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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 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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&nbsp;On April 7, 2020, the U.S. Department of Homeland Security’s Federal Emergency Management Agency (“FEMA”) issued a <a href="https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-07659.pdf">temporary final rule</a> (“Rule”) to establish export restrictions on certain types of personal protective equipment products (“PPE”) and respirators (“Covered Products”) used in the response to the COVID-19 pandemic. The Rule implements the Presidential Memorandum dated April 3, 2020, in which President Trump directed Homeland Security to take action under the Defense Production Act of 1950 (50 U.S.C. § 4501) to prevent diversion of the necessary materials overseas. The Rule will remain in effect until August 8, 2020.

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On April 17, 2020, the Federal Emergency Management Agency’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">notification of exemptions</a> (the “Exemptions”) that identifies 10 exemptions for certain types of exports of the Covered Products. (The notice was published in the Federal Register on April 21, 2020 but effective on the date filed, April 17, 2020.)

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What PPE and respirators are covered by the Rule?

The Rule covers some, but not all, of the 15 categories of materials the U.S. Department of Health and Human Services identified as “scarce or threatened materials” in a <a href="https://www.hhs.gov/sites/default/files/hhs-dfa-notice-of-scarce-materials-for-hoarding-prevention.pdf">notice</a> dated March 25, 2020. Specifically, the Covered Products are:

The Rule applies to all persons involved in the export of the Covered Products from the United States, including “manufacturers, brokers, distributors, exporters, and shippers.”

What will happen to the Covered Products at the border?

The Rule provides that all shipments of the covered PPE will be “temporarily detained” by U.S. Customs and Border Protection while FEMA determines whether to:

In reaching a determination about a particular shipment, the Rule states that FEMA will consider the totality of the circumstances, including the following:

The Rule originally contained a limited exemption for covered PPE “from shipments made by or on behalf of U.S. manufacturers with continuous export agreements with customers in other countries since at least January 1, 2020, so long as at least 80% of such manufacturer’s domestic production of these materials was distributed in the U.S. in the preceding 12 months.”

Effective April 17, 2020, the following 10 types of shipments of Covered Products are also exempt from the Rule:

Each of the Exemptions includes additional details on their scope and the basis for each exemption.

What documentation is required to claim an exemption?

Exemptions (2), (3), (4), (8), and (9) require that exporters submit a letter of attestation to FEMA via CBP’s document imaging system certifying the purpose of the shipment. The letter must also include the following information:

If FEMA determines that a shipment of covered PPE falls within an exemption, the shipment may be transferred out of the United States without further review by FEMA.

However, FEMA has directed 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, diverting materials from the U.S. market or is otherwise trying to circumvent the export restrictions.”

How long will FEMA take to make a determination?

FEMA stated that it plans to make its determinations for most shipments of Covered Products within 2-4 days. To avoid processing delays, exporters should upload their letters of attestation to CBP’s document-imaging system at the same time their Electronic Export Information is transmitted in the Automated Export System.

What are the penalties for violations of the Rule?

Any person who willfully violates the Rule, may face monetary penalties of up to $10,000 and/or imprisonment for no more than one year under the DPA. Further, under 18 U.S.C. § 554, anyone who fraudulently or knowingly exports anything from the United States contrary to U.S. law, or who facilitates such a transaction, can face fines and/or up to 10 years’ imprisonment.

If you need help drafting a letter of attestation or determining whether your shipment falls within one of the exemptions, please contact us.

Francesca M.S. Guerrero Partner, International Trade 202.973.2774 <a href="mailto:Francesca.Guerrero@ThompsonHine.com">Francesca.Guerrero@ThompsonHine.com</a>

Samir D. Varma Partner, International Trade 202.263.4136 <a href="mailto:Samir.Varma@ThompsonHine.com">Samir.Varma@ThompsonHine.com</a>

Joyce Rodriguez Associate, International Trade 202.973.2724 <a href="mailto:Joyce.Rodriguez@ThompsonHine.com">Joyce.Rodriguez@ThompsonHine.com</a>

Scott E. Diamond* Senior Legislative &amp; Regulatory Policy Advisor, International Trade 202.263.4197 <a href="mailto:Scott.Diamond@ThompsonHine.com">Scott.Diamond@ThompsonHine.com</a> *Not licensed to practice law

Additional Resources

We have assembled a firmwide multidisciplinary task force to address clients’ business and legal concerns and needs related to the COVID-19 pandemic. Please see our <a href="https://www.thompsonhine.com/services/covid-19-task-force">COVID-19 Task Force</a> page for additional information and resources.

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

https://admin.thompsonhine.com/wp-content/uploads/2022/04/UPDATE_-_FEMA_Announces_Additional_Exemptions_to_Recently_Effective_Export_Restrictions_on_PPE-1.pdf

UPDATE: FEMA Announces Additional Exemptions to Recently Effective Export Restrictions on Personal Protective Equipment

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