Jeremy B. Zucker
Washington, D.C. +1 202 261 3322
On April 10, 2020, the Department of Homeland Security (“DHS”), through the Federal Emergency Management Agency (“FEMA”), issued a new rule at 44 C.F.R. Part 328 prohibiting exports of certain PPE (“Subject PPE”) used in the global response to the COVID-19 pandemic (the “FEMA Rule”).1 The FEMA Rule, which is being implemented in conjunction with U.S. Customs and Border Protection (“CBP”), is retroactive effective to April 7, 2020 and will remain in place until August 10, 2020.
On April 3, 2020, President Trump issued a Presidential Memorandum establishing a U.S. policy to prevent exports of scarce PPE outside of the United States.2 The Presidential Memorandum instructed DHS, through FEMA, to consult with Health and Human Services to implement the policy. The FEMA Rule implements the policy.
Effective April 7, 2020, all exports of Subject PPE (defined below) are prohibited unless FEMA provides explicit approval for the export. The FEMA Rule is not limited to exports by PPE manufacturers. It covers all parties, including U.S. companies exporting to their subsidiaries, and it applies regardless of whether there is a commercial sale.3
The Subject PPE are:
This list of Subject PPE is current as of the Federal Register notice and the date of this OnPoint. However, the FEMA Rule grants FEMA the authority to make a future determination that additional items are “scarce and necessary for national defense.” If FEMA makes such a determination, it can add items to the list of products prohibited for export.
The Subject PPE list presently does not include other medical gear or sanitation items such as protective clothing, disinfectants and soaps, thermometers and hand sanitizers.
In considering a proposed export of Subject PPE, FEMA is to consider the “totality of the circumstances.” The FEMA Rule provides a list of factors to be considered:
FEMA Application Process
Companies can submit export applications to FEMA by letter. While FEMA does not have a form, we suggest addressing each of the factors and including information that would be included in a commercial export license application to the Bureau of Industry and Security.
The FEMA Rule notes the agency will make a determination on the export of Subject PPE “within a reasonable timeframe” but does not provide any deadlines.
In deciding whether to apply to FEMA, exporters should be aware that FEMA’s determination may not be limited to approving or denying the export. FEMA may require the PPE to be returned for domestic commercial order, or issue a “rated order” to procure the PPE under its authority pursuant to the Defense Production Act. FEMA is most likely to approve smaller shipments where there is a compelling argument as to how the exports support U.S. national security objectives.
For companies that need to export PPE for critical reasons, we suggest quickly preparing an application before FEMA receives more applications than it can handle.
1) Prioritization and Allocation of Certain Scarce or Threatened Health and Medical Resources for Domestic Use, 85 Fed. Reg. 20195 (Apr. 10, 2020).
2) The White House, Memorandum on Allocating Certain Scarce or Threatened Health and Medical Resources to Domestic Use (Apr. 3, 2020), available at https://www.whitehouse.gov/presidential-actions/memorandum-allocating-certain-scarce-threatened-health-medical-resources-domestic-use/.
3) There is a limited exception for pre-existing commercial sales. FEMA will not purchase covered materials from shipments 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 manufacturer’s domestic production of covered materials, on a per item basis, was distributed in the United States in the preceding 12 months. See new 44 C.F.R. 328.102(c).