Motor Vehicle Content Labeling

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 583

[Docket No. 92-64; Notice 11]

RIN 2127-AG46

Motor Vehicle Content Labeling

AGENCY: National Highway Traffic Safety Administration (NHTSA),

Department of Transportation (DOT).

ACTION: Final rule.

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SUMMARY: Under NHTSA's content labeling program, passenger motor

vehicles (passenger cars and other light vehicles) are required to be

labeled with information about their domestic and foreign parts

content. In this document, the agency extends for two years a

[[Page 33757]]

limited, temporary provision in its content calculation procedures to

provide vehicle manufacturers added flexibility in making content

determinations where outside suppliers have not responded to requests

for content information. This flexibility will be available for up to

10 percent, by value, of a carline's total parts content from outside

suppliers, and only for carlines offered for sale prior to January 1,

1999. It will also only be available where manufacturers or allied

suppliers have made a good faith effort to obtain the information. The

agency views this provision as providing extra flexibility during the

early years of the content labeling program, as the vehicle

manufacturers and suppliers continue to gain familiarity with the

program and develop appropriate procedures to ensure supplier

responsiveness to requests for content information.

DATES: Effective date: The amendments made by this rule are effective

July 23, 1997.

Petitions: Petitions for reconsideration must be received by August

7, 1997.

ADDRESSES: Petitions for reconsideration should refer to the docket and

notice number of this notice and be submitted to: Administrator,

National Highway Traffic Safety Administration, 400 Seventh Street,

SW., Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: For non-legal issues: Mr. Orron Kee,

Office of Planning and Consumer Programs, National Highway Traffic

Safety Administration, 400 Seventh Street, SW., Washington, DC 20590

(202-366-0846).

For legal issues: Mr. J. Edward Glancy, Office of Chief Counsel,

National Highway Traffic Safety Administration, 400 Seventh Street,

SW., Washington, DC 20590 (202-366-2992).

SUPPLEMENTARY INFORMATION:

Background

On July 21, 1994, NHTSA published in the Federal Register (59 FR

37294) a new regulation, 49 CFR part 583, Automobile Parts Content

Labeling, to implement the American Automobile Labeling Act (Labeling

Act). That Act, which is codified at 49 U.S.C. 32304, requires

passenger motor vehicles to be labeled with information about their

domestic and foreign parts content. Interested persons are encouraged

to read the July 1994 notice for a detailed explanation of this

program.

NHTSA received several petitions for reconsideration of the July

1994 final rule, and has subsequently published four notices addressing

issues raised in those or subsequent petitions.1

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\1\ 60 FR 14228, March 16, 1995; 60 FR 47878, September 15,

1995; 61 FR 17253, April 19, 1996; 61 FR 46385, September 3, 1996.

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One issue has been the subject of successive petitions from the

American Automobile Manufacturers Association (AAMA). That organization

has repeatedly objected to a provision in part 583 which specifies that

the U.S./Canadian content of components is defaulted to zero if

suppliers fail to respond to a manufacturer's or allied supplier's

request for content information. AAMA would like the agency to permit

vehicle manufacturers and allied suppliers to make ``best-efforts''

content determinations when their outside suppliers fail to do so.

The agency published two notices on this issue last year. On April

19, 1996, NHTSA published in the Federal Register (61 FR 17253) a

notice denying an AAMA petition on this subject. The agency explained

that it believes that the ability to obtain the necessary content

information from suppliers is within the control of the vehicle

manufacturers.

On September 3, 1996, however, in light of new information provided

by AAMA and General Motors (GM), NHTSA published in the Federal

Register (61 FR 46385) a very narrow, temporary final rule providing

vehicle manufacturers additional flexibility in this area. The

temporary final rule provided that, in limited situations where outside

suppliers had not responded to requests for content information, allied

suppliers and manufacturers could make those content determinations

from information available to them. This flexibility was only available

if the allied supplier or manufacturer had a good faith basis for

making the calculation. Moreover, this flexibility was only available

for up to 10 percent, by value, of a carline's total parts content from

outside suppliers. Finally, the flexibility was only available where

the manufacturer or allied supplier had made a good faith effort to

obtain the information from the outside supplier.

The amendment applied only to carlines offered for sale before

January 1, 1997. However, the agency requested comments on whether the

applicability of the amendment, or a similar one, should be extended

past that date. (The September 1996 temporary final rule was issued

without a prior notice of proposed rulemaking.)

