On August 10, 2020 the Federal Emergency Management Agency (“FEMA”) published a modified list of goods covered by its temporary rule requiring authorization from FEMA to export the articles. The rule was also extended to December 31, 2020.
In response to the increasing incidence of COVID-19 in the United States, as well as reports that large volumes of essential PPE had been exported from the U.S. in the months of January and February, the Trump Administration issued a series of Executive Orders (13909-13911).Combined with a Presidential Memorandum on “Allocating Certain Scare or Threatened Health and Medical Resources for Domestic Use” these Orders delegated authority to the Department of Health and Human Services (“HHS”) in conjunction with the Federal Emergency Management Agency (“FEMA”) to “allocate certain scare or threatened materials for domestic use” under the authority of the Defense Production Act of 1950.
On April 10, 2020, FEMA issued a temporary rule, effective from April 7, 2020 until August 10, 2020, designating as “scare or threatened materials”: 1) N95 filtering facepiece respirators; 2) Other filtering facepiece respirators (e.g. N99, N100, R95, R99, R100 or P95, P99, P100); 3)Elastomeric, air-purifying respirators; 4) PPE surgical masks; 5) PPE gloves or surgical gloves. Under the temporary rule, CBP is to detain any export shipments of the scarce or threatened materials during which time FEMA will determine whether to return the goods for domestic use, issue a rated order for, or allow the export of part or all of the goods.
In determining whether it is necessary to purchase or allocate the goods for domestic use, FEMA considers the following: 1) the need to ensure goods are appropriately allocated for domestic use; 2) minimizing disruption to supply chains; 3) hoarding or price-gouging concerns; 4) quantity and quality of the goods; 5) humanitarian considerations; 5) diplomatic considerations. The rule contains an exemption for shipments of covered goods made by or on behalf of U.S. manufacturers with continuous export agreements with customers in other countries since at least January 1, 2020 so long as at least 80 percent of such a manufacturer’s domestic products was distributed in the U.S. in the preceding 12 months.
On August 10, 2020 FEMA modified its temporary rule and extended its effective dates to August 10, 2020 until December 31, 2020. The list of scare or threatened materials has been modified to reflect current domestic needs. The remaining covered goods continue to be subject to allocation for domestic use and may not be exported from the United States without explicit approval by FEMA. The following modifications to the covered list have now been put into effect:
- PPE gloves and surgical gloves remained covered goods, but the scope is narrowed to only encompass nitrile gloves. Domestic supply for latex and vinyl examination and surgical gloves have caught up with demand.
- Level 3 and 4 Surgical Gowns and Surgical Isolation Gowns have been added to the covered materials list.
- Other filtering facepiece respirators and elastomeric, air-purifying respirators have been removed from the covered goods list because domestic supply has caught up with demand.
Do not hesitate to contact any Barnes, Richardson & Colburn, LLP attorney if you have any questions regarding exports of PPE.