[Federal Register Volume 65, Number 224 (Monday, November 20, 2000)]
[Proposed Rules]
[Pages 69810-69838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29034]



[[Page 69809]]

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Part II





Department of Transportation





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National Highway Traffic Safety Administration



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49 CFR Parts 567, 591, 592, and 594



Certification; Importation of Vehicles and Equipment Subject to Federal 
Safety, Bumper and Theft Prevention Standards; Registered Importers of 
Vehicles Not Originally Manufactured To Conform With the Federal Motor 
Vehicle Safety Standards; Schedule of Fees Authorized by 49 U.S.C. 
30141; Proposed Rules

Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / 
Proposed Rules

[[Page 69810]]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 567, 591, 592, and 594

[Docket No. NHTSA-2000-8159; Notice 1]
RIN 2127-AH67


Certification; Importation of Vehicles and Equipment Subject to 
Federal Safety, Bumper and Theft Prevention Standards; Registered 
Importers of Vehicles Not Originally Manufactured To Conform With the 
Federal Motor Vehicle Safety Standards; Schedule of Fees Authorized by 
49 U.S.C. 30141

AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to amend regulations that pertain to 
the importation by registered importers (RIs) of motor vehicles that 
were not manufactured to comply with all applicable Federal motor 
vehicle safety, bumper, and theft prevention standards. The principal 
effect of these changes would be to expedite the importation of 
vehicles originally manufactured for sale in Canada. These proposals 
would require corresponding minor amendments to other regulations, 
which we are also proposing.
    We are also proposing a number of changes in requirements for RI 
registration applications, RI duties, and suspension or revocation of 
RI registrations (49 CFR part 592). We are also proposing an amendment 
of our fee regulation, 49 CFR part 594, to add a new fee for processing 
the information that we would require from RI's who import motor 
vehicles from Canada under the simplified procedure we are proposing.

DATES: You should submit your comments early enough to ensure that 
Docket Management receives them not later than January 4, 2001.
    The final rule would be effective 30 days after its publication in 
the Federal Register.

ADDRESSES: You should mention the docket number of this document in 
your comments, and submit your comments in writing to: Docket 
Management, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590. 
Comments may also be submitted to the docket electronically by logging 
onto the Dockets Management System website at http//dms.dot.gov. Click 
on ``Help & Information,'' or ``Help/Info'' to obtain instructions for 
filing the document electronically.
    You may call Docket Management at 202-366-9324. You may visit the 
Docket from 10 a.m. to 5 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Taylor Vinson, Office of Chief 
Counsel, NHTSA, 400 Seventh St., SW., Washington, DC 20590. (202-366-
5263).

SUPPLEMENTARY INFORMATION:   

Table of Contents

I. Background of This Rulemaking Action
    A. The 1968 Importation Regulation (19 CFR 12.80).
    B. The Imported Vehicle Safety Compliance Act of 1988 (Pub. L. 
100-562).
    C. Vehicle Eligibility Determinations (49 CFR part 593).
    D. Importations of Canadian Vehicles for Personal Use.
II. How We Propose to Simplify the Importation Process for Canadian 
Vehicles Imported for Resale.
    A. The Present Process.
    B. How We Would Treat Canadian Vehicles Imported for Resale if 
the Manufacturer Has Informed NHTSA That the Vehicle is in Virtual 
Compliance with the FMVSS.
    C. How We Would Treat Other Motor Vehicles.
III. Problems We Have Encountered in Administering the RI Program 
and How We Propose to Deal With Them.
    A. Requirements for Registration and its Maintenance 
(Sec. 592.5).
    1. Section 592.5(a) (3) and (5): Whether a Post Office Box or 
Canadian Address is an Acceptable Address for a RI; Identification 
of Officer(s) Authorized to Certify Compliance to NHTSA; 
Identification of Applicant and its Principals.
    2. Section 592.5(a)(8): Defining ``Service Insurance Policy'' 
and ``Independent Insurance Company'' to Best Assure That Owners 
Will be Able to Have Noncompliances and Safety-Related Defects 
Remedied Without Charge.
    3. Section 592.5(a)(9): Capability of an Applicant to Perform 
Conformance Work.
    4. Section 592.5(a)(11): Ensuring That an Applicant Understands 
its Duties.
    5. Section 592.5(b): Incomplete Applications.
    6. Section 592.5(d): Denial of Applications.
    7. Section 592.5(e): The Due Date for the RI's Annual Fee.
    8. Transfer of Current Section 592.5(f): Notification of Change 
of Information in a RI Application.
    9. Section 592.5(g): Treatment of Applications Pending on 
Effective Date of the Final Rule.
    B. Duties of a Registered Importer (Sec. 592.6)
    1. Section 592.6(a): Duties to Ensure Conformance of All 
Imported Vehicles With Safety, Bumper, and Theft Prevention 
Standards, and to Furnish a Conformance Bond for Type 2 Motor 
Vehicles.
    2. Section 592.6(b): Recordkeeping Requirements.
    3. Section 592.6(c): Whether a Person Other than the RI May 
Affix a Certification Label to a Vehicle After it is Conformed; 
Whether the Certification Label May Be Affixed Outside the United 
States.
    4. Sections 592.6(d) and 592.6(e): Documentation That a RI Must 
Submit to NHTSA.
    5. Section 592.6(f): Acts Prohibited Before Expiration of 30 
Days After Submission of Compliance Statement or Release of the 
Conformance Bond.
    6. Section 592.6(g): Duty to Provide Copy of the Service 
Insurance Policy With Each Vehicle.
    7. Section 592.6(h) Duty to Provide and Retain Copies of 
Odometer Disclosure Statements.
    8. Section 592.6(j): Duty to Remedy Noncompliances and Safety-
Related Defects, and to Provide Reports Regarding Recalls.
    9. Section 592.6(m): Duty to Notify NHTSA of Any Change of 
Information in the Registration Application Including Prior 
Notification Before Adding or Discontinuing the Use of Any Facility.
    10. Section 592.6(n): Duty to Assure That at Least One Full-Time 
Employee of a RI is Present at Each of the RI's Facilities.
    11. Section 592.6(o): Prohibition of Two or More RIs Co-
Utilizing the Same Employee or the Same Conformance, Repair, or 
Storage Facility.
    12. Section 592.6(p): Duty to Provide Timely Response to NHTSA 
Requests for Information.
    13. Section 592.6(q): Duty to Pay Fees in a Timely Manner.
    14. Section 592.6(r): Duty of Entities That Are RIs When Final 
Rule is Adopted to Provide Information That Will be Required of New 
RI Applicants.
    C. Automatic Suspension, Revocation, and Suspension of 
Registrations; Reinstatement of Registrations (Sec. 592.7).
    1. Section 592.7(a): Automatic Suspension of a Registration.
    2. Section 592.7(b): Non-Automatic Suspension and Revocation of 
Registrations.
    3. Section 592.7(c): Reinstatement of Suspended Registrations.
    4. Section 592.7(d): Effects of Suspension or Revocation.
    5. Section 592.7(e): Continuing Obligations of a RI Whose 
Registration Has Been Revoked or Suspended.
    D. Proposed Amendments of part 591 to Preclude the Importation 
by a RI of a Salvage, Repaired Salvage, or Reconstructed Motor 
Vehicle; Minor Conforming Amendments to part 591; Sec. 592.9: 
Forfeiture of Bond.
    E. Section 594.11: Fees to be Paid by Registered Importers for 
Importation of Type 1 Motor Vehicles.
IV. Effective Date
V. Rulemaking Analyses and Notices
    Regulatory Text

[[Page 69811]]

I. Background of This Rulemaking Action

A. The 1968 Importation Regulation (19 CFR 12.80)

    The National Traffic and Motor Vehicle Safety Act of 1966 (``the 
Safety Act''), now codified as 49 U.S.C. Chapter 301 ``Motor Vehicle 
Safety,'' grants us authority to issue Federal motor vehicle safety 
standards (``FMVSS''), and to require that vehicles imported into the 
United States be brought into compliance with them. For the first two 
decades after enactment of the Safety Act, vehicles that were not 
originally manufactured to comply with the FMVSS were imported under a 
regulation we jointly issued with the United States Customs Service 
(``Customs''), 19 CFR 12.80, effective January 10, 1968. Under 
Sec. 12.80(b)(1)(iii), a nonconforming motor vehicle could be brought 
into the United States permanently if its importer demonstrated to us 
within 120 days after entry that the vehicle had been brought into 
compliance with the FMVSS. Performance of the importer was secured by a 
Customs bond given at the time of importation. Until January 31, 1990, 
this was the DOT regulation that applied to the importation of 
noncomplying vehicles.

B. The Imported Vehicle Safety Compliance Act of 1988 (Pub. L. 100-562)

    During the 1980s, as the dollar grew stronger against European 
currencies, the volume of nonconforming imported vehicles also grew, 
peaking at 65,000 units in 1985. When Congress reviewed our importation 
program in the wake of this influx, it concluded that the safety of the 
public could be enhanced by a comprehensive revision of the laws under 
which nonconforming motor vehicles were imported.
    On October 31, 1988, Congress enacted the Imported Vehicle Safety 
Act of 1988 (``the 1988 Act''). It became effective on January 31, 
1990. As we explain more fully below, under the 1988 Act, a 
nonconforming vehicle of a specific make, model, and model year could 
not be admitted into the United States unless we had determined that it 
was capable of being modified so that it would comply with the FMVSS in 
effect as of the date it was manufactured.\1\ Further, the importer 
could no longer choose any facility to perform conformance work. Such 
work had to be performed by, and noncomplying vehicles intended for 
resale had to be imported by, a ``registered importer'' (``RI''). Under 
the 1988 Act, a RI is an entity that we have recognized as being 
technically and financially capable of satisfying a number of 
requirements, including the ability to conform noncomplying vehicles to 
the FMVSS and to remedy noncompliances and safety-related defects, 
without charge, that exist in the vehicles that they have imported. See 
generally 49 U.S.C. 30141-30147 and 49 CFR parts 591-594.
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    \1\ The 1988 Act contains several exceptions under which 
noncomplying vehicles can be imported without going through a RI. 
See 49 U.S.C. 30112(b), e.g., vehicles imported for temporary use, 
vehicles that are at least 25 years old.
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    During the last few years, a strong dollar has once again resulted 
in an unanticipated volume of imported vehicles not originally 
manufactured to conform to the FMVSS, this time from Canada rather than 
from Europe. In 1998, 76,092 noncomplying vehicles were imported into 
the United States, which virtually doubled in 1999, to a total of 
151,842 vehicles. Approximately 99 percent of these vehicles were 
Canadian.

C. Vehicle Eligibility Determinations (49 CFR Part 593)

    As noted above, before a nonconforming motor vehicle can be 
imported into the United States, we must have decided that vehicles of 
that make, model, and model year are capable of being modified to 
comply with the FMVSS. We are authorized to make such a decision on one 
of two bases: (1) The nonconforming vehicle is substantially similar to 
one whose manufacturer has certified it for sale in the United States, 
and it is capable of being readily modified to comply with the FMVSS, 
or (2) if there is no substantially similar vehicle, the vehicle's 
safety features comply with, or are capable of being modified to comply 
with, the FMVSS (see 49 U.S.C. 30141). We make these decisions upon 
application by a RI or a manufacturer, or on our own initiative. In all 
cases, we publish notices in the Federal Register, first to invite 
comment, and then to announce our decision. Each year, we also publish 
a list of eligible vehicles, and this also appears as appendix A to 49 
CFR part 593, Determinations That a Vehicle Not Originally Manufactured 
to Conform to the Federal Motor Vehicle Safety Standards is Eligible 
for Importation.
    It has become apparent to us that many vehicles originally 
manufactured and certified for sale in Canada (we will refer to these 
as ``Canadian vehicles,'' even though some of these vehicles were 
manufactured elsewhere, such as the United States, and then imported 
into Canada) had counterparts of the same make, model, and model year 
in the United States that were virtually indistinguishable from them. 
This is due to the fact that the Canadian Motor Vehicle Safety 
Standards (``CMVSS'') are identical to the FMVSS in all but a few 
respects. To facilitate importation, we decided on our own initiative 
that most Canadian vehicles certified as complying with the CMVSS were 
``substantially similar'' to vehicles certified as complying with the 
FMVSS and were therefore eligible for importation (see 55 FR 32988, 
August 13, 1990 and the portion of part 593, appendix A, entitled 
``Vehicles Certified by Their Original Manufacturer as Complying With 
All Applicable Canadian Motor Vehicle Safety Standards''). By making 
blanket Canadian-vehicle-eligibility decisions on our own initiative, 
we have also facilitated international trade by removing the need for 
numerous individual petitions.

D. Importation of Canadian Vehicles for Personal Use

    Some time ago, we simplified the procedures under which virtually-
complying Canadian vehicles could be imported for personal use. We 
decided that the certification requirement of the Safety Act (49 U.S.C. 
30115) could be satisfied by a letter from the original manufacturer of 
the Canadian vehicle to the importer stating that the vehicle met all 
applicable FMVSS except for minor labeling requirements (by this we 
mean such as those established by FMVSS No. 101 (a ``km'' label for a 
speedometer calibrated in kilometers) and the tire information placard 
required by S4.3 of FMVSS No. 110). On this basis, we have exempted 
from the RI process Canadian vehicles imported for personal use by 
individuals who have a de facto certification letter from the vehicle 
manufacturer. This has expedited traffic at the U.S./Canadian border 
and relieved a burden on importers whose Canadian cars virtually comply 
with the FMVSS. However, those Canadian vehicles that have not been 
manufactured to meet the FMVSS that are more stringent than the CMVSS, 
such as FMVSS No. 208, Occupant Crash Protection, and the dynamic crash 
requirements of FMVSS No. 214, Side Impact Protection, obviously cannot 
be covered by a manufacturer's virtual-compliance letter. Thus, such 
vehicles must be brought into compliance pursuant to a contract with a 
RI.

[[Page 69812]]

II. How We Propose To Simplify the Importation Process for Canadian 
Vehicles Imported for Resale

    We have concluded that some of the current procedures and 
requirements have resulted in regulatory requirements on the 
importation of Canadian vehicles for resale that are not necessary to 
implement the safety purposes of the statute. Therefore, we are 
proposing a number of simplifying amendments.

A. The Present Process

    Nonconforming vehicles imported for resale can only be imported by 
a RI. The RI must enter the vehicle under a bond that guarantees that 
it will bring the vehicle into compliance and certify its compliance to 
us within 120 days after entry. 49 U.S.C. 30141(d); 49 CFR 591.8. The 
RI must support its certification with appropriate documentation. If we 
accept the certification and documentation, we inform the RI and 
release the bond.
    Until the bond is released, the RI must not register the vehicle or 
license it for use on the public roads (or release it from its custody 
for such purposes). 49 U.S.C. 30146(a). However, if the RI has not 
heard from us within 30 days after submitting its certification 
package, it may release the vehicle. But if we advise the RI within the 
30-day period that we intend to inspect the vehicle, the RI must retain 
custody until the inspection is completed. 49 U.S.C. 30146(c).
    Failure of the RI to comply with these and other requirements can 
result in forfeiture of the bond, and/or civil penalty liability.
    The ever-growing number of Canadian imports, the desire of RIs to 
turn over their inventory promptly, and the submission to and review by 
NHTSA of extensive compliance certification information has resulted in 
strains on the existing system. We have recently implemented procedures 
to expedite vehicle entry, and we are also working on a number of other 
measures, such as electronic submission of data by RIs, to improve the 
process. However, we believe that other improvements should be made 
that would require the regulatory changes proposed below.

B. How We Would Treat Canadian Vehicles Imported for Resale if the 
Manufacturer Has Informed NHTSA That the Vehicle Is in Virtual 
Compliance With the FMVSS

    We have tentatively concluded that we should make it easier to 
import Canadian vehicles for resale that are covered by a letter from 
the original manufacturer indicating that they are in compliance with 
all applicable FMVSS except for some labeling requirements of Standards 
Nos. 101, 110 or 120 (and, occasionally, the daytime running lamp (DRL) 
specifications of Standard No. 108), the same way we have been doing 
for vehicles imported for personal use. Most manufacturers of Canadian-
certified vehicles have informed us which of their late-model vehicles 
conform to the FMVSS except in minor respects. More than 99 percent of 
the 151,842 vehicles imported in 1999 came from Canada and 75 percent 
of them fit into this category. We propose to identify these virtually-
conforming vehicles as ``Type 1 motor vehicles.'' However, we would 
require that the manufacturer's letter also include a statement of 
compliance with U.S. bumper and theft prevention standards. A ``Type 1 
motor vehicle'' would be defined as follows:

    Type 1 motor vehicle means a motor vehicle that is certified by 
its original manufacturer as complying with all applicable Canadian 
motor vehicle safety standards and whose original manufacturer has 
informed NHTSA in writing that the vehicle complies with all 
applicable Federal motor vehicle safety, bumper, and theft 
prevention standards (except for the labeling requirements of 
Federal Motor Vehicle Safety Standards Nos. 101 and 110 or 120, and, 
if appropriate, S5.5.11 of Standard No. 108 (related to daytime 
running lamps)).

We propose to add an appendix A to part 592, as reflected in this 
notice, which would list by make, model, and model year the vehicles 
that would be Type 1 vehicles. We would revise that list from time to 
time to reflect the current circumstances.
    Type 1 motor vehicles imported for resale would still have to be 
imported by a RI, and the RI would have to ensure they comply with all 
applicable FMVSS. In particular, because many Canadian vehicles have 
DRLs that do not comply with FMVSS No. 108 (either because they are too 
bright or because they are mounted higher than we permit), the RI, as 
today, would have to assure that the DRLs comply as manufactured, or 
either replace the DRL modules with compliant modules or disconnect the 
DRLs. In addition, the RI would have to substantiate that a Type 1 
motor vehicle is not subject to any outstanding recalls or, 
alternatively, that all pending safety recall work has been completed. 
Under our proposal, a RI would not have to submit documents to us 
demonstrating that compliance work had been performed, but it would 
have to retain appropriate documentation for 10 years for our review if 
we asked for it. These are the same documents that importers of Type 2 
motor vehicles (defined below) would have to retain, and are more 
specifically described in proposed Sec. 592.6(b).
    Neither a bond nor a conformity statement would have to be 
furnished for Type 1 vehicles. They would therefore be admitted 
pursuant to a new declaration added to 49 CFR part 591, specifically a 
new Sec. 591.5(g) (to replace the present ``reserved'' subsection) 
stating that the vehicle has been manufactured and certified to conform 
to the CMVSS and that the manufacturer has represented to NHTSA that 
the vehicle conforms to the FMVSS, bumper, and theft prevention 
standards except for minor safety labeling requirements and, if 
appropriate, DRLs. Therefore, those provisions of 49 U.S.C. 30146(a), 
under which RIs must retain custody of vehicles for 30 days after 
submission of a conformance certification, or until notified by NHTSA 
that the bond has been released, would not apply. Type 1 motor vehicles 
could be released after the RI performs all necessary conformance work, 
affixes a certification label, and confirms that there are no 
outstanding unremedied safety recalls covering the vehicle. This will 
simplify procedures for both the RIs and NHTSA, and expedite the 
importation of these vehicles.
    For purposes of safety recalls, the RI is the statutory 
manufacturer of each motor vehicle it imports or conforms. 49 U.S.C. 
30147(a)(1)(B). Therefore, regardless of the Type of vehicle imported, 
the RI is required to assure that owners of vehicles it imports or 
conforms for personal use are notified of all determinations that the 
vehicles have a noncompliance or safety-related defect and that it can 
be remedied without charge. For this reason, among others, NHTSA needs 
to have certain information regarding all vehicles imported for resale. 
For Type 1 vehicles, we believe that the following information is 
necessary: Make, model, model year, Vehicle Identification Number 
(``VIN''), vehicle type, date of manufacture, and date of importation. 
RIs would be required to furnish this information to us on a monthly 
basis, not later than 10 calendar days after the end of the month in 
which the vehicle was imported. In addition, as noted above, RIs would 
have to keep records covering all importations, including documentation 
on the modifications that it performed to conform vehicles and 
substantiation of its confirmation that all outstanding safety recall 
work has been performed on all the vehicles that they import or conform 
for personal use, including Type 1 motor vehicles, and allow us to 
inspect these records upon our request.

[[Page 69813]]

    Establishment of a Type 1 category represents our tentative 
conclusion as to how best to simplify importation from Canada of 
vehicles for resale. We are interested in having comments on the 
proposed process, whether there are additional ways in which the 
process could be simplified, or, alternatively, whether the simplified 
process proposed in this notice might compromise safety in a manner 
that has not occurred to us.

C. How We Would Treat Other Motor Vehicles

    With respect to the remaining noncomplying motor vehicles that are 
not Type 1 motor vehicles, we propose to call them ``Type 2'' motor 
vehicles, and would define them as follows:

    ``Type 2 motor vehicle means a motor vehicle, other than a Type 
1 motor vehicle, that is not certified by its original manufacturer 
as complying with all applicable Federal motor vehicle safety, 
bumper, and theft prevention standards.''

