Date: 1987-12-14
Speaker: THOMAS A. LUKEN (democrat)
Chamber: H

Mr. Speaker. last year the House passed. as part of the NHTSA authorization. a bill to address the problem of ensuring the safety of foreign motor vehicles that are designed to be used in foreign countries but are. in fact. imported for use into this country. These vehicles. because they are designed for use in foreign countries. do not meet all the safety and emission standards of our Government and are commonly called "gray market" vehicles. Unfortunately. last years NHTSA authorization bill. H.R. 2248. died at the end of the 99th Congress. The bill that is now before us. H.R. 2628. was introduced by the gentleman from Kansas . and it is. with minor and technical changes. the same bill as the House adopted at the end of the last Congress. As part of its oversight responsibilities. the committee. in January 1985. asked the GAO to study the administration of the gray market program by the three agencies involved: EPA. NHTSA. and Customs. The GAOs report was published in December 1986. This report further demonstrates the need for legislative reform of NHTSAs procedures to ensure that gray market vehicles are safe. Under current regulations. the importer is supposed to have the gray market vehicle brought into conformity with NHTSAs standards within 120 days after the vehicle clears customs. While the importer puts up a bond to ensure eventual compliance. the importer is free to drive the vehicle as soon as it is imported and may also sell it before it is modified to meet NHTSAs standards. The seller may not even tell the buyer that it is a gray market vehicle. GAO examined a random sample of 30 vehicles that according to NHTSAs records had not met NHTSAs standards within the 120day period. As shown on page 38 of the GAO report. for 23 of these vehicles. or 77 percent of the sample. NHTSA had taken no steps to get these vehicles off the highway even though more than a year had passed since the 120day period had expired. Moreover. the current system is not working even for those vheicles that the importer does modify. The modifications are done by private firms. which send documents to NHTSA for review. NHTSA does not routinely actually inspect any of the gray market vehicles that have allegedly been modified. Nor does NHTSA inspect the firms that do the modifications. The GAO examined a random sample of 29 vehicles that NHTSA. based on NHTSAs review of the documents supplied by the importer. had determined were in compliance with NHTSAs own safety standards. GAO found that for 17 percent of this sampleand I quote from page 40 of the GAO report-"NHTSA accepted incorrect. incomplete. or inadequate documentation to substantiate the conformance of * * * these vehicles." In the spring of 1985. according to the GAO. NHTSA randomly purchased two gray market vehicles that the importer had reported had been appropriately modified and found that neither vehicle met all of NHTSAs standards. H.R. 2628 is designed to end the safety problems whose existence has been recently confirmed by the GAO. The bill requires the Secretary of Transportation to establish procedures for registering importers of gray market vehicles. A registered importer is prohibited from releasing custody rwf any motor vehicle for use until .30 days after the registered importer certifies that the vehicle complies with all applicable Federal safety standards. The importer will have to post a bond. Registered importers will have to attach a label to the gray market vehicle identifying the importer and indicating that the vehicle is a gray market vehicle. and the registered importer is responsible for any subsequent notification or remedy of a defect in the vehicle. The Secretary must periodically inspect a representative number of gray market vehicles that have been certified to ensure that in fact the vehicles comply with NHTSAs safety standards. The Secretary is enpowered to revoke the registration of any importer who fails to comply with the law. In sum. Mr. Speaker. H.R. 2628 will help prevent unsafe gray market vehicles from being driven on our highways.