On April 7, 2020, the Federal Emergency Management Agency (FEMA) released for public inspection a temporary rule that prohibits the export of five types of personal protective equipment (PPE) without explicit approval by FEMA. The rule will remain in effect from April 7, 2020 through August 8, 2020.
The rule was issued pursuant to FEMA’s authority under the Defense Production Act (DPA), following President Trump’s direction to use any and all authority available under the DPA to allocate for domestic use the following scarce or threatened materials designated by Health and Human Services (“HHS”) under Section 102 of the DPA (collectively “covered materials”).
“Covered Materials” identified under the rule are as follows:
- N95 Filtering Facepiece Respirators, including devices that are disposable half-face-piece 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.
Before any shipments of such covered materials may leave the U.S., Customs and Border Protection (“CBP”) will detain the shipment temporarily, during which time, FEMA will determine whether to return for domestic use, issue a rated order for, or allow the export of part or all of the shipment under the DPA. In making these determinations, FEMA will consider “the totality of the circumstances,” in addition to the following factors:
- need to ensure that scarce or threatened items are appropriately allocated for domestic use;
- minimization of disruption to supply chains, both domestically and abroad;
- circumstances surrounding distribution and potential hoarding and price gouging concerns;
- quality and quantity of the materials;
- humanitarian considerations; and
- international relations and diplomatic considerations.
Though the rule does not provide a set timeframe for FEMA determinations, it notes that all determinations will be made “within a reasonable time” of being notified of an intended shipment.
The Rule Currently Contains One Exemption, with the Possibility for Others
This rule currently contains only one exemption. Specifically, FEMA will allow 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 U.S. in the preceding 12 months. The rule contemplates additional exemptions being published within FEMA’s discretion. Notably, there is no exemption for shipment by a U.S. parent to its foreign subsidiaries.
The List of “Covered Materials” May be Expanded or Otherwise Modified
The “covered materials” can be expanded to include products designated by HHS as “scarce or threatened materials.” These include, among others, face shields, portable ventilators, and disinfecting devices. Therefore, it is advisable for companies to review HHS’s list of materials designated as “scarce or threatened” to determine whether their product is listed; and if so, have contingency plans in the event “covered materials” is expanded or otherwise modified.