[Federal Register Volume 86, Number 112 (Monday, June 14, 2021)]
[Rules and Regulations]
[Pages 31448-31450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12484]


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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 and Critical 
Health and Medical Resources for Domestic Use; Additional Exemptions

AGENCY: Federal Emergency Management Agency, Department of Homeland 
Security (DHS).

ACTION: Notification of additional exemptions.

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SUMMARY: The Federal Emergency Management Agency (FEMA) announces 
additional exemptions from a temporary final rule that FEMA published 
in the Federal Register on December 31, 2020.

DATES: Applicability date: This notification applies beginning on June 
11, 2021.

ADDRESSES: You may review the docket by searching for Docket ID FEMA-
2020-0018, via the Federal eRulemaking Portal: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Daniel McMasters, Program Analyst, 
Office of Policy and Program Analysis, 202-212-2900, [email protected].

SUPPLEMENTARY INFORMATION:

Background

    On April 10, 2020, the Federal Emergency Management Agency (FEMA) 
published a temporary final rule (the ``rule'') to allocate certain 
health and medical resources for domestic use, so that these resources 
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 health and medical resources are 
appropriately allocated for domestic use. The rule was modified and 
extended on August 10, 2020 and December 31, 2020, respectively.\2\
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    \1\ 85 FR 20195 (Apr. 10, 2020) (codified at 44 CFR part 328). 
See also 85 FR 22622 (Apr. 23, 2020) (correcting the date filed from 
``4-8-20'' to'' 4-7-20'').
    \2\ 85 FR 48113 (Aug. 10, 2020) and 85 FR 86835 (Dec. 31, 2020) 
(codified at 44 CFR part 328).
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    FEMA 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

[[Page 31449]]

Domestic Use (Memorandum).\5\ In the Memorandum, the President directed 
the Secretary of Homeland Security, through the FEMA 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, the five types of personal 
protective equipment (PPE) materials identified in the Memorandum. FEMA 
executed this direction by publishing an allocation order on April 10, 
2020, as a temporary final rule pursuant to the Memorandum. On April 
21, 2020, FEMA published notification of 10 exemptions in addition to 
the exemption listed in the original temporary final rule.\6\ The 
temporary final rule was modified and extended on August 10, 2020, and 
again on December 31, 2020, to ensure certain health and medical 
resources were appropriately allocated for domestic use.\7\
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    \3\ 50 U.S.C. 4501 et seq.
    \4\ See 85 FR 20195 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://trumpwhitehouse.archives.gov/presidential-actions/memorandum-allocating-certain-scarce-threatened-health-medical-resources-domestic-use/ (last accessed May 12, 2021).
    \6\ 85 FR 22021 (Apr. 21, 2020).
    \7\ See 85 FR 48113 (Aug. 10, 2020); 85 FR 86835 (Dec. 31, 
2020).
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    Consistent with the Memorandum, the December 31, 2020 rule provides 
that until June 30, 2021, and subject to certain exemptions, no 
shipments of covered materials may leave the United States without 
explicit approval by FEMA.\8\ 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.\9\ 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.\10\ 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 
critical 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.\11\
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    \8\ 44 CFR 328.102(a).
    \9\ 44 CFR 328.102(b).
    \10\ Id.
    \11\ 44 CFR 328.102(c).
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    In addition to providing for the determination described above, the 
rule includes eleven exemptions 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 that FEMA will not purchase 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.\12\ 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.\13\ Additionally, the Administrator 
determined that it is necessary and appropriate to promote the national 
defense to continue the 10 additional exemptions to the original 
temporary final rule that were published on April 21, 2020.\14\
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    \12\ 44 CFR 328.102(d)(1).
    \13\ Id.
    \14\ See 85 FR 86835, 86838 (Dec. 31, 2020).
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    Pertinent to this notification, the rule also provides that the 
Administrator may establish, in his or her discretion, additional 
exemptions that he or she determines necessary or appropriate to 
promote the national defense and will announce any such exemptions by 
notice in the Federal Register. This notification announces additional 
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.
    The additional exemptions are as follows:
    (1) Exports of Industrial N95 Respirators. The Administrator issues 
this exemption to narrow the scope of the allocation order to exempt 
shipments of industrial N-95 respirators from the allocation order. The 
Administrator believes that this exemption is necessary to narrow the 
scope of the allocation order to be limited to surgical N95 filtering 
facepiece respirators that are single-use, disposable respiratory 
protective devices used in a healthcare setting that are worn by 
healthcare personnel during procedures to protect both the patient and 
healthcare personnel from the transfer of microorganisms, body fluids, 
and particulate material at an N95 filtration efficiency level per 42 
CFR 84.171. A surgical N95 respirator is a class II device, regulated 
by the U.S. Food and Drug Administration under 21 CFR 878.4040. 
Narrowing the scope of the covered materials ensures that only those 
items that are scarce or critical items in the domestic supply chain 
are affected by the allocation order. The Administrator believes that 
industrial N95 respirators are in sufficient domestic supply \15\ and 
that worldwide demand for these items remains high. As such, it is 
necessary and appropriate to promote the national defense and 
consistent with the purposes of the Presidential Memorandum and the 
subsequent allocation order to exempt these items from the list of 
covered materials.
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    \15\ FEMA fills requests from state, local, tribal, and 
territorial partners for respirators through the standard Resource 
Request Form process. The agency does not have any open requests for 
industrial N95 respirators and is equipped to fill requests as they 
are received.
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    (2) Exports of PPE Surgical Masks. The Administrator believes it is 
necessary and appropriate to promote the national defense to exempt 
these items from the list of covered materials to support the efforts 
of domestic

