Importation of Vehicles and Equipment Subject to Federal Safety, Bumper, and Theft Prevention Standards; Registered Importers of Vehicles Not Originally Manufactured To Conform to the Federal Motor Vehicle Safety Standards

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 591 and 592

[Docket No. 89-5; Notice 13]

RIN 2127-AD00

Importation of Vehicles and Equipment Subject to Federal Safety,

Bumper, and Theft Prevention Standards; Registered Importers of

Vehicles Not Originally Manufactured To Conform to the Federal Motor

Vehicle Safety Standards

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

ACTION: Interim final rule, request for comments.

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SUMMARY: This interim final rule amends part 591 to adopt a continuous

entry bond as an alternative to the single entry bond that is required

to accompany each nonconforming vehicle imported into the United

States. Under the alternative, a registered importer of motor vehicles

who imports more than one vehicle can enter vehicles under a continuous

bond that covers an indefinite number of vehicles at a single time up

to the value of the bond. The new bond has a ceiling value of

$1,000,000, and is valid for an indefinite period. Conforming

amendments are also adopted for part 592. The agency has determined

that immediate action is in the public interest since it has been

informed by a Registered Importer that the principal bonding company

that issues single entry bonds has decided to terminate offering them.

The agency is also requesting comments whether NHTSA should make

permanent this alternative.

The interim final rule also deletes the provisions which expired on

October 31, 1992 that allowed importation of a vehicle without the

agency of a registered importer if the importer owned the vehicle

before October 31, 1988.

DATES: Effective Date: The amendments made by this interim final rule

are effective on June 20, 1994.

Comments: Comments must be received on or before August 19, 1994.

ADDRESSES: Comments should refer to Docket No. 89-5; Notice 13, and be

submitted to: Docket Section, room 5109, 400 Seventh Street, SW,

Washington, D.C. 20590 [Docket hours are from 9:30 a.m. to 4 p.m.].

FOR FURTHER INFORMATION CONTACT: Taylor Vinson, Office of Chief

Counsel, NHTSA (202-366-5263).

SUPPLEMENTARY INFORMATION: Under the regulatory scheme in effect for

the importation of motor vehicles subject to the Federal motor vehicle

safety, bumper, and theft prevention standards, a non-conforming

vehicle may be entered under bond in an amount equal to 150 percent of

its dutiable value. The purpose of the bond is to assure that the

vehicle is subsequently brought into conformance, or, alternatively,

delivered to the U.S. Customs Service for export, or abandoned. The

bond covers only one motor vehicle.

A Registered Importer (RI) who is an importer of Canadian vehicles

for resale asked NHTSA recently for permission to use a continuous

surety bond that would cover more than one motor vehicle. The example

given was of a continuous bond of $150,000 which would cover 10

vehicles imported together, each with a value of $10,000 as determined

by the U.S. Customs Service, instead of 10 individual bonds for 10

vehicles of $10,000 value, each bond set at $15,000. NHTSA replied

(letter of June 4, 1993, to Dan Kokal of Champagne Imports) that it was

unable to implement this suggestion without rulemaking, but that it

would consider the feasibility of it.

After review of this matter, NHTSA tentatively concluded that the

amendment of its regulations to permit an importer the choice of a

continuous entry bond could simplify entry procedures for both

government and the private sector, and would therefore be in the public

interest. However, before it could initiate rulemaking, it was informed

on April 28, 1994, by another RI, Lawrence A. Beyer, that ``the only

bonding company which issues these bonds [has] now advised me that they

no longer wish to issue these bonds.'' According to Mr. Beyer, the

effect of this development is that ``[w]ithout these bonds, registered

importers can no longer import. The jobs and livelihood of many people

is (sic) at stake.''

For this reason, NHTSA is amending part 591 to permit a continuous

entry bond, as an alternative to the single entry bond, which has a

ceiling of $1,000,000, to minimize the possibility that a registered

importer might have to obtain more than one continuous entry bond.

Under the present scheme, Customs ensures that the bond is attached to

the HS-7 importation form, and forwards the documents to NHTSA. Under

the alternative, the bond will already be on file at NHTSA. However,

the importer will be required to attach to the HS-7 importation form a

photocopy of the continuous entry bond and a copy of the Customs Entry

Summary (CF 7501) which states the entered value of the vehicle. This

information is necessary to enforce bond forfeiture should that be

necessary. The continuous entry bond is simply that shown in Appendix A

with the reference to ``vehicle'' in the singular changed to the plural

``vehicles'' when appropriate. Because Customs will ensure that a

photocopy of the continuous entry bond is attached to the importation

form, the bond processing fee of $4.75 per importation form will

continue to apply, but the single fee will cover all vehicles

represented by the single importation form.

