FEMA Temporarily Bans Exports of Scarce or Threatened Personal Protective Equipment

On April 10, 2020, the Federal Emergency Management Agency (FEMA) issued a temporary rule pursuant to the Defense Production Act of 1950 (DPA) banning the export of designated personal protective equipment (PPE) such as protective masks and gloves from April 7, 2020 through August 10, 2020, unless otherwise approved by FEMA. The ban applies to all export activity: sales to third parties and exports by companies or persons for use within their organizations. The President delegated DPA authority and directed the Secretary of Homeland Security to take action in Executive Order 13911 and Presidential Memorandum on Allocating Certain Scarce or Threatened Health and Medical Resources to Domestic Use. The Secretary subsequently delegated DPA authority to the Administrator of FEMA. FEMA designated the following PPE as subject to its order:

• N95 Filtering Facepiece Respirators, including devices that are disposable half-face-piece non-powered air-purifying particulate respirators intended for use to cover the nose and mouth of the wearer to help reduce wearer exposure to pathogenic biological airborne particulates;
• Other Filtering Facepiece Respirators (e.g., those designated as N99, N100, R95, R99, R100, or P95, P99, P100), including single-use, disposable half-mask respiratory protective devices that cover the user’s airway (nose and mouth) and offer protection from particulate materials at an N95 filtration efficiency level per 42 CFR 84.181;
• Elastomeric, air-purifying respirators and appropriate particulate filters/cartridges;
• PPE surgical masks, including masks that cover the user’s nose and mouth and provide a physical barrier to fluids and particulate materials; and
• PPE gloves or surgical gloves, including those defined at 21 CFR 880.6250 (exam gloves) and 878.4460 (surgical gloves) and such gloves intended for the same purposes.

As a result of the order, the above PPE is “allocated for domestic use, and may not be exported from the United States without explicit approval by FEMA.” US Customs and Border Protection may temporarily detain any shipments containing the designated PPE in order for FEMA to make a determination as to whether a shipment must be returned for domestic use or whether the export may continue. FEMA also has the authority to issue a “rated order,” i.e., an order deemed necessary or appropriate to promote the national defense, pursuant to section 101(a) of the DPA. Rated orders must be given priority over other orders by US businesses.

FEMA will take into account the following factors in determining the appropriate treatment of a shipment of PPE: (1) the need to ensure that scarce or threatened items are appropriately allocated for domestic use; (2) minimization of disruption to the supply chain, both domestically and abroad; (3) the circumstances surrounding the distribution of the materials and potential hoarding or price gouging concerns; (4) the quantity and quality of the materials; (5) humanitarian considerations; and (6) international relations and diplomatic considerations.

Although FEMA has stated that it will make such determinations within a “reasonable time” and “will endeavor to minimize disruptions to the supply chain,” no definitive time period for assessing and releasing shipments has been published.

The rule contains an exception for shipments made by or on behalf of US manufacturers with continuous export agreements with customers in other countries since at least January 1, 2020. FEMA has stated that it will not require shipments meeting this criteria to be returned “so long as at least 80 percent of such manufacturer’s domestic production of covered materials, on a per item basis, was distributed in the United States in the preceding 12 months.” Materials that fall within the exemption can be exported without further review by FEMA. However, FEMA’s Administrator has the authority to waive the exemption and fully review all shipments if it determines “doing so is necessary or appropriate to promote the national defense.” There is no exception for companies and persons seeking to supply foreign affiliates or make international donations. Those activities will require a specific authorization from FEMA.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Greta Lichtenbaum, an O'Melveny partner licensed to practice law in the District of Columbia, John Dermody, an O'Melveny counsel licensed to practice law in California, and Mary Pat Dwyer, an O'Melveny counsel licensed to practice law in the District of Columbia and Pennsylvania, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

© 2020 O’Melveny & Myers LLP. All Rights Reserved. Portions of this communication may contain attorney advertising. Prior results do not guarantee a similar outcome. Please direct all inquiries regarding New York’s Rules of Professional Conduct to O’Melveny & Myers LLP, Times Square Tower, 7 Times Square, New York, NY, 10036, T: +1 212 326 2000.