FEMA Sets 10 Exemptions for Exports of PPE
The Federal Emergency Management Agency set 10 exemptions for exports of personal protective equipment (see 2004080018) and formally announced exceptions for shipments to Canada, Mexico and U.S territories, in a notice filed April 17. FEMA also announced exemptions for certain shipments containing controlled PPE, shipments traveling through the U.S. involving a foreign shipper and consignee, exports to military bases and more. The new exemptions were announced less than two weeks after a leaked CBP memo detailed some of the measures (see 2004160050).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
FEMA said it will exempt shipments to U.S. commonwealths and territories, including Guam, American Samoa, Puerto Rico, the U.S. Virgin Islands, the Northern Mariana Islands (including U.S. Minor Outlying Islands). The agency said these shipments are not considered to be exports but believes the exception is “necessary to clarify the scope of the original allocation order.” FEMA also confirmed that it will lift restrictions on exports to Canada and Mexico, saying it recognizes “the important role our closest neighbors play” in national defense. U.S.-Mexico-Canada supply chains are “robust,” and a lack of PPE could damage a range of sectors across all three countries, including the agriculture, energy and auto industries, FEMA said. Export restrictions could “disrupt the large flow of cross-border trade” with both countries and hurt “diplomatic ties.”
FEMA will also exempt shipments exported “solely” for assembly in medical and diagnostic testing kits that are ultimately “destined for U.S. sale and delivery.” In “many instances,” medical goods intended for domestic use are assembled in other countries before being returned to the U.S., FEMA said, and this exemption will allow that process to continue. These exports are “important to allow for uninterrupted continuation of existing supply chains,” the agency said, “and is the most expedient means to ensure timely delivery and allocation of these materials within the” U.S.
FEMA will also allow exports of certain items that contain restricted medical goods if FEMA can't separate the controlled goods without destroying the product, FEMA said. This exemption will apply to medical kits and diagnostic testing kits where “only a portion” of the kits are composed of controlled items that “cannot be easily removed without damaging the kits.” FEMA said detaining these shipments and trying to remove the controlled items is an “inefficient use of national defense resources” and could hinder the delivery of medical kits to other countries. FEMA said it “believes that refraining from needlessly dismantling valuable kits is necessary and appropriate to promote the national defense” of the U.S.
Another exemption will lift restrictions on shipments “in transit” through the U.S. “with a foreign shipper and consignee,” the agency said. FEMA said this exemption also applies to shipments that have temporarily entered a warehouse or foreign trade zone. FEMA said medical goods that are “merely passing through” the U.S. are “outside the scope” of the restrictions, and the “diversion of these specific types of materials would cause significant impacts to international relations, diplomacy, and global supply chains.”
FEMA will also exempt donated exports by nonprofit and nongovernmental organizations, “intracompany transfers” of PPE between U.S.-based and foreign offices, diplomatic exports from foreign embassies and consulates to their home countries, exports to U.S. military bases abroad and exports “by or on behalf of the U.S. Federal Government.”
If CBP suspects an exporter is “intentionally modifying its shipments” to take advantage of the new exceptions, the agency may detain the shipment and alert FEMA, the notice said. In addition, exporters using the exemptions for non-profit donations, intracompany transfers, exports eventually destined for U.S. sale, in-transit merchandise and shipments to Canada and Mexico must submit a “letter of attestation” to CBP. The letter must certify “the purpose of the shipment” and include a description of the exemption that the exporter is claiming, details of the shipment so officials can determine whether it qualifies and a statement that says the information “is true and accurate to the best of the exporter’s knowledge.”
After receiving the letter, CBP may detain exports of PPE as it awaits FEMA’s determination, according to an April 18 post from Baker McKenzie. This will likely cause delays at ports across the country, the law firm said, especially because the notice does not mandate a specific time frame for FEMA to issue a determination. “It is not clear whether, when, or how exporters will be notified of the status of their shipment,” Baker McKenzie said. FEMA and CBP did not comment. FEMA, unlike the Commerce Department, may not have the experience to oversee export restrictions (see 2004150034).
(Federal Register 04/21/20)