The notice also adopts certain housekeeping amendments. Under

section 591.6(g), nonconforming vehicles whose importers met certain

specified requirements could be imported before October 31, 1992,

without the offices of a registered importer. As this authority has now

expired and will not be renewed, the agency has deleted it, as well as

the bond (Appendix B) which accompanied this type of entry. Conforming

amendments are made elsewhere in part 591 as well.

Finally, a conforming amendment is adopted to the ancillary

importation regulation on registered importers, part 592.

Effective Date

The interim final rule is effective upon publication in the Federal

Register. NHTSA notes that without this amendment to permit a

continuous entry bond, RIs and their customers will be unable to import

nonconforming vehicles pursuant to 49 CFR 591.5(f). Therefore, NHTSA

finds that the issuance of this notice without prior opportunity for

comment is necessary in view of the difficulties that unexpectedly

began to occur recently and would continue to occur were part 591 not

amended. The agency also finds for good cause that it is in the public

interest to establish an immediate effective date for the amendments

made by this notice. In the absence of an immediate effective date, RIs

would be unable to continue importing vehicles from Canada and other

countries. The amendments impose no new requirements but instead

provides an alternative to an existing requirement, whose continued

viability is doubtful.

Rulemaking Analyses

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

Policies and Procedures

This notice was not reviewed under EO 12866. After considering the

impacts of this rulemaking action, NHTSA has determined that the action

is not significant within the meaning of the Department of

Transportation regulatory policies and procedures. It amends an

existing requirement to afford RIs an alternative method of providing a

bond for imported nonconforming vehicles. The number of RIs affected is

less than 20. The cost impacts of this regulatory action are cost

savings to the RIs in procuring bonds (an estimated $20 per vehicle),

and nonquantifiable cost savings in the paper work involved to obtain

single-entry bonds. The impacts are so minimal as not to warrant the

preparation of a full regulatory evaluation.

B. Regulatory Flexibility Act

The agency has also considered the effects of this action in

relation to the Regulatory Flexibility Act. I certify that this action

would not have a significant economic impact upon ``a substantial

number of small entities,'' but it will have a significant economic

impact upon RIs, which number less than 20, and which are small

businesses within the meaning of the Regulatory Flexibility Act. This

action appears required to allow them to continue in business.

Governmental jurisdictions will not be affected at all since they are

generally neither importers nor purchasers of nonconforming imported

motor vehicles.

C. Executive Order 12612 (Federalism)

The agency has analyzed this action in accordance with the

principles and criteria contained in Executive Order 12612

``Federalism'' and determined that the action does not have sufficient

federalism implications to warrant the preparation of a Federalism

Assessment.

D. National Environmental Policy Act

NHTSA has analyzed this action for purposes of the National

Environmental Policy Act. The action will not have a significant effect

upon the environment because it is anticipated that the annual volume

of motor vehicles imported will not vary significantly from that

existing before promulgation of the rule.

E. Civil Justice Reform

This interim final rule will not have any retroactive effect. Under

section 103(d) of the National Traffic and Motor Vehicle Safety Act (15

U.S.C. 1392(d)), whenever a Federal motor vehicle safety standard is in

effect, a state may not adopt or maintain a safety standard applicable

to the same aspect of performance which is not identical to the Federal

standard. Section 105 of the Act (15 U.S.C. 1394) sets forth a

procedure for judicial review of final rules establishing, amending or

revoking Federal motor vehicle safety standards. That section does not

require submission of a petition for reconsideration or other

administrative proceedings before parties may file suit in court.

Comments

Interested persons are invited to submit comments on the interim

final rule. It is requested but not required that 10 copies be

submitted.

All comments must not exceed 15 pages in length. (49 CFR 553.21).

Necessary attachments may be appended to these submissions without

regard to the 15-page limit. This limitation is intended to encourage

commenters to detail their primary arguments in a concise fashion.

If a commenter wishes to submit certain information under a claim

of confidentiality, three copies of the complete submission, including

purportedly confidential business information, should be submitted to

the Chief Counsel, NHTSA, at the street address given above, and seven

copies from which the purportedly confidential information has been

deleted should be submitted to the Docket Section. A request for

confidentiality should be accompanied by a cover letter setting forth

the information specified in the agency's confidential business

information regulation. 49 CFR Part 512.