In the September 1996 notice, NHTSA explained that it was issuing

the temporary amendment in light of several factors. The agency stated:

On the one hand, NHTSA believes that Chrysler's experience

(discussed in a letter cited in the September 1996 notice)

demonstrates that the ability to obtain the necessary content

information from suppliers is within the control of the vehicle

manufacturers. However, the agency also agrees that there are

differences between Chrysler and GM, related to number of suppliers

and degree of vertical integration, which make efforts by GM to

obtain content information from its suppliers considerably more

complex.

The agency has previously recognized that a certain amount of

confusion is likely during the time period when a new program, such

as content labeling, is implemented. The content labeling program is

still a relatively new program. Indeed, model year 1997 is the first

year for which the full content calculation procedures of part 583

are required, i.e., the temporary alternative procedures are not

available.

The agency believes that GM has demonstrated that it has been

making significant efforts in recent months to obtain content

information from non-responsive suppliers. Moreover, GM has shown

that, despite those efforts, it is having difficulty obtaining

information for the last portion of a carline's content.

Finally, NHTSA believes that, all other things being equal, a

good faith content determination by a vehicle manufacturer or allied

supplier of equipment it receives is likely to be more accurate than

simply applying a ``default-to-zero'' provision. Thus, adoption of

today's amendment should result in more accurate information for

consumers.

The agency recognizes, of course, that the most accurate

determinations are those provided by the outside suppliers

themselves, since they obviously have much more complete information

about the content of the equipment they manufacture than the

purchaser. Therefore, the agency must consider whether its actions

would have the effect of reducing the incentives for outside

suppliers to provide the required information, or for the vehicle

manufacturers to make efforts to obtain the information.

NHTSA has concluded that adoption of today's temporary amendment

will not reduce incentives for outside suppliers or vehicle

manufacturers for model year 1997. Given that the vehicle

manufacturers are already in the final stages of making content

calculations for these vehicles, today's amendment should not have

any effect on whether outside suppliers provide, or do not provide,

the required information for model year 1997. However, the agency

will consider this issue further in deciding whether to extend the

applicability of today's temporary amendment. NHTSA also emphasizes

that today's amendment does not excuse outside suppliers for failure

to comply with part 583. 61 FR 46387.

Comments

NHTSA received comments from AAMA, GM, and the Association of

International Automobile

[[Page 33758]]

Manufacturers, Inc. (AIAM). All of the commenters asked the agency to

issue a permanent amendment providing greater flexibility in making

content determinations when outside suppliers do not respond to

requests for information.

AAMA asked again that vehicle manufacturers be permitted to make

``best efforts'' content determinations when suppliers fail to respond

to requests for content information, as is permitted for outside

suppliers. That organization stated that over the past three years,

vehicle manufacturers have made attempts to standardize the forms used

for reporting content information, and developed programs to

familiarize the supplier community with the law and its requirements.

However, because supplier compliance has not been uniform, vehicle

manufacturers have been forced to make multiple requests of some

suppliers to gain accurate content information.

AAMA noted that Congress expressly contemplated rules that would

not be financially burdensome to vehicle manufacturers. That

organization argued that each manufacturer has used more resources than

ever contemplated to effect compliance with the law.

AAMA also stated that vehicle manufacturers believe that defaulting

content to zero U.S./Canadian content when a certificate is not

forthcoming is not required by the law. That organization stated that

there is no penalty against the supplier even though noncompliance

under the present rule could result in understatement of U.S./Canadian

content and false information being provided to the consumer. AAMA

argued that the best solution is for the rule to provide the same

flexibility for vehicle manufacturers and allied suppliers to provide

this content information as outside suppliers have in dealing with the

same issue.

GM noted that its allied supplier operations generally supply

products not only for GM-produced vehicles but also for vehicles

produced by others for the U.S. market. That company stated that as an

outside supplier, it is allowed to make best efforts estimates of

content to establish domestic content to the benefit of its non-allied

vehicle manufacturer customers. However, as an allied supplier, GM is

not allowed to use best efforts determinations on essentially the same

products. GM argued that this is particularly inequitable, and urged

that the agency allow the same flexibility for vehicle manufacturers

and allied suppliers as for outside suppliers.

