Presidential Proclamation: PPE now an export control item?

The current COVID-19 crisis has every nation in the world questioning what Personal Protective Equipment (PPE) supplies are made domestically and what items require importing. The supplies needed to combat the pandemic are not produced by every country, so each nation is zeroing in on its own PPE supplies and supply chains as they continue or prepare to begin the fight against COVID-19. For instance, Germany, the United States (US), and Switzerland supply 35% of medical products; China, Germany and the US export 40% of personal protective products. 

Health systems around the globe are under daily pressures to ensure they have the appropriate amount of PPE supplies like medical equipment, masks, medicines, protective gowns, gloves, and hand sanitizers across a daily, weekly, and monthly timeline. 

The current trade stance of countries around the world has now been tweaked to issue out a unified stance as a response to the virus. Since the beginning of 2020, the governments of 24 nations have taken steps to ban or limit the export of medical equipment. Export bans are now proliferating — 16 have been imposed since the beginning of March and the United States has followed suit. The President of the United States issued an Executive Order on April 3, 2020, that stops the diversion of PPE material overseas. The US is a major exporter of certain medical supplies therefore this order might have a long-term impact on the export side of US companies.

With this order comes two predominant questions: How will this new order impact the export of PPE supplies, and what enforcement will be in place at the borders to ensure compliance? Right now, we don’t have full visibility into the issues that surround this order. PPE supplies are not controlled by the Department of Commerce nor any other US federal governmental agency, therefore seeking a permit or an export license to have the ability to export does not exist. The Department of Homeland Security, US Customs and Border Protection is the agency on the front lines that has the right to detain any export order at the port or border. CBP uses the EEI in the AES system to review all orders to ensure that the details meet all governmental regulations. Additionally, CBP will need to shift staff at the ports to monitor the export flows that leave the US to ensure full compliance with the Executive Order.

In the coming business days, I expect to obtain more details about the export of PPE supplies to provide you further guidance. Several thoughts may be on your mind such as “Can I export PPE supplies to my Customers overseas that have a contract with?  If I break the contract then I go into default!, My customer will probably find a new supplier in another country and then my sales opportunity could be lost forever!" 

At this time, we don’t have all of the information to provide sufficient answers to these questions as well as other issues that are specific to you and your business.

BDP is here to assist you with these important issues as they arise. We will also continue to update our customers on new developments as the information becomes available.

In the meantime, please reach out to me with any questions, and please stay well.