[[Page 31450]]

manufacturing to combat COVID-19 around the world 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 assist in meeting the global 
demand for items where domestic supply needs have been met, help those 
in need, and to remain stalwarts of the international community. The 
Administrator also 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 promoting the U.S. economy. One 
of the factors specifically identified in the allocation order that the 
Administrator considers in determining whether to return for domestic 
use, issue rated order for, or allow the export of a shipment is 
minimization of disruption of the supply chain, both domestically and 
abroad. The Administrator believes that this exemption would not 
disrupt the domestic supply chain,\16\ nor cause a detrimental shortage 
of covered materials to Americans.
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    \16\ FEMA fills requests from state, local, tribal, and 
territorial partners for respirators through the standard Resource 
Request Form process. The agency does not have any open requests for 
PPE surgical masks.
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    (3) Exports of Specific Syringes and Needles. The Administrator 
believes it is necessary and appropriate to promote the national 
defense to exempt the specific syringes and needles covered under the 
current rule given the worldwide efforts to provide COVID-19 
vaccinations. Similar to PPE surgical masks above, the Administrator 
believes these items should be exempted from the list of covered 
materials to support the efforts to combat COVID-19 around the world 
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 assist in 
meeting the global demand for items where domestic supply needs have 
been met, help those in need, and to remain stalwarts of the 
international community. The Administrator also 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 
promoting the U.S. economy. One of the factors specifically identified 
in the allocation order that the Administrator considers in determining 
whether to return for domestic use, issue rated order for, or allow the 
export of a shipment is minimization of disruption of the supply chain, 
both domestically and abroad. The Administrator believes that this 
exemption would not disrupt the domestic supply chain, nor cause a 
detrimental shortage to Americans given the current state of 
vaccination rates in the United States.\17\
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    \17\ As of May 11, 2021, approximately 35.1 percent of the U.S. 
population has been fully vaccinated, while 46.2 percent of the U.S. 
population has received at least one dose of a vaccine. Over 71 
percent of the U.S. population 65 years of age or older (one of the 
highest at-risk segments of the U.S. population) have now been fully 
vaccinated. See www.covid.cdc.gov/covid-data-tracker/#vaccinations 
(last accessed May 12, 2021 at 1:30 p.m.).

Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2021-12484 Filed 6-11-21; 8:45 am]
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