AIAM stated that, despite its many objections to the Labeling Act,

it supports a permanent amendment to NHTSA's calculation procedures to

provide vehicle manufacturers with added flexibility in making content

determinations when outside suppliers have not provided content

information. That organization stated that such flexibility would

reflect an understanding of the difficulties manufacturers have in

obtaining necessary information from outside suppliers. AIAM stated

that without a permanent amendment, future labels will understate the

value of the ``domestic'' content because manufacturers using

``recalcitrant'' outside suppliers will have to default that supplier's

content to 0% ``domestic.''

According to AIAM, allowing manufacturers and allied suppliers to

make content determinations in these situations would provide

flexibility that recognizes the realities of the industry. That

organization stated that contrary to NHTSA's statement, some outside

suppliers cannot be forced into compliance with the labeling

requirements merely through contract provisions. AIAM stated that some

of these suppliers may be supplying components that have been designed

to the manufacturer's specifications, and punishing outside suppliers

who refuse to comply with the labeling requirements is not realistic

when it jeopardizes the manufacturer's own ability to meet its

production schedules.

AIAM also stated that allowing greater flexibility would relieve

slightly the regulatory burden associated with the Labeling Act. That

organization stated that pursuing and obtaining the documentation from

the suppliers who refuse to comply often requires extraordinary efforts

which increase administrative costs and often fail to obtain the

missing data.

Agency Decision

After considering the comments, NHTSA has decided to extend for two

years the applicability of the limited, temporary provision established

in the September 1996 final rule, to provide vehicle manufacturers

added flexibility in making content determinations where outside

suppliers have not responded to requests for content information. The

agency is extending the provision to apply to carlines offered for sale

prior to January 1, 1999, but is not making any other changes. The

agency views this provision as providing extra flexibility during the

early years of the content labeling program, as the vehicle

manufacturers and suppliers continue to gain familiarity with the

program and develop appropriate procedures to ensure supplier

responsiveness to requests for content information.

NHTSA notes that all of the commenters on the September 1996 notice

essentially re-raised issues which the agency has addressed at length

in responding to previous petitions on this subject. Since the

commenters did not provide any arguments significantly different from

ones previously offered by the vehicle manufacturers, the agency is not

changing its views with respect to those basic issues.

NHTSA is providing a two-year extension of the limited, temporary

provision established in the September 1996 final rule because it

believes that the problems encountered by GM and other vehicle

manufacturers for model year 1997 will not disappear immediately. At

the same time, the agency continues to believe that the vehicle

manufacturers can take steps to ensure that, in the future, they will

obtain the necessary content information from essentially all of their

suppliers, without costly efforts. The agency believes that a two-year

extension will enable manufacturers to take, or complete taking, such

steps.

NHTSA has considered the extent to which this action may reduce the

incentives for outside suppliers to provide the required information,

or for the vehicle manufacturers to make efforts to obtain the

information. The agency believes that any such effects will be very

small, given the limited scope and duration of the amendment. NHTSA

also emphasizes, as it did with respect to the September 1996 final

rule, that today's amendment does not excuse outside suppliers for

failure to comply with part 583. The agency also notes that, while AAMA

indicated that there are no penalties against suppliers for

noncompliance, suppliers are in fact subject to civil penalties for

failure to comply with part 583.

NHTSA will not attempt to repeat all of its prior analyses related

to the issues raised by the commenters in this notice, since it has

addressed the same issues on several prior occasions. The agency

specifically incorporates by reference its responses to these issues

set forth in the September 15, 1995, April 19, 1996, and September 3,

1996 notices cited above.

NHTSA notes that, in the September 1996 notice, it specifically

addressed the ``equity'' of providing different procedures for outside

and allied suppliers. The agency explained:

[T]he agency does not believe there is anything inequitable

about providing different procedures for outside and allied

suppliers. The Labeling Act establishes vastly

[[Page 33759]]

different procedures for outside and allied suppliers. For example,

in making domestic content calculations, outside suppliers need

determine only whether an item of equipment has at least 70 percent

U.S./Canadian content, while allied suppliers must make precise

calculations based on certificates from outside suppliers. The

differences in part 583's procedures for outside and allied

suppliers reflect the specific statutory differences for these two

groups and/or the agency's efforts to limit the regulatory burdens

associated with the content labeling program. For example, a

significant reason why the agency permits outside suppliers to make

good faith estimates of the U.S./Canadian content of the materials

they purchase is that, unlike the situation for allied suppliers,

suppliers to outside suppliers are not required, by statute or

regulation, to provide certificates of content. 61 FR 46388.

