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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On April 17, 2020, the Federal Emergency Management Agency&rsquo;s (FEMA) filed a <a href="https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-08542.pdf?utm_campaign=pi+subscription+mailing+list&amp;utm_source=federalregister.gov&amp;utm_medium=email" target="_blank" rel="noopener noreferrer">notification of exemptions</a> (the &ldquo;Exemptions&rdquo;) that identifies 10 exemptions from the <a href="https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-07659.pdf" target="_blank" rel="noopener noreferrer">temporary final rule</a> published on April 10, 2020 (the &ldquo;Rule&rdquo;), which restricts the export from the United States of certain personal protective equipment (PPE) and respirators in the response to the COVID-19 pandemic. On April 21, 2020 the Exemptions were <a href="https://www.federalregister.gov/documents/2020/04/21/2020-08542/prioritization-and-allocation-of-certain-scarce-or-threatened-health-and-medical-resources-for" target="_blank" rel="noopener noreferrer">published in the Federal Register</a> and became effective on April 17.
The Rule, which is described in our <a href="https://www.trumpandtrade.com/2020/04/fema-announces-export-restrictions-on-personal-protective-equipment-ppe/">Trump and Trade April 7, 2020 post</a>, imposes export restrictions on certain PPE and respirators (&ldquo;Covered Products&rdquo;) pursuant to a <a href="https://www.presidency.ucsb.edu/documents/memorandum-allocating-certain-scarce-or-threatened-health-and-medical-resources-domestic" target="_blank" rel="noopener noreferrer">presidential memorandum</a> dated April 3, 2020. The Rule directs U.S. Customs and Border Protection (CBP) to detain any shipments of the Covered Products pending FEMA&rsquo;s determination whether to return such shipments for domestic use, issue a rated order for the products, or allow the export of part or all of the shipment.
Previously, the Rule contained only one narrow exemption for shipments by or on behalf of U.S. manufacturers with continuous export agreements with foreign customers since January 1, 2020, and a track record of distributing at least 80% of their supply of the Covered Products, on a per item basis, in the United States during the preceding 12 months. Effective April 17, 2020, the following shipments of Covered Products are also exempt from the Rule:
<ol>
<li>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).</li>
<li>Exports 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).</li>
<li>Intracompany transfers by U.S. companies from domestic facilities to company-owned or affiliated foreign facilities.</li>
<li>Shipments of Covered Products exported solely for assembly in medical kits and diagnostic testing kits destined for U.S. sale and delivery.</li>
<li>Sealed, sterile medical kits and diagnostic testing kits where only a portion of the kit is made up of one or more Covered Products that cannot be easily removed without damaging the kits.</li>
<li>Declared diplomatic shipments from foreign embassies and consulates to their home countries, shipped from and consigned to foreign governments (may be shipped via intermediaries).</li>
<li>Shipments to overseas U.S. military addresses, foreign service posts (e.g., diplomatic post offices,) and embassies.</li>
<li>In-transit merchandise such as shipments in transit through the United States with a foreign shipper and consignee and shipments temporarily entered into a warehouse or temporarily admitted to a foreign trade zone.</li>
<li>Shipments for which the final destination is Canada or Mexico.</li>
<li>Shipments by or on behalf of the U.S. federal government, including its military.</li>
</ol>
Each of the Exemptions includes additional details on their scope and the basis for each exemption.&nbsp; Notably, Exemptions (2), (3), (4), (8), and (9) require that exporters submit a letter of attestation to FEMA via CBP&rsquo;s document imaging system certifying the purpose of the shipment. The letter must also include the following information:
<ul>
<li>a description of which Exemption the exporter is claiming;</li>
<li>details regarding the shipment sufficient for CBP and FEMA officials to determine whether the shipment falls under the claimed Exemption(s); and</li>
<li>a statement that the information provides is true and accurate to the best of the exporter&rsquo;s knowledge, and that the exporter is aware that false information is subject to prosecution under the Defense Production Act.</li>
</ul>
In the Exemptions, FEMA has directed CBP to detain shipments of any manufacturer, broker, distributor, exporter or shipper that CBP believes &ldquo;is intentionally modifying shipments in a way to take advantage of one or more of these exemptions, diverting materials from the U.S. market or is otherwise trying to circumvent the export restrictions.&rdquo;
FEMA will make its determination as to each shipment based on the letters of attestation submitted, the Exemptions, and the &ldquo;totality of the circumstances&rdquo; described in the Rule.

core/freeform

SmarTrade

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

FEMA Announces Additional Exemptions to Export Restrictions on Personal Protective Equipment (PPE)