Notification of Exemptions

This document is scheduled to be published in the
Federal Register on 04/21/2020 and available online at
federalregister.gov/d/2020-08542, and on govinfo.gov

Billing Code: 9111-19-P
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.
________________________________________________________
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 [INSERT DATE OF
FILING FOR PUBLIC INSPECTION AT THE FEDERAL REGISTER].
ADDRESSES: You may review the docket by searching for Docket ID FEMA-20200018, 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

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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
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).
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,

1

See 85 FR 20195 (Apr. 10, 2020) (codified at 44 CFR part 328).
See 44 CFR 328.101.
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-threatenedhealth-medical-resources-domestic-use/.
6
44 CFR 328.102(a).
2

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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
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
7

44 CFR 328.102(b).
Id.
9
44 CFR 328.102(c).
10
44 CFR 328.102(d)(1).
8

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materials, if the Administrator determines that doing so is necessary or appropriate to
promote the national defense.11
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
11

Id.

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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 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

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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

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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

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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
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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

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foster positive diplomatic relationships with our partners and allies, the
Administrator has determined to exempt diplomatic shipments from the allocation
order.
(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.

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-threatenedhealth-medical-resources-domestic-use/.

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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.
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
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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

[FR Doc. 2020-08542 Filed: 4/17/2020 4:15 pm; Publication Date: 4/21/2020]

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Agency.