69810 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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.

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 (§ 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 (§ 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 (§ 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;

§ 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

Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules 69811

1The 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.

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

§ 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.

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 virtuallycomplying 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 virtualcompliance letter. Thus, such vehicles

must be brought into compliance

pursuant to a contract with a RI.

69812 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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 Canadiancertified 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

§ 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 § 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.

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

69814 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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 abovereferenced 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 safetyrelated 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

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

§ 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 § 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 recordkeeping 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.

69816 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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 § 592.6. We are proposing

additions to and clarifications of the

duties of a RI. In this light, we are

proposing an amendment of

§ 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

§ 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 § 592.7

(§ 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’’

(§ 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’’ (§ 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’’ (§ 592.5(a)(5)). The RI is

required to inform us of any change in

the ownership information it has

provided (§ 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,

§ 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

§ 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 § 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 § 592.6, and we

are proposing to transfer it to a new

§ 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 § 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

(§ 592.6)

The duties of a RI are set forth in

§ 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 § 592.6 in its entirety.

The present duties imposed by § 592.6

may be summarized as follows, by their

subsection:

Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules 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 § 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 fulltime 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 § 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 § 567.4(k), the RI is required to

inscribe the Vehicle Identification

Number on certain parts (§ 541.5(b)(3)),

and to affix a label meeting these

requirements before the vehicle is

imported (§ 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’’ (§ 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 § 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 recordkeeping 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

69818 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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

§ 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

§ 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

§ 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, § 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 § 592.6 rather

than rely on informal communication

with RIs.

Therefore, we are proposing a new

§ 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 § 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

Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules 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 § 592.6(d) or the

required information under § 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 § 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 § 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 § 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 § 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 nonautomatically, 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

69820 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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, § 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 §§ 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

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

§ 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

§ 573.6 with respect to those recalls.

This is reflected in proposed

§ 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 postimportation 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 § 592.6(j)(5) to reduce the amount of

information required in such reports.

Finally, we have reviewed current

§ 592.6(g)(2)(i) relating to the 8-year

period of remedy without charge, and

have restated it in proposed § 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

§ 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 § 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, § 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 § 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 § 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

69822 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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

§ 592.6(o) to prohibit a RI from coutilizing 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 § 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

§ 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 § 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, § 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 § 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

(§ 594.7); for importing a vehicle

covered by an eligibility determination

by NHTSA (§ 594.8); for reimbursement

of bond processing costs (§ 594.9); and

for review and processing of a

conformity certificate (§ 594.10). We are

also proposing to add a new § 594.11 to

establish a fee applicable to the

importation of Type 1 motor vehicles,

infra.

Under current § 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 § 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

§ 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

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

§ 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 nonautomatically 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 § 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 § 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 § 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

(§ 592.6(r)). If a RI fails to provide this

information, we would automatically

suspend its registration (§ 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 § 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

§ 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 § 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 § 592.6.

We have also reviewed the

suspension and revocation procedures

currently specified in § 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

69824 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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 § 592.7(d)).

These procedures currently apply to

all suspensions and revocations (other

than the automatic suspension of

§ 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 §§ 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 § 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

(§ 592.7(a)), and a registration may be

suspended for failure to comply with

statutory or regulatory authorities after

notification from the Administrator

(§ 592.7(b)). Proposed § 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 § 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 § 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

§ 592.6(j) to notify owners of, and to

remedy, noncompliances or safetyrelated 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 § 592.6(e). New § 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 § 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 § 591.7(e). We would

remove existing § 591.7(e), which has

expired (§ 591.7(e) provided for

applications to the Administrator, on or

before February 14, 2000, to change the

status of vehicles imported pursuant to

§ 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;

§ 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

Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules 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 § 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 (§ 594.8); a fee to cover bond

processing costs (§ 594.9), and a fee to

cover review of and processing a

conformity certificate (§ 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

§ 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 §§ 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 § 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 § 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 § 594.11 until

the amendments to part 592 are

adopted, the fees specified in § 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 § 594.10 in

the interim period. We note, too, that

these fees would be identical to those

proposed for § 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

69826 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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

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

§ 567.4 Requirements for manufacturers of

motor vehicles.

* * * * *

(k) In the case of passenger cars and

multipurpose passenger vehicles (as

defined by § 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:

§ 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

§ 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:

§ 591.6 Documents accompanying

declarations.

* * * * *

(c) A declaration made pursuant to

paragraph (f) of § 591.5 of this part, and

under a bond for the entry of a single

vehicle, shall be accompanied by a bond

69828 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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 § 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:

§ 591.7 Restrictions on importations.

* * * * *

(e) If the importer of a vehicle under

§ 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 § 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 § 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 § 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:

§ 591.8 Conformance bond and

conditions.

(a) The bond required under

paragraph (c) of § 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 § 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 lll

day of lll, 20lll.

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

Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules 69829

Whereas, the motor vehicle described

above has been imported at the port of

lll, and entered at said port for

consumption on entry No. lll, dated

lll, 20lll,

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 lday

of l, 20l.

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

lll, and entered at said port for

consumption on entry No. lll, dated

lll, 20lll;

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:

§ 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.

* * * * *

69830 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

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 § 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:

§ 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 § 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 § 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

§ 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

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

§ 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 § 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:

§ 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 § 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

69832 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

§ 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

§ 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

§ 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 § 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

§ 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 § 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

§ 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

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

§ 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

§ 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

§ 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 §§ 577.7 and 577.8 of

this chapter, and is subject to §§ 577.9

and 577.10 of this chapter.

(5) Except as provided in this

paragraph, instead of the six quarterly

reports required by § 573.6(a) of this

chapter, the Registered Importer must

submit to the Administrator two reports

containing the information specified in

§ 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.

69834 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

(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

§ 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 nonelectronic 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

§ 592.5(a)], file with the Administrator

all information required by § 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:

§ 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

Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules 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 § 592.5(a)], does

not file with the Administrator all

information required by § 592.5(a) of

this part, as required by § 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 § 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 § 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 § 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 § 592.6(d) or (e) of this part.

With respect to any vehicle imported

pursuant to § 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:

69836 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

§ 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 § 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 § 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:

§ 592.9 Forfeiture of bond.

(a) A Registered Importer is required

by § 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 § 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.

Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules 69837

APPENDIX A TO PART 592—TYPE 1 MOTOR VEHICLES AS OF [DATE FINAL RULE IS PUBLISHED] IMPORTED UNDER VSA

80 OR VSA 81—Continued

Year Make Model Exceptions

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:

§ 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 § 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 § 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:

§ 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

§ 592.6(d) of this chapter.

* * * * *

4. Section 594.11 would be added to

read as follows:

§ 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

69838 Federal Register / Vol. 65, No. 224 / Monday, November 20, 2000 / Proposed Rules

importation of a Type 1 motor vehicle

pursuant to § 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