While GM re-raised the issue of the equity of different procedures

for outside and allied suppliers, it did not address the explanation

provided by the agency. NHTSA also notes that the ``default-to-zero''

provision of concern to GM only adversely affects vehicle manufacturers

and allied suppliers to the extent that outside suppliers do not

provide content information. For reasons discussed below and in other

Federal Register notices, the ability to obtain this information is

within the control of the vehicle manufacturers.

In the September 1996 notice, the agency addressed at some length

the issue of whether the provision providing greater flexibility, or a

similar provision, should be extended for a longer period of time.

NHTSA stated that it believes the guiding principle for making this

decision should be the statutory direction specifying that regulations

promulgated under the Labeling Act are to provide the ultimate

purchaser of a new passenger motor vehicle with the best and most

understandable information possible about the foreign and U.S./Canadian

origin of the equipment of the vehicles without imposing costly and

unnecessary burdens on the manufacturers. 49 U.S.C. 32304(e).

The agency explained:

There is no question that the ``best'' determinations of the

content of equipment provided by outside suppliers are those

provided by the suppliers themselves, since they obviously have much

more complete information about the content of the equipment they

manufacture than the purchaser. There is also no question that the

Labeling Act contemplates the vehicle manufacturers basing their

content calculations on certificates provided by the outside

suppliers, and that outside suppliers are statutorily required to

provide this information. See 49 U.S.C. 32304(e). Thus, the only

question is the extent, if any, to which the agency should provide

alternatives to address situations where outside suppliers fail to

provide the required information despite being asked to do so by the

vehicle manufacturers.

As indicated above, an important consideration is whether such

alternatives would have the effect of reducing the incentives for

outside suppliers to provide the required information, or for the

vehicle manufacturers to make efforts to obtain the information. It

is clear that the ``default-to-zero'' provision does provide

significant incentives in this regard. Therefore, the agency will

not simply drop that provision.

To the extent that the non-responsive supplier problem

experienced by GM is likely to continue, it could be argued that, at

some point, the costs of obtaining the last portion of outside

supplier content value for a particular carline become unreasonable.

This argument could be used to support extending the temporary

amendment. The length of such extension would depend on how long the

problem was likely to continue.

On the other hand, NHTSA is not convinced that the vehicle

manufacturers cannot ultimately obtain the necessary content

information from essentially 100 percent of their suppliers, without

costly efforts. 61 FR 46388.

NHTSA then cited the following discussion from its March 16, 1996

notice denying an earlier petition from AAMA on this subject:

NHTSA notes that AAMA's petition did not discuss whether its

member companies experienced difficulty in obtaining content

information from suppliers in the presence or absence of specific

contractual provisions intended to ensure the provision of content

information by suppliers. As stated in the September 1995 notice,

outside suppliers are dependent on the vehicle manufacturers for

their business. Therefore, the agency believed, and continues to

believe, that the ability to obtain the necessary content

information is within the control of the vehicle manufacturers.

The purpose of including any specific provision in a business

contract is to make observance of the terms of that provision a

required element of the business relationship. Just as such things

as meeting material specifications, strength requirements and

specified time of delivery are a necessary part of a supplier's

doing business with a vehicle manufacturer and are ensured by

provisions included in contractual agreements, the providing of

content information can also be made a necessary part of that

business relationship and be reflected in the purchase contract.

Moreover, just as liquidated damages clauses can be inserted in

a contract for failure to comply with any other part of the

contract, so can such a provision be included for failure to provide

timely content reports. If a supplier knows that it will be paid

less money if it fails to provide content information, it will have

a strong incentive to provide the information.

The agency also notes that the supplier industry is highly

competitive. If one supplier is unwilling to agree to provide

content information (an agreement to do no more than comply with

existing Federal law), other suppliers would step in to take

advantage of the opportunity for new business.

For the above reasons, including those presented in the

September 1995 notice, NHTSA continues to believe that the vehicle

manufacturers will be able to obtain the required content

information from their suppliers. 61 FR 17254-55.

In the September 1996 notice, the agency noted that AAMA and GM had

argued in their new petitions that even if a non-responsive supplier is

penalized under the contract, the penalty paid to the manufacturer is

not compensatory because the ``damages'' cannot offset the effects of

understating the U.S./Canadian content value for the manufacturer's

vehicles. NHTSA stated that it believes, in contrast, that the

contractual provisions would help ensure that outside suppliers provide

content information without the need to actually impose ``damages.''