    In addition to the requirements set out above for safety recall 
work and recordkeeping for Type 1 vehicles, Type 2 vehicles would still 
be imported under a conformance bond, and the RI would therefore be 
obligated under 49 U.S.C. 30146(a) to retain custody for 30 days after 
submission of the conformity certification to us, unless we release the 
bond earlier or request an inspection.
    Approximately 99 percent of motor vehicles imported last year were 
manufactured for sale in Canada, comply with the Canadian Motor Vehicle 
Safety Standards, and thus are very similar to vehicles manufactured 
for sale in the United States (although 24% of these vehicles would by 
Type 2 motor vehicles because their manufacturers have not advised us 
that they comply with the FMVSS). The majority of RIs have not been 
importing vehicles manufactured for sale in countries other than 
Canada. At the present time, all RIs must fulfill the same 
requirements. Because conformance modifications of Canadian cars are 
relatively simple, and a RI may not need the technical expertise 
required to conform vehicles manufactured for sale in countries other 
than Canada, we have considered whether it is feasible to establish two 
categories of RIs, one restricted to importing vehicles certified to 
the CMVSS (Type 1 and Type 2 vehicles of Canadian origin), and the 
other, unrestricted as at present. We are interested in having comments 
on this subject, which will have some relevance to the more detailed 
registration requirements we are proposing below.

III. Problems We Have Encountered in Administering the RI Program 
and How We Propose To Deal With Them

    In administering the RI program, we have encountered many 
situations that were not anticipated when we adopted part 592 in 1989. 
We are proposing a number of changes to part 592 and announcing several 
interpretations of the statute and existing regulations, in order to 
address these situations and to assure that the RI program operates 
efficiently under the circumstances existing today.

A. Requirements for Registration and Its Maintenance (Sec. 592.5)

    An entity that wishes to register as an RI must file an application 
with us as specified in 49 CFR 592.5(a). Moreover, at the time an RI 
submits its annual fee, as required by 49 U.S.C. 30141(a)(3), it must 
file an annual statement in which it affirms that the information 
provided in its application remains unchanged. 49 CFR 592.5(e).
    As addressed below, based on experience gained over the years, we 
would require more information from a person seeking to be a RI than 
was originally required. Moreover, we need to obtain this additional 
information from each existing RI. Because a RI who was registered 
before the application requirements are amended cannot affirm the 
continuing correctness of information that it has never furnished, we 
have concluded that the most appropriate way to ensure that appropriate 
information is provided is to require existing RIs to maintain their 
existing registrations by providing the additional information called 
for by any final rule not later than 30 days after the effective date 
of the amended regulation. See proposed Sec. 592.6(r).
    If you wish to comment on whether we should have two categories of 
RI, as discussed above, we ask that you also address which items of the 
proposed information should be different for applicants who would be 
permitted to import only Type 1 vehicles and Type 2 vehicles of 
Canadian origin.
1. Sections 592.5(a)(3)and (5): Whether a Post Office Box or Canadian 
Address Is an Acceptable Address for a RI; Identification of Officer(s) 
Authorized To Certify Compliance to NHTSA; Identification of Applicant 
and Its Principals
    Section 592.5(a)(3) requires the applicant to provide its 
``address,'' among other information. Two issues have arisen with 
respect to this requirement: Whether a RI may give a post office box as 
its sole address, and whether a Canadian address is acceptable.
    We have accepted a post office box as the sole mailing address for 
a RI. However, there are times when we may wish to communicate with a 
RI by Registered Mail, such as notification of suspension of 
registration, and the U.S. Postal Service requires a street address for 
this purpose. Also, sometimes we use overnight delivery services that 
cannot deliver to a post office box. Further, we need to know the 
actual location of each of a RI's facilities in order to assure that 
the RI is properly carrying out its duties and responsibilities. 
Without street address(es), we are unable to inspect records and 
vehicles as authorized by 49 U.S.C. 30146(c), or to communicate by 
Registered Mail. Accordingly, we want to amend Sec. 592.5(a)(3) to 
require a RI applicant to provide the street addresses of all its 
vehicle conversion, recordkeeping, and storage facilities in the United 
States, and to designate one of these as a mailing address. The 
applicant could also give a post office box as a mailing address, 
provided that it is located in the same city as the designated street 
address. The RI would be required to affirm in its annual statement to 
NHTSA that these addresses remain correct and to notify us of any 
change in these addresses (proposed Secs. 592.5(f), 592.6(l), 
592.6(m)).
    We have not required that principals of a RI be citizens of the 
United States, and we have registered several RIs who have used mailing 
addresses in Canada; however, we have required them to maintain 
facilities in the United States where conformance work is performed and 
records are kept. We have reviewed the question of our ability to 
afford RIs with mailing addresses outside the United States adequate 
notice and process in administrative and judicial proceedings. We have 
concluded that if the RI is an entity organized under the laws of any 
State (e.g., corporation, partnership, sole proprietorship), it may be 
legally served at the street address of the United States facility it 
has provided us, even though its principal(s) may reside at a mailing 
address in Canada. The question of the adequacy of service may differ, 
however, if the RI is an entity that is not organized under the laws of 
any State, that is to say, if it is a sole proprietorship, partnership, 
or corporation under the laws of Canada.
    The statute addresses the question of service upon non-residents to 
the extent of specifying that a manufacturer ``offering a motor vehicle 
or motor vehicle equipment for import shall designate an agent on whom 
service of

[[Page 69814]]

notices and process in administrative and judicial proceedings may be 
made.'' 49 U.S.C. 30164(a). We have implemented section 30164 with 49 
CFR 551.45, Service of process on foreign manufacturers and importers. 
This regulation requires ``any manufacturer, assembler, or importer of 
motor vehicles'' to ``designate a permanent resident of the United 
States upon whom service of all processes, notices, orders, decisions, 
and requirements may be made for him and on his behalf * * * .'' 49 CFR 
551.45(a). As a RI is an ``importer of motor vehicles,'' we therefore 
propose to require an applicant organized under the laws of another 
country to file a designation of agent in the form specified in Sec. 
551.45 before we register it as a RI. (proposed Sec. 592.5(a)(5)(E)). 
This would not relieve the RI from maintaining required facilities and 
records within the United States.
    Given the difficulties discussed above, we are interested in having 
comments on whether we should not register applicants organized under 
the laws of another country or sole proprietors who are not citizens of 
the United States.
    We are also proposing that an applicant identify itself, its 
principals, and the form of its organization and the state laws under 
which it is organized. We would define a ``principal'' as any officer, 
partner, or director of a RI, and any person whose ownership interest 
in a RI is 10% or more. We need to be able to identify all officers and 
persons with a significant ownership interest in an applicant in order 
to be able to decide whether an application should be granted. For 
example, we need to know whether such an individual has previously been 
associated with a RI that has been suspended or revoked. If the 
applicant is a corporation, we intend to require it to include a 
statement provided by the Secretary of State, or other appropriate 
official of the state in which the applicant is organized, certifying 
that the applicant corporation is in good standing. We would also 
require an applicant to provide a copy of its license or similar 
document to do business as an importer/modifier/seller of motor 
vehicles in each state or political subdivision thereof where it 
intends to perform such activities as a RI or, alternatively, a 
statement by the applicant that it has made a bona fide inquiry and is 
not required by state or local law to have such a license.
    We propose to require the principals of an applicant to provide 
their dates of birth and social security numbers, which we would keep 
confidential. The reason for this is to allow us to determine whether 
any person associated with an applicant has ever been convicted of a 
misdemeanor or felony involving motor vehicles or the motor vehicle 
business, such as title fraud, odometer fraud, auto theft, or the sale 
of stolen vehicles. If we discover that there is such a person 
associated with an applicant, we could deny the application after 
considering the severity of the offense and the prospective role of the 
associate in operating the RI's business.
    For reasons discussed more fully later in this notice, we are 
proposing to require that conformity certifications be submitted to 
NHTSA by a principal of the RI. This would be an officer, a partner, or 
the sole proprietor of the RI but not someone who is merely an 
employee. Therefore, we are proposing to require that the RI 
application identify each principal who will be authorized to sign 
conformity certifications submitted to NHTSA.
2. Section 592.5(a)(8): Defining ``Service Insurance Policy'' and 
``Independent Insurance Company'' To Best Ensure That Owners Will Be 
Able To Have Noncompliances and Safety-Related Defects Remedied Without 
Charge
    Under 49 U.S.C. 30147(a)(1)(A), a noncompliance or a safety-related 
defect that is determined to exist in a vehicle that is substantially 
similar to a vehicle imported by a RI generally is deemed to exist in 
the vehicle imported by the RI. Since a RI ``shall be deemed to be the 
manufacturer of any imported motor vehicle that the importer imports or 
brings into compliance * * *.'' (49 U.S.C. 30147(a)(1)(B)), the RI has 
the responsibility, pursuant to 49 U.S.C. 30117(b), 30118-30121, and 
30166(f), to ensure that owners are notified of such noncompliances and 
defects and that they can be remedied without charge to the vehicle 
owner.
    Section 30147(b) directs us to require each RI (including any 
successor in interest) to provide and maintain evidence of sufficient 
financial responsibility to meet the above-referenced obligations. To 
implement section 30147(b), we currently require a RI applicant to 
submit to us a copy of a contract to acquire (or a copy of the policy 
itself) a prepaid ``mandatory service insurance policy underwritten by 
an independent insurance company,'' in an amount that equals $2,000 for 
each motor vehicle for which the applicant will furnish a certificate 
of conformity to the Administrator. Section 592.5(a)(8). In addition, 
we require each RI to maintain such an insurance policy in effect. 
Section 592.6(i). The purpose of these requirements is to ensure that 
each RI will have the financial capability to remedy any noncompliance 
or safety-related defect that exists in the vehicles it has imported, 
and to ensure that owners have a financial recourse if the RI does not 
perform, or if the RI is no longer in business.
    In 1989, when we originally adopted this provision, we were guided 
by the experience of the Environmental Protection Agency (EPA), which 
had a similar provision addressing the financial capability of 
Independent Commercial Importers (ICIs) (i.e., entities that conform 
imported vehicles to EPA's emissions requirements) to honor emissions 
warranties (40 CFR 85.1510(b)(2)(I)). Equipment, vehicle, and engine 
manufacturers, and the California Air Resources Board (CARB), had 
suggested that ICIs acquire prepaid insurance and/or bonds to cover 
warranty and recall liability for the useful life of each vehicle. 
Without a requirement for an insurance policy or bond to cover warranty 
and recall repairs, owners of vehicles obtained from firms that are no 
longer in business would have to bear the repair costs.
    EPA decided to require a prepaid ``mandatory service insurance 
policy'' that, in effect, assures effective warranty coverage. 
Following EPA's lead, and because the prepaid mandatory service 
insurance policy seemed to be an acceptable means of assuring the ICIs' 
performance with respect to warranties and emissions recalls, we 
required RIs to have a similar insurance policy covering the vehicles 
it imports, rather than post a recall bond.
    We now understand that the mandatory service insurance policies 
under the Clean Air Act are intended to cover only those parts 
installed, and modifications performed, to satisfy the emissions 
requirements of that statute. Thus, the policies are financial 
guarantees or warranties of the work actually performed by the ICI. The 
purpose of the NHTSA requirement, on the other hand, is not to provide 
warranty coverage of compliance work performed by the RI, but to ensure 
that a vehicle owner will be compensated if the RI responsible for the 
vehicle is unable to provide a remedy without charge for all 
noncompliances and safety defects that exist in the vehicle, not just 
those related to the conformance work performed by the RI. Assuming 
that service insurance policies are effective and workable, we do not 
believe that this difference justifies a substantially different 
approach, such as a surety bond, from the course of action we have 
followed

[[Page 69815]]

for over a decade. However, to ensure that the current approach 
adequately protects owners, we are proposing to make certain changes, 
as described below.
    When the 1988 Act became effective in 1990, we discovered that no 
established insurance company would issue a ``mandatory service 
insurance policy.'' However, American Consumer Service Corporation 
(ACSC) was willing to issue a ``Warranty Policy.'' After review, and in 
light of the unavailability of insurance products as originally 
intended, we decided to accept the warranty while the insurance 
remained unavailable, and ACSC has been the principal issuer of these 
policies to RIs. Within the past two years, other entities have been 
issuing similar ``warranty policies.'' However, we are concerned about 
the financial capability of the issuers of these policies to honor 
them. Some of the issuing companies do not appear to be recognized as 
insurance companies by the states in which they are located, and it is 
not clear whether there are state requirements regarding the adequacy 
of their financial reserves, etc. Moreover, we are unsure of how 
``independent'' they may be of the RIs to which they furnish the 
policies.
    Aware of our concern about stand-alone warranty policies, in the 
fall of 1999 ACSC persuaded the National Warranty Insurance Company 
Risk Retention Group to underwrite the warranty policies it issues, and 
Signet Star Reinsurance Company to act as the reinsurer. These two 
companies are registered by the state of Nebraska to conduct an 
insurance business. At this time, we intend to rely on these safeguards 
for the warranty policies issued by ACSC.
    We have informed companies other than ACSC that are issuing 
warranty policies that they must be backed by a guarantee of 
performance similar to that above, either by becoming insurance 
companies that meet the requirements of State law if they are not 
already, or by having the policies they issue underwritten by a 
recognized insurance company. We have also informed them that such 
policies must be issued by a truly independent company, e.g., one in 
which no RI or any of its officers, directors, employees, or 
shareholders has a financial interest and in which no legal relation 
(e.g., relative) of a RI's officers, directors, shareholders or 
employees is employed.
    While in this notice we are not proposing to change Sec. 
592.5(a)(8), we are proposing to add definitions of the terms ``service 
insurance policy'' and ``independent insurance company'' to address our 
concerns.
    A ``service insurance policy'' would be defined as any policy 
issued or underwritten by an independent insurance company which covers 
a specific Type 1 or Type 2 motor vehicle and guarantees that any 
noncompliance with a Federal motor vehicle safety standard or safety-
related defect determined to exist in that vehicle, will be remedied 
without charge to the owner of the vehicle. An ``independent insurance 
company'' would be defined as an entity that is registered with any 
State and authorized thereby to conduct an insurance business, none of 
whose affiliates, shareholders, officers, directors, or employees, or 
in affinity with such, is employed by, or has a financial interest in 
or otherwise controls or participates in the business of, a RI to which 
it issues or underwrites such policies. The phrase ``in affinity with 
such'' includes but is not limited to family members.
    We note, also, that some RIs are furnishing policies limited to 
coverage of vehicles originally manufactured for sale in Canada. These 
policies are not valid for vehicles manufactured for sale elsewhere, 
and we will not accept these restricted policies for compliance 
certification submissions for Type 2 vehicles of other than Canadian 
origin.
    We are also interested in having comments on whether there might be 
an alternative, simpler means of ensuring that owners of vehicles 
imported by RIs will be able to have recalls performed, such as the 
provision of a bond in a certain amount (e.g., 5% of the dutiable value 
of the vehicle).
3. Section 592.5(a)(9): Capability of an Applicant To Perform 
Conformance Work
    The original ``gray market'' provisions of the Safety Act 
emphasized the responsibility of the importer to bring its imported 
nonconforming vehicles into compliance, but the Act was silent 
regarding the qualifications of the importer/modifier. In the 1988 Act, 
Congress rejected the 20-year practice of leaving conformers of motor 
vehicles unregulated, and enacted a statutory scheme under which only 
RIs may import noncompliant vehicles for resale. The statute directed 
NHTSA to establish procedures and requirements that, among other 
things, ensure that the RI ``will be able technically'' to carry out 
conformance and recall repair work. 49 U.S.C. 30141(c)(1)(C). This was 
intended to reassure the public that a Federal agency had reviewed the 
qualifications of a person to bring vehicles into compliance with the 
FMVSS and to repair vehicles covered by safety recall campaigns. (Of 
course, the fact that an entity has become a RI should not be 
interpreted or represented as our ``approval'' of a RI; it simply means 
that the RI has met the requirements of the statute and regulations.)
    As reflected in 49 CFR 592.5(a)(9), we currently require an 
applicant to demonstrate that it will be ``technically able (to remedy 
a noncompliance or safety-related defect) through repair.'' However, 
the regulation does not address the technical ability of the applicant 
to conform vehicles or the sufficiency of its facilities to do so. 
Therefore, we are proposing to amend Sec. 592.5(a)(9) to correct this 
oversight by requiring an applicant to submit information sufficient to 
demonstrate to us that it has technical ability to bring vehicles into 
compliance with safety, bumper, and theft prevention standards, and to 
perform recall repairs on vehicles, such as its experience repairing 
vehicles and the qualifications of its personnel.
    To demonstrate ownership or leasing of facilities adequate for the 
conformance, repair, and storage of vehicles, under 
Sec. 592.5(a)(9)(B), an applicant would have to provide a copy of the 
lease agreement or ownership document relating to that facility. We are 
also proposing that the applicant provide a copy of a license or other 
similar document issued by an appropriate local authority permitting 
the applicant to do business as an importer, or modifier, or seller of 
motor vehicles, or, alternatively, a statement by the applicant that it 
has made a bona fide inquiry and is not required by state or local law 
to have such a license.
    We are authorized to inspect the conformance, storage, and record-
keeping facilities of an applicant to assist us in deciding on a RI 
application. 49 U.S.C. 30141(c)(1)(B). In some instances, we have 
conducted an on-site inspection to judge the technical competence of an 
applicant; in others, we have relied on the description provided in the 
application. To reduce the need to conduct on-site inspections and to 
expedite the process, we are proposing to require an applicant to 
submit photographs in non-electronic form, with street addresses, of 
each of its lots and garages; i.e., the facilities where vehicles would 
be conformed and stored prior to their release and remedied in safety 
recall campaigns.
    If you are commenting on the feasibility of a two-tier RI system, 
your comments on this section of our proposal would be particularly 
pertinent.

[[Page 69816]]

4. Section 592.5(a)(11): Ensuring That an Applicant Understands Its 
Duties
    At present, Section 592.5(a)(11) requires an applicant to state 
that it will fully comply with the duties of a RI as set forth in 
Sec. 592.6. We are proposing additions to and clarifications of the 
duties of a RI. In this light, we are proposing an amendment of 
Sec. 592.5(a)(11) to require an applicant to state that it has read and 
understood the duties of a registered importer as set forth in 49 CFR 
592.6 and that it will fully comply with each such duty.
5. Section 592.5(b): Incomplete Applications
    Under the present regulation, if the information submitted is 
incomplete, the Administrator notifies the applicant of the areas of 
insufficiency and that the application is in abeyance.
    We propose a clarification under which the Administrator would 
notify the applicant of the ``information that is needed,'' and that 
the Administrator will not give further consideration to the 
application until the information is received.
6. Section 592.5(e): Denial of Applications
    We would remove from present Sec. 592.5(d) and place in a new 
subsection (e) material on denial of applications and refunds of 
certain components of the initial annual fee.
    At present, the regulation states only that ``If the information 
[in the application] is not acceptable, the Administrator informs the 
applicant in writing that its application is not approved.'' We are 
proposing to expand this in several ways.
    We currently require an applicant to state that it has never had a 
registration revoked pursuant to Sec. 592.7 (Sec. 592.5(a)(6)). We 
would continue this requirement and we would restate section 
30141(c)(3) as well by specifying that we shall deny registration to an 
applicant whose registration has previously been revoked.
    We also currently require an applicant to state that it is not and 
was not ``directly or indirectly, owned or controlled by, or under 
common ownership or control with, a person who has had a registration 
revoked'' (Sec. 592.5(a)(6)). We would also continue this requirement 
and refer to the portion of section 30141(c)(3) that specifies that we 
may deny registration to an applicant that is or was owned or 
controlled by, or under common ownership or control with, a RI whose 
registration has been revoked. For example, if we revoke the 
registration of a corporate RI which had four officers, we would deny 
registration to an applicant in which any one of the four individuals, 
or specified family members, is involved.
    Under the current regulation, each RI's application must include 
the ``names of all owners, including shareholders, partners, or sole 
proprietors'' (Sec. 592.5(a)(4)), and, if an owner is a corporation, 
``the names of all shareholders of such corporation whose ownership 
interest is 10 percent or greater'' (Sec. 592.5(a)(5)). The RI is 
required to inform us of any change in the ownership information it has 
provided (Sec. 592.5(f)). Thus, under the present regulation, there is 
some information that can be used to compare the ownership interests of 
a RI whose registration has been revoked with those of an applicant. 
However, the present regulation, in our view, is not sufficient to 
cover situations where an application is filed by person(s) that may be 
influenced by a revoked RI, or its shareholders, principals, partners, 
or employees, and whose name may not have appeared on that RI's 
application. For example, this would include a spouse, in-law, child, 
partner, substantial shareholder, or employee. Thus, we would also 
require an applicant to state whether any of its shareholders, 
officers, directors, employees, or in affinity with such, had been 
previously affiliated with a RI in any capacity (e.g., major 
shareholder, partner, participant in the business), and, if so, to 
state the name of the RI and the capacity.
    We would provide that denials shall be in writing and shall include 
the reasons for the denial. Applicants would be authorized to submit a 
petition for reconsideration of the denial within 30 days.
7. Section 592.5(f): The Due Date for the RI's Annual Fee
    Present subsection (e) would be redesignated subsection (f). Under 
49 U.S.C. 30141(a)(3), we are directed to establish, and a RI must pay, 
an annual fee ``to pay for the costs of carrying out the registration 
program for importers * * * .'' Such fees are specified in 49 CFR 
594.6. Section 592.5(e) currently requires a RI to provide with this 
fee an annual statement that affirms that certain of the information 
provided in its original application ``remains correct.''
    The annual fee covers a fiscal year, October 1 through September 30 
of the year following. At present, the fee, along with the affirmation 
statement, must be filed and paid not later than October 31 of each 
year. This is a month after the beginning of the fiscal year. Moreover, 
Sec. 592.7(a) now provides that we may not revoke or suspend a 
registration until the 31st calendar day after an unpaid fee is due and 
payable. The 31st calendar day after October 31 is December 1. This 
means that a RI that does not pay its annual fee has a ``free ride'' to 
continue to operate for two months into the fiscal year.
    To address this anomaly, we want to amend the present provisions to 
require payment of the annual fee, and submission of the annual 
affirmation statement, not later than September 30 of each year, to 
cover the next fiscal year. In addition, as discussed in more detail 
below, we are proposing to amend Sec. 592.7(a) to specify that we may 
automatically suspend an RI's registration if the annual fee has not 
been paid by the close of business on October 10 or, if October 10 is a 
weekend or a holiday, the next business day.
8. Transfer of Current Section 592.5(f): Notification of Change of 
Information in a RI Application
    Under current Sec. 592.5(f), a RI must notify us within 30 days of 
any change in the information provided in its application. This duty is 
more appropriately located in Sec. 592.6, and we are proposing to 
transfer it to a new Sec. 592.6(m).
9. Section 592.5(h): Treatment of Applications Pending on Effective 
Date of the Final Rule
    We may have received, but not acted upon, registration applications 
that are pending when the final rule based upon this proposal becomes 
effective. Under proposed subsection (h), if the application does not 
contain all the information that will then be required by Sec. 592.5(a) 
as amended by the final rule, we would notify the applicant of the 
additional information required by the new rule and inform it that we 
are deferring further consideration of its application until the 
information is received.

