FEMA in conjunction with CBP has updated the export process and added additional exemptions to the exporting of PPE from the United States of America that will be published in the Federal Register on April 21, 2020.
This temporary rule (in effect until August 10, 2020) has not changed in that no shipments of covered materials may leave the United States without explicit approval by FEMA. The rule now calls out specific exemptions to the requirement that covered materials not leave the United States without explicit approval by FEMA.
As previously reported on the rule, FEMA allows the export of covered materials from shipments made by or on behalf of US manufacturers with continuous export agreements with customers in other countries since at least January 1, 2020. So long as at least 80 percent of said manufacturer’s domestic production of such covered materials, on a per-item basis, was distributed in the United States in the preceding 12 months.
The new rule by FEMA now lists out 10 exemptions that permit the export of PPE. Some of the exemptions will require a letter from the exporter (USPPI) addressed to FEMA and sent to CBP via the Document Imaging System (DIS) and some exemptions do not require the letter.
The CBP DIS system is used by Trade and CBP to submit requested documentation that is requested by CBP and any PGA to assist them with additional information about your particular transaction. BDP recommends that your letter is an individual letter for your export order and lists a date that is related to your order and references your specific order number or similar reference so that a match of your letter and the shipment takes place. Submission to the DIS will use a specific email address that provides FEMA and CBP of your exemption
The requested stated for “other documentation” will be treated on a case by case request from CBP/FEMA at the time of export.
For exemptions (2), (3), (4), (8), and (9), below, FEMA will require a letter of attestation to be submitted to FEMA via CBP’s document imaging system and placed on file with CBP, certifying to FEMA the purpose of the shipment of covered materials.
The letter will be submitted to CBP with other documentation related to the shipment, and contain the following information:
(1) A description of which exemption(s) the exporter is claiming.
(2) Details regarding the shipment that are sufficient for the CBP and FEMA officials to determine whether the shipment falls under the claimed exemption(s).
(3) A statement that the provided information is true and accurate to the best of the exporter’s knowledge, and that the exporter is aware that false information is subject to prosecution under the DPA, as outlined in the allocation order.
FEMA is expected to provide a template of a letter that can be used in the coming days.
The exemptions are as follows:
(1) Shipments to U.S. Commonwealths and Territories, Including Guam, American
Samoa, Puerto Rico, U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands (Including Minor Outlying Islands). The Administrator issues this exemption to clarify that shipments to U.S. territories are not considered to be “exports” for purposes of the implementation of the allocation order. The Administrator believes that this exemption is necessary to clarify the scope of the original allocation order and to ensure that scarce or threatened items are allocated for the use of all Americans, including Americans living in U.S. territories.
(2) Exports of Covered Materials by Non-profit or Non-governmental Organizations that are Solely for Donation to Foreign Charities or Governments for Free Distribution (Not Sale) at their Destination(s). The Administrator believes that it is necessary and appropriate to promote the national defense to support the efforts of domestic and international non-profit and non-governmental organizations (NGOs) responding to COVID-19 around the world, in response to the humanitarian concerns that have arisen as a result of this global pandemic, and consistent with the position of the United States as a world leader. The allocation order recognizes the importance of humanitarian considerations by specifying it as an explicit factor to be considered in making determinations about whether to allow an export to proceed or to utilize the purchase domestically. This exemption creates a limited definition of what constitutes a humanitarian shipment for purpose of the exemption by limiting the exemption both on the exporter side (by limiting it to non-profit organizations or NGOs) and on the recipient side (foreign governments or charities). Further, the exemption is limited by specifying that the goods must be shipped as donations in kind and cannot be sold upon receipt.
(3) Intracompany Transfers of Covered Materials by U.S. Companies from Domestic Facilities to Company-owned or Affiliated Foreign Facilities. The Administrator recognizes the international nature of many U.S. companies, and believes that allowing these companies to continue to produce at a high level is crucial to the functioning of the U.S. economy. One of the factors specifically identified in the allocation order as being critical for the national defense is minimization of disruption of the supply chain, both domestically and abroad.