The agency stated that it believes outside suppliers would not sign

contracts that they planned to violate and that, given that it is not

very costly to provide content information, it would be irrational for

outside suppliers to decide to pay damages instead of simply providing

the information (information that they are, in any event, required by

Federal law to provide).

The agency also pointed out that, in addition to providing an extra

incentive for outside suppliers, such contractual provisions would

provide an educational function. AAMA had stated in its petition that

``suppliers that deliberately do not respond cite the uncompensated

cost to establish the information on content in their parts, the

increased employees to calculate the data, and the burdens they already

face in generating multiple content reports such as for NAFTA, AALA,

CAFE and others each with its own rules.'' The agency noted that these

sorts of explanations by suppliers suggest that they were unaware of

the need to provide content information when they signed their

contracts. The agency added:

The inclusion of a specific contract provision concerning the

need to provide content information would make suppliers aware of

this obligation. While the costs of providing content information

may not be compensated directly, such costs are simply a necessary

part of doing business. Assuming that suppliers are aware of these

costs, they will presumably consider them in negotiating their

contracts, just as they consider other costs of doing business. 61

FR 46389.

[[Page 33760]]

While both AAMA and AIAM asserted in their comments on the

September 1996 notice that the problem of outside supplier

nonresponsiveness cannot be solved by contractual provisions, they did

not address the analysis presented by the agency. Further, they did not

respond in any detail to the question in the September 1996 notice

about what types of good faith actions should be specified in the

regulation. The agency notes that while AAMA stated that the vehicle

manufacturers have included specific provisions concerning content

labeling in their contracts, that organization did not provide specific

examples of such provisions or explain how they worked in practice. For

example, AAMA did not indicate what penalties, if any, were

incorporated in the contractual provisions or the degree to which the

vehicle manufacturers had actually attempted to enforce such

provisions. With respect to AIAM's argument that it is not

``realistic'' for a vehicle manufacturer to enforce contractual

provisions related to labeling, the agency does not see how such

enforcement would be any different than enforcing other contractual

provisions that are part of the business relationship between the

vehicle manufacturer and supplier.

Since the commenters have not provided any new arguments or

information indicating that the agency's previous determinations

concerning this subject are incorrect, the agency is not making any

changes other than providing a two-year extension of the limited,

temporary provision established in the September 1996 final rule. The

agency is not including a definition of ``good faith effort'' in

today's final rule, primarily because the vehicle manufacturers and

allied suppliers would likely not be able to, among other actions, add

such provisions to their contracts in time to take advantage of the

relief being provided. The agency notes, as it did in the September

1996 notice, that, in the absence of a definition, it intends the term

``good faith effort'' to mean at least some effort beyond the request

for information and certificates that is required by part 583, e.g.,

some kind of follow-up effort.

At this time, NHTSA does not contemplate the need to provide

further relief when this temporary provision expires. Should vehicle

manufacturers and allied suppliers conclude in the future that there is

a need to extend this provision again, they should be aware that any

future relief would likely be available only upon demonstration that

specific good faith actions have been taken. To this end, the agency

anticipates that it would specifically define what constitutes a ``good

faith effort'' by a vehicle manufacturer or allied supplier to obtain

content information. Such a definition of ``good faith effort'' might

include elements along the following lines: (1) An express contractual

provision between the vehicle manufacturer or allied supplier and the

outside supplier which cites 49 CFR part 583, requires the outside

supplier to provide content information in the time and manner required

by that regulation, and includes some contractual penalty for failure

to comply; (2) follow-up efforts (after the initial request for content

information) by the vehicle manufacturer or allied supplier to obtain

content information; and (3) in instances in which follow-up efforts

are unsuccessful, action by the vehicle manufacturer or allied supplier

to enforce the contractual penalty for failure to provide content

information.

NHTSA notes that the temporary final rule now being extended

expired as of the end of 1996, that is, it was only available for

carlines first offered for sale to ultimate purchasers prior to January

1, 1997. In extending the final rule at this time, the agency does not

wish to create a gap with respect to the procedures that applied to any

carlines offered for sale between January 1, 1997 and now. The agency

notes that this is not likely to be a very significant issue, since few

carlines are first offered for sale to ultimate purchasers in the early

months of a calendar year.