B. Duties of a Registered Importer (Sec. 592.6)

    The duties of a RI are set forth in Sec. 592.6. Upon review, we 
have tentatively decided that several provisions in that section should 
be amended or clarified, and that several more need to be modified to 
reflect the establishment of different Types of motor vehicles. 
Therefore, we propose revising Sec. 592.6 in its entirety.
    The present duties imposed by Sec. 592.6 may be summarized as 
follows, by their subsection:

[[Page 69817]]

    (a) Bond requirements;
    (b) Record-keeping;
    (c) Conformance records after initial certification for same make, 
model, and model year has been submitted;
    (d) Certification of conformed vehicles;
    (e) Certification to NHTSA;
    (f) Substantiation of certification;
    (g) Obligation to notify and remedy;
    (h) Requirement to admit NHTSA representatives for inspection;
    (i) Maintenance of prepaid mandatory service insurance policy; and
    (j) Obligation upon failure to conform vehicles.
    Under our proposed revision, we would adopt the following structure 
of subsections for Sec. 592.6:
    (a) Conformance and bond requirements;
    (b) Recordkeeping;
    (c) Certification of conformed vehicles;
    (d) Certification documentation to be submitted to NHTSA for Type 2 
motor vehicles;
    (e) Information to be submitted to NHTSA for Type 1 motor vehicles;
    (f) Acts prohibited before bond release;
    (g) Furnishing the service insurance policy with the vehicle;
    (h) Odometer disclosure requirements;
    (i) Obligation to export or abandon a vehicle upon failure to 
conform it;
    (j) Obligation to provide notification of and remedy for safety-
related defects and noncompliances, and to submit related reports to 
NHTSA;
    (k) Requirement to admit NHTSA representatives for inspection;
    (l) Requirement to provide an annual statement with fee;
    (m) Notification to NHTSA upon change of information provided in 
application; prior notice of change of facility.
    (n) Assurance that at least one full-time employee is present at 
each facility;
    (o) Prohibition against co-utilization of employees, or 
conformance, repair, or storage facilities with any other RI;
    (p) Timely response to NHTSA information requests;
    (q) Timely payment of fees; and
    (r) provision not later than 30 days after effective date of final 
rule of information required of new RI applicants.
1. Section 592.6(a): Duties To Ensure Conformance of All Imported 
Vehicles With Safety, Bumper, and Theft Prevention Standards and To 
Furnish a Conformance Bond for Type 2 Motor Vehicles
    Under current Sec. 592.6(a), a RI has the duty to ``furnish to the 
Secretary of the Treasury (acting on behalf of the Administrator)'' a 
bond to assure that it will bring a nonconforming vehicle into 
conformity with the FMVSS within 120 days of entry. Literally speaking, 
this is a duty to furnish a bond only, and not, by its terms, a duty to 
conform the vehicle, which exists in the statute. We believe that 
subsection (a) should be amended to encompass both duties, and a third 
duty as well: To assure that any vehicle that a RI imports has been 
deemed eligible for importation by the Administrator pursuant to part 
593. The duty to conform the vehicle would include conformance to 
Federal bumper and theft prevention standards if they applied to the 
vehicle.
    Although we believe that 120 days is not required for the 
relatively minor or straightforward modifications needed to bring Type 
2 motor vehicles of Canadian origin into compliance with applicable 
standards, we are not currently proposing to reduce this period and the 
present 120 days would continue to apply to Type 2 motor vehicles. 
However, we welcome comments on whether such a reduction for Canadian 
Type 2 vehicles would be appropriate, and, if so, an appropriate 
period.
    Until now, part 592 has been silent on the RI's responsibility to 
ensure conformance with the theft prevention standard, though the 
matter is addressed in part 567, the certification regulation. It is a 
violation of Federal laws to import motor vehicles that do not comply 
with safety and bumper standards, but in each case the statutory 
prohibition does not apply if the vehicles have been determined to be 
capable of complying and are brought into conformity after importation 
(See 49 U.S.C. 30112, 30146, and 32506). It is also a violation of 
Federal law to import a vehicle that does not comply with the theft 
prevention standard (see 49 U.S.C. 33114), but section 33114 provides 
no exceptions. Thus, until now, we have interpreted section 33114 as 
requiring a vehicle to meet the theft prevention standard at the time 
of entry, and have not allowed post-entry conformance. We have 
implemented this through our certification regulation (49 CFR part 
567): If a RI imports a passenger car or multipurpose passenger vehicle 
from a line listed in appendix A of 49 CFR part 541, Federal Motor 
Vehicle Theft Prevention Standard, and the original manufacturer has 
not affixed a label meeting the requirements of Sec. 567.4(k), the RI 
is required to inscribe the Vehicle Identification Number on certain 
parts (Sec. 541.5(b)(3)), and to affix a label meeting these 
requirements before the vehicle is imported (Sec. 567.4(k)). We 
recognize, however, that it may be difficult to mark parts or to take 
other actions needed to certify compliance with the theft prevention 
standard outside the United States.
    The purpose of the theft prevention standard ``is to reduce the 
incidence of motor vehicle thefts by facilitating the tracing and 
recovery of parts from stolen vehicles'' (Sec. 541.2). We view it as 
highly unlikely that an imported vehicle subject to the theft 
prevention standard would be stolen while in the custody of a RI. We 
have tentatively concluded that the purpose of the standard would not 
be compromised by allowing a RI to bring a vehicle into compliance 
after its entry, when it is conforming and certifying vehicles to the 
safety and bumper standards, and we are proposing an amendment of 
Sec. 567.4(k) to permit this.
    In accordance with our views, we propose that a RI, as part of its 
Type 1 information submission or as part of its Type 2 certification, 
include a statement that the vehicle is not subject to the parts 
marking requirements of the theft prevention standard, or, 
alternatively, that the vehicle conforms to these requirements. The 
submission would also have to indicate whether the vehicle conformed as 
originally manufactured or whether the RI brought it into conformity.
2. Section 592.6(b): Recordkeeping Requirements
    For the most part, existing recordkeeping requirements will be 
retained. Our proposed amendment to Sec. 592.6(b) would clarify that 
record-keeping requirements apply to importations of Type 1 motor 
vehicles as well as to importations of any vehicle for which a RI 
furnishes a certificate of conformity to NHTSA (this includes vehicles 
imported for personal use conformed under contract, as well as vehicles 
that the RI imports for resale). We also want to clarify that all 
records must be kept as hard copies (not electronically) at the 
facility in the United States identified by the RI in its application. 
The records would include copies of certifications of conformity 
submitted to NHTSA covering Type 2 motor vehicles, and information 
furnished covering Type 1 motor vehicles. The use of the term ``the 
facility'' means that all required records must be stored at a single 
location.
    A primary purpose of record-keeping is to provide a ready means of 
identifying vehicles for which a RI is responsible for providing remedy 
without charge in the event of a defect or noncompliance determination. 
The period of free remedy was recently

[[Page 69818]]

increased by the Transportation Recall Enhancement, Accountability, and 
Documentation (TREAD) Act (PL 106-414, effective November 1, 2000) from 
8 to 10 years. Accordingly, Sec. 592.6(b) will be amended in the near 
future to specify that a RI shall retain the required records for 10 
years, rather than for 8 years, as is presently required. This 
amendment is reflected in proposed 592.6(b).
3. Section 592.6(c): Whether a Person Other Than the RI May Affix a 
Certification Label to a Vehicle After It Is Conformed; Whether the 
Certification Label May Be Affixed Outside the United States
    Under 49 U.S.C. 30146(a)(3), ``each registered importer shall 
include on each motor vehicle * * * a label prescribed by the 
(Administrator) identifying the importer and stating that the vehicle 
has been altered by the importer to comply with the standards 
applicable to the vehicle.'' We implemented this section by present 
Sec. 592.6(d), which requires the RI, upon completion of compliance 
modifications, to permanently affix a certification of compliance to 
the vehicle that meets the general vehicle certification requirements 
of 49 CFR part 567, and to provide a photograph of the label to us. 
These requirements would be continued in proposed Sec. 592.6(c), and 
modified as discussed below.
    Two questions have arisen with respect to gray market vehicle 
certification: Who may affix the certification label, and whether the 
certification label may be affixed outside the United States if 
compliance work is completed before importation.
    In a recent instance, we discovered that a RI had not taken 
possession of the vehicles it had imported and was shipping its 
certification labels to a customer without having actually seen the 
cars it was purporting to modify and certify. We had made it clear, in 
the preamble to the final rule adopting Part 592, that a RI may not 
contract to have another person conform a vehicle for which it is the 
importer of record (54 FR 40063 at 40066). For similar reasons, it is 
improper for a RI to delegate the responsibility to affix the 
certification label.
    In every instance, the proper course of action for a RI is to take 
physical possession of a vehicle, then perform all necessary 
conformance modifications at a facility identified to NHTSA, and 
permanently affix the certification label on the vehicle at the 
conformance facility at the end of the modification process. We would 
therefore add to proposed Sec. 592.6(c) the requirement that all 
conformance work be performed at a facility identified to NHTSA for 
that purpose and that the certification label be permanently affixed at 
that facility after all appropriate modifications are performed on the 
vehicle.
    We have not allowed pre-importation certification of motor vehicles 
that have been conformed by persons other than their original 
manufacturers. Congress intended to provide us with a review function 
to ensure that nonconforming vehicles are properly conformed by 
responsible entities. To allow certification outside the United States 
by someone other than the original manufacturer would allow these 
vehicles to be imported as ``complying'' vehicles, outside of the RI 
process, which would be inconsistent with the purpose and structure of 
the 1988 Act. We intend to continue this policy. Therefore, we specify 
in proposed Sec. 592.6(c) that certification labels may be affixed only 
in the United States. However, we wish to clarify that a RI may perform 
conformance modifications and recall remedy repairs outside the U.S. 
before importation, provided that the RI has imported the vehicles 
before the label is permanently affixed and before it submits the 
relevant compliance information to NHTSA.
4. Sections 592.6(d) and 592.6(e): Documentation That a RI Must Submit 
to NHTSA
    Currently, Sec. 592.6(f) specifies a limited amount of information 
that must be submitted to NHTSA with the RI's conformance 
certification. However, it provides that the RI must also submit ``such 
information, if any, as the Administrator may request.'' Over the 
years, we have identified a number of other items that we need to 
effectively administer the RI importation program, and we have advised 
the RIs of these items through newsletters and direct communications. 
We will continue to require this information (with one exception 
discussed below) for Type 2 motor vehicles, and we have decided that it 
would be more appropriate to identify these items in Sec. 592.6 rather 
than rely on informal communication with RIs.
    Therefore, we are proposing a new Sec. 592.6(d), which would 
specify that the initial certification conformance package submitted to 
NHTSA for a Type 2 motor vehicle contain (A) the make, model, model 
year and date of manufacture, odometer reading, VIN meeting the 
requirements of 49 CFR part 565, and Customs Entry Number, (B) a 
statement that the RI has brought the vehicle into conformity with all 
applicable Federal motor vehicle safety, bumper, and theft prevention 
standards, and a description, with respect to each standard for which 
modifications were needed, of how it has modified the vehicle, (C) a 
copy of the bond given at the time of entry to ensure conformance, (D) 
the vehicle's vehicle eligibility number, (E) a copy of the HS-7 form 
executed at the time of its importation if a Customs broker did not 
make an electronic entry with Customs, (F) true and unaltered front, 
side, and rear photographs of the vehicle, (G) true and unaltered 
photographs of the original manufacturer's certification label and the 
certification label of the Registered Importer permanently affixed to 
the vehicle (and, if the vehicle is a motorcycle, a photograph or 
photocopy of the Registered Importer certification label before it has 
been affixed), (H) documentation including photographs sufficient to 
demonstrate conformity, and (I) the policy number of the service 
insurance policy furnished with the vehicle pursuant to Sec. 592.6(g).
    A RI's second and subsequent certification submissions for a given 
make, model, and model year Type 2 motor vehicle would normally need to 
contain the same information as its first submission, including the 
conforming VIN of the vehicle covered, and would have to refer to its 
first submission. However, if the RI conformed the vehicle in the same 
manner as it stated in its initial submission, the RI may say so in a 
subsequent submission, and it need only provide photographs and other 
documentation of the modifications that it made to achieve conformity.
    Currently, we require RIs to submit a copy of the actual service 
insurance policy that applies to each vehicle with the certification 
conformance package for the vehicle. We have tentatively concluded that 
this is not necessary, as long as the RI submits the insurance policy 
number or other identifying information so that we have a record in 
case the owner of the vehicle needs to utilize the policy. We would 
continue to require the RI to retain a copy of the policy in its 
records.
    Section 592.6 does not currently address a RI's duties with respect 
to pending recalls on vehicles for which it is responsible under the 
statute. In recent years, we have required RIs to include a statement 
in each certification conformity package that there are no outstanding 
recalls (i.e., recalls for which the remedy had not been performed). 
However, we have found that some RIs were not actually checking to see 
if this was true and that

[[Page 69819]]

in some cases vehicles were being released to the public with 
unremedied noncompliances and safety defects. Because of the clear 
adverse impact that this practice has on safety, we are proposing to 
require that RIs substantiate that there are no unremedied defects or 
noncompliances applicable to any vehicle that it imports or conforms. 
We would require that a RI submit substantiation that, at the time of 
submission of its certification of conformity under Sec. 592.6(d) or 
the required information under Sec. 592.6(e), the vehicle is not 
subject to any safety recall campaigns being conducted by its original 
manufacturer (or its U.S. subsidiary) in the United States, or, 
alternatively, that all noncompliances and defects covered by those 
safety recalls have been remedied.
    Such substantiation would normally be in the form of a document 
issued by the original manufacturer or a franchised dealer of that 
manufacturer stating that there are no recalls pending that apply to 
the vehicle for which the remedy work has not been performed. If the 
manufacturer's records indicated that there were one or more recall 
campaigns for which the remedy had not been performed, the RI would 
have to submit repair records demonstrating that the remedy work had 
been performed prior to release of the vehicle. We would like comments 
on whether it would be sufficient to merely require the RIs to maintain 
this substantiation in their records, or whether they should be 
required to submit it to us along with the other required information.
    For Type 1 motor vehicles, we would adopt a new Sec. 592.6(e) 
requiring the submission of much less documentation than is currently 
required, and much less than would be required for Type 2 motor 
vehicles. The required information would include the make, model, model 
year, odometer reading, VIN that conforms to 49 CFR part 565, date of 
manufacture, Customs entry number, the name of the insurance company 
and the policy number of the service insurance policy to be provided 
with the vehicle, and substantiation that there are no pending safety 
recalls for which the remedy work has not been performed. The RI would 
be required to provide this information on a monthly basis so that we 
receive it within 10 calendar days after the end of the month in which 
the vehicle was imported.
    We are moving in our administration of import procedures to allow 
the electronic submission of certain conformance documentation. 
However, we need to assure ourselves that all photographic information 
is authentic. Current technology is sufficiently advanced that it is 
easy to alter photographs. We therefore have proposed to require that 
certain photographic information submitted for Type 2 motor vehicles, 
and retained for all vehicles conformed by RIs, be in true and non-
altered form: specifically, views of the vehicle speedometer/odometer 
displays and the RI label and certification labels on the doors. As in 
the current regulation, for motorcycles, the RI would also have to 
submit a true and unaltered photograph or a photocopy of the label 
itself, flat, to allow readability, as well as of the label as affixed 
to the motorcycle crossbar.
    Section 592.6(e) currently requires a RI, after it has completed 
bringing a vehicle into conformity, to certify to NHTSA that the 
vehicle complies with all applicable FMVSS, ``and that it is the person 
legally responsible for bringing the vehicle into conformity.'' In some 
recent instances, RIs have purported to certify vehicles without any 
knowledge or exercise of management control over the process. For 
example, certification to NHTSA has been provided by individuals, 
hundreds of miles away from the vehicles, who have been granted a power 
of attorney from the RI. In another instance, we informed a RI that we 
would not accept certifications to us from appointed individuals 
resident in Canada. In our view, certification to NHTSA is a 
responsibility that must not to be delegated by a RI to someone who has 
no personal knowledge of the relevant information. We therefore are 
proposing in new Sec. 592.6(d) that the certification to NHTSA required 
for Type 2 motor vehicles can only be signed by a principal of the RI, 
who must attest to personal knowledge that the RI has performed all 
work required to bring the vehicle into conformity with all applicable 
Federal motor vehicle safety, bumper, and theft prevention standards. 
As noted above, the identity of the principal authorized to make this 
certification must be stated in the RI application or subsequent 
filings with NHTSA pursuant to Sec. 592.6(m). Certification to the 
Administrator would have to be personally signed and not be a signature 
that is stamped or otherwise mechanical in origin. The submission to 
the Administrator would have to identify the facility where the 
conformance work was performed, and the location where the vehicle may 
be inspected.
    Similarly, the information furnished to us for Type 1 motor 
vehicles would have to be submitted by a principal of the RI.
    Finally, we want to add a word of caution. For many years we have 
accepted a RI's certification in the form of a check list that allows 
the RI to indicate whether the vehicle was originally manufactured to 
conform with a specific standard (by checking a column headed ``O''), 
or modified by the RI to conform to the standard (by checking a column 
headed ``M''), or that the standard is inapplicable (by checking a 
column headed ``N/A''). There have been times in their haste to certify 
that RIs have inaccurately checked the box of a standard that does not 
apply to the vehicle, or indicated that the RI modified the vehicle 
when the vehicle, in fact, was originally manufactured to comply, or 
indicated that a standard did not apply when it did. These inaccuracies 
call into question the accuracy of the remaining certifications. We 
wish to advise RIs that we may reject such certifications and return 
such submissions to the RI. We will also return submissions that are 
incomplete. If a submission is returned to a RI, we would charge to the 
RI the costs associated with the return. Return would not toll the 120-
day period submitting compliance information as provided under 
Sec. 592.6(a). Further, if a RI has certified that it has modified a 
vehicle, whether by checking an ``M'' box or otherwise, and we discover 
that it has not in fact modified the vehicle, we will consider that to 
be a knowingly false certification within the meaning of 49 U.S.C. 
30115 and 30141(c)(4)(B), and grounds for automatic suspension of a RI 
registration, as discussed below. To bring greater accountability to 
the certification process by encouraging RIs to complete their 
certification in a careful and thorough manner so that NHTSA may 
expedite its certification review, we propose to add appropriate 
language to paragraph (d) to address these issues.
    We seek comments on whether a registration ought to be suspended, 
either automatically or non-automatically, if a RI continues to submit 
inaccurate or incomplete certifications over a period of time.
5. Section 592.6(f): Acts Prohibited Before Expiration of 30 Days After 
Submission of Compliance Statement or Release of the Conformance Bond
    A RI may license or register an imported motor vehicle for use on 
public roads, or release custody of a motor vehicle to a person for 
license or registration for use on public roads ``only after 30 days 
after the registered importer certifies (to NHTSA) that the motor 
vehicle complies [with applicable FMVSS].'' 49 U.S.C. 30146(a)(1). We

