[Federal Register Volume 85, Number 77 (Tuesday, April 21, 2020)]
[Rules and Regulations]
[Pages 22021-22024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08542]
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DEPARTMENT OF HOMELAND SECURITY
Federal Emergency Management Agency
44 CFR Part 328
[Docket ID FEMA-2020-0018]
Prioritization and Allocation of Certain Scarce or Threatened
Health and Medical Resources for Domestic Use; Exemptions
AGENCY: Federal Emergency Management Agency, DHS.
ACTION: Notification of exemptions.
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SUMMARY: The Federal Emergency Management Agency (FEMA) announces
exemptions from a temporary final rule that FEMA published in the
Federal Register on April 10, 2020.
DATES: Applicability date: This notification applies beginning on April
17, 2020.
ADDRESSES: You may review the docket by searching for Docket ID FEMA-
2020-
[[Page 22022]]
0018, via the Federal eRulemaking Portal: http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Daniel McMasters, Program Analyst,
Office of Policy and Program Analysis, 202-709-0661, [email protected].
SUPPLEMENTARY INFORMATION:
Background
On April 10, 2020, the Administrator of the Federal Emergency
Management Agency Administrator (FEMA Administrator or the
Administrator) published a temporary final rule (the ``rule'') to
allocate certain scarce or threatened materials for domestic use, so
that these materials may not be exported from the United States without
explicit approval by FEMA.\1\ The rule aids the response of the United
States to the spread of COVID-19 by ensuring that certain scarce or
threatened health and medical resources are appropriately allocated for
domestic use.\2\
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\1\ See 85 FR 20195 (Apr. 10, 2020) (codified at 44 CFR part
328).
\2\ See 44 CFR 328.101.
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The Administrator issued the rule under the authority of the
Defense Production Act of 1950, as amended (DPA),\3\ and related
executive orders and delegations.\4\ Most prominently, on April 3,
2020, the President signed a Memorandum on Allocating Certain Scarce or
Threatened Health and Medical Resources to Domestic Use
(Memorandum).\5\ In the Memorandum, the President directed the
Secretary of Homeland Security, through the Administrator, and in
consultation with the Secretary of Health and Human Services (HHS), to
use any and all authority available under section 101 of the DPA to
allocate to domestic use, as appropriate, five types of personal
protective equipment (PPE) materials (covered materials).
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\3\ 50 U.S.C. 4501 et seq.
\4\ See 85 FR at 20196-20197.
\5\ See Memorandum on Allocating Certain Scarce or Threatened
Health and Medical Resources to Domestic Use for the Secretary of
Health and Human Services, the Secretary of Homeland Security, and
the Administrator of the Federal Emergency Management Agency (Apr.
3, 2020), https://www.whitehouse.gov/presidential-actions/memorandum-allocating-certain-scarce-threatened-health-medical-resources-domestic-use/.
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Consistent with the Memorandum, the rule provides that until August
10, 2020, and subject to certain exemptions, no shipments of covered
materials may leave the United States without explicit approval by
FEMA.\6\ The rule requires U.S. Customs and Border Protection (CBP), in
coordination with such other officials as may be appropriate, to notify
FEMA of an intended export of covered materials.\7\ CBP must
temporarily detain any shipment of such covered materials pending the
Administrator's determination whether to return for domestic use, issue
a rated order for, or allow the export of part or all of the
shipment.\8\ In making such determination, the Administrator may
consult other agencies and will consider the totality of the
circumstances, including: (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.\9\
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\6\ 44 CFR 328.102(a).
\7\ 44 CFR 328.102(b).
\8\ Id.
\9\ 44 CFR 328.102(c).
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In addition to providing for the determination described above, the
rule includes one exemption to the requirement that covered materials
not leave the United States without explicit approval by FEMA. In the
interest of promoting the national defense, the Administrator
determined to generally allow the export of covered materials 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 percent of such manufacturer's
domestic production of such covered materials, on a per item basis, was
distributed in the United States in the preceding 12 months.\10\ If
FEMA determines that a shipment of covered materials falls within this
exemption, such materials may be exported without further review by
FEMA, provided that the Administrator may waive this exemption and
fully review shipments of covered materials, if the Administrator
determines that doing so is necessary or appropriate to promote the
national defense.\11\
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\10\ 44 CFR 328.102(d)(1).
