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COVID-19: Update on Trade Agency Operations in Response to Pandemic

Tuesday, April 28, 2020
Sandler, Travis & Rosenberg Trade Report

Federal trade regulatory agencies have announced the following with regard to their operations in response to the COVID-19 pandemic. For more information, please contact trade attorney Lenny Feldman at (305) 894-1011.

(Sandler, Travis & Rosenberg has launched a new resource page to help members of the trade community keep track of the latest COVID-related policies and procedures and understand how best to respond. ST&R will also be conducting COVID-related webinars this month on the regulatory and policy framework and the impact on trade. In the meantime, this ST&R article identifies steps trade businesses can take to mitigate the effects of the crisis.)

Directorate of Defense Trade Controls

Compliance/Registration

- Effective March 13 DDTC temporarily suspended the requirement to renew registration as a manufacturer, exporter, and/or broker and pay a fee on an annual basis by extending ITAR registrations expiring on February 29, March 31, April 30, May 31, and June 30 for two months from the original date of expiration.

- DDTC is granting an additional 30 days for responses to its request-for-information letters related to voluntary and directed disclosure matters and is considering extensions for the submission of full voluntary disclosures on a case-by-case basis.

- DDTC is pursuing a one-time temporary reduction in registration fees for certain categories of registrants.

Licensing

- Effective March 13 DDTC extended any ITAR license that expires between March 13 and May 31 for six months from the original date of expiration so long as there is no change to the scope or value of the authorization and no name or address changes are required.

- Effective March 13 DDTC is allowing regular company employees to work at a remote work location so long as they are not located in Russia or a country listed in ITAR § 126.1. This provision will terminate July 31 unless otherwise extended in writing.

- Effective March 13 DDTC authorized regular employees of licensed entities who are working remotely in a country not currently authorized by a TAA, MLA, or exemption to

send, receive, or access any technical data authorized for export, reexport, or retransfer

to their employer via a TAA, MLA, or exemption so long as the employee is not located in Russia or a country listed in ITAR § 126.1. This provision will terminate July 31 unless otherwise extended in writing.

- Where possible, DDTC will email scans of (1) final action letters for general correspondence requests and (2) unclassified final action letters for DSP-85s.

Federal Emergency Management Agency

FEMA has issued a number of exemptions to its restrictions on exports of personal protective equipment.

Federal Maritime Commission

The FMC has issued a final rule that, effective April 27, allows exemptions from the regulatory requirements for service contracts to be granted without notice and opportunity for a hearing. The FMC explains that the COVID-19 pandemic and its effects on international supply chains have demonstrated a need for flexibility to provide immediate regulatory relief in appropriate circumstances. This is particularly true in the case of service contracts, the FMC states, given the challenges that the current situation presents to contract negotiation, formation, and filing by carriers and their customers.

Food and Drug Administration

Third-Party Certification Program

The FDA has provided temporary flexibility so that recognized accreditation bodies under the Food Safety Modernization Act’s Accredited Third-Party Certification Program for foreign food entities and their products can maintain the accreditations of certification bodies and so that already-issued certifications need not lapse when certain safeguards are in place.

Recognized ABs are required to monitor the CBs they accredit through a comprehensive assessment of their performance, which includes a review of the CB’s self-assessment, regulatory audit reports, and notifications submitted to the FDA; onsite observations of regulatory audits performed by the CB; and a visit to the CB’s headquarters no later than one year after the initial date of accreditation and every two years thereafter. The FDA now states that in certain circumstances it does not intend to enforce the requirement for onsite monitoring activities because they may be temporarily impractical due to COVID-19-related restrictions.

In addition, accredited CBs are responsible for conducting regulatory audits when certifying that eligible foreign entities are in compliance with applicable food safety requirements. These certificates are issued for a term of up to 12 months. However, because current travel restrictions and advisories related to COVID-19 may hinder the ability of accredited CBs to conduct the onsite regulatory audits needed to recertify foreign entities, the FDA states that for already-issued certificates it does not intend to enforce the requirement that the accredited CBs issue the certificates for a term only up to 12 months, in certain circumstances.

PPE Entry Information

The FDA has updated its instructions on the submission of entry information for personal protective equipment and certain other medical devices to reflect the expanded list of (1) products authorized for emergency use pursuant to an emergency use authorization and (2) products regulated by the FDA as a medical device that are not authorized by an EUA but for which an enforcement discretion policy has been published in guidance. Click here to access the FDA webpage that includes current lists of both types of products. Click here for more information on entry information required for these types of products.

International Trade Administration

In response to operational adjustments due to COVID-19, the ITA has decided to uniformly toll by 50 days deadlines for all antidumping and countervailing duty administrative reviews. This determination applies to every administrative review segment before the ITA as of April 24, including actions by the ITA (such as preliminary and final results) and by parties to administrative reviews (such as the submission of questionnaire responses, supplemental questionnaire responses, and case and rebuttal briefs).

This determination does not apply to (1) any segment of a proceeding other than administrative reviews (e.g., original investigations), (2) court-ordered redeterminations and associated remand proceedings, (3) scope inquiries, anti-circumvention proceedings, changed circumstances reviews, or sunset reviews, or (4) new shipper reviews, unless a pending new shipper review has been aligned with an administrative review.

U.S. Customs and Border Protection

Duty Deferral

CBP issued a temporary rule allowing importers to postpone for 90 days their deposit of certain estimated duties, taxes, and fees. CBP has also issued and updated a list of frequently-asked questions on this deferral.

Mexico and Canada Border Closure

CBP has extended from April 20 to May 20 a prohibition on non-essential travel from Canada and Mexico at land ports of entry. Those exempt from this restriction include individuals engaged in lawful cross-border trade; e.g., truck drivers supporting the movement of cargo between the U.S. and Canada or Mexico. CBP continues to state that this restriction “should not interrupt legitimate trade … or disrupt critical supply chains that ensure food, fuel, medicine, and other critical materials reach individuals on both sides of the border.”

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