On April 21, US Customs and Border Protection (“CBP”) issued guidance via a bulletin in its Cargo Systems Messaging Service (available here) (“Bulletin”) on the new temporary final rule published by the Federal Emergency Management Agency (“FEMA”) imposing export restrictions on certain personal protective equipment products (“PPE Products”) used in the response to the COVID-19 pandemic. The Bulletin details CBP’s implementation of the PPE export restrictions and its process for determining whether an export may be covered by an exemption.

The FEMA Rule and Exemptions

By way of background, on April 10, 2020, FEMA published a temporary final rule (“FEMA Rule”), which is described in our prior blog post here, directing CBP to detain temporarily any shipments of PPE Products pending FEMA’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. The FEMA Rule contained only one exemption, which was for shipments by or on behalf of US manufacturers with continuous export agreements with non-US customers since at least January 1, 2020 and a track record of distributing at least 80% of their supply of PPE Products, on a per item basis, in the United States during the preceding 12 months (the “First FEMA Exemption”).

On April 21, 2020, FEMA published a notification of exemptions (the “FEMA Notification”) in the Federal Register that identified 10 additional numbered exemptions to the FEMA Rule, which are summarized in our blog post here. The FEMA Notification provided that for several of these exemptions exporters should submit a letter of attestation to FEMA certifying the purpose of the shipment. Exporters interested in a template letter of attestation to satisfy an exemption should reach out to their usual contacts in Baker McKenzie’s trade compliance group.

Bulletin

The Bulletin clarifies how these exemptions will be applied and provides technical guidance on submitting documentation to claim an exemption. Highlights include:

  • FEMA and CBP are working to establish a process to identify manufacturers that qualify for the First FEMA Exemption.
  • Regarding exemption 9 (i.e., Canada and Mexico shipments), the letter of attestation must state that the covered materials are for use in Canada/Mexico, and will not be transhipped through those countries.
  • Regarding exemption 8 (i.e., in-transit merchandise), CBP clarified that the exemption largely applies to goods temporarily entered into a bonded warehouse or Foreign Trade Zone with the intent to leave the United States.

In order to avoid detention of shipments, letters should be uploaded in CBP’s document imaging system (“DIS”) at the same time as the Electronic Export Information is transmitted in the Automated Export System.  The Bulletin also contains further technical information regarding submissions to the DIS and CBP contact information.

Author

Paul Amberg is a partner in Baker McKenzie’s Amsterdam office, where he handles international trade and compliance issues. He advises multinational companies on export controls, trade sanctions, antiboycott rules, customs laws, anticorruption laws, and commercial law matters. Paul helps clients assess and address compliance risks presented by export controls, trade sanctions, antiboycott rules, customs laws, and anticorruption laws. His practice especially focuses on internal reviews, voluntary disclosure filings, and enforcement actions brought by, the US Government in relation to the Export Administration Regulations (EAR), International Traffic in Arms Regulations (ITAR), trade and economic sanctions programs, and US customs laws.

Author

Inessa Owens is an associate in the Washington, D.C. office and member of the Firm’s International Trade practice group. She focuses on outbound trade compliance issues, including compliance with the Export Administration Regulations, anti-boycott rules, and economic sanctions administered by the US Treasury Department’s Office of Foreign Assets Control, including those targeting Cuba, Iran, North Korea, Syria, and Russia. She has worked with clients in diverse industries that include finance, pharmaceuticals, and energy.

Author

Laura Klick is a US-qualified Associate in Baker McKenzie's London office, where she advises on a variety of trade and compliance matters involving US, UK, and EU export controls and economic sanctions. Laura regularly counsels individuals and multinational corporations on compliance, licensing, and enforcement matters involving the US Treasury, State, and Commerce Departments and assists clients in understanding and navigating the complex regulatory regime governing international trade and investment.