[[Page 69820]]

have construed this provision to allow a RI to license or register a 
vehicle, or release custody of a vehicle, for use on the public roads 
less than 30 days after receipt of the conformance package if we have 
notified the RI that the conformance bond required by 49 U.S.C. 
30141(d) has been released.
    We have tried to accommodate RIs by reducing data-submission 
requirements for Canadian vehicles, and expediting the process by 
releasing the conformance bonds. During this year, we have released 
those bonds within an average of five working days. However, despite 
these short processing times, we have discovered that in some instances 
vehicles imported from Canada have been shipped directly to auction 
houses or dealers and sold within days after entry, before bonds were 
released, and in some instances, even before we had received the 
vehicle's certification of conformity from the RI.
    The RI's duty to retain ``custody'' of the vehicles is a statutory 
requirement that has not been explicitly implemented previously in part 
592 even though it is one of the conditions of the performance bond 
required by part 591 and its Annex A. To eliminate any possible 
confusion, we want to clarify this statutory requirement.
    Issues have arisen as to whether the retention of ``custody'' 
requires a RI to maintain physical possession of a vehicle at one of 
its own facilities, pending bond release. It has been our view that, at 
a minimum, we need to know the location of a vehicle to be able to 
inspect it during the period before we release the bond, and to have 
the same access to the vehicle as if it were stored at the RI's own 
facility. In addition, title to the vehicle must not have passed from 
the RI to any U.S. entity before bond release so that we can be certain 
that a RI will be able to fulfill the bond condition to export or 
abandon the vehicle if NHTSA does not release the bond. See letters of 
April 17, 2000, from Frank Seales, Jr., to Philip Trupiano, and of 
April 19, 2000, from Kenneth N. Weinstein to John Dowd et al.
    As noted before, 75 percent of Canadian vehicles imported are Type 
1 motor vehicles. Under today's proposal, the custody issue would no 
longer arise with respect to Type 1 motor vehicles, since they would 
enter free of bond requirements. However, they remain relevant to Type 
2 motor vehicles.
    With respect to Type 2 motor vehicles, we are proposing to adopt 
requirements that parallel those of EPA with respect to emissions 
requirements established under the Clean Air Act to ensure that the RI 
retains physical possession of a vehicle at its own facility pending 
bond release. Under EPA's regulation, during the period of 
``conditional admission'' before EPA issues a certificate of conformity 
and a vehicle is released, the importer may not operate the vehicle on 
the public roads, sell or offer it for sale, or store it on the 
premises of a dealer. 40 CFR 85.1513(b). We believe that these 
restrictions would be appropriate for Type 2 motor vehicles, including 
those of Canadian origin that are not Type 1 motor vehicles. Thus, if a 
RI imports a Type 2 motor vehicle from Canada (or elsewhere) and sells 
it at any time before the end of the 30-day hold period or before the 
bond had been released, whichever first occurs, or stores it on 
another's lot, or allows it to be operated on the public roads, a 
violation will have taken place for which sanctions may be imposed. We 
recognize that this approach could affect present practices of some RIs 
with respect to some Canadian vehicles, but we believe that it is a 
necessary safeguard for vehicles not covered by a letter from their 
manufacturer that would qualify them as Type 1 motor vehicles.
    In addition to the restrictions that parallel EPA's, we are also 
proposing language that tracks the statutory prohibitions against 
premature licensing or registering of a Type 2 motor vehicle for use on 
the public roads, or release of custody to any person for such 
purposes.
    In line with our past interpretations, we propose to continue to 
permit a RI to obtain title in its own name to the vehicles that it 
imports for resale, either before or after importation, but we shall 
not allow the RI to title it in the name of any other entity (such as a 
title clearer, dealer or a retail purchaser) until after we have 
released the bond. This is designed to ensure that the RI retains the 
ability to export or abandon the vehicle to the United States, upon 
demand by the United States, for its failure to conform the vehicle.
    Since Type 1 vehicles would be admitted free of bond, we seek 
comments on whether title restrictions are appropriate for them.
6. Section 592.6(g): Duty To Provide Copy of the Service Insurance 
Policy With Each Vehicle
    We propose requiring that a RI provide a copy of the service 
insurance policy (guaranteeing that a remedy will be provided without 
charge to the vehicle owner in the event of a safety recall) with each 
vehicle it imports not later than the time the RI sells the vehicle. 
When a RI has conformed a vehicle imported for personal use, the RI 
would have to provide a copy with the vehicle not later than the time 
it releases custody of the vehicle to its importer-owner. Finally, on a 
monthly basis, a RI would have to provide to the insurance company 
issuing the policies the VINs of each vehicle covered by a policy, 
retaining a copy of this correspondence in its files. We are adding 
this duty to ensure that the purchasers of all gray market vehicles are 
aware of their ability to use this policy to have safety recall work 
done at no charge to them, and to ensure that the issuers of the 
policies are informed of the number and identity of the vehicles that 
their policies cover.
7. Section 592.6(h): Duty To Provide and Retain Copies of Odometer 
Disclosure Statements
    We wish to call attention to an obligation that another statute 
imposes upon persons who sell vehicles. Pursuant to 49 U.S.C. 32705 and 
49 CFR part 580, Odometer Disclosure Requirements, a person 
transferring ownership of a motor vehicle must provide an odometer 
mileage disclosure statement to the transferee. Dealers and 
distributors, such as a RI who imports vehicles for resale, must also 
retain a copy for five years (49 CFR 580.8(a)). We want to reiterate 
these obligations in part 592, so that a RI which focuses principally 
on 49 CFR parts 591-594 does not miss this requirement. Also, a failure 
to comply with these requirements would be a violation of this Part.
8. Section 592.6(j): Duty To Remedy Noncompliances and Safety-Related 
Defects, and To Provide Reports Regarding Recalls
    As discussed above, each RI is statutorily responsible for 
conducting safety recalls in the vehicles that it imports or conforms. 
49 U.S.C. 30147(a)(1). Section 592.6(g) currently specifies certain of 
a RI's responsibilities with respect to recalls, but it does not 
address all relevant issues.
    As currently written, Sec. 592.6(g) is primarily directed toward 
recalls that are announced after a vehicle has been released by the RI 
and is already in the possession of an owner, and does not address 
recalls that apply to imported vehicles at the time they are imported. 
To assure that there is no misunderstanding about the duties of a RI 
under the latter circumstances, we have proposed to amend 
Secs. 592.6(b), (c), (d), and (e) to explicitly require a RI to assure 
that all recall remedy work has been performed. (Information about 
recalls is available from a variety of sources, including the vehicle

[[Page 69821]]

manufacturers, their dealers, and NHTSA's Internet Website: 
www.nhtsa.gov/cars/programs/recalls. Whether the recall work has been 
performed on a specific vehicle often can be determined by inspecting 
the vehicle or by reviewing its repair records. This information is 
always available from the manufacturer and usually from the 
manufacturer's franchised dealers).
    We are also proposing amendments addressing a RI's responsibilities 
for recalls that are announced after the vehicle has been certified by 
the RI. These duties already exist by virtue of section 30147(a)(1). 
However, some RIs apparently have not attended to their obligations in 
this regard. To further emphasize these obligations, we propose to 
restate them in Part 592.
    Current Sec. 592.6(g) requires the RI to provide notification and 
remedy ``with respect to any motor vehicle for which it has furnished a 
certificate of conformity.'' As discussed above, we would no longer 
require submission of a ``certificate of conformity'' for Type 1 motor 
vehicles, but would continue the RI's responsibility for recalls 
affecting such vehicles. Therefore, we plan to amend the phrase in new 
Sec. 592.6(j)(1) to read, ``with respect to any motor vehicle that it 
has imported or for which it has furnished a certificate of 
conformity.'' This will be broad enough to cover Type 1 motor vehicles 
that the RI imports for resale, as well as Type 2 motor vehicles that 
it sells and/or for which it furnishes conformity statements to NHTSA.
    We understand that it is the practice of most major manufacturers 
who sell vehicles in the United States to include in their safety 
recall campaigns vehicles that were originally manufactured for sale in 
Canada that have been registered in the United States (with the 
exception of some Asian producers of Canadian vehicles). Nevertheless, 
the statute requires a RI to assure that the owner of each vehicle it 
imports or conforms has been provided with notification of all 
noncompliances and safety-related defects and the opportunity to 
receive a free remedy.
    To allow us to ascertain whether a RI is satisfying those 
obligations, when a vehicle manufacturer determines that a 
noncompliance or safety-related defect exists in its vehicles and 
commences its notification and remedy campaign, we need each RI to 
inform us whether the manufacturer's campaign will also cover vehicles 
that the RI has imported. If it does not, the RI must notify the 
current owner and provide an appropriate remedy. We are proposing to 
require each RI to inform us not later than 30 days after a vehicle 
manufacturer commences its notification campaign whether the 
manufacturer's recall will cover vehicles imported by the RI. If not, 
the RI would be required to furnish us with a copy of the notification 
that it intends to send to the vehicle owners, in accordance with 49 
CFR part 577, and to provide the appropriate remedy without charge.
    To allow us to monitor the performance of manufacturers in carrying 
out their recall responsibilities, we issued 49 CFR 573.6, which 
requires manufacturers conducting recalls to provide six quarterly 
reports to us setting forth specified information regarding the recall. 
This information includes the number of vehicles or items of equipment 
covered by the campaign and the number of vehicles or equipment items 
remedied by the end of each calendar quarter. Although RIs are 
``manufacturers,'' we have tentatively concluded that some of the 
provisions of Sec. 573.6 can be relaxed with respect to them.
    For recalls that have been announced by a vehicle manufacturer 
before the RI submits the information required by Sec. 592.6(d) or (e), 
the RI must ensure the completion of appropriate recall repairs before 
it releases the vehicle; therefore, there appears to be no need for the 
RI to submit any reports pursuant to Sec. 573.6 with respect to those 
recalls. This is reflected in proposed Sec. 592.6(j)(5). Nor do we need 
to receive reports from RIs with respect to recall campaigns being 
conducted by the manufacturer on vehicles imported by the RI.
    There may be instances when the U.S. manufacturer does not want to 
include the Canadian counterparts of the recalled vehicles in its 
campaign. Recall responsibility in this instance falls upon the RI, as 
it does when the RI makes its own determination of a defect or 
noncompliance. In these instances we need to receive reports from RIs. 
While 49 CFR 573.6 requires vehicle manufacturers to submit six 
quarterly reports containing extensive, detailed information, we 
believe that fewer reports and significantly less information is needed 
from RIs. Therefore, we are proposing to merely require two reports for 
each post-importation recall campaign. The first report would be due 
nine months after the RI began to notify owners, and the second report 
would cover the 18-month period after notification began. Those reports 
would be due not later than the 30th day following the end of each of 
the two periods. Also, in view of the differences between RIs and other 
vehicle manufacturers, we are proposing in Sec. 592.6(j)(5) to reduce 
the amount of information required in such reports.
    Finally, we have reviewed current Sec. 592.6(g)(2)(i) relating to 
the 8-year period of remedy without charge, and have restated it in 
proposed Sec. 592.6(j)(6) in a much simpler fashion. By doing so, we 
are heeding E.O. 12866 and its goal to write all rules in plain 
language. As noted in our discussion under Sec. 592.6(b), the TREAD Act 
has increased the period of free remedy to 10 years. This increase, 
effective as of the date of enactment of the TREAD Act, is reflected in 
proposed Sec. 592.6(j)(2).
9. Section 592.6(m): Duty To Notify NHTSA of Any Change of Information 
in the Registration Application Including Prior Notification Before 
Adding or Discontinuing the Use of Any Facility
    At present, Sec. 592.5(f) requires a RI to notify us not later than 
30 days after a change in any of the information submitted in its 
registration application. We would maintain this requirement as a duty 
under new Sec. 592.6(m), with one exception.
    We have tentatively concluded that, where the change involves the 
use of a facility not designated in the registration application, we 
should be notified of the intent to use such facility not less than 30 
days before such change takes place, and provided with the same 
information required in the original RI application, including non-
electronic photographs of the facility. This will allow us to evaluate 
the adequacy of the new facility for the services to be performed 
there. We are also proposing to require the RI to notify us 10 days in 
advance before it discontinues the use of any identified facility, and 
to identify the facility, if any, that will be used in its stead.
10. Section 592.6(n): Duty To Assure That at Least One Full-Time 
Employee of a RI Is Present at Each of the RI's Facilities
    Where a RI has several separate facilities, we are concerned about 
the RI's ability to supervise conformance and recall work to maintain 
records regarding the vehicles it has imported, and our ability to 
inspect the vehicles, operation, and records. To address these 
concerns, we have tentatively decided to adopt a new Sec. 592.6(n) to 
require each RI to assure that at least one full-time employee of the 
RI is present at each of its facilities. This is consistent with our 
statement in the preamble to the final rule establishing part 592 that 
a RI may not utilize agents to fulfill its statutory responsibilities, 
and that ``conformance operations must be carried out by

[[Page 69822]]

Registered Importers (and) their employees.'' 54 FR 40083, at 40086.
11. Section 592.6(o): Prohibition of Two or More RIs Co-Utilizing the 
Same Employee or the Same Conformance, Repair, or Storage Facility
    Questions have been raised whether two or more RIs may use common 
employees or a shared facility to perform conformance modifications or 
recall repairs, or to store imported vehicles. As indicated above, we 
do not allow a RI to make arrangements with other persons, including 
its customers (e.g., used car dealers) and other RIs, under which the 
other entity would perform the RI's duties. We have tentatively 
concluded that to allow two or more RIs to use the same employee, or a 
common facility for repairs, conformance work, or storage, raises the 
possibility of ineffective management and controls, particularly when 
the main office of a RI is some distance away from the facility in 
question. A storage facility shared with another RI will also make it 
more difficult to identify bonded vehicles for which an individual RI 
may be responsible when we are conducting inspections. We therefore 
propose to add a new Sec. 592.6(o) to prohibit a RI from co-utilizing 
any employee, or any conformance, repair, or storage facility, with 
another RI.
    If a RI stores bonded vehicles on premises that do not belong to 
it, the storage area should be clearly delineated and the vehicles 
being stored not mingled with vehicles for which the RI is not 
responsible (other than its vehicles that have been released from 
bond).
12. Section 592.6(p): Duty To Provide Timely Response To NHTSA Requests 
for Information
    Under 49 U.S.C. 30166(e), we reasonably may require a manufacturer 
to make reports to enable us to decide whether it is complying with any 
of our requirements. Our requests for information invariably identify 
the date by which we expect a response. As noted above, a RI is a 
statutory manufacturer because it imports motor vehicles for resale. We 
have tentatively decided that a regulation reiterating the requirement 
to make timely reports under section 30166(e) will heighten our ability 
to obtain information, and to provide a basis for suspension or 
revocation of a registration if the information is not forthcoming.
13. Section 592.6(q): Duty To Pay Fees in a Timely Manner
    We propose a new section adding a specific duty for a RI to pay all 
applicable fees in a timely manner. Although a registration may be 
suspended under Sec. 592.7(a) upon a RI's failure to pay fees when they 
are due and payable, we wish to emphasize that it is an affirmative 
duty for a RI to pay fees and pay them in a timely manner.
14. Section 592.6(r): Duty of Entities That Are RIs When Final Rule is 
Adopted To Provide Information That Will Be Required of New RI 
Applicants
    As described above, we are proposing to make comprehensive 
revisions in Sec. 592.5 to the information required in RI applications. 
By their own terms, these new requirements would apply to applications 
pending as of the effective date of the final rule. However, we believe 
that, to assure proper qualifications and operations, entities that are 
RIs at the time the final rule becomes effective must furnish the 
equivalent information, even though that information was not required 
at the time they submitted their original applications. In order to 
ensure that this information is provided by those whose applications 
have been granted previously (i.e., those who are already RIs at the 
time of the final rule), we are proposing that RIs, not later than 30 
days after the effective date of the amendments to Sec. 592.5(a), 
provide all the information that the revised regulation will require. A 
RI may incorporate by reference any item of information previously 
provided to the Administrator in its application, annual statement, or 
notification of change by a clear reference to the date, page and entry 
in the existing document. This additional information would include the 
RI's designation of an agent for service of process if it is not 
organized under the law of any state of the United States. Failure to 
provide this information in a timely manner would be grounds for 
suspension.

C. Automatic Suspension, Revocation, and Suspension of Registrations; 
Reinstatement of Registrations (Sec. 592.7)

1. Section 592.7(a): Automatic Suspension of a Registration
    49 U.S.C. 30141(c)(4)(A) authorizes NHTSA to suspend a registration 
for not complying with specified statutory requirements as well as 
``regulations prescribed under this subchapter'', i.e. 49 U.S.C. 30141-
47. Two of the circumstances warranting suspension are of a serious 
enough nature that section 30141(c)(4)(B) requires the suspension to be 
automatic: when a Registered Importer does not, in a timely manner, pay 
a fee required by Part 594 of this title or for knowingly filing a 
false or misleading certification under 49 U.S.C. 30146. Our present 
regulation covers this in 49 CFR 592.7(a) and (b).
    Currently, Sec. 592.7(a) provides that a registration will 
automatically be suspended if we have not received a fee by the 
beginning of the 31st day after it is due and payable.
    Until now, we have only applied this provision to the annual fee 
that the RI must pay pursuant to Sec. 594.6. However, 49 U.S.C. 
30141(a)(3) also authorizes the imposition of fees ``to pay for the 
costs of--(A) processing bonds provided * * * under subsection (d) of 
this section; and (B) making the decisions under this subchapter.''
    Under this provision, we have established fees for the filing of a 
petition for a determination whether a vehicle is eligible for 
importation (Sec. 594.7); for importing a vehicle covered by an 
eligibility determination by NHTSA (Sec. 594.8); for reimbursement of 
bond processing costs (Sec. 594.9); and for review and processing of a 
conformity certificate (Sec. 594.10). We are also proposing to add a 
new Sec. 594.11 to establish a fee applicable to the importation of 
Type 1 motor vehicles, infra.
    Under current Sec. 594.5(e), (f), and (g), the fees for importing a 
vehicle covered by a NHTSA eligibility determination, for bond 
processing costs, and for the NHTSA review and processing of a 
conformity certificate are to be submitted with the certificate of 
conformity. However, we have allowed RIs to delay payment until 30 days 
after we issue a monthly invoice indicating the amount due. In 
practice, about 80 percent of the payments are made less than two weeks 
after the invoice, and most payments are transmitted electronically or 
made by credit card. We are proposing to formalize the actual payment 
practice by establishing a due date of 15 days from the date of the 
invoice by deleting subsections (e), (f), and (g) and adding a new 
Sec. 594.5(f).
    Since there can be no legitimate reason for not paying required 
fees in a timely manner, we intend to suspend automatically a RI's 
registration if any of the required fees are not received by their due 
dates. As we propose in Sec. 592.7(a)(1), if a RI has not paid its 
annual fee by October 10 or paid its other fees within 15 calendar days 
of NHTSA's invoice, on the next business day we would inform Customs 
that the RI's registration had been suspended

[[Page 69823]]

until further notice, and that the RI may not import any additional 
motor vehicles. We intend to apply this policy as of the effective date 
of the final rule to fees that are overdue as of that date under the 
old rule.
    If a fee is paid after registration is suspended, following receipt 
and clearance of the payment we would reinstate the registration and 
inform Customs of this action. However, to further encourage timely 
payment and to partially cover our administrative costs of processing 
such a suspension and reinstatement, we are proposing to require the RI 
to also pay an amount equal to 10 percent of the overdue amount as a 
condition of having the registration reinstated.
    Congress also directed us to establish procedures for automatically 
suspending a registration of a RI that has knowingly filed a false or 
misleading certification. 49 U.S.C. 30141(c)(4)(B). We have currently 
implemented this to some degree in Sec. 592.7(b). The procedure that we 
currently follow is not truly ``automatic.'' We inform the RI in 
writing of the facts giving rise to our belief that it has knowingly 
filed a false or misleading certification, and afford it 30 days in 
which to present data, views, and arguments in its behalf. After 
considering the views of the RI, we make a final decision and notify 
the RI in writing. If we decide to suspend, we inform the RI of the 
period of suspension.
    Upon review of these provisions, we propose to revise them to 
reflect the express intent of Congress that a knowing filing of a false 
or misleading certification shall result in automatic suspension of a 
registration. We believe there are certain situations under which we 
could justifiably conclude that a filing had been knowingly false or 
misleading, such as by filing(s) of false or misleading certifications 
after we have warned the RI of similar transgressions, by filing a 
document that was clearly falsified, by falsely representing a vehicle 
to be older than it really is and certifying it to performance 
requirements that applied in an earlier year rather than to the 
requirements that applied in the year of its manufacture, or by 
representing that recall work had been done when it had not been done. 
Under proposed Sec. 592.7(a)(2), if we decide that a RI has knowingly 
filed a false or misleading certification, we would automatically 
suspend the RI's registration, notifying the RI by letter of the 
decision, the length of the suspension, if applicable, and the facts 
and conduct upon which our decision was based. We would afford the RI, 
within 30 days of the Administrator's notification, an opportunity to 
challenge the decision by presenting data, views and arguments in 
writing or in person. We could also suspend a registration non-
automatically for these violations under section 30141(c)(4)(A). For 
example, in a complex case involving filing a false and misleading 
certification under section 30146, we might provide an opportunity for 
a hearing before issuing a suspension.
    We have identified three further situations that we believe warrant 
automatic suspension. It is imperative that we be able to reach each RI 
to obtain information or to conduct an inspection. Each RI must include 
telephone numbers and a street address in the United States with its 
application. Under current Sec. 592.5(f), a regulation prescribed under 
section 30141(c)(1), a RI is to notify us in writing within 30 days 
after its change of street address or phone number. As noted above, in 
proposed new Sec. 592.6(m), a RI would be required to notify us at 
least 30 days in advance of its change of street address and/or 
telephone number.
    There have been instances in which mail addressed to a RI has been 
returned as ``undeliverable.'' When this occurs, and the RI cannot 
readily be contacted by us, the agency has lost its ability to 
communicate with the RI even though the RI may still be importing motor 
vehicles. This is an untenable and unacceptable situation. Therefore, 
we are proposing in Sec. 592.7(a)(3) to automatically suspend a 
registration, and request Customs not to allow vehicles to be imported 
into the U.S. by a RI, if our letters to the RI are returned to us as 
undeliverable at the street address it has provided to us or if the 
telephone number provided to us is disconnected.
    As discussed above, we are proposing that each entity who is a RI 
at the time that the final rule is adopted provide us with information 
equivalent to that which will be required of new RI applicants not 
later than 30 days after the effective date of the final rule 
(Sec. 592.6(r)). If a RI fails to provide this information, we would 
automatically suspend its registration (Sec. 592.7(a)(4)).
    Our final proposal for automatic suspension of a registration 
reflects our concern over the recent practice of some RIs of releasing 
vehicles based upon forged or otherwise falsified documents purporting 
to be agency bond release letters. Such falsification is a criminal 
action deserving of severe sanctions. We intend to refer such matters 
to the Department of Justice for its consideration of possible criminal 
prosecution. In addition, however, we believe that the registration of 
a RI that is releasing vehicles on the basis of such falsified bond 
release letters should be suspended automatically, and we are proposing 
to include appropriate language in Sec. 592.7(a). Moreover, it is 
likely that during such a suspension we would commence a proceeding to 
revoke the registration, in accordance with the procedures discussed 
below that we would adopt as part of Sec. 592.7(b).
    We are interested in having comments as to whether other violations 
of section 30141(c)(4) might warrant automatic suspension, such as 
failure to admit a NHTSA inspector to the premises, or to make records 
available for inspection.
2. Section 592.7(b): Non-Automatic Suspension and Revocation of 
Registrations
    49 U.S.C. 30141(c)(4)(A) requires us to establish procedures for 
revoking or suspending a registration for not complying with a 
requirement of 49 U.S.C. 30141-30147, or any of sections 30112, 30115, 
30117-30122, 30125(c), 30127, or 30166, or regulations prescribed under 
any of those sections. We had intended to implement 49 U.S.C. 
30141(c)(4)(A) by regulation but have not completely done so.
    The statute authorizes us to consider revocation or suspension of a 
RI's registration for a broad range of violations, literally for any 
failure to comply with any aspect of the Imported Vehicle Safety Act of 
1988 or its implementing regulations, 49 CFR parts 591-594, as well 
other general requirements of Chapter 301 relating to notification, 
recalls, inspections, and recordkeeping. We are therefore proposing in 
Sec. 592.7(b) to reflect the statutory language of 49 U.S.C. 
30141(c)(4)(A) and to clarify and broaden the circumstances under which 
a registration may be suspended or revoked. This would encompass any 
failure to perform any duty prescribed by Sec. 592.6.
    We have also reviewed the suspension and revocation procedures 
currently specified in Sec. 592.7(b) and (c). Under these procedures, 
if the Administrator has reason to believe that a RI has failed to 
comply with a requirement and that a RI's registration should be 
suspended or revoked, (s)he notifies the RI in writing, affording an 
opportunity to present data, views, and arguments, either in writing or 
in person, as to why the registration should not be revoked or 
suspended. The Administrator then decides as to the appropriate action 
under the circumstances. If a registration is suspended or revoked, the 
RI may