However, given the circumstances of today's final rule, the agency

will permit manufacturers to re-label any such vehicles.2 In

such an instance, however, NHTSA urges manufacturers to take steps to

prevent confusion when consumers compare the labels of vehicles within

the same carline manufactured at different times. For example,

manufacturers could take steps to re-label all of the vehicles within a

carline that have not yet been sold to a consumer. Alternatively, the

revised label could include a note indicating that the carline

percentages have been revised during the model year. NHTSA notes that

it took this same position in the September 1996 notice with respect to

model year 1997 carlines which had been introduced prior to issuance of

that final rule.

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\2\ While content percentages are ordinarily calculated only

once for a carline for a particular model year, NHTSA has previously

concluded that, under special circumstances, manufacturers may

revise the carline percentages. See interpretation letter to Diamond

Star Motors dated February 10, 1995.

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Rulemaking Analyses and Notices

A. Executive Order 12866 (Regulatory Planning and Review) and DOT

Regulatory Policies and Procedures

This rulemaking document was not reviewed under Executive Order

12866. NHTSA has considered the economic implications of this

regulation and determined that it is not significant within the meaning

of the DOT Regulatory Policies and Procedure. Today's amendment will

not affect manufacturer or supplier costs. It simply provides

additional flexibility to vehicle manufacturers and their allied

suppliers in making content calculations.

B. Regulatory Flexibility Act

In accordance with the Regulatory Flexibility Act, NHTSA has

evaluated the effects of this action on small entities. Based upon this

evaluation, I certify that the final rule will not have a significant

economic impact on a substantial number of small entities. Today's

amendments simply provide additional flexibility to vehicle

manufacturers and their allied suppliers in making content

calculations. Therefore, a regulatory flexibility analysis is not

required for this action.

C. Executive Order 12612 (Federalism)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been determined

that the final rule did not have sufficient Federalism implications to

warrant preparation of a Federalism Assessment. No state laws are

affected.

D. Executive Order 12778 (Civil Justice Reform)

This final rule does not have any retroactive effect. States are

preempted from promulgating laws and regulations contrary to the

provisions of this rule. The rule does not require submission of a

petition for reconsideration or other administrative proceedings before

parties may file suit in court.

E. National Environmental Policy Act

The agency has considered the environmental implications of this

rule in accordance with the National Environmental Policy Act of 1969

and determined that this rule will not significantly affect the human

environment.

List of Subjects in 49 CFR Part 583

Motor vehicles, Imports, Labeling, Reporting and recordkeeping

requirements.

[[Page 33761]]

In consideration of the foregoing, 49 CFR part 583 is amended as

follows:

PART 583--AUTOMOBILE PARTS CONTENT LABELING

1. The authority for part 583 continues to read as follows:

Authority: 49 U.S.C. 32304, 49 CFR 1.50, 501.2(f).

2. Section 583.6 is amended by revising paragraph (c)(6) to read as

follows:

Sec. 583.6 Procedure for determining U.S./Canadian parts content.

* * * * *

(c) * * *

(6) For carlines which are first offered for sale to ultimate

purchasers before January 1, 1999, if a manufacturer or allied supplier

requests information in a timely manner from one or more of its outside

suppliers concerning the U.S./Canadian content of particular equipment,

but does not receive that information despite a good faith effort to

obtain it, the manufacturer or allied supplier may make its own good

faith value added determinations, subject to the following provisions:

(i) The manufacturer or allied supplier shall make the same value

added determinations as would be made by the outside supplier, i.e.,

whether 70 percent or more of the value of equipment is added in the

United States and/or Canada;

(ii) The manufacturer or allied supplier shall consider the amount

of value added and the location in which the value was added for all of

the stages that the outside supplier would be required to consider;

(iii) The manufacturer or allied supplier may determine that the

value added in the United States and/or Canada is 70 percent or more

only if it has a good faith basis to make that determination;

(iv) A manufacturer and its allied suppliers may, on a combined

basis, make value added determinations for no more than 10 percent, by

value, of a carline's total parts content from outside suppliers;

(v) Value added determinations made by a manufacturer or allied

supplier under this paragraph shall have the same effect as if they

were made by the outside supplier;

(vi) This provision does not affect the obligation of outside

suppliers to provide the requested information.

Issued on: June 17, 1997.

Ricardo Martinez,

Administrator.

[FR Doc. 97-16333 Filed 6-18-97; 3:13 pm]

BILLING CODE 4910-59-P