Restrictions on export of personal protective equipment (PPE) outside the EU
Since the outbreak of the new coronavirus SARS-Cov-2 and the disease caused by the virus COVID-19, the need for personal protective equipment (PPE) has increased significantly. Personal protective equipment is urgently needed to protect people in health care and other industries, against infection. This also applies in the EU.
Imminent shortages of personal protective equipment
The demand for personal protective equipment has risen sharply in recent weeks and is expected to increase even further in the near future. Shortages are likely to arise in the Member States. Companies that produce personal protective equipment in the EU scale up their production. However, upscaling the production level within the EU alone will not be enough to prevent shortages. Due to the pandemic, demand for these products has exploded worldwide.
Furthermore, personal protective equipment can normally be traded and exported from the EU to other parts of the world without any restrictions.
Commission makes export of personal protective equipment subject to a licensing requirement
In order to ensure as much as possible the availability of these essential goods within the EU, the European Commission issued Implementing Regulation (EU) 2020/402 on 14 March 2020 making the exportation of certain personal protective equipment subject to the production of an export authorization. This Regulation was published in the Official Journal of the EU on March 15, 2020 and entered into force the same day to prevent stock depletion for speculative reasons. This regulation will apply for a period of six weeks.
Pursuant to Article 1 (1) exports of the personal protective equipment listed in Annex I to the Regulation, irrespective of their origin, require an export license from the competent authorities of the Member State where the exporter is established. The export license must be in accordance with the model in Annex II. Without an export license, exports of the products listed in the Annex are prohibited (Article 1 (2)). Export without a required export license is a criminal offense under the national law of the Member States.
Five categories of personal protective equipment
Annex I contains five categories of personal protective equipment, namely:
- Safety glasses, protective eyewear and contact lenses;
- Face shields;
- Mouth and nose protection;
- Protective clothing;
The overview in Annex I contains the product descriptions and the relevant commodity codes.
Relevant product regulations
It is also stated that the personal protective equipment listed in the Annex is in accordance with the relevant product regulations. The product regulations for personal protective equipment are included in Regulation (EU) 2016/425. This Regulation establishes, inter alia, the essential health and safety requirements for the design, manufacture and making available on the market of personal protective equipment.
The Regulation requires that the competent authorities decide in principle within five working days whether or not to grant an export license. When taking their decision, they take into account relevant considerations listed in the Regulation.
Safeguard measures as an exception to free exports
Restricting exports of products is exceptional. Apart from known restrictions such as those in the case of sanctions or export-controlled products under the Dual-use Regulation and drug precursors under Regulation (EC) No. 111/2005, the basic principle is that the export of goods from the EU to third countries is free.
The legal basis for the promulgated measure authorizing the export of certain personal protective equipment is laid down in Regulation (EU) 2015/479 on common rules for exports. The basic principle of this Regulation is that exportation of products from the EU to third countries are in principle free and not subject to quantitative restrictions (Article 1).
Safeguard measures can be imposed in exceptional circumstances. In that regard, Article 5 provides: “In order to prevent a critical situation from arising on account of a shortage of essential products, or to remedy such a situation, and where Union interests call for immediate intervention, the Commission, acting at the request of a Member State or on its own initiative, and taking account of the nature of the products and of the other particular features of the transactions in question, may make the export of a product subject to the production of an export authorisation […] ”.
Restrictive measures in third countries
Not only the EU curbs exports of personal protective equipment in the current crisis. Recital 6 of the Regulation states that third countries have already proceeded to restrict exports or take similar measures on a more informal basis. Some of these third countries traditionally supply the EU. This puts further pressure on the availability of the products on the EU market.
Corona crisis leads to protectionism
Not only international trade in personal protective equipment is under pressure. This also applies in particular to the worldwide production and supply of respiratory equipment and parts for this. The Netherlands Broadcasting Corporation (“NOS”) reported on March 24, 2020 that Philips is concerned about a potential claim for respirators by US authorities. President Trump last week signed an executive order mandating his Secretary of Health to use an old Defense Production Act to claim production and supplies of respiratory equipment for the U.S. market. Philips produces respirators at a facility in Pittsburgh, USA.
Impact of the corona crisis on the import and export of goods
The corona crisis has a huge impact on international trade as a whole, but also in particular with regard to medical devices and personal protective equipment and hygiene products. Both on the import and the export side, there are points of attention for companies that produce, trade internationally, transport these products or who are involved in import and export formalities. For the import side, we refer to our item about the trade in counterfeit COVID-19 related products and an investigation by the European Anti-Fraud Office OLAF.
On the export side, as of March 15, 2020, with regard to personal protective equipment, exporters, logistics service providers and customs brokers must take into account the export license requirement.