\11\ Id.
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Pertinent to this notification, the rule also provides that the
Administrator may establish, in his discretion, additional exemptions
that he determines necessary or appropriate to promote the national
defense and will announce any such exemptions by notice in the Federal
Register. This notification announces such exemptions.
Notice of Additional Exemptions
Pursuant to 44 CFR 328.102(d)(2), section 101 of the DPA, and
related authorities, the Administrator has determined that it is
necessary and appropriate in order to promote the national defense to
exempt certain categories of covered materials from the requirements of
44 CFR 328.102(a) and (b). The Administrator may waive any of these
exemptions at any time and fully review shipments of covered materials
under 44 CFR 328.102(b) if the Administrator determines that doing so
is necessary or appropriate to promote the national defense. In
addition, if CBP believes that any manufacturer, broker, distributor,
exporter, or shipper of any covered materials is intentionally
modifying its shipments in a way to take advantage of one or more of
these exemptions, diverting materials from the United States market, or
otherwise trying to circumvent the FEMA review requirements in 44 CFR
328.102(b) through application of any of the exemptions, CBP may detain
a shipment and forward information about that shipment (including the
basis for CBP's belief) to FEMA for determination.
For exemptions (2), (3), (4), (8), and (9), below, FEMA will
require a letter of attestation to be submitted to FEMA via CBP's
document imaging system and placed on file with CBP, certifying to FEMA
the purpose of the shipment of covered materials. The letter should be
submitted to CBP with other documentation related to the shipment, and
contain the following information:
(1) A description of which exemption(s) the exporter is claiming.
(2) Details regarding the shipment that are sufficient for the CBP
and FEMA officials to determine whether the shipment falls under the
claimed exemption(s).
(3) A statement that the provided information is true and accurate
to the best of the exporter's knowledge, and that the exporter is aware
that false information is subject to prosecution under the DPA, as
outlined in the allocation order.
Exporters who have concerns about how to file this letter of
attestation should reach out to CBP to request additional details.
The exemptions are as follows.
(1) 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). The Administrator issues this exemption to clarify that
shipments to U.S. territories are not
[[Page 22023]]
considered to be ``exports'' for purposes of the implementation of the
allocation order. The Administrator believes that this exemption is
necessary to clarify the scope of the original allocation order and to
ensure that scarce or threatened items are allocated for the use of all
Americans, including Americans living in U.S. territories. The
Administrator believes that ensuring widespread access by Americans to
covered materials is necessary and appropriate to promote the national
defense and consistent with the purposes of the Presidential Memorandum
and the subsequent allocation order to provide for the needs of all
Americans.
(2) Exports of Covered Materials 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).
The Administrator believes that it is necessary and appropriate to
promote the national defense to support the efforts of domestic and
international non-profit and non-governmental organizations (NGOs)
responding to COVID-19 around the world, in response to the
humanitarian concerns that have arisen as a result of this global
pandemic, and consistent with the position of the United States as a
world leader. A key element of national defense is the ability of the
United States to convey international leadership during times of
crisis, including the COVID-19 pandemic. This includes our ability to
exercise moral leadership, help those in need, and to remain stalwarts
of the international community. Denying shipments of humanitarian goods
would undermine U.S. diplomacy and messaging internationally, allowing
strategic competitors to take advantage of our absence. The allocation
order recognizes the importance of humanitarian considerations by
specifying it as an explicit factor to be considered in making
determinations about whether to allow an export to proceed or to
utilize the purchase domestically. This exemption creates a limited
definition of what constitutes a humanitarian shipment for purpose of
the exemption by limiting the exemption both on the exporter side (by
limiting it to non-profit organizations or NGOs) and on the recipient
side (foreign governments or charities). Further, the exemption is
limited by specifying that the goods must be shipped as donations in
kind and cannot be sold upon receipt. This limited exemption will allow
FEMA to meet the goals of the allocation order while prioritizing
review of commercial shipments most likely to be needed for domestic
use.