[[Page 69824]]

request reconsideration of the decision ``if the request is supported 
by factual matter which was not available to the Administrator at the 
time the registration was suspended or revoked'' (current 
Sec. 592.7(d)).
    These procedures currently apply to all suspensions and revocations 
(other than the automatic suspension of Sec. 592.7(a) for failure to 
pay a fee). As discussed above, they would be slightly modified to 
apply to automatic suspensions to address cases in which a RI knowingly 
files a false or misleading certification.
    We are proposing a revised procedure for non-automatic suspension 
and revocation of registrations. Under our proposal, the Administrator 
would notify the RI if there was reason to believe that the RI had 
violated one or more statutes or regulations, and that suspension for a 
proposed period or revocation would be an appropriate sanction under 
the circumstances. The proceedings would then essentially follow those 
set out in Secs. 592.7(a), (b), and (c) of the current regulation, 
affording the RI, within 30 days of the Administrator's notification, 
an opportunity to present data, views and arguments in writing or in 
person as to whether the violations occurred, why the registration 
ought not to be suspended or revoked, or whether the suspension should 
be shorter than proposed. The Administrator would make a decision on 
the basis of all information then available, and notify the RI in 
writing of the decision. Because the Registered Importer would have 
already been afforded an opportunity to present data, views, and 
arguments relating to the proposed suspension, we do not plan to 
provide an opportunity to seek administrative reconsideration of a 
decision to suspend or revoke a registration under this subsection.
3. Section 592.7(c): Reinstatement of Suspended Registrations
    Current Sec. 592.7(f) specifies that the Administrator shall 
reinstate a suspended registration if the cause that led to the 
suspension no longer exists, as determined by the Administrator, either 
upon the Administrator's motion, or upon the submission of further 
information or fees by the RI. We believe that the provisions governing 
reinstatement of registrations need to be clarified and expanded to 
reflect the changes we are proposing in our suspension procedures.
    Under our proposal, there are four specific bases upon which a 
registration could be automatically suspended (Sec. 592.7(a)), and a 
registration may be suspended for failure to comply with statutory or 
regulatory authorities after notification from the Administrator 
(Sec. 592.7(b)). Proposed Sec. 592.7(c) would specify the conditions 
under which the registrations would be reinstated under each of the 
proposed bases for suspension.
4. Section 592.7(d): Effect of Suspension or Revocation.
    If a registration is suspended or revoked, the entity will no 
longer be considered a RI, will no longer have the rights and 
authorities appertaining thereto, and must cease and will not be 
allowed to import vehicles. We would notify Customs of our action.
    Under current Sec. 592.7(e), if a registration is revoked, the RI 
is not refunded any annual or other fees it has paid for the fiscal 
year in which its registration is revoked. This would be retained in 
new Sec. 592.7(d). In addition, in accordance with 49 U.S.C. 
30141(c)(2), the section would specify that a RI whose registration has 
been revoked may not apply for reregistration. The prohibition would 
apply if any of the principals of the applicant had been, or been 
affiliated with, a principal of the RI whose registration was revoked.
5. Section 592.7(e): Continuing Obligations of a RI Whose Registration 
Has Been Revoked or Suspended
    Section 592.7(e)(1) would clarify that a RI whose registration is 
suspended or revoked remains obligated under Sec. 592.6(j) to notify 
owners of, and to remedy, noncompliances or safety-related defects for 
each vehicle for which it has furnished a certificate of conformity or 
information to the Administrator.
    Although a suspended or revoked RI will be foreclosed from 
importing vehicles, there may well be Type 2 motor vehicles in its 
custody that are still under bond, or Type 1 vehicles for which 
information has not been submitted to the Administrator pursuant to 
Sec. 592.6(e). New Sec. 592.7(e)(2) would cover these vehicles. With 
respect to those Type 2 motor vehicles that the RI has certified and 
for which it has submitted certificates of conformity to NHTSA at the 
time of a suspension or revocation, NHTSA will review and act upon the 
submissions as if the suspension or revocation had not occurred, and 
the RI may release the vehicles from custody when NHTSA releases the 
bonds, even if its suspension is in effect. With respect to those 
vehicles for which certification or information submissions have not 
been submitted at the time a registration has been suspended, and the 
suspension is for the first time, the RI would not be precluded from 
performing conformance work, and it would be allowed to certify 
vehicles and submit certificates of conformity or information to NHTSA 
when the registration is reinstated, but it would be required to retain 
custody of those vehicles during the suspension period. NHTSA will toll 
the 120-day submittal period during the term of the first suspension. 
When a registration has been revoked, or suspended for a second (or 
more) time, the RI would be required to export all vehicles for which 
it has not yet submitted certificates of conformity or information to 
NHTSA at the time of the suspension or revocation.
    As for those vehicles imported for personal use under 
Sec. 591.5(f)(2)(ii) that the RI has contracted to conform and for 
which it has not yet submitted certifications, the RI would be required 
to notify immediately the owners of the vehicles of NHTSA's action. We 
are proposing to adopt a conforming amendment to part 591 under which 
the notified owner would be required to contract with another RI in 
order to have the vehicle certified and released. The applicable 120-
day period for submission of certification information would be tolled 
during the period from the date of the RI's notice to the importer 
until the date of the contract with the substitute RI. This would be 
designated as Sec. 591.7(e). We would remove existing Sec. 591.7(e), 
which has expired (Sec. 591.7(e) provided for applications to the 
Administrator, on or before February 14, 2000, to change the status of 
vehicles imported pursuant to Sec. 591.5(j)).

D. Proposed Amendments of Part 591 to Preclude the Importation by a RI 
of a Salvage, Repaired Salvage, or Reconstructed Motor Vehicle; Minor 
Conforming Amendments to Part 591; Sec. 592.9: Forfeiture of Bond

    Within the past year, some RIs have sought to import heavily 
damaged motor vehicles both before and after their repair. In addition, 
some motor vehicles have been imported consisting of the body of one 
vehicle and the chassis and frame of another. Although we may have 
determined under part 593 that the original vehicles, as manufactured, 
are capable of being modified to meet Federal motor vehicle safety 
standards, when a vehicle has been heavily damaged or reconstructed, we 
have no assurance that it can be restored to a condition in which it 
complies, or can be brought into compliance with, the Federal motor 
vehicle safety standards. We have tentatively decided that the

[[Page 69825]]

safety of the American public would be served by prohibiting 
importation of salvage vehicles into this country. Accordingly, we 
propose amending part 591 to require a RI to declare that the motor 
vehicle it is importing (whether Type 1 or Type 2) is not a salvage 
motor vehicle, a repaired salvage motor vehicle, or a reconstructed 
motor vehicle as defined below.
    Under the proposal, a ``salvage motor vehicle'' would mean a 
vehicle that is less than 25 years old that has been damaged to the 
extent that to restore it to operable and licensable condition would 
require replacement of two or more specified major components such as 
engine and transmission, frame, front clip assembly and rear clip 
assembly. This definition is based in large part upon that of the State 
of Georgia. A ``repaired salvage motor vehicle'' would mean a salvage 
motor vehicle that has been restored to an operable and licensable 
condition. A ``reconstructed motor vehicle'' would mean a vehicle less 
than 25 years old whose body is mounted on a chassis or frame that is 
not its original chassis or frame. Pursuant to 49 U.S.C. 30112(b)(9), 
motor vehicles that are at least 25 years old may be imported without 
the need to meet the Federal motor vehicle safety standards.
    Under our proposal, Part 592 would be extended to cover conformance 
with the theft prevention standard. We need, then, to modify the terms 
of the safety and bumper standard conformance bonds (appendix A and 
appendix B of part 591) to cover compliance with the theft prevention 
standard as well, and appropriate amendments are proposed. The two 
bonds presently differ somewhat in wording because they were adopted at 
different times, and we would also revise them in nonsubstantive ways 
to be more consistent with each other.
    There is no need to modify the bond terms to reflect their 
applicability only to Type 2 motor vehicles, since the regulatory text 
in the first instance does not require the entry of a Type 1 motor 
vehicle to be accompanied by a bond.
    Section 591.8(c) requires that ``the surety on a bond shall possess 
a certificate of authority to underwrite Federal bonds. (See list of 
certificated sureties at 54 FR 27800, June 30, 1989).'' When published 
late in 1989, this list was intended to be a reference to current 
sureties, rather than a list of sureties that is incorporated by 
reference. The list is a document that changes as sureties are added to 
and dropped from the list, and we wish to drop the reference to it. The 
requirement would remain, of course, that, at the time the bond is 
given, the surety possesses a certificate of authority to underwrite 
Federal bonds.
    To ensure that the conditions under which the conformance bond may 
be forfeited are clearly understood, we are proposing to adopt a new 
Sec. 592.9 that clearly describes the forfeiture conditions.

E. Section 594.11: Fees To Be Paid by Registered Importers for 
Importation of Type 1 Motor Vehicles

    Under 49 CFR part 594, Schedule of Fees Authorized by 49 U.S.C. 
30141, certain fees are due from RIs: A fee for importation of a 
vehicle covered by an eligibility decision made on NHTSA's initiative 
(Sec. 594.8); a fee to cover bond processing costs (Sec. 594.9), and a 
fee to cover review of and processing a conformity certificate 
(Sec. 594.10).
    Type 1 motor vehicles remain vehicles covered by an eligibility 
decision made on NHTSA's initiative, and it appears appropriate that 
RIs continue to pay the fee established by Sec. 594.8(c) for each Type 
1 motor vehicle they import. Because no bond or certification 
conformity statement would accompany these vehicles, the fees 
established by Secs. 594.9 and 594.10 would no longer be applicable. 
However, we will be receiving and processing certain identifying 
information on Type 1 motor vehicles, including information relating to 
safety recalls, and we believe that we will spend some amount of time 
on these activities that should be reimbursed pursuant to 49 U.S.C. 
30141(c)(4). Based upon our experience in processing conformity 
packages submitted by RIs for Canadian vehicles, we estimate that the 
cost of processing the importation of a Type 1 motor vehicle would be 
approximately $13. Accordingly, we are proposing to add a new 
Sec. 594.11 to require a fee of $13 for each Type 1 motor vehicle 
imported by a RI. If the information is submitted by Automated Broker 
Interface (ABI), the fee would be $6, provided that payment is by 
credit card and that all the information is correct.
    These fees are identical to those that we adopted on September 19, 
2000, as an amendment to Sec. 594.10, Fee for review and processing of 
conformity certificate, and which apply to the importation of all 
nonconforming vehicles, including Canadian vehicles, effective October 
1, 2000 (65 FR 56497). Because we cannot adopt Sec. 594.11 until the 
amendments to part 592 are adopted, the fees specified in Sec. 594.11 
for the processing of information submitted for Type 1 vehicles will 
not be effective until October 1, 2001, assuming that a final rule 
based on this proposal is issued before that date. The question then 
arises as to the fee to be paid to the agency by a RI for the 
importation of Type 1 vehicles in the period between the effective date 
of the final rule and October 1, 2001. Because the information 
furnished the Administrator for Type 1 vehicles is, in effect, a 
certification of conformity of those vehicles, we will continue to 
collect the fees specified in Sec. 594.10 in the interim period. We 
note, too, that these fees would be identical to those proposed for 
Sec. 594.11.

IV. Effective Date

    The final rule would be effective 30 days after its publication in 
the Federal Register.

V. Rulemaking Analyses and Notices

A. Executive Order 12866 (Federal Regulation) and DOT Regulatory 
Policies and Procedures

    This notice has not been reviewed under E.O. 12866. After 
considering the impacts of this rulemaking action, we have determined 
that the action is not significant within the meaning of the Department 
of Transportation regulatory policies and procedures. The intent of the 
rulemaking action is to modify regulatory procedures that have been in 
effect for almost ten years. In most cases, the effect of the proposed 
amendments would be to relax or eliminate burdens on regulated 
entities. This action does not involve a substantial public interest or 
controversy. The rulemaking action would not have a substantial impact 
on any transportation safety program or on state and local governments. 
The impacts are so minimal as not to warrant the preparation of a full 
regulatory evaluation.

B. Regulatory Flexibility Act

    We have also considered the effects of this action in relation to 
the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). For the reasons 
discussed above under E.O. 12866 and the DOT Policies and Procedures, I 
certify that this action will not have a significant economic impact 
upon a substantial number of small entities.
    The following is our statement providing the factual basis for our 
certification (5 U.S.C. 605(b)). The proposal primarily affects 
registered importers (RIs) of motor vehicles. As of September 20, 2000, 
there were 166 entities that are currently RIs under 49 CFR part 592. 
Their business is importing motor vehicles for resale. That this is a 
profitable business is

[[Page 69826]]

demonstrated by the growing number of vehicles imported from Canada and 
the increasing number of applicants to become a RI. About 75 percent of 
vehicles being imported are Type 1 motor vehicles as defined by the 
proposal. If the proposed rule is adopted, a RI would be relieved of 
the present necessity to provide conformance bonds for these vehicles 
and to provide conformance information to us, resulting in cost savings 
to the RI. Other aspects of the proposal are refinements and 
clarifications of existing RI obligations. RIs may or may not be small 
businesses as defined by the Small Business Administration's 
regulations, but we believe that the overall effect of the proposal 
will be to the economic benefit of any RI, regardless of its size. 
Governmental jurisdictions will not be affected.

C. Executive Order 13132 (Federalism)

    E.O. 13132 (64 FR 43255, August 10, 1999), revokes and replaces 
E.O.s 12612 ``Federalism'' and 12875 ``Enhancing the Intergovernmental 
Partnership.'' E.O. 13132 requires NHTSA to develop an accountable 
process to ensure ``meaningful and timely input by State and local 
officials in the development of regulatory policies that have 
federalism implications.'' E.O. 13132 defines the term ``Policies that 
have federalism implications'' to include regulations that have 
``substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government.'' Under 
E.O. 13132, NHTSA may not issue a regulation that has federalism 
implication, that imposes substantial direct compliance costs, and that 
is not required by statute, unless the Federal government provides the 
funds necessary to pay the direct compliance costs incurred by State 
and local governments, or NHTSA consults with State and local officials 
early in the process of developing the proposed regulation.
    The proposed rule will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government as specified in E.O. 13132. Thus, the 
requirements of section 6 of the Executive Order do not apply to this 
rule.

D. National Environmental Policy Act

    We have analyzed this action for purposes of the National 
Environmental Policy Act. The action will not have a significant effect 
upon the environment because the proposal would not impose any 
manufacturing requirements. We expect the volume of vehicles imported 
from Canada to increase, independent of our rulemaking actions.

E. Civil Justice Reform

    This proposed rule does not have a retroactive or preemptive 
effect. Judicial review of a rule based on this proposal may be 
obtained pursuant to 5 U.S.C. 702. That section does not require that a 
petition for reconsideration be filed prior to seeking judicial review.

F. Paperwork Reduction Act

    The procedures in this rule to permit importation of motor vehicles 
and equipment not originally manufactured for the U.S. market include 
information collection requirements as that term is defined by the 
Office of Management and Budget (OMB) in 5 CFR part 1320. The original 
information collection requirements of part 591 were approved by the 
OMB pursuant to the requirements of the Paperwork Reduction Act (44 
U.S.C. 3501 et seq.). Under the proposal, new requirements would be 
imposed for submission of safety recall data on all vehicles, but this 
would be more than offset by the proposed reduction in paperwork 
required for Type 1 motor vehicles, which are 75 percent of the 
vehicles currently imported. We believe, therefore, that the existing 
clearance covers a final rule that would be based on implementing this 
proposal and we have not sought a new or expanded clearance. This 
collection of information has been assigned OMB Control No. 2127-0002 
(``Motor Vehicle Information'').

G. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires 
agencies to prepare a written assessment of the cost, benefits, and 
other effects of proposed or final rules that include a Federal mandate 
likely to result in the expenditure by state, local, or tribal 
governments, in the aggregate, or by the private sector, of more than 
$100 million annually. Because a final rule based on this proposal 
would not have an effect of $100 million, no Unfunded Mandates 
assessment has been prepared.

H. Plain Language

    E.O. 12866 and the President's memorandum of June 1, 1998, require 
each agency to write all rules in plain language. Application of the 
principles of plain language include consideration of the following 
questions:
--Have we organized the material to suit the public's needs?
--Are the requirements in the proposed rule clearly stated?
--Does the proposed rule contain technical language or jargon that is 
unclear?

--Would a different format (grouping and order of sections, use of 
heading, paragraphing) make the rule easier to understand?
--Would more (but shorter) sections be better?
--Could we improve clarity by adding tables, lists, or diagrams?
--What else could we do to make the rule easier to understand?

    If you have any responses to these questions, please include them 
in your comments on this document.

Request for Comments

How Do I Prepare and Submit Comments?

    Your comments must be written and in English. To ensure that your 
comments are correctly filed in the Docket, please include the docket 
number of this document in your comments.
    Your comments must not be more than 15 pages long (49 CFR 553.21). 
We established this limit to encourage you to write your primary 
comments in a concise fashion. However, you may attach necessary 
additional documents to your comments. There is no limit on the length 
of the attachments.
    Please submit two copies of your comments, including the 
attachments, to Docket Management at the beginning of this document, 
under ADDRESSES.

How Can I Be Sure That My Comments Were Received?

    If you wish Docket Management to notify you upon its receipt of 
your comments, enclose a self-addressed, stamped postcard in the 
envelope containing your comments. Upon receiving your comments, Docket 
Management will return the postcard by mail.

How Do I Submit Confidential Business Information?

    If you wish to submit any information under a claim of 
confidentiality, you should submit three copies of your complete 
submission, including the information you claim to be confidential 
business information, to the Chief Counsel, NHTSA, at the address given 
at the beginning of this document under FOR FURTHER INFORMATION 
CONTACT. In addition, you should submit two copies

[[Page 69827]]

from which you have deleted the claimed confidential business 
information, to Docket Management at the address given at the beginning 
of this document under ADDRESSES. When you send a comment containing 
information claimed to be confidential business information, you should 
include a cover letter setting forth the information specified in our 
confidential business information regulation, 49 CFR part 512.

Will the Agency Consider Late Comments?

    We will consider all comments that Docket Management receives 
before the close of business on the comment closing date indicated at 
the beginning of this notice under DATES. To the extent possible, we 
will also consider comments that Docket Management receives after that 
date. If Docket Management receives a comment too late for us to 
consider in developing a final rule (assuming that one is issued), we 
will consider that comment as an informal suggestion for future 
rulemaking action.

How Can I Read the Comments Submitted By Other People?

    You may read the comments received by Docket Management at the 
address and times given near the beginning of this document under 
ADDRESSES.
    You may also see the comments on the internet. To read the comments 
on the internet, take the following steps:
    (1) Go to the Docket Management System (DMS) Web page of the 
Department of Transportation (http://dms.dot.gov/).
    (2) On that page, click on ``search.''
    (3) On the next page (http://dms.dot.gov/search/), type in the 
four-digit docket number shown at the heading of this document. 
Example: if the docket number were ``NHTSA-2000-1234,'' you would type 
``1234.''
    (4) After typing the docket number, click on ``search.''
    (5) The next page contains docket summary information for the 
docket you selected. Click on the comments you wish to see.
    You may download the comments. Although the comments are imaged 
documents, instead of the word processing documents, the ``pdf'' 
versions of the documents are word searchable.
    Please note that even after the comment closing date, we will 
continue to file relevant information in the Docket as it becomes 
available. Further, some people may submit late comments. Accordingly, 
we recommend that you periodically search the Docket for new material.

