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On April 7, 2020, the U.S. Department of Homeland Security’s Federal Emergency Management Agency (“FEMA”) issued a temporary final rule (“Rule”) to establish export restrictions on certain types of personal protective equipment products (“PPE”) used in the response to the COVID-19 pandemic. The Rule implements the Presidential Memorandum dated April 3, 2020, in which President Trump directed Homeland Security to take action under the Defense Production Act of 1950 (50 U.S.C. § 4501) to prevent diversion of the necessary materials overseas. Although the Rule will not be published in the Federal Register until April 10, 2020, it became effective immediately and will remain in effect for 120 days from its publication, until August 8, 2020.

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The Rule covers some, but not all, of the 15 categories of materials the U.S. Department of Health and Human Services identified as “scarce or threatened materials” in a <a href="https://www.hhs.gov/sites/default/files/hhs-dfa-notice-of-scarce-materials-for-hoarding-prevention.pdf">notice</a> last week. Specifically, the PPE covered by the Rule are:

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The Rule applies to all persons involved in the export of the covered PPE from the United States, including “manufacturers, brokers, distributors, exporters, and shippers.” The Rule provides that all shipments of the covered PPE will be “temporarily detained” by U.S. Customs and Border Protection while FEMA determines whether to:

(1) Return the shipment for domestic use; (2) Issue a rated order under the DPA; or (3) Allow the export of part or all of the shipment.

In reaching a determination about a particular shipment, the Rule states that FEMA will consider the totality of the circumstances, including the following:

Notably, the Rule contains a limited exemption for covered PPE “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% of such manufacturer’s domestic production of these materials was distributed in the U.S. in the preceding 12 months.” If FEMA determines that a shipment of covered PPE falls within this exemption, the shipment may be transferred out of the United States without further review by FEMA. Additional guidance on this exemption from FEMA appears to be forthcoming.

Francesca M.S. Guerrero Partner, International Trade 202.973.2774 <a href="mailto:Francesca.Guerrero@ThompsonHine.com">Francesca.Guerrero@ThompsonHine.com</a>

Samir D. Varma Partner, International Trade 202.263.4136 <a href="mailto:Samir.Varma@ThompsonHine.com">Samir.Varma@ThompsonHine.com</a>

Joyce Rodriguez Associate, International Trade 202.973.2724 <a href="mailto:Joyce.Rodriguez@ThompsonHine.com">Joyce.Rodriguez@ThompsonHine.com</a>

Scott E. Diamond* Senior Legislative &amp; Regulatory Policy Advisor, International Trade 202.263.4197 <a href="mailto:Scott.Diamond@ThompsonHine.com">Scott.Diamond@ThompsonHine.com</a> *Not licensed to practice law

Additional Resources

We have assembled a firmwide multidisciplinary task force to address clients’ business and legal concerns and needs related to the COVID-19 pandemic. Please see our <a href="https://www.thompsonhine.com/services/covid-19-task-force">COVID-19 Task Force</a> page for additional information and resources.

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

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FEMA Announces Export Restrictions on Personal Protective Equipment (PPE)

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