FEMA will require a letter of attestation to be submitted to FEMA
via CBP's document imaging system and placed on file with CBP,
certifying to FEMA the purpose of the shipment of covered materials.
(3) Intracompany Transfers of Covered Materials by U.S. Companies
from Domestic Facilities to Company-owned or Affiliated Foreign
Facilities. The Administrator recognizes the international nature of
many U.S. companies, and believes that allowing these companies to
continue to produce at a high level is crucial to the functioning of
the U.S. economy. One of the factors specifically identified in the
allocation order as being critical for the national defense is
minimization of disruption of the supply chain, both domestically and
abroad. The Administrator believes that allowing this exemption would
minimize disruption to the domestic supply chain, while not causing a
detrimental shortage of covered materials to Americans.
FEMA will require a letter of attestation to be submitted to FEMA
via CBP's document imaging system and placed on file with CBP,
certifying to FEMA the purpose of the shipment of covered materials.
(4) Shipments of Covered Materials that are Exported Solely for
Assembly in Medical Kits and Diagnostic Testing Kits Destined for U.S.
Sale and Delivery. The Administrator recognizes that, in many
circumstances, materials destined for domestic use are assembled in
other countries, prior to being returned to the United States for
domestic distribution. One of the factors specifically identified in
the allocation order as being critical for the national defense is the
minimization of disruption of the supply chain, both domestic and
abroad. The Administrator believes that allowing the shipments of these
kits is important to allow for uninterrupted continuation of existing
supply chains, and is the most expedient means to ensure timely
delivery and allocation of these materials within the United States to
respond to the national emergency. Relying on existing supply chains
where available and efficient will maximize the ability for FEMA and
CBP to focus limited resources on areas where the supplies are being
shipped outside the United States for final disposition. As noted
above, the Administrator believes that ensuring widespread access by
Americans to covered materials is necessary and appropriate to promote
the national defense and consistent with the purposes of the
Presidential Memorandum, and the subsequent allocation order, to
provide for the needs of Americans.
FEMA will require a letter of attestation to be submitted to FEMA
via CBP's document imaging system and placed on file with CBP,
certifying to FEMA the purpose of the shipment of covered materials.
(5) Sealed, Sterile Medical Kits and Diagnostic Testing Kits Where
Only a Portion of the Kit is Made Up of One or More Covered Materials
That Cannot be Easily Removed Without Damaging the Kits. The
Administrator believes that detaining shipments containing these kits,
and subsequently attempting to separate the covered materials from the
kits (potentially destroying the kits in the process), is an
inefficient use of national defense resources. In addition, ready-to-
use sealed, sterile medical kits are vital for the healthcare community
globally to continue to meet broader urgent healthcare needs in the
context of the pandemic. Addressing the related healthcare needs
globally will enable other countries to best respond to and contain the
pandemic, which will advance the ability of the United States
Government to best contain the pandemic within the United States. The
Administrator believes that refraining from needlessly dismantling
valuable kits is necessary and appropriate to promote the national
defense and consistent with the purposes of the Presidential
Memorandum, and the subsequent allocation order, to provide for the
needs of Americans.
(6) Declared Diplomatic Shipments from Foreign Embassies and
Consulates to their Home Countries. These May be Shipped via
Intermediaries (Logistics Providers) but are Shipped from and Consigned
to Foreign Governments. Pursuant to the diplomatic interests of the
United States, the Administrator believes that it is necessary and
appropriate to promote the national defense to allow diplomatic
shipments to proceed without interruption or delay. One of the factors
specifically identified in the allocation order as being critical for
the national defense is international relations and diplomatic
concerns. The Administrator believes that stopping these types of
shipments would cause significant international relations and domestic
concerns, while not providing significantly enhanced access to covered
materials for Americans. In order to continue to foster positive
diplomatic relationships with our partners and allies, the
Administrator has determined to exempt diplomatic shipments from the
allocation order.