List of Subjects in 49 CFR Parts 567, 591, 592, and 594

    Imports, Motor vehicle safety, Motor vehicles, Reporting and 
recordkeeping requirements.

    In consideration of the foregoing, 49 CFR parts 567, 591, 592, and 
594 would be amended as follows:

PART 567--CERTIFICATION

    1. The authority citation for part 567 would continue to read as 
follows:

    Authority: 49 U.S.C. 322, 30111, 30115, 30117, 30166, 32502, 
32504, 33101-33104, 33108, and 33109; delegation of authority at 49 
CFR 1.50.

    2. Section 567.4 would be amended by revising paragraph (k) to read 
as follows:


Sec. 567.4  Requirements for manufacturers of motor vehicles.

* * * * *
    (k) In the case of passenger cars and multipurpose passenger 
vehicles (as defined by Sec. 541.4(b)(5) of this chapter) admitted to 
the United States under part 591 of this chapter to which the label 
with statement required by paragraphs (a) and (g)(5)(ii) respectively 
of this section has not been affixed by the original producer or 
assembler of the vehicle, if the vehicle is from a line listed in 
appendix A to part 541 of this chapter the registered importer shall 
affix a label meeting the requirements of paragraph (g)(5)(ii) this 
section.
* * * * *

PART 591--IMPORTATION OF VEHICLES AND EQUIPMENT SUBJECT TO FEDERAL 
SAFETY, BUMPER AND THEFT PREVENTION STANDARDS

    1. The authority citation for part 591 would be revised to read as 
follows:

    Authority: Pub. L. 100-562, 49 U.S.C. 322(a), 30117, 30141-
30147; delegation of authority at 49 CFR 1.50.

    2. Section 591.4 would be amended by adding the following 
definitions in alphabetical order:


Sec. 591.4  Definitions.

* * * * *
    Reconstructed motor vehicle means a motor vehicle whose body is 
less than 25 years old and which is mounted on a chassis or frame that 
is not its original chassis or frame and that is less than 25 years 
old.
    Repaired salvage motor vehicle means a salvage motor vehicle that 
has been repaired to the extent that any State will issue it a title 
and register it for use on the public streets, roads or highways.
    Salvage motor vehicle means a motor vehicle less than 25 years old 
that has been wrecked, damaged, or destroyed to the extent that to 
repair it to the extent that any State would issue it a title and 
register it for use on the public streets, roads or highways would 
require replacement of two or more of the following subassemblies: 
Front clip assembly (fenders, grille, hood and bumper), rear clip 
assembly (rear quarter panels and floor panel assembly), side assembly 
(fenders, door(s), and quarter panel), engine and transmission, top 
assembly (except for convertible tops), or frame.
    3. Section 591.5 would be amended as follows:
    a. By revising the introductory text of paragraph (f),
    b. By adding the word ``and'' following the semicolon at the end of 
paragraph (f)(2)(ii),
    c. By adding a new paragraph (f)(3), and
    d. By adding a new paragraph (g). The revision and additions read 
as follows:


591.5  Declarations required for importation.

* * * * *
    (f) The vehicle does not conform with all applicable Federal motor 
vehicle safety, bumper, and theft prevention standards, but the 
importer is eligible to import it because:
* * * * *
    (3) The vehicle is not a salvage motor vehicle, a repaired salvage 
motor vehicle, or a reconstructed motor vehicle.
    (g) The vehicle was certified by its original manufacturer as 
complying with all applicable Canadian motor vehicle safety standards 
and its original manufacturer has informed NHTSA that it complies with 
all applicable Federal motor vehicle safety, bumper, and theft 
prevention standards except the labeling requirements of Federal Motor 
Vehicle Safety Standards Nos. 101 and 110 or 120, and (if appropriate) 
S5.5.11 of Sec. 571.108 of this chapter (related to daytime running 
lamps). The vehicle is not a salvage motor vehicle, a repaired salvage 
motor vehicle, or a reconstructed motor vehicle.
* * * * *
    4. Section 591.6 would be amended by revising paragraphs (c) and 
(d) to read as follows:


Sec. 591.6  Documents accompanying declarations.

* * * * *
    (c) A declaration made pursuant to paragraph (f) of Sec. 591.5 of 
this part, and under a bond for the entry of a single vehicle, shall be 
accompanied by a bond

[[Page 69828]]

in the form shown in Appendix A to this part in an amount equal to 150% 
of the dutiable value of the vehicle, or, if under bond for the entry 
of more than one vehicle, shall be accompanied by a bond in the form 
shown in Appendix B to this part and by Customs Form CF 7501, for the 
conformance of the vehicle(s) with all applicable Federal motor vehicle 
safety, bumper, and theft prevention standards, or, if conformance is 
not achieved, for the delivery of such vehicles to the Secretary of the 
Treasury for export at no cost to the United Sates, or for its 
abandonment.
    (d) A declaration made pursuant to paragraph (f) of Sec. 591.5 of 
this part by an importer who is not a Registered Importer shall be 
accompanied by a copy of the contract or other agreement that the 
importer has with a Registered Importer to bring the vehicle into 
conformance with all applicable Federal motor vehicle safety, bumper, 
and theft prevention standards.
* * * * *
    5. Section 591.7 would be amended by revising paragraph (e) to read 
as follows:


Sec. 591.7  Restrictions on importations.

* * * * *
    (e) If the importer of a vehicle under Sec. 591.5(f)(2)(ii) has 
been notified in writing by the Registered Importer with which it has 
executed a contract or other agreement that the registration of the 
Registered Importer has been suspended (for other than the first time) 
or revoked, pursuant to Sec. 592.7 of this chapter, and that it has not 
affixed a certification label on the vehicle and/or filed a 
certification of conformance with the Administrator as required by 
Sec. 592.6 of this chapter, and that it therefore may not release the 
vehicle for the importer, the importer shall execute a contract or 
other agreement with another Registered Importer for the certification 
of the vehicle and submission of the certification of conformance to 
the Administrator. The Administrator shall toll the 120-day period for 
submission of certification information to the Administrator pursuant 
to Sec. 592.6(d) of this chapter during the period from the date of the 
Registered Importer's notification to the importer until the date of 
the contract with the substitute Registered Importer.
    6. Section 591.8 would be amended by revising the first sentence of 
paragraph (a) and by revising paragraphs (c), (d), introductory text, 
(d)(1), (d)(2), and (d)(6) to read as follows:


Sec. 591.8  Conformance bond and conditions.

    (a) The bond required under paragraph (c) of Sec. 591.6 of this 
part for importation of a vehicle not originally manufactured to 
conform with all applicable standards issued under part 541, part 571 
and part 581 of this chapter shall cover only one motor vehicle and 
shall be in an amount equal to 150% of the dutiable value of the 
vehicle. * * *
* * * * *
    (c) The surety on the bond shall possess a certificate of authority 
to underwrite Federal bonds.
    (d) In consideration of the release from the custody of the U.S. 
Customs Service, or the withdrawal from a Customs bonded warehouse into 
the commerce of, or for consumption in, the United States, or a motor 
vehicle not originally manufactured to conform to applicable standards 
issued under part 541, part 571, and part 581 of this chapter, the 
obligors (principal and surety) shall agree to the following conditions 
of the bond:
    (1) To have such vehicle brought into conformity with all 
applicable standards issued under part 541, part 571, and part 581 of 
this chapter within the number of days after the date of entry that the 
Administrator has established for such vehicle (to wit, 120 days);
    (2) In the case of a vehicle imported pursuant to paragraph (f) of 
Sec. 591.5, to file (or if not a Registered Importer, to cause the 
Registered Importer of the vehicle to file) with the Administrator, a 
certificate that the vehicle complies with each Federal motor vehicle 
safety, bumper, and theft prevention standard in the year that the 
vehicle was manufactured that applies in such year to the vehicle; or
* * * * *
    (6) If the principal has received written notice from the 
Administrator that the vehicle has been found not to comply with all 
applicable Federal motor vehicle safety, bumper, and theft prevention 
standards, and written demand that the vehicle be abandoned to the 
United States, or delivered to the Secretary of the Treasury for export 
(at no cost to the United States), or to abandon the vehicle to the 
United States, or to deliver the vehicle, or cause the vehicle to be 
delivered to, the custody of the District Director of Customs of the 
port of entry listed above, or to any other port of entry, and to 
secure all documents necessary for exportation of the vehicle from the 
United States at no cost to the United States, or in default of 
abandonment or redelivery after prior notice by the Administrator to 
the principal, to pay to the Administrator the amount of the bond.
* * * * *
    7. Appendix A to part 591 would be amended by revising the 
introductory text and Conditions (1), (2), and (6) to read as follows:

Appendix A to Part 591--Section 591.5(f) Bond for the Entry of a 
Single Vehicle

Department of Transportation

National Highway Traffic Safety Administration

Bond to ensure conformance with federal motor vehicle safety, 
bumper, and theft prevention standards

(To redeliver vehicle, to produce documents, to perform conditions 
of release such as to bring vehicle into conformance with all 
applicable Federal motor vehicle safety, bumper, and theft 
prevention standards)

Know All Men by These Presents That

(principal's name, mailing address which includes city, state, ZIP 
code, and state of incorporation if a corporation), as principal, 
and (surety's name, mailing address which includes city, state, ZIP 
code and state of incorporation), as surety, are held and firmly 
bound unto the UNITED STATES OF AMERICA in the sum of (bond amount 
in words) dollars ($ (bond amount in numbers)), which represents 
150% of the entered value of the following described motor vehicle, 
as determined by the U.S. Customs Service: (model year, make, 
series, and VIN) for the payment of which we bind ourselves, our 
heirs, executors, and assigns (jointly and severally), firmly bound 
by these presents.

    WITNESS our hands and seals this ______ day of ______, 20______.
    Whereas, motor vehicles may be entered under the provisions of 
49 U.S.C. Chapters 301, 325, and 331; and DOT Form HS-7 
``Declaration,''
    Whereas, pursuant to 49 CFR part 591, a regulation promulgated 
under the provisions of 49 U.S.C. Chapter 301, the above-bounden 
principal desires to import permanently the motor vehicle described 
above, which is a motor vehicle that was not originally manufactured 
to conform with the Federal motor vehicle safety, or bumper, or 
theft prevention standards; and
    Whereas, pursuant to 49 CFR part 592, a regulation promulgated 
under the provisions of 49 U.S.C. Chapter 301, the above-bounden 
principal has been granted the status of Registered Importer of 
motor vehicles not originally manufactured to conform with the 
Federal motor vehicle safety, bumper, and theft prevention standards 
(or, if not a Registered Importer, has a contract with a Registered 
Importer covering the vehicle described above); and
    Whereas, pursuant to 49 CFR part 593, a regulation promulgated 
under 49 U.S.C. Chapter 301, the Administrator of the National 
Highway Traffic Safety Administration has determined that the motor 
vehicle described above is eligible for importation into the United 
States; and

[[Page 69829]]

    Whereas, the motor vehicle described above has been imported at 
the port of ______, and entered at said port for consumption on 
entry No. ______, dated ______, 20______,
    Now, therefore, the condition of this obligation is such that--
    (1) The above-bounden principal (the ``principal''), in 
consideration of the permanent admission into the United States of 
the motor vehicle described above (the ``vehicle''), voluntarily 
undertakes and agrees to have such vehicle brought into conformity 
with all applicable Federal motor vehicle safety, bumper, and theft 
prevention standards within the time period specified by the 
Administrator of the National Highway Traffic Safety Administration 
(the ``Administrator'');
    (2) The principal shall then file, or if not a Registered 
Importer, shall then cause the Registered Importer of the vehicle to 
file, with the Administrator a certificate that the vehicle complies 
with each Federal motor vehicle safety standard in effect in the 
year that the vehicle was manufactured and which applies in such 
year to the vehicle, and that the vehicle complies with applicable 
requirements of the Federal bumper and theft prevention standards;
* * * * *
    (6) And if the principal has received written notice from the 
Administrator that the vehicle has been found not to comply with all 
applicable Federal motor vehicle safety, bumper, and theft prevention 
standards, and written demand that the vehicle be abandoned to the 
United States, or delivered to the Secretary of the Treasury for export 
(at no cost to the United States), the principal shall abandon the 
vehicle to the United States, or shall deliver the vehicle, or cause 
the vehicle to be delivered to, the custody of the District Director of 
Customs of the port of entry listed above, or any other port of entry, 
and shall execute all documents necessary for exportation of the 
vehicle from the United States, at no cost to the United States; or in 
default of abandonment or redelivery after proper notice by the 
Administrator to the principal, the principal shall pay to the 
Administrator the amount of this obligation;
* * * * *
    8. Appendix B to part 591 would be amended by revising the 
introductory text and Conditions (1), (2), and (6) to read as follows:

Appendix B to Part 591--Section 591.5(f) Bond for the Entry of More 
Than a Single Vehicle

Department of Transportation

National Highway Traffic Safety Administration

Bond to ensure conformance with federal motor vehicle safety, 
bumper, and theft prevention standards

(To redeliver vehicles, to produce documents, to perform conditions 
of release such as to bring vehicles into conformance with all 
applicable Federal motor vehicle safety, bumper, and theft 
prevention standards)

    Know All Men by These Presents That (principal's name, mailing 
address which includes city, state, ZIP code, and state of 
incorporation if a corporation), as principal, and (surety's name, 
mailing address which includes city, state, ZIP code and state of 
incorporation) as surety, are held and firmly bound unto the UNITED 
STATES OF AMERICA in the sum of (bond amount in words) dollars ($ 
(bond amount in numbers)), which represents 150% of the entered 
value of the following described motor vehicle, as determined by the 
U.S. Customs Service: (model year, make, series, and VIN of each 
vehicle) for the payment of which we bind ourselves, our heirs, 
executors, and assigns (jointly and severally), firmly bound by 
these presents.
    WITNESS our hands and seals this __day of __, 20__.
    Whereas, motor vehicles may be entered under the provisions of 
49 U.S.C. Chapters 301, 325, and 331; and DOT Form HS-7 
``Declaration,''
    Whereas, pursuant to 49 CFR part 591, a regulation promulgated 
under the provisions of 49 U.S.C. Chapter 301, the above-bounden 
principal desires to import permanently the motor vehicles described 
above, which are motor vehicles that were not originally 
manufactured to conform with the Federal motor vehicle safety, or 
bumper, or theft prevention standards; and
    Whereas, pursuant to 49 CFR part 592, a regulation promulgated 
under the provisions of 49 U.S.C. Chapter 301, the above-bounden 
principal has been granted the status of Registered Importer of 
motor vehicles not originally manufactured to conform with the 
Federal motor vehicle safety, bumper, and theft prevention 
standards; and
    Whereas, pursuant to 49 CFR part 593, a regulation promulgated 
under 49 U.S.C. Chapter 301, the Administrator of the National 
Highway Traffic Safety Administration has determined that each motor 
vehicle described above is eligible for importation into the United 
States; and
    Whereas, the motor vehicles described above have been imported 
at the port of ______, and entered at said port for consumption on 
entry No. ______, dated ______, 20______;
    Now, therefore, the Condition of this Obligation is such that--
    (1) The above-bounden principal (the ``principal''), in 
consideration of the permanent admission into the United States of 
the motor vehicles described above (the ``vehicles''), voluntarily 
undertakes and agrees to have such vehicles brought into conformity 
with all applicable Federal motor vehicle safety, bumper, and theft 
prevention standards within the time period specified by the 
Administrator of the National Highway Traffic Safety Administration 
(the ``Administrator'');
    (2) For each motor vehicle described above, the principal shall 
then file with the Administrator a certificate that such vehicle 
complies with each Federal motor vehicle safety standard in effect in 
the year that such vehicle was manufactured and which applies in such 
year to such vehicle, and that such vehicle complies with applicable 
requirements of the Federal bumper and theft prevention standards;
* * * * *
    (6) And if the principal has received written notice from the 
Administrator that such vehicle has been found not to comply with all 
applicable Federal motor vehicle safety, bumper, and theft prevention 
standards, and written demand that such vehicle be abandoned to the 
United States, or delivered to the Secretary of the Treasury for export 
(at no cost to the United States), the principal shall abandon such 
vehicle to the United States, or shall deliver such vehicle, or cause 
such vehicle to be delivered to, the custody of the District Director 
of Customs of the port of entry listed above, or any other port of 
entry, and shall execute all documents necessary for exportation of 
such vehicle from the United States, at no cost to the United States; 
or in default of abandonment or redelivery after proper notice by the 
Administrator to the principal, the principal shall pay to the 
Administrator an amount equal to 150% of the entered value of such 
vehicle as determined by the U.S. Customs Service;
* * * * *

PART 592--REGISTERED IMPORTERS OF VEHICLES NOT ORIGINALLY 
MANUFACTURED TO CONFORM TO THE FEDERAL MOTOR VEHICLE SAFETY 
STANDARDS

    1. The authority citation for part 592 would be revised to read as 
follows:

    Authority: Pub. L. 100-562, 49 U.S.C. 322(a), 30117, 30141-
30147; delegation of authority at 49 CFR 1.50.

    2. Section 592.4 would be amended by adding the following 
definitions in alphabetical order:


Sec. 592.4  Definitions.

* * * * *
    Independent insurance company means an entity that is registered 
with any State and authorized to conduct an insurance business, none of 
whose affiliates, shareholders, officers, directors, or employees, or 
in affinity with such, is employed by, or has a financial interest in, 
or otherwise controls or participates in the business of, a Registered 
Importer to which it issues or underwrites a service insurance policy.
* * * * *

[[Page 69830]]

    Principal means any officer, partner, or director of a Registered 
Importer, and any person whose ownership interest in a Registered 
Importer is 10% or more.
* * * * *
    Safety recall means a notification and remedy campaign conducted 
pursuant to 49 U.S.C. 30118-30120 to address a noncompliance with a 
Federal motor vehicle safety standard or a defect that relates to motor 
vehicle safety.
    Service insurance policy means any policy issued or underwritten by 
an independent insurance company which covers a specific Type 1 or Type 
2 motor vehicle and guarantees that any noncompliance with a Federal 
motor vehicle safety standard or defect related to motor vehicle safety 
determined to exist in that vehicle will be remedied without charge to 
the owner of the vehicle.
    Type 1 motor vehicle means a motor vehicle that is certified by its 
original manufacturer as complying with all applicable Canadian motor 
vehicle safety standards and whose original manufacturer has informed 
NHTSA in writing that the vehicle complies with all applicable Federal 
motor vehicle safety, bumper, and theft standards (except the labeling 
requirements of Federal Motor Vehicle Safety Standards Nos. 101 and 110 
or 120, and (if appropriate) S5.5.11 of Sec. 571.108 of this chapter 
(related to daytime running lamps)).
    Type 2 motor vehicle means a motor vehicle, other than a Type 1 
motor vehicle, that is not certified by its original manufacturer as 
complying with all applicable Federal motor vehicle safety, bumper, and 
theft prevention standards.
    3. Section 592.5 would be amended by revising paragraphs (a)(3), 
(4), (5), (9) and (11), (b), (e) and (f) and by adding a new paragraph 
(h) to read as follows:


Sec. 592.5  Requirements for registration and its maintenance.