All comments received before the close of business on the comment

closing date indicated above will be considered, and will be available

for examination in the docket at the above address both before and

after that date. If no comments are received as of the comment closing

date, no further notice will be published. If comments have been

received as of the closing date, comments received after the closing

date will be considered to the extent practicable. If no comments have

been received as of the closing date, comments received after the

closing date will be considered as suggestions for further rulemaking

action. Comments on the interim final rule will be available for

inspection in the docket. NHTSA will continue to file relevant

information as it becomes available in the docket after the closing

date, and it is recommended that interested persons continue to examine

the docket for new material.

Those persons desiring to be notified upon receipt of their

comments in the rules docket should enclose a self-addressed, stamped

postcard in the envelope with their comments. Upon receiving the

comments, the docket supervisor will return the postcard by mail.

List of Subjects in 49 CFR Parts 591 and 592

Imports, Motor vehicle safety, Motor vehicles.

In consideration of the foregoing, 49 CFR parts 591 and 592 are

amended as follows:

PART 591--IMPORTATION OF VEHICLES AND EQUIPMENT SUBJECT TO FEDERAL

SAFETY, BUMPER, AND THEFT PREVENTION STANDARDS

1. The authority citation for part 591 continues to read as

follows:

Authority: Public Law 100-562, 15 U.S.C. 1401, 1407; delegation

of authority at 49 CFR 1.50.

2. Section 591.5 is amended by revising paragraph (f)(1) and

removing and reserving paragraph (g) to read as follows:

Sec. 591.5 Declarations required for importation.

* * * * *

(f) * * *

(1) The importer has furnished a bond in an amount equal to 150% of

the dutiable value of the vehicle, containing the terms and conditions

specified in section 591.8; and

* * * * *

(g) [Reserved]

* * * * *

3. Section 591.6 is amended by revising paragraph (c) to read as

set forth below, by removing paragraph (e), and by redesignating

paragraphs (f) and (g) as paragraphs (e) and (f), respectively:

Sec. 591.6 Documents accompanying declarations.

* * * * *

(c) A declaration made pursuant to paragraph 591.5(f), and under a

single entry bond, shall be accompanied by a bond in the form shown in

Appendix A, in an amount equal to 150% of the dutiable value of the

vehicle, or, if under a continuous entry bond, shall be accompanied by

a photocopy of a bond in the form shown in Appendix A (which may refer

to ``vehicles'' in the plural where appropriate) and by Customs Form CF

7501, for the conformance of the vehicle(s) with all applicable Federal

motor vehicle safety and bumper standards, or, if conformance is not

achieved, for the delivery of such vehicle to the Secretary of the

Treasury for export at no cost to the United States, or for its

abandonment.

* * * * *

Sec. 591.7 [Amended]

4. Paragraph 591.7(c) is amended by revising the reference to

``section 591.6(g)(1)'' to read ``paragraph 591.6(f)(1).''

5. Section 591.8 is amended by amending paragraph (a) to add a

sentence at the end thereof to read as set forth below, by removing

paragraph (d)(2)(ii), and by redesignating paragraph (d)(2)(i) as

paragraph (d)(2):

Sec. 591.8 Conformance bond and conditions.

(a) * * * However, a registered importer may enter vehicles under a

bond of a continuing nature that covers an indefinite number of motor

vehicles 150% of whose total dutiable value at any point in time does

not exceed $1,000,000.

* * * * *

6. Section 591.9 is amended by revising the second sentence of

paragraph (a) to read as follows:

Sec. 591.9 Petitions for remission or mitigation of forfeiture.

(a) * * * A principal and/or surety may petition for mitigation of

forfeiture only if the motor vehicle has been imported pursuant to

paragraph 591.5(f) and the condition not met relates to the compliance

of a passenger motor vehicle with part 581 of this chapter.

* * * * *

Appendix B--[Removed]

7. Appendix B is removed.

PART 592--REGISTERED IMPORTERS OF VEHICLES NOT ORIGINALLY

MANUFACTURED TO CONFORM TO THE FEDERAL MOTOR VEHICLE SAFETY

STANDARDS

8. The authority citation for part 592 continues to read as

follows:

Authority: Public Law 100-562, 15 U.S.C. 1401, 1407; delegation

of authority at 49 CFR 1.50.

9. Section 592.6 is amended by amending paragraph (a) to add a

sentence at the end thereof to read as follows:

Sec. 592.6 Duties of a registered importer.

* * * * *

(a) * * * However, if the Registered Importer has procured a

continuous entry bond, it shall furnish the Administrator with such

bond, and shall 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 motor vehicle.

* * * * *

Issued on: June 14, 1994.

Christopher A. Hart,

Deputy Administrator.

[FR Doc. 94-14865 Filed 6-15-94; 11:29 am]

BILLING CODE 4910-59-P