On Tuesday, April 7, 2020, the Federal Emergency Management Agency (FEMA), under the Department of Homeland Security (DHS), issued a temporary final rule, under the authorization of the Defense Production Act (DPA), to allocate certain types of personal protective equipment (PPE) for domestic use and prohibit such PPE from being exported from the United States without prior express approval from FEMA.
The temporary rule became effective on April 7, 2020 and will be effective for approximately four (4) months, until August 10, 2020, and covers five (5) types of PPE ("Covered Materials"), namely:
- N-95 filtering facepiece respirators, including devices that are disposable half-facepiece non-powered air-purifying particulate respirators intended for use to cover the nose and mouth of the wearer to help reduce wearer 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.
The definition of Covered Materials is consistent with an April 3 memorandum from the White House defining the scope of PPE. Notably, the definition of Covered Materials is intended to reflect domestic scarcity and could be broadened to include other categories of goods, such as face shields or food safety gloves, that are not currently identified in the enumerated Covered Materials categories. The rule retains the authority to designate additional materials as "Covered Materials" in a subsequent Federal Register notice.
FEMA indicated that, in determining whether to detain a shipment, the agency will consider the totality of the circumstances, including: (1) the need to ensure that scarce or threatened items are appropriately allocated for domestic use; (2) minimization of disruption to the supply chain, both domestically and abroad; (3) the circumstances surrounding the distribution of the materials and potential hoarding or price-gouging concerns; (4) the quantity and quality of the materials; (5) humanitarian considerations; and, (6) international relations and diplomatic considerations.
The original rule contained a carve out in the interest of "national defense," which allowed for the export of Covered Materials made by or on behalf of U.S. manufacturers that have had continuous export agreements with customers in other countries since at least January 1, 2020, as long as at least 80 percent of the U.S. manufacturer's domestic production of Covered Materials, on a per-item basis, was distributed in the United States in the preceding 12 months. The intent behind the exemption is to limit the impact of the temporary rule on pre-existing commercial relationships and for humanitarian purposes.
On April 17, 2020, FEMA authorized ten (10) additional exemptions to the export prohibition, summarized as follows:
- 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 non-profit or non-governmental 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 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, 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 (FTZ);
- Shipments for which the final destination is Canada or Mexico; and,
- Shipments by or on behalf of the U.S. federal Government, including its military.
U.S. Customs and Border Protection (CBP) is authorized to detain Covered Materials intended for export while FEMA conducts a review of the shipment and makes a determination to allocate the shipment for domestic use, or to permit the export, in whole or in part, in the interest of national defense. CBP issued guidance with respect to its enforcement of the export restrictions and exemptions. In order to qualify for exemptions 2, 3, 4, 8, and 9 listed above, CBP notes that FEMA requires a letter of attestation, submitted via the document imaging system (DIS).
The temporary restriction on exports is consistent with similar regulatory initiatives to increase the availability of PPE in the United States. The Food and Drug Administration (FDA) recently released several Final Guidance documents relaxing various regulations to help facilitate the import of face masks and respirators and gowns, other apparel, and gloves during the COVID-19 public health emergency. In addition, CBP recently set up a COVID-19 Cargo Resolution Team, with a dedicated email address (COVID19_RELIEF_IMPORTS@cbp.dhs.gov), to address issues raised by importers of PPE and other COVID-19-related medical supplies, as outlined by CBP.
For more information about this announcement, how it may impact your business, whether the PPE goods related to your business meet the definition of Covered Materials, or whether you may qualify for the exception to export PPE, please reach out to Venable's International Trade Group and Food and Drug Law Group.