Exportation of Used Motor Vehicles

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 192

RIN 1515-AC19

Exportation of Used Motor Vehicles

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes amendments to the Customs Regulations

which relate to the exportation of used self-propelled vehicles. These

amendments are being proposed to clarify the intent of the regulations

and provide for uniformity and standardized procedures. They are also

being proposed to conform the regulations to legislation which was

enacted since the regulations were originally written. The overall

objective of the proposed amendments is to more efficiently and

effectively deter the export of stolen vehicles.

DATES: Comments must be received on or before December 29, 1997.

ADDRESSES: Comments (preferably in triplicate) may be submitted to

Regulations Branch, Office of Regulations and Rulings, U.S. Customs

Service, 1300 Pennsylvania Avenue, N.W., 3rd Floor, Washington, D.C.

20229, and may be inspected at the same location.

FOR FURTHER INFORMATION CONTACT: Hugh Austin, Outbound Process, Office

of Field Operations, 202-927-3735.

SUPPLEMENTARY INFORMATION:

Background

Part 192 of the Customs Regulations (19 CFR Part 192) was

established by the publication of T.D. 89-46 on April 18, 1989. These

regulations implemented a provision of the Trade and Tariff Act of 1984

(19 U.S.C. 1627a) concerning the unlawful exportation of used self-

propelled vehicles. Generally, that statute provides for civil

penalties for the knowing importation or exportation, or attempted

importation or exportation, of stolen self-propelled vehicles or

equipment or any similar activity with respect to any self-propelled

vehicle or part of such vehicle from which the vehicle identification

number (VIN) has been removed, obliterated, tampered with or altered.

The statute also directs that regulations be prescribed by the

Secretary of the Treasury with regard to the procedures for the lawful

exportation of used self-propelled vehicles. In implementing the

existing regulations, both Customs and the public have encountered

several difficulties which this proposed amendment to the regulations

is intended to resolve.

Proposed Amendments

The first proposed amendment to the existing regulations is to

require the presentation to Customs of the original or certified copy

of a title as proof of ownership of the vehicle to be exported. This is

intended to eliminate a situation where there is a conflict between

differences over a certified and a notarized copy of a title and the

validity of each type of document. Certified copies can only be

obtained from official issuing authorities. While the current

regulations do not specifically address notarized copies, the proposed

amendments explicitly disallow the use of notarized copies as proof of

ownership. Customs field offices are currently accepting a variety of

paperwork to establish ownership of vehicles presented for export.

There is no national standard. Because all 50 states now have title

laws, requiring the presentation of a title to show ownership will

provide the field with a standard. By requiring that the documents be

certified by the issuing authority, and not merely notarized, Customs

will have a greater assurance of the authenticity of the documentation.

In instances when a vehicle owned by a foreign national and

registered in a foreign country is being exported, where no title is

available, Customs will require production of satisfactory proof of

ownership by the exporter.

Realizing that there are instances where a party purchases a

``new'' car from a dealer and then immediately exports it without

registering it in any state, and thus never receives a title in a

state, Customs is making a provision for that situation by adding a

document known as a ``manufacturer's statement of origin'' to the list

of items which Customs will accept as proof of ownership. In those

instances where a vehicle's purchaser does not intend to operate the

vehicle in the U.S., Customs does not want to unnecessarily burden him

by requiring that he obtain a state title. The manufacturer's statement

of origin can provide a clear chain of possession from the manufacturer

through the dealership to the present owner/exporter.

Leased and Liened Vehicles

Today, there are many vehicles being operated legally in the United

States by people who do not have title to the vehicle. Since the

original regulations in this area were issued, there has been a

significant increase in the number of vehicles which are ``on the

road'' by virtue of a lease rather than a sale. In instances where a

vehicle has been leased to an operator, the title to the vehicle is

never intended to pass to the operator, because the right to use the

vehicle will revert to the owner upon termination of the lease. Another

instance of legal operation of a vehicle by one not in possession of a

title occurs when a vehicle is purchased on time. Most often, in that

situation, title is retained by the finance company until the note is

paid, at which time the title will be transferred to the owner/

operator. In recent years, Customs has seen an increase in the

frequency in which either leased or liened vehicles are attempted to be

exported without the knowledge or authorization of the actual title

holder--the owner or the lien-holder. If the potential exporter keeps

either the lease or note payments current until after the vehicle is

exported, a check to see whether the vehicle is stolen at the time of

export will not reveal anything suspicious. This is because, at the

time of exportation, the vehicle is not yet stolen. Once the vehicle

has been taken out of the reach of the lienholder or owner, payments

are stopped and the theft takes place. In order to prevent this from

happening as easily as it does now, Customs is proposing to amend the

regulations to require that a party attempting to export a vehicle that

is either leased or is subject to a lien present a letter from the

lienholder or owner stating that they have knowledge

[[Page 55765]]

of and authorize the exportation of the vehicle.