    (a) * * *
    (3) Sets forth the full name, street address, and title of the 
person preparing the application, and the full name, street address, e-
mail address (if any), and telephone and facsimile (if any) numbers in 
the United States of the person for whom application is made (the 
``applicant'').
    (4) Specifies the form of the applicant's organization and the 
State under which it is organized, and:
    (i) If the applicant is an individual, the application must include 
the full name, street address, date of birth, and Social Security 
Number of the individual;
    (ii) If the applicant is a partnership, the application must 
include the full name, street address, date of birth, and Social 
Security Number of each partner; if one or more of the partners is a 
limited partnership, the application must include the names and street 
addresses of the general partners and limited partnership; if one or 
more of the partners is a corporation, the application must include the 
information specified by either paragraph (a)(4)(iii) or (iv) of this 
section, as applicable;
    (iii) If the applicant is a non-public corporation, the application 
must include the full name, street address, date of bith, and Social 
Security Number of each officer, director, manager, and person who is 
authorized to sign documents on behalf of the corporation. The 
application must also include the name of any person who owns or 
controls 10 percent or more of the corporation. The applicant must also 
provide a statement issued by the Office of the Secretary of State, or 
other official of the State in which the applicant is incorporated, 
certifying that the applicant is a corporation in good standing;
    (iv) If the applicant is a public corporation, the applicant must 
include a copy of its latest 10-K filing with the Securities and 
Exchange Commission, and provide the name and address of any person who 
is authorized to sign documents on behalf of the corporation;
    (v) Contains a statement that the applicant has never had a 
registration revoked pursuant to Sec. 592.7, nor is it, or was it, 
directly or indirectly, owned or controlled by, or under common 
ownership or control with, a Registered Importer which has had a 
registration revoked pursuant to Sec. 592.7; and
    (vi) Identifies any shareholder, officer, director, employee, or 
any person in affinity with such, who has been previously affiliated 
with another Registered Importer in any capacity. If the response is 
affirmative, the applicant shall state the name of each such Registered 
Importer and the affiliation of any identified person.
    (5) Includes the following:
    (i) The street address of each of its facilities for conformance, 
storage, and repair in the United States that the applicant will use to 
fulfill its duties as a Registered Importer and where the applicant 
will maintain the records it is required by this part to keep;
    (ii) The street address that the applicant designates as its 
mailing address (in addition, an applicant may list a post office box, 
provided that it is in the same city as the street address designated 
as its mailing address);
    (iii) A copy of the applicant's business license or other similar 
document issued by a State of the United States or a political 
subdivison thereof, authorizing it to do business as an importer, or 
modifier, or seller of motor vehicles, or a statement by the applicant 
that it has made a bona fide inquiry and is not required by such state 
or local law to have such a license or document;
    (iv) The name of each principal of the applicant whom the applicant 
authorizes to submit conformity certifications to NHTSA and the street 
address of the repair, storage, or conformance facility where each such 
principal will be located; and
    (v) If an applicant is not organized under the laws of a State of 
the United States, the application must be accompanied by the 
applicant's designation of an agent for service of process in the form 
specified by Sec. 551.45 of this chapter.
* * * * *
    (9) Sets forth in full complete descriptive information, views, and 
arguments sufficient to establish that the applicant:
    (i) Is technically able to modify any nonconforming motor vehicle 
to conform to all applicable Federal motor vehicle safety, bumper, and 
theft prevention standards, including but not limited to the 
professional qualifications of the applicant and its employees at the 
time of the application (such as whether any such have been certified 
as mechanics), and a description of their experience in conforming and 
repairing vehicles;
    (ii) Owns or leases facilities sufficient in nature and size to 
repair, conform, and store the number of vehicles for which it provides 
certification of conformance to NHTSA and which it imports and may hold 
pending release of conformance bonds, including a copy of a deed or 
lease evidencing ownership or tenancy for each such facility, still or 
video photographs of each such facility, the street address of each 
such facility, and for each such facility, a license or similar 
document issued by an appropriate state or local authority stating that 
the applicant is licensed to do business as an importer and/or modifier 
and/or seller of motor vehicles at that facility (or a statement by the 
applicant that it has made a bona fide inquiry and is not required by 
state or local law to have such a license or permission);
    (iii) Is financially and technically able to notify and remedy a 
noncompliance with a Federal motor vehicle safety standard or defect 
related to motor vehicle safety determined to exist in the

[[Page 69831]]

vehicles that it imports and/or for which it provides certification of 
conformity to NHTSA through repair, repurchase or replacement of such 
vehicles; and
    (iv) Is able to acquire and maintain information regarding the 
vehicles that it imported and the names and addresses of owners of the 
vehicles that it imported and/or for which it provided certifications 
of conformity to NHTSA in order to notify such owners when a 
noncompliance or defect related to motor vehicle safety has been 
determined to exist in such vehicles.
* * * * *
    (11) Contains the statement: ``I certify that I have read and 
understood the duties of a Registered Importer, as set forth in 49 CFR 
592.6, and that [name of applicant] will fully comply with each such 
duty. I further certify that all the information provided in this 
application is true and correct. I further certify that I understand 
that, in the event the registration for which it is applying is 
suspended or revoked, or lapses, (name of applicant) will remain 
obligated to notify owners and to remedy noncompliances or safety 
related defects, as required by 49 CFR 592.6(j), for each vehicle for 
which it has furnished a certificate of conformity or information to 
the Administrator.''
    (b) If the application is incomplete, the Administrator notifies 
the applicant in writing of the information that is needed for the 
application to be complete and advises that no further action will be 
taken on the application until the applicant has furnished all the 
information needed.
* * * * *
    (d) When the application is complete (and, if applicable, when the 
applicant has paid a sum representing the inspection component of the 
initial annual fee), the Administrator reviews the application and 
decides whether the applicant has complied with the requirements 
prescribed by paragraph (a) of this section. The Administrator shall 
base this decision on the application and upon any inspection NHTSA may 
have conducted of the applicant's conformance, storage, and 
recordkeeping facilities and any assessment of the applicant's 
personnel. If the Administrator decides that the applicant complies 
with the requirements, (s)he informs the applicant in writing and 
issues it a Registered Importer Number.
    (e)(1) The Administrator shall deny registration to any applicant 
who (s)he decides does not comply with the requirements of paragraph 
(a) of this section and to an applicant whose previous registration has 
been revoked. The Administrator also may deny registration to an 
applicant that is or was owned or controlled by, or under common 
ownership or control with, or in affinity with, a Registered Importer 
whose registration has been revoked. In determining whether to deny an 
application, the Administrator may consider whether the applicant is 
comprised in whole or in part of relatives, employees, major 
shareholders, partners, or relations of former partners, of a 
Registered Importer whose registration was revoked.
    (2) If the Administrator denies an application, (s)he informs the 
applicant in writing of the reasons for denial and that the applicant 
is entitled to a refund of that component of the initial annual fee 
representing the remaining costs of administration of the registration 
program, but not those components of the initial annual fee 
representing the costs of processing the application, and, if 
applicable, the costs of conducting an inspection of the applicant's 
facilities.
    (3) Within 30 days of the date of the denial, the applicant may 
submit a petition for reconsideration. The applicant may submit 
information and/or documentation supporting its request. If the 
Administrator grants the request, (s)he notifies the applicant in 
writing and issues it a Registered Importer Number. If the 
Administrator denies the request, (s)he notifies the applicant in 
writing and refunds that component of the initial annual fee 
representing the remaining costs of administration of the registration 
program, but does not refund those components of the initial annual fee 
representing the costs of processing the application, and, if 
applicable, the costs of conducting an inspection.
    (f) In order to maintain its registration, a Registered Importer 
must file an annual statement. The Registered Importer must affirm in 
its annual statement that all information provided in its application 
or pursuant to Sec. 592.6(r) of this part, or as may have been changed 
in any notification that it has provided to the Administrator in 
compliance with Sec. 592.6(m) of this part, remains correct, and that 
it continues to comply with the requirements to be a Registered 
Importer. The Registered Importer must include with its annual 
statement a current copy of its service insurance policy. Such 
statement must be titled ``Yearly Statement of Registered Importer,'' 
and must be filed not later than September 30 of each year. A 
Registered Importer must also pay any annual fee, and any other fee, 
that is established under part 594 of this chapter. An annual fee must 
be paid not later than September 30 of any calendar year for the fiscal 
year that begins on October 1 of that calendar year. The Registered 
Importer must pay any other fee not later than 15 days after the date 
of the written notice from the Administrator.
* * * * *
    (h) An applicant whose application is pending on [the effective 
date of the final rule] and which has not provided the information 
required by paragraph (a) of this section, as amended, will be notified 
by the Administrator that it must provide all the information required 
by this amended subsection before the Administrator gives further 
consideration to the application.
    4. Section 592.6 would be revised to read as follows:


Sec. 592.6  Duties of a registered importer.

    Each Registered Importer must:
    (a) With respect to each motor vehicle that it imports into the 
United States, assure that the Administrator has decided that it is 
eligible for importation pursuant to part 593 of this chapter, prior to 
such importation. The Registered Importer must also bring such vehicle 
into conformity with all applicable Federal motor vehicle safety 
standards prescribed under part 571 of this chapter, the bumper 
standard prescribed under part 581 of this chapter, if applicable, and 
the theft prevention standard prescribed under part 541 of this 
chapter, if applicable, and furnish certification to the Administrator 
pursuant to Sec. 592.6(e) of this part, within 120 calendar days after 
such entry, if a Type 2 motor vehicle. For each Type 2 motor vehicle, 
the Registered Importer must furnish to the Secretary of Treasury at 
the time of importation a bond in an amount equal to 150 percent of the 
dutiable value of the eligible vehicle, as determined by the Secretary 
of the Treasury, to ensure that such vehicle either will be brought 
into conformity with all applicable Federal motor vehicle safety, 
bumper, and theft prevention standards or will be exported (at no cost 
to the United States) by the importer or the Secretary of the Treasury 
or abandoned to the Unites States. However, if the Registered Importer 
has procured a continuous entry bond, it must furnish the Administrator 
with such bond, and must furnish the Secretary of the Treasury (acting 
on behalf of the Administrator) with a photocopy of such bond and 
Customs Form CF 7501 at the time of importation of each Type 2 motor 
vehicle.
    (b) Establish, maintain, and retain, for 10 years from the date of 
entry, at the facility in the United States it has identified in its 
application pursuant to

[[Page 69832]]

Sec. 592.5(a)(5)(ii) of this part, for each Type 1 motor vehicle that 
it imports, and each Type 2 motor vehicle for which it furnishes a 
certificate of conformity, the following records, correspondence and 
other documents, in hard copies:
    (1) The declaration required by Sec. 591.5 of this chapter.
    (2) All vehicle or equipment purchase or sales orders or 
agreements, conformance agreements between the Registered Importer and 
persons who import motor vehicles for personal use, and correspondence 
between the Registered Importer and the owner or purchaser of the 
vehicle.
    (3) The make, model, model year, odometer reading, and VIN of each 
vehicle that it imports and the last known name and address of the 
owner or purchaser of the vehicle.
    (4) Records, both photographic and documentary, sufficient to 
identify the vehicle and to substantiate that it has been brought into 
conformity with all safety, bumper, and theft prevention standards that 
apply to the vehicle, that the certification label has been affixed, 
and that either the vehicle is not subject to any safety recalls or 
that all noncompliances and safety defects covered by such recalls were 
remedied before the submission to the Administrator under paragraph (d) 
or (e) of this section. All required photographs shall be in true and 
unaltered form.
    (5) A copy of the certification submitted to the Administrator 
pursuant to paragraph (d) of this section, and information submitted 
pursuant to paragraph (e) of this section.
    (6) The number that the issuer has assigned to the service 
insurance policy that will accompany the vehicle and the name of the 
issuer of the policy, and substantiation that the Registered Importer 
has notified the issuer of the policy that a policy of the issuer has 
been provided with the vehicle.
    (c) Take possession of the vehicle and perform all modifications 
necessary to conform the vehicle to all Federal motor vehicle safety, 
bumper, and theft prevention standards that apply to the vehicle at a 
facility that it has identified to the Administrator pursuant to 
Sec. 592.5(a)(5)(i) of this part, and permanently affix to the vehicle 
at that facility, upon completion of conformance modifications and 
remedy of all noncompliances and defects related to any pending safety 
recalls, a label that identifies the Registered Importer and states 
that the Registered Importer certifies that the vehicle complies with 
all Federal motor vehicle safety, bumper, and theft prevention 
standards that apply to the vehicle, and contains all additional 
information required by Sec. 567.4 of this chapter.
    (d) For each Type 2 motor vehicle, certify to the Administrator:
    (1) within 120 days of the importation that it has brought the 
motor vehicle into conformity with all applicable Federal motor vehicle 
safety and bumper standards in effect at the time the vehicle was 
manufactured. The Registered Importer shall also certify, as 
appropriate, that either:
    (i) The vehicle is not required to comply with the parts marking 
requirements of the theft prevention standard (part 541 of this 
chapter);
    (ii) The vehicle complied as manufactured with those parts marking 
requirements; or
    (iii) The Registered Importer has brought the vehicle into 
compliance with those requirements.
    (2) If the Registered Importer certifies that the vehicle was 
originally manufactured to comply with a standard that does not apply 
to the vehicle or that it has modified the vehicle to conform to such 
standard, or if the certification is incomplete, the Administrator may 
refuse to accept the certification. The Administrator shall refuse to 
accept a certification for a vehicle that has not been determined to be 
eligible for importation under part 593 of this chapter. If the 
Administrator does not accept a submission, (s)he shall return it to 
the Registered Importer. The costs associated with such a return will 
be charged to the Registered Importer. If the Administrator returns the 
submission as described above, the 120-day period specified in 
paragraph (d)(1) of this section continues to run. If the Registered 
Importer certifies that it has modified the vehicle to bring it into 
compliance with a standard and has, in fact, performed no such 
modifications, the Administrator will regard such certification as 
``knowingly false'' within the meaning of 49 U.S.C. 30115 and 49 U.S.C. 
30141(c)(4)(B).
    (3) The certification must be signed and submitted by a principal 
of the Registered Importer designated in its registration application 
pursuant to Sec. 592.5(a)(5)(iv) of this part, with an original 
signature and not with a stamp or other device, and must include the 
statement that the signer has personal knowledge that the RI has 
performed all work required to bring such vehicle into conformity with 
all applicable Federal motor vehicle safety, bumper, and theft 
prevention standards.
    (4) The submission to the Administrator must specify the location 
of the facility where the vehicle was conformed, and the location where 
the Administrator may inspect the motor vehicle.
    (5) The submission to the Administrator must contain substantiation 
that the vehicle is not subject to any safety recall campaigns as of 
the time of such submission, or, alternatively, that all noncompliances 
and defects covered by those safety recall campaigns have been 
remedied.
    (6) When a Registered Importer certifies a make, model, and model 
year of a Type 2 motor vehicle for the first time, its submission must 
include:
    (i) The make, model, model year and date of manufacture, odometer 
reading, VIN that complies with Sec. 565.4(b), (c), and (g) of this 
chapter, and Customs Entry Number,
    (ii) A statement that it has brought the vehicle into conformity 
with all Federal motor vehicle safety, bumper, and theft prevention 
standards that apply to the vehicle, and a description, with respect to 
each standard for which modifications were needed, of the modifications 
performed,
    (iii) A copy of the bond given at the time of entry to ensure 
conformance with the safety standards,
    (iv) The vehicle's vehicle eligibility number,
    (v) A copy of the HS-7 form executed at the time of its importation 
if a Customs broker did not make an electronic entry with Customs,
    (vi) True and unaltered front, side, and rear photographs of the 
vehicle,
    (vii) True and unaltered photographs of the original manufacturer's 
certification label and the certification label of the Registered 
Importer affixed to the vehicle (and, if the vehicle is a motorcycle, a 
photograph or photocopy of the Registered Importer certification label 
before it has been affixed),
    (viii) Photographs and documentation sufficient to demonstrate 
conformity, and
    (ix) The policy number of the service insurance policy furnished 
with the vehicle pursuant to paragraph (g) of this section.
    (7) Except as specified below in this paragraph, a Registered 
Importer's second and subsequent certification submissions for a given 
make, model, and model year vehicle must contain the same information 
as its first submission, including the VIN of the vehicle covered that 
complies with Sec. 565.4(b), (c), and (g) of this chapter, and must 
refer to its first submission. If the Registered Importer conformed 
such a vehicle in the same manner as it stated in its initial 
submission, it may say so in a subsequent submission and it need only 
provide photographs and documentation of the modifications that

[[Page 69833]]

it made to such a vehicle to achieve conformity.
    (e) For each Type 1 motor vehicle:
    (1) Submit to the Administrator the make, model, model year, 
odometer reading, VIN that complies with Sec. 565.4(b), (c), and (g) of 
this chapter, date of manufacture, and Customs entry number of the 
vehicle, the policy number of the service insurance policy furnished 
with the vehicle pursuant to paragraph (g) of this section, and 
substantiation that the vehicle is not subject to any safety recall 
campaigns as of the time of the submission, or, alternatively, that all 
noncompliances and defects covered by those safety recall campaigns 
have been remedied.
    (2) The submission must contain a statement that the vehicle 
complies with, or that the Registered Importer has brought it into 
compliance with, all safety and bumper standards that apply to the 
vehicle. The Registered Importer shall also state, as appropriate, that 
either:
    (i) The vehicle is not required to comply with the parts marking 
requirements of the theft prevention standard (part 541 of this 
chapter);
    (ii) The vehicle as manufactured complied with those parts marking 
requirements; or
    (iii) The Registered Importer brought the vehicle into compliance 
with those requirements.
    (3) The submission must be signed and submitted by a principal of 
the Registered Importer designated in its registration application 
pursuant to Sec. 592.5(a)(5)(D) of this part, with an original 
signature and not with a stamp or other device, and must include the 
statement that the signer has personal knowledge that the RI has 
certified that the vehicle complies with all applicable Federal motor 
vehicle safety, bumper, and theft prevention standards.
    (4) The information required by this subparagraph must be submitted 
on a monthly basis so that the Administrator receives it within 10 days 
of the end of the month in which the vehicle was imported.
    (f) With respect to each Type 2 motor vehicle, not take any of the 
following actions until the bond referred to in paragraph (a) of this 
section has been released, unless 30 days have elapsed from the date 
the Administrator receives the Registered Importer's certification of 
compliance of the motor vehicle in accordance with paragraph (d) of 
this section (the 30-day period may be extended if the Administrator 
has made written demand to inspect the motor vehicle):
    (1) Operate the motor vehicle on the public streets, roads, and 
highways;
    (2) Sell the motor vehicle or offer it for sale;
    (3) Store the motor vehicle on the premises of a dealer;
    (4) License or register the motor vehicle for use on public 
streets, roads, or highways; or
    (5) Release custody of the motor vehicle to a person for sale, or 
license or registration for use on public streets, roads, and highways.
    (g) Furnish with each motor vehicle for which it furnishes 
certification or information to the Administrator in accordance with 
paragraphs (d) or (e) of this section, not later than the time it sells 
the vehicle, or releases custody of a vehicle to an owner who has 
imported it for personal use, a service insurance policy written or 
underwritten by an independent insurance company, in the amount of 
$2,000. The Registered Importer shall provide the insurance company 
with a monthly list of the VINs of vehicles covered by the policies of 
the insurance company, and shall retain a copy of each such list in its 
files.
    (h) Comply with the requirements of part 580 of this chapter, 
Odometer Disclosure Requirements, when the Registered Importer is a 
transferor of a vehicle as defined by Sec. 580.3 of that part.
    (i) With respect to any Type 2 motor vehicle it has imported and 
for which it has furnished a performance bond, deliver such vehicle to 
the Secretary of the Treasury for export, or abandon it to the United 
States, upon demand by the Administrator, if such vehicle has not been 
brought into conformity with all applicable Federal motor vehicle 
safety, bumper, and theft prevention standards in a timely manner.
    (j)(1) With respect to any motor vehicle that it has imported or 
for which it has furnished a certificate of conformity or information 
to the Administrator as provided in paragraphs (d) or (e) of this 
section, provide notification and a remedy without charge to the 
vehicle owner according to part 577 of this chapter, after any 
determination that a vehicle to which such motor vehicle is 
substantially similar under part 593 of this chapter contains a defect 
related to motor vehicle safety or fails to conform with an applicable 
Federal motor vehicle safety standard. However, this obligation does 
not exist if the manufacturer of the vehicle or the Registered Importer 
of such vehicle demonstrates to the Administrator that the defect or 
noncompliance is not present in such vehicle, or that the defect or 
noncompliance was remedied before the submission of the certificate or 
the information to the Administrator, or that the original manufacturer 
of the vehicle will provide such notification and remedy.
    (2) With respect to defects and noncompliances that are determined 
to exist in vehicles described in the first sentence of paragraph 
(j)(1) of this section, inform the Administrator in writing whether the 
original manufacturer or the Registered Importer will provide the 
required notification and remedy. If the Registered Importer informs 
the Administrator that the manufacturer will notify and remedy, the 
Registered Importer must submit documentation sufficient to support its 
statement. If the Registered Importer informs the Administrator that it 
will notify and remedy, it must provide the Administrator with a copy 
of the notification that it intends to send. A Registered Importer must 
inform the Administrator according to this subsection not later than 30 
days after the original manufacturer commences its notification 
campaign.
    (3) Any notification to vehicle owners sent by a Registered 
Importer must contain the information specified in Sec. 577.5 of this 
chapter, and must include the statement that if the Registered 
Importer's repair facility is more than 50 miles from the owner's 
mailing address, remedial repairs may be performed at no charge at a 
specific facility designated by the Registered Importer that is within 
50 miles of the owner's mailing address, or, if no such facility is 
designated, that repairs may be performed anywhere, with the cost of 
parts and labor to be reimbursed by the Registered Importer.
    (4) Such notification by a Registered Importer must also conform to 
the requirements of Secs. 577.7 and 577.8 of this chapter, and is 
subject to Secs. 577.9 and 577.10 of this chapter.
    (5) Except as provided in this paragraph, instead of the six 
quarterly reports required by Sec. 573.6(a) of this chapter, the 
Registered Importer must submit to the Administrator two reports 
containing the information specified in Sec. 573.6(b)(1)-(4) of this 
chapter. The reports shall cover the periods ending nine and 18 months 
after the commencement of the owner notification campaign, and must be 
submitted within 30 days of the end of each period. However, the 
reporting requirements established by this paragraph shall not apply to 
any safety recall that a vehicle manufacturer conducts that includes 
vehicles for which the Registered Importer has submitted the 
information required by paragraphs (d) or (e) of this section.