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(7) Shipments to Overseas U.S. Military Addresses, Foreign Service
Posts (e.g., Diplomatic Post Offices), and Embassies. The Administrator
believes the intent of the Presidential Memorandum is to protect
Americans by ensuring their access to covered materials. The
Administrator believes this extends to all Americans, including those
serving our country overseas. For this reason, the Administrator
believes that it is necessary and appropriate to promote the national
defense to allow shipments of covered materials to be shipped overseas
to U.S. government employees working abroad.
(8) In-Transit Merchandise: Shipments in Transit through the United
States with a Foreign Shipper and Consignee, Including Shipments
Temporarily Entered into a Warehouse or Temporarily Admitted to a
Foreign Trade Zone. The April 3 Presidential Memorandum states that
``To ensure that these scarce or threatened PPE materials remain in the
United States for use in responding to the spread of COVID-19, it is
the policy of the United States to prevent domestic brokers,
distributors, and other intermediaries from diverting such material
overseas'' (emphasis added).\12\ The Administrator believes that
merchandise merely passing through the United States is outside the
scope of the Presidential Memorandum. In addition, the Administrator
believes that diversion of these specific types of materials would
cause significant impacts to international relations, diplomacy, and
global supply chains, each of which is a factor that is specifically
identified in the allocation order as being necessary and appropriate
to promote the national defense. Therefore, the Administrator is
explicitly exempting these shipments from the enforcement of the
allocation order.
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\12\ See Memorandum on Allocating Certain Scarce or Threatened
Health and Medical Resources to Domestic Use for the Secretary of
Health and Human Services, the Secretary of Homeland Security, and
the Administrator of the Federal Emergency Management Agency, sec. 1
(Apr. 3, 2020), https://www.whitehouse.gov/presidential-actions/memorandum-allocating-certain-scarce-threatened-health-medical-resources-domestic-use/.
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FEMA will require a letter of attestation to be submitted to FEMA
via CBP's document imaging system and placed on file with CBP,
certifying to FEMA the purpose of the shipment of covered materials.
(9) Shipments for Which the Final Destination is Canada or Mexico.
The Administrator recognizes the important role our closest neighbors
play in the national defense interests of the United States. The
integration of the economies and supply chains among the United States,
Mexico, and Canada is robust. Many critical sectors--including, for
example, food and agriculture; communications and energy; automotive
and industrial; water and wastewater management; and law enforcement
and first responders--cross national boundaries. Negative impacts to
workers, including a lack of PPE, in these and other critical sectors
in Canada and Mexico may cause significant interruptions to the
corresponding supply chains in the United States, and in turn, may
disrupt the large flow of cross-border trade with our neighbors. In
addition, the United States maintains close economic and diplomatic
ties with these nations, which would be negatively impacted by the
restriction of exports of covered materials into these countries. In
the allocation order, the Administrator specifically identified
minimization of disruption to the supply chain, both domestically and
abroad, and international relations and diplomatic considerations as
key elements of promoting the national defense. Each would be
negatively impacted by slowing or halting the transportation of covered
materials across country lines to Canada and Mexico. For these reasons,
the Administrator has determined that this exemption is necessary and
appropriate to promote the national defense.
FEMA will require a letter of attestation stating that the items
being shipped are for use in and not for transshipment through Canada
or Mexico, to be submitted to FEMA via CBP's document imaging system
and placed on file with CBP, certifying to FEMA the purpose of the
shipment of covered materials.
(10) Shipments by or on behalf of the U.S. Federal Government,
including its Military. The Administrator recognizes that any shipment
of covered materials made by or on behalf of the Federal Government,
including its military, are inherently necessary and appropriate to
promote the national defense, and so should be exported without delay.
Peter T. Gaynor,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2020-08542 Filed 4-17-20; 4:15 pm]
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