On April 21, 2020, the US Federal Emergency Management Agency (FEMA) is due to publish a notification of exemptions (Notification) to the restrictions it has recently imposed on the export of five types of personal protective equipment (PPE). 

As detailed in a prior WilmerHale client alert, FEMA published a temporary final rule (TFR) on April 10 restricting the export of five types of PPE, including certain respirators, surgical masks and gloves. Under the TFR, which FEMA issued pursuant to the Defense Production Act (DPA), “[a]ll shipments of covered materials … shall be allocated for domestic use, and may not be exported from the United States without explicit approval by FEMA.”

US Customs and Border Protection (CBP)—which is responsible for identifying covered shipments for review by FEMA—subsequently issued a Memorandum to its field operators providing guidance on CBP’s implementation of the TFR. As detailed in another WilmerHale client alert, the CBP Memorandum instructs CBP field operators to apply the TFR’s restrictions to shipments containing “commercial quantities,” defined as shipments that (i) are valued at $2,500 or more and (ii) contain more than 10,000 units of subject commodities. The Memorandum also includes a list of shipment types excluded from the TFR.

FEMA’s April 21 Notification establishes additional and partially overlapping exemptions pursuant to the DPA and FEMA’s regulations. The Notification exempts from the prohibitions on exportation the following types of shipments:

1. Shipments to US territories and affiliated commonwealths, including Guam, Puerto Rico, the US Virgin Islands, American Samoa and the Commonwealth of the Northern Mariana Islands (including Minor Outlying Islands);
2. Exports by nonprofit or nongovernmental organizations for donation (not sale) to foreign charities or governments for free distribution;
3. Intracompany transfers by US companies to foreign-owned or affiliated facilities;
4. Shipments exported solely for assembly into medical and diagnostic testing kits destined for US delivery and sale;
5. Shipments of sealed, sterile medical and diagnostic testing kits that include covered PPE, as well as other materials, and where the PPE cannot be easily removed without damaging the kit;
6. Diplomatic shipments from foreign embassies and consulates to their home countries;
7. Shipments destined for overseas US military addresses, US foreign service posts and US embassies;
8. In-transit shipments, including shipments temporarily entered into a warehouse or admitted into a Foreign Trade Zone;
9. Shipments ultimately destined for Canada or Mexico; and
10.  Shipments by or on behalf of the US federal government, including the military.

For exemptions number two, three, four, eight, and nine, FEMA will require that exporters file a letter of attestation with CBP certifying that the shipment comports with the terms of the applicable exemption. The letter should identify the exemption, substantiate that the shipment “falls within the claimed exemption,” and include a statement that the provided information is true and accurate “and that the exporter is aware that false information is subject to prosecution under the DPA.”

FEMA instructs CBP to detain shipments of any manufacturer, broker, distributor, exporter or shipper that CBP believes “is intentionally modifying shipments in a way to take advantage of one or more of these exemptions,” is diverting materials from the US market or is otherwise trying to circumvent the export restrictions.