[[Page 69834]]

    (6) The requirement that the remedy be provided without charge does 
not apply if the motor vehicle was bought by its first purchaser from 
the Registered Importer (or, if imported for personal use, conformed 
pursuant to a contract with the Registered Importer) more than 10 
calendar years before the date the Registered Importer or the original 
manufacturer notifies the Administrator of the noncompliance or safety-
related defect pursuant to part 573 of this chapter.
    (k) In order that the Administrator may determine whether the 
Registered Importer is meeting its statutory responsibilities, allow 
representatives of NHTSA during operating hours, upon demand, and upon 
presentation of credentials, to copy documents, or to inspect, monitor, 
or photograph any of the following:
    (1) Any facility where any vehicle for which a Registered Importer 
has the responsibility of providing a certificate of conformity to 
applicable safety standards is being modified, repaired, tested, or 
stored, and any facility where any record or other document relating to 
the modification, repair, testing, or storage of these vehicles is 
kept;
    (2) Any part or aspect of activities relating to the modification, 
repair, testing, or storage of vehicles by the Registered Importer;
    (3) Any motor vehicle for which the Registered Importer has 
provided a certification of conformity to the Administrator before the 
Administrator releases the conformance bond.
    (l) Provide an annual statement and pay an annual fee as required 
by Sec. 592.5(e) of this part.
    (m) Except as noted in this paragraph, notify the Administrator in 
writing of any change that occurs in the information which was 
submitted in its registration application, not later than the 30th 
calendar day after such change. If a Registered Importer intends to use 
a facility that was not identified in its registration application, not 
later than 30 days before it begins to use such facility, it must 
notify the Administrator of its intent to use such facility with a 
description of its intended use, provide a copy of the lease or 
ownership agreement relating to that facility and a copy of the license 
or similar document issued by an appropriate state or municipal 
authority stating that the Registered Importer is licensed to do 
business at that facility as an importer and/or modifier and/or seller 
of motor vehicles (or a statement that it has made a bona fide inquiry 
and is not required by state or local law to have such a license or 
permission), and supply non-electronic photographs of that facility. If 
a Registered Importer intends to change its street address or telephone 
number or discontinue use of a facility that was identified in its 
registration application, it shall notify the Administrator not less 
than 10 days before such change or discontinuance of such use, and 
identify the facility, if any, that will be used instead.
    (n) Assure that at least one full-time employee of the Registered 
Importer is present at each of the facilities it maintains for the 
repair, conformance, or storage of motor vehicles in connection with 
its duties as a Registered Importer.
    (o) Not co-utilize the same employee, or any repair, conformance, 
or storage facility with any other Registered Importer.
    (p) Make timely, complete, and accurate responses to any requests 
by the Administrator for information, whether by general or special 
order or otherwise, to enable the Administrator to decide whether the 
Registered Importer has complied or is complying with 49 U.S.C. 
Chapters 301, 325, and 331, and the regulations issued thereunder.
    (q) Pay all fees either by certified check, cashier's check, money 
order, credit card, or Electronic Funds Transfer System made payable to 
the Treasurer of the United States, in accordance with the invoice of 
fees incurred by the Registered Importer in the previous month that is 
provided by the Administrator. All such fees are due and payable not 
later than 15 days from the date of the invoice.
    (r) Not later than [30 days after the effective date of the final 
rule amending Sec. 592.5(a)], file with the Administrator all 
information required by Sec. 592.5(a) of this part, as amended. If a 
Registered Importer has previously provided any item of information to 
the Administrator in its registration application, annual statement, or 
notification of change, it may incorporate that item by reference in 
the filing required under this subsection, provided that it clearly 
indicates the date, page, and entry of the previously-provided 
document.
    5. Section 592.7 would be revised to read as follows:


Sec. 592.7  Automatic suspension, suspension, revocation, and 
reinstatement of suspended registrations.

    This section specifies the acts and omissions that may result in 
suspensions and revocations of Registered Importers by NHTSA, the 
process for such suspensions and revocations, and the provisions 
applicable to the reinstatement of suspended registrations.
    (a) Automatic suspension of a registration. 49 U.S.C. 
30141(c)(4)(B) explicitly authorizes NHTSA to automatically suspend a 
registration when a Registered Importer does not, in a timely manner, 
pay a fee required by part 594 of this chapter or for knowingly filing 
a false or misleading certification under 49 U.S.C. 30146. NHTSA also 
may automatically suspend a registration under other circumstances, as 
specified in paragraphs (a)(3), (4) and (5) of this section.
    (1) If the Administrator has not received the annual fee from a 
Registered Importer by the close of business on October 10 of a year, 
or, if October 10 is a weekend or holiday, by the next business day 
thereafter, or has not received any other fee owed by a Registered 
Importer within 15 calendar days from the date of the Administrator's 
invoice, the Registered Importer's registration will be automatically 
suspended at the beginning of the first following business day. The 
Administrator will promptly notify the Registered Importer in writing 
of the suspension. Such suspension shall remain in effect until 
reinstated pursuant to paragraph (c)(1) of this section.
    (2) If the Administrator decides that a Registered Importer has 
knowingly filed a false or misleading certification, (s)he shall 
promptly notify the Registered Importer in writing that its 
registration is automatically suspended. The notification shall inform 
the Registered Importer of the facts and conduct upon which the 
decision is based, and the period of suspension (which begins as of the 
date of the Administrator's written notification). The notification 
shall afford the Registered Importer an opportunity to seek 
reconsideration of the decision by presenting data, views, and 
arguments in writing and/or in person, within 30 days. Not later than 
30 days after the submission of data, views, and arguments, the 
Administrator, after considering all the information available, shall 
notify the Registered Importer in writing of his or her decision on 
reconsideration. Any suspension issued under this paragraph shall 
remain in effect until reinstated pursuant to paragraph (c)(2) of this 
section.
    (3) If mail is undeliverable to the Registered Importer at the 
official street address it has provided to the Administrator, or if the 
telephone has been disconnected at the telephone number specified by 
the Registered Importer, the Administrator may automatically suspend 
the Registered Importer's registration. Such suspension shall remain in 
effect until the

[[Page 69835]]

registration is reinstated pursuant to paragraph (c)(3) of this 
section.
    (4) If a Registered Importer, not later than [30 days after the 
effective date of the final rule amending Sec. 592.5(a)], does not file 
with the Administrator all information required by Sec. 592.5(a) of 
this part, as required by Sec. 592.6(r) of this part, the Administrator 
may automatically suspend the registration. The Administrator shall 
promptly notify the Registered Importer in writing of the suspension. 
Such a suspension shall remain in effect until the registration is 
reinstated pursuant to paragraph (c)(4) of this section.
    (5) If a Registered Importer releases one or more Type 2 motor 
vehicles on the basis of a forged or falsified bond release letter, and 
the Administrator has not in fact issued such a letter, the 
Administrator may automatically suspend the registration. The 
Administrator shall promptly notify the Registered Importer in writing 
of the suspension. The notification shall afford the Registered 
Importer an opportunity to seek reconsideration of the decision by 
presenting data, views, and arguments in writing and/or in person, 
within 30 days. Not later than 30 days after the submission of data, 
views, and arguments, the Administrator, after considering all the 
information available, shall notify the Registered Importer in writing 
of his or her decision on reconsideration. Any suspension issued under 
this paragraph shall remain in effect until reinstated pursuant to 
paragraph (c)(2) of this section.
    (6) The Administrator, in his or her sole discretion, may provide 
notice of a proposed suspension or revocation based on the matters in 
paragraphs (a)(1) through (a)(5) of this section, and provide an 
opportunity to be heard prior to a decision, as provided in paragraph 
(b)(2) of this section.
    (b) Non-automatic suspension or revocation of a registration. (1) 
49 U.S.C. 30141(c)(4)(A) authorizes NHTSA to revoke or suspend a 
registration if a Registered Importer does not comply with a 
requirement of 49 U.S.C. 30141-30147, or any of 49 U.S.C. 30112, 30115, 
30117-30122, 30125(c), 30127, or 30166, or any regulations issued under 
these sections. These regulations include, but are not limited to, 
parts 567, 568, 573, 577, 591, 593, and 594 of this chapter.
    (2) When the Administrator has reason to believe that a Registered 
Importer has violated one or more of the statutes or regulations cited 
in paragraph (b)(1) of this section and that suspension or revocation 
would be an appropriate sanction under the circumstances, (s)he shall 
notify the Registered Importer in writing of the facts giving rise to 
the allegation of a violation and the proposed length of a suspension, 
if applicable, or revocation. The notice shall afford the Registered 
Importer an opportunity to present data, views, and arguments, in 
writing and/or in person, within 30 days of the date of the notice, as 
to whether the violation occurred, why the registration ought not to be 
suspended or revoked, or whether the suspension should be shorter than 
proposed. If the Administrator decides, on the basis of the available 
information, that the Registered Importer has violated a statute or 
regulation, the Administrator may suspend or revoke the registration. 
The Administrator shall notify the Registered Importer in writing of 
the decision, including the reasons for it. A suspension or revocation 
is effective as of the date of the Administrator's written 
notification. The Administrator shall state the period of any 
suspension in the notice to the Registered Importer. There shall be no 
opportunity to seek reconsideration of a decision issued under this 
paragraph.
    (c) Reinstatement of suspended registrations. (1) When a 
registration has been suspended under paragraph (a)(1) of this section, 
the Administrator will reinstate the registration when all fees owing 
are paid by wire transfer or certified check from a bank in the United 
States, together with a sum representing 10 percent of the amount of 
the fees that were not timely paid.
    (2) When a registration has been suspended under paragraph (a)(2) 
or (a)(5) of this section, the registration will be reinstated after 
the expiration of the period of suspension specified by the 
Administrator, or such earlier date as the Administrator may 
subsequently decide is appropriate.
    (3) When a registration has been suspended under paragraph (a)(3) 
of this section, the registration will be reinstated when the 
Administrator decides that the Registered Importer has provided a 
street address to which mail to it is deliverable and a telephone 
number in its name that is in service.
    (4) When a registration has been suspended under paragraph (a)(4) 
of this section, the registration will be reinstated when the 
Administrator decides that the Registered Importer has provided all 
relevant documentation and information required by Sec. 592.6(r) of 
this part.
    (5) When a registration has been suspended under paragraph (b) of 
this section, the registration will be reinstated after the expiration 
of the period of suspension specified by the Administrator, or such 
earlier date as the Administrator may subsequently decide is 
appropriate.
    (d) Effect of suspension or revocation. If a Registered Importer's 
registration is suspended or revoked, as of the date of suspension or 
revocation the entity will no longer be considered a Registered 
Importer, will no longer have the rights and authorities appertaining 
thereto, and must cease importing, and will not be allowed to import, 
vehicles for resale. The Registered Importer will not be refunded any 
annual or other fees it has paid for the fiscal year in which its 
registration is revoked. The Administrator shall notify the U.S. 
Customs Service of the suspension or revocation of the registration.
    (e) Continuing obligations. (1) A Registered Importer whose 
registration is suspended or revoked remains obligated under 
Sec. 592.6(j) of this part to notify owners and to remedy 
noncompliances or safety related defects for each vehicle for which it 
has furnished a certificate of conformity or information to the 
Administrator.
    (2) With respect to any vehicle for which it has not affixed a 
certification label and submitted a certificate of conformity or 
information to the Administrator under Sec. 592.6(d) or (e) of this 
part at the time its registration has been suspended, and the 
suspension is for the first time, the Registered Importer may not affix 
a certification label or submit a certificate of conformity until its 
registration is reinstated, and the Administrator will toll the 120-day 
period during the term of that suspension.
    (3) When a registration has been revoked, or suspended for other 
than the first time, the Registered Importer must export within 30 days 
of the effective date of the suspension or revocation all vehicles that 
it imported to which it has not affixed a certification label and 
furnished a certificate of conformity or information to the 
Administrator pursuant to Sec. 592.6(d) or (e) of this part. With 
respect to any vehicle imported pursuant to Sec. 591.5(f)(2)(ii) of 
this part that the Registered Importer has agreed to bring into 
compliance with all applicable standards and for which it has not 
certified and furnished a certificate of conformity or information to 
the Administrator, the Registered Importer must immediately notify the 
owner of the vehicle in writing that its registration has been 
suspended or revoked.
    6. Section 592.8 would be amended by revising paragraph (a), the 
first sentence of paragraphs (b), (c), and (d), and paragraph (e) to 
read as follows:

[[Page 69836]]

Sec. 592.8  Inspection; release of vehicle and conformance bond.

    (a) With respect to any Type 2 motor vehicle for which it must 
provide a certificate of conformity to the Administrator as required by 
Sec. 592.6(d) of this part, a Registered Importer shall not obtain 
title, licensing, or registration of the motor vehicle for use on the 
public roads, or release custody of it for such titling, licensing or 
registration, except in accordance with the provisions of this section.
    (b) When conformance modifications to a Type 2 motor vehicle have 
been completed, a Registered Importer shall submit the certification 
and information required by Sec. 592.6(d) of this part to the 
Administrator. * * *
    (c) Before the end of the 30th calendar day after receipt of 
certification of a Type 2 motor vehicle, the Administrator may inform 
the Registered Importer in writing that an inspection of the vehicle is 
required to ascertain the veracity of the certification. * * *
    (d) The Administrator may by written notice request certification 
verification by the Registered Importer before the end of the 30th 
calendar day after the date the Administrator receives certification of 
a Type 2 motor vehicle. * * *
    (e) If the Registered Importer has received no written notice from 
the Administrator by the end of the 30th calendar day after it has 
furnished a certification of a vehicle to the Administrator, the 
Registered Importer may release the vehicle from custody, sell or offer 
it for sale, or have it titled, licensed or registered for use on the 
public roads.
* * * * *
    7. New Section 592.9 would be added to read:


Sec. 592.9  Forfeiture of bond.

    (a) A Registered Importer is required by Sec. 591.6 of this chapter 
to furnish a bond with respect to each Type 2 motor vehicle that it 
imports. The conditions of the bond are set forth in Sec. 591.8 of this 
chapter. Failure to fulfill any one of these conditions may result in 
forfeiture of the bond. A bond may be forfeited if the Registered 
Importer:
    (1) Fails to bring the motor vehicle covered by the bond into 
compliance with all applicable standards issued under part 571, part 
581, and part 541 of this chapter within 120 days;
    (2) Fails to file with the Administrator a certificate that the 
motor vehicle complies with each Federal motor vehicle safety, bumper, 
and theft prevention standard in effect at the time the vehicle was 
manufactured and which applies to the vehicle;
    (3) Fails to cause a motor vehicle to be available for inspection 
if it has received written notice from the Administrator that an 
inspection is required;
    (4) Releases the motor vehicle before the Administrator accepts the 
certification and any modification thereof, if it has received written 
notice from the Administrator that there is reason to believe that the 
certification is false or contains a misrepresentation;
    (5) Before the bond is released, releases custody of the motor 
vehicle to any person for license or registration for use on public 
roads, streets, and highways, or licenses or registers the vehicle, 
including titling the vehicle in the name of another person, unless 30 
calendar days have elapsed after the Registered Importer has filed the 
certificate specified in paragraph (a)(2) of this section and the 
Registered Importer has not received written notice pursuant to 
paragraph (a)(3) or (a)(4) of this section. For purposes of this part, 
a vehicle is deemed to be released from custody if it is not located at 
a duly identified facility of the Registered Importer and the 
Registered Importer has not notified the Administrator of the vehicle's 
location or, if written notice has been provided, if the Administrator 
is unable to inspect the vehicle, or if the Registered Importer has 
transferred title to any other person regardless of the vehicle's 
location; or
    (6) Fails to deliver the vehicle, or cause it to be delivered, to 
the custody of a District Director of Customs at any port of entry, for 
export or abandonment to the United States, and to execute all 
documents necessary to accomplish such purposes, if the Administrator 
has furnished it written notice that the vehicle has been found not to 
comply with all applicable Federal motor vehicle safety standards along 
with a demand that the vehicle be delivered for export or abandoned to 
the United States.
    8. An Appendix A to part 592 would be added to read as follows:

 Appendix A to Part 592--Type 1 Motor Vehicles as of [date final rule is published] IMPORTED UNDER VSA 80 or VSA
                                                       81
----------------------------------------------------------------------------------------------------------------
               Year                          Make                       Model                    Exceptions
----------------------------------------------------------------------------------------------------------------
1995..............................  Audi.................  All...........................
1996..............................  .....................  All...........................
1997..............................  .....................  All...........................
1998..............................  .....................  All...........................
1999..............................  .....................  All...........................
2000..............................  .....................  All...........................
1995-2000.........................  Chrysler.............  Cirrus........................
1995-2000.........................  .....................  Concorde......................
1995-2000.........................  .....................  Intrepid......................
2000..............................  .....................  Neon..........................
1996-2000.........................  .....................  Sebring Convertible...........
1995-2000.........................  .....................  Sebring Coupe.................
1995-2000.........................  .....................  Town & Country................
1995-1999.........................  Dodge................  Avenger.......................
1995-1999.........................  .....................  Neon..........................
1994-1995.........................  .....................  Stealth.......................
1995-1999.........................  .....................  Stratus.......................
1995-2000.........................  .....................  Viper.........................
1995-2000.........................  .....................  Caravan.......................
1995-2000.........................  .....................  Grand Caravan.................
1995-2000.........................  .....................  Dakota........................
1998-2000.........................  .....................  Durango.......................
1995-2000.........................  .....................  Ram Pickup....................
1995-2000.........................  .....................  Ram Van/Wagon.................

[[Page 69837]]

 
1994-1997.........................  Eagle................  Vision........................
1995..............................  Ford.................  All...........................
1996..............................  .....................  All...........................
1997..............................  .....................  All...........................
1998..............................  .....................  All...........................
1999..............................  .....................  All...........................
2000..............................  .....................  All...........................
1995..............................  General Motors.......  All...........................
1996..............................  (Buick, Cadillac,....  All...........................
1997..............................  Chevrolet, Geo,......  All...........................
1998..............................  Oldsmobile, Pontiac,.  All...........................
1999..............................  Saturn)..............  All...........................
2000..............................  .....................  All...........................
1995..............................  Infiniti.............  All...........................
1996..............................  .....................  All...........................
1997..............................  .....................  All...........................
1998..............................  .....................  All...........................
1999..............................  .....................  All...........................
2000..............................  .....................  All...........................
1995-2000.........................  Jeep.................  Cherokee......................
1995-2000.........................  .....................  Grand Cherokee................
1995-1996.........................  .....................  YJ............................
1997-2000.........................  .....................  TJ............................
1995..............................  Nissan...............  All Except....................  Sentra
1996..............................  .....................  All Except....................  Sentra
1997..............................  .....................  All Except....................  Sentra
1998..............................  .....................  All Except....................  Sentra
1999..............................  .....................  All Except....................  Sentra
2000..............................  .....................  All...........................
1995-1999.........................  Plymouth.............  Breeze........................
1995-1999.........................  .....................  Neon..........................
1997..............................  .....................  Prowler.......................
1999-2000.........................  .....................  Prowler.......................
1995-2000.........................  .....................  Voyager.......................
1995-2000.........................  .....................  Grand Voyager.................
1995..............................  Volkswagen...........  All...........................
1996..............................  .....................  All...........................
1997..............................  .....................  All...........................
1998..............................  .....................  All...........................
1999..............................  .....................  All Except....................  Gold
2000..............................  .....................  All...........................
----------------------------------------------------------------------------------------------------------------

PART 594--SCHEDULE OF FEES AUTHORIZED BY 49 U.S.C. 30141

    1. The authority citation for part 594 would continue to read as 
follows:

    Authority: Pub. L. 100-562, 49 U.S.C. 30141; 31 U.S.C. 9701; 
delegation of authority at 49 CFR 1.50.

    2. Section 594.5 would be amended as follows:
    a. By removing present paragraphs (e), (f), and (g) and adding new 
paragraph (f);
    b. By redesignating paragraphs (h) and (i) as paragraphs (e) and 
(g) and revising newly redesignated paragraph (g). The addition and 
revision read as follows:


Sec. 594.5  Establishment and payment of fees.

* * * * *
    (f) The Administrator will furnish each Registered Importer with a 
monthly invoice of the fees owed by the Registered Importer for 
reimbursement for bond processing costs and for the review and 
processing of conformity certificates and information regarding 
importation of Type 1 motor vehicles, as defined in Sec. 592.4 of this 
chapter. A person who for personal use imports a vehicle covered by a 
determination of the Administrator must pay the fee specified in either 
Sec. 594.8(b) or (c) of this chapter, as appropriate, to the Registered 
Importer, and the invoice will also include these fees. The Registered 
Importer must pay the fees within 15 days of the date of the invoice.
    (g) Fee payments must be by certified check, cashier's check, money 
order, credit card, or Electronic Funds Transfer System, made payable 
to the Treasurer of the United States.
* * * * *
    3. Section 594.9 would be amended by revising paragraph (a) to read 
as follows:


Sec. 594.9  Fee for reimbursement of bond processing costs.

    (a) Each Registered Importer must pay a fee based upon the direct 
and indirect costs of processing each bond furnished to the Secretary 
of the Treasury on behalf of the Administrator with respect to each 
vehicle for which it furnishes a certificate of conformity pursuant to 
Sec. 592.6(d) of this chapter.
* * * * *
    4. Section 594.11 would be added to read as follows:


Sec. 594.11  Fee for review and processing of information relating to 
importation of Type 1 motor vehicles.

    (a) Each Registered Importer must pay a fee based on the agency's 
direct and indirect costs for the review and processing of information 
relating to the

[[Page 69838]]

importation of a Type 1 motor vehicle pursuant to Sec. 592.6(e) of this 
chapter.
    (b) The direct costs attributable to the review and processing of 
information relating to the importation of a Type 1 motor vehicle 
include the estimated cost of contract and professional staff time, 
computer usage, and record assembly, marking, shipment and storage 
costs.
    (c) The indirect costs attributable to the review and processing of 
information relating to the importation of a Type 1 motor vehicle 
include a pro rata allocation of the average benefits of persons 
employed in reviewing and processing the information, and a pro rata 
allocation of the costs attributable to the rental and maintenance of 
office space and equipment, the use of office supplies, and other 
overhead items.
    (d) The fee for review and processing of information relating to 
the importation of each Type 1 motor vehicle submitted on and after 
October 1, 2001, is $13. However, if the vehicle covered by the 
information has been entered electronically with the U.S. Customs 
Service through the Automated Broker Interface and the Registered 
Importer submitting the information has an e-mail address, the fee for 
the information is $6, provided that the fee is paid by a credit card 
issued to the Registered Importer and that all the information is 
correct.

    Issued on: November 28, 2000.
Kenneth N. Weinstein,
Associate Administrator for Safety Assurance.
[FR Doc. 00-29034 Filed 11-17-00; 8:45 am]
BILLING CODE 4910-59-P