On September 24, 2021, the Department of Commerce announced that its Bureau of Industry and Security (BIS) is investigating whether imports of neodymium-ironboron (NdFeB) permanent magnets, or rare earth magnets, undermine U.S. national security. Commerce also published a Federal Register notice seeking comments on the investigation; comments are due November 12, 2021.

The announcement noted that the investigation is consistent with a recommendation that resulted from the Biden Administration’s 100-day supply chain reviews, which focused on the critical minerals and materials supply chain, among three other key industries.

Rare earth magnets are used in critical national security systems such as fighter aircraft and missile guidance systems. They are also used in critical infrastructures such as electronic vehicles and wind turbines, as well as computer hard drives, audio equipment, and MRI devices.

If the Commerce Secretary finds that these products are being imported into the United States in “such quantities or under such circumstances as to threaten to impair the national security,” she will report her findings to the President. The President then has 90 days to determine whether to “adjust” imports or take other non-trade related action, and 15 days to take such action as he deems warranted.

While Commerce “is interested in any information” related to the investigation it identified areas of particular significance. Specifically, Commerce seeks comment on:

Nicole Hager, a Law Clerk at Wiley Rein LLP, contributed to this alert.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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