CBP must temporarily detain the intended shipment of the covered materials pending the determination by the FEMA administrator as to whether to return for domestic use or issue a rated order for all or part of the shipment. The one limited exemption to this general requirement set forth in the rule permits U.S. manufacturers to continue exporting covered materials if they have had export agreements with customers in other countries since at least January 1, 2020, so long as least 80 percent of their domestic production was distributed in the United States during the preceding 12 months. Significantly, though, the rule explicitly provided the administrator of FEMA with the authority to establish additional exemptions.
New Exemptions Relating to Various Kinds of Shipments of Covered Materials
Utilizing the authority granted to him by the temporary final rule, the administrator of FEMA established several new exemptions that are set forth in the April 21 notice. These exemptions include the following:
- Shipments to U.S. commonwealths and territories, including Guam, American Samoa, Puerto Rico, U.S. Virgin Islands and the Commonwealth of the Northern Mariana Islands (including minor outlying islands).
- Exports of covered materials by nonprofit or nongovernmental organizations that are solely for donation to foreign charities or governments for free distribution (not sale) at their destination(s).
- Intracompany transfers of covered materials by U.S. companies from domestic facilities to company-owned or affiliated foreign facilities.
- Shipments of covered materials that are exported solely for assembly in medical kits and diagnostic testing kits destined for U.S. sale and delivery.
- Sealed, sterile medical kits and diagnostic testing kits where only a portion of the kit is made up of one or more covered materials that cannot be easily removed without damaging the kits.
- Declared diplomatic shipments from foreign embassies and consulates to their home countries. These may be shipped via intermediaries (logistics providers) but are shipped from and consigned to foreign governments.
- Shipments to overseas U.S. military addresses, Foreign Service posts (e.g., Diplomatic Post Offices), and embassies.
- In-transit merchandise: shipments in transit through the United States with a foreign shipper and consignee, including shipments temporarily entered into a warehouse or temporarily admitted to a foreign trade zone.
- Shipments with final destinations of Canada or Mexico.
- Shipments by or on behalf of the U.S. federal government, including its military.
For exemptions 2, 3, 4, 8 and 9, a letter of attestation must be submitted to FEMA via CBP’s document imaging system and placed on file with CBP. The letter must contain the following information:
- A description of which exemption(s) the exporter is claiming.
- Details regarding the shipment that are sufficient for the CBP and FEMA officials to determine whether the shipment falls under the claimed exemption(s).
- A statement that the provided information is true and accurate to the best of the exporter’s knowledge, and that the exporter is aware that false information is subject to prosecution under the Defense Production Act, as outlined in the allocation order.
As further noted in the April 21 notice, in addition to the letter, the exporter also should provide CBP with other documentation related to the shipment.
Many Kinds of Shipments of Covered Materials Will Still Require FEMA Approval
As the discussion above indicates, the new exemptions are rather limited in scope. Entities wishing to utilize the new exemptions must take great care to ensure that their shipments meet all of the criteria for the use of a specific exemption, including submitting a letter of attestation to FEMA via CBP’s document imaging system and placing it on file with CBP when required.
For the many kinds of shipments of covered materials that will not qualify for any of the exemptions, it will be critical for companies to develop strategies for working effectively with FEMA and CBP to minimize or eliminate delays in their shipments. In a similar vein, foreign entities wishing to import covered materials from the United States will need to evaluate and select U.S. suppliers in a very discerning way to avoid disruptions in their supply chains. Given the stakes involved, entities with little experience with such matters should consider contacting experienced legal counsel who can assist in developing effective strategies to achieve their objectives.
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For More Information
If you have any questions about this Alert, please contact Geoffrey M. Goodale, Delphine O'Rourke, Michael E. Barnicle, any of the attorneys in our Government Contracts and International Trade Group, any member of the COVID-19 Strategy Team or the attorney in the firm with whom you are regularly in contact.
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