(4) Shipments of Covered Materials that are Exported Solely for Assembly in Medical Kits and Diagnostic Testing Kits Destined for U.S. Sale and Delivery. The Administrator recognizes that, in many circumstances, materials destined for domestic use are assembled in other countries, prior to being returned to the United States for domestic distribution. One of the factors specifically identified in the allocation order as being critical for the national defense is the minimization of disruption of the supply chain, both domestic and abroad. The Administrator believes that allowing the shipments of these kits is important to allow for uninterrupted continuation of existing supply chains and is the most expedient means to ensure timely delivery and allocation of these materials within the United States to respond to the national emergency. Relying on existing supply chains where available and efficient will maximize the ability for FEMA and CBP to focus limited resources on areas where the supplies are being shipped outside the United States for final disposition. As noted above, the Administrator believes that ensuring widespread access by Americans to covered materials is necessary and appropriate to promote the national defense and consistent with the purposes of the Presidential Memorandum, and the subsequent allocation order, to provide for the needs of Americans.
(5) Sealed, Sterile Medical Kits and Diagnostic Testing Kits Where Only a Portion of the Kit is Made Up of One or More Covered Materials That Cannot be Easily
Removed Without Damaging the Kits. The Administrator believes that detaining shipments containing these kits, and subsequently attempting to separate the covered materials from the kits (potentially destroying the kits in the process), is an inefficient use of national defense resources. In addition, ready-to-use sealed, sterile medical kits are vital for the healthcare community globally to continue to meet broader urgent healthcare needs in the context of the pandemic. Addressing the related healthcare needs globally will enable other countries to best respond to and contain the pandemic, which will advance the ability of the United States Government to best contain the pandemic within the United States. The Administrator believes that refraining from needlessly dismantling valuable kits is necessary and appropriate to promote the national defense and consistent with the purposes of the Presidential Memorandum, and the subsequent allocation order, to provide for the needs of Americans.
(6) Declared Diplomatic Shipments from Foreign Embassies and Consulates to their Home Countries. These May be Shipped via Intermediaries (Logistics Providers) but are Shipped from and Consigned to Foreign Governments. Pursuant to the diplomatic interests of the United States, the Administrator believes that it is necessary and appropriate to promote the national defense to allow diplomatic shipments to proceed without interruption or delay. One of the factors specifically identified in the allocation order as being critical for the national defense is international relations and diplomatic concerns. The Administrator believes that stopping these types of shipments would cause significant international relations and domestic concerns, while not providing significantly enhanced access to covered materials for Americans. In order to continue to foster positive diplomatic relationships with our partners and allies, the Administrator has determined to exempt diplomatic shipments from the allocation order.
(7) Shipments to Overseas U.S. Military Addresses, Foreign Service Posts (e.g., Diplomatic Post Offices), and Embassies. The Administrator believes the intent of the Presidential Memorandum is to protect Americans by ensuring their access to covered materials. The Administrator believes this extends to all Americans, including those serving our country overseas. For this reason, the Administrator believes that it is necessary and appropriate to promote the national defense to allow shipments of covered materials to be shipped overseas to U.S. government employees working abroad.
(8) In-Transit Merchandise: Shipments in Transit through the United States with a Foreign Shipper and Consignee, Including Shipments Temporarily Entered into a
Warehouse or Temporarily Admitted to a Foreign Trade Zone.The April 3
Presidential Memorandum states that “To ensure that these scarce or threatened
PPE materials remain in the United States for use in responding to the spread of COVID-19, it is the policy of the United States to prevent domestic brokers, distributors, and other intermediaries from diverting such material overseas” (emphasis added). The Administrator believes that merchandise merely passing through the United States is outside the scope of the Presidential Memorandum. In addition, the Administrator believes that diversion of these specific types of materials would cause significant impacts to international relations, diplomacy, and global supply chains, each of which is a factor that is specifically identified in the allocation order as being necessary and appropriate to promote the national defense. Therefore, the Administrator is explicitly exempting these shipments from the enforcement of the allocation order.
(9) Shipments for Which the Final Destination is Canada or Mexico. The Administrator recognizes the important role our closest neighbors play in the national defense interests of the United States. The integration of the economies and supply chains among the United States, Mexico, and Canada is robust. Many critical sectors – including, for example, food and agriculture; communications and energy; automotive and industrial; water and wastewater management; and law enforcement and first responders – cross national boundaries. Negative impacts to workers, including a lack of PPE, in these and other critical sectors in Canada and Mexico may cause significant interruptions to the corresponding supply chains in the United States, and in turn, may disrupt the large flow of cross-border trade with our neighbors.
(10) Shipments by or on behalf of the U.S. Federal Government, including its Military. The Administrator recognizes that any shipment of covered materials made by or on behalf of the Federal Government, including its military, are inherently necessary and appropriate to promote the national defense, and so should be exported without delay.
To view the full Federal Register announcement, please click here.
Should you have any questions or concerns, please reach out to your local BDP representative.
Sources: FEMA, CBP, Federal Register