Other Areas of Clarification

There are certain other areas where the current regulations have

caused some uncertainty among groups or individuals, which this

document proposes to clarify. In Sec. 192.2(b) of the current

regulations, the phrase ``in other cases'' appears at the beginning of

the second sentence. Customs proposes to change the phrase to read ``in

cases other than automobiles, trucks, vans, minivans, motorcycles, and

buses''. This proposal is being made because some situations have

developed where exporters and Customs field locations have interpreted

the current phrase ``in other cases'' to mean situations in which

individuals may present other types of documentation to prove

ownership.

It is further proposed to amend Sec. 192.2(b) by changing the word

``available'' to ``required'' in the phrase ``or other document if a

certificate of title is not available as a result of a state regulatory

requirement''. This change is being made to mandate presentation of

titles at exportation if titles are required in the state in which the

vehicle was purchased. All states require titles. However, some states

only require titles for vehicles if they are of a certain age. Older

vehicles, depending on the state, may or may not require titles. If the

state does not require a title, then acceptable documentation for

Customs export purposes would include a bill of sale.

Because of their growing popularity, and to prevent any

misunderstanding about the intended coverage of the scope of vehicles

intended to be covered by the regulation, the proposed regulation

expressly includes vans and minivans as types of vehicles intended to

be covered by the regulation.

Time and Place of Presentation

In an attempt to resolve some uncertainty which has arisen in the

implementation of Sec. 192.2(c) of the current regulations, which deals

with the time when the required documentation must be presented,

Customs is proposing the following amendments.

The current regulation states that the documentation must be

presented at least 3 days prior to the lading or exportation of the

vehicle. Questions have arisen whether that phrase meant calendar or

business days. Those questions were made moot, however, by enactment of

the Anti Car Theft Act of 1992. That Act amended the Tariff Act of 1930

by adding a new section, 19 U.S.C. 1646c, which requires that all

persons or entities exporting used automobiles provide to Customs both

the vehicle identification numbers and proof of ownership at least 72

hours before the export. In order to conform the regulatory

requirements to the law and still provide port personnel the

opportunity to examine vehicles which are being exported, it is

proposed that the time for required presentation of documents in

Sec. 192.2(c) be changed to at least 72 hours, to include not less than

2 full business days for air or sea exports. The addition of the phrase

``at the port of exit'' is also being proposed as the place where

documentation must be presented. There have been instances where

documentation has been presented at a port which is not the exit port.

The addition of this phrase is intended to remove any opportunity for

confusion as to where the documentation is to be produced.

Because many vehicles are exported through land border ports,

Customs is proposing to permit exporters to transmit copies of the

required documentation by facsimile to the port of exit. This means

that an exporter will not have to wait at the border for 72 hours after

presenting the documentation. However, the original documents required

will need to be presented, along with the vehicle, on the date of exit.

The proposed amendments change the terminology used in reference to

the type of non-original documents which Customs will accept from

``facsimile'' to ``copy.'' This change is being made to avoid confusion

resulting from current usage of the word ``facsimile''; the word is

used often interchangeably with ``FAX.'' By using the word ``copy,''

Customs wishes to clarify that it intends to accept photocopies as well

as ``faxes.'' In order that the regulations will be consistent, it is

proposed to amend paragraph (d) by replacing the word ``facsimile''

with the word ``copy''.

A new paragraph (e) is being proposed which states that each Port

Director has the authority to establish a time and place for

presentation of original documentation and inspection of vehicles.

Customs believes that in order to implement the law, it is necessary to

impose constraints on times when the original documentation and

vehicles will be accepted. By giving the Port Director the authority to

set times and places for acceptance of original documents, it is

intended that processing of exported used vehicles will be more

efficient for both Customs and exporters in this time of limited

resources.

Comments

Before adopting this proposal, consideration will be given to any

written comments (preferably in triplicate) that are timely submitted

to Customs. All such comments received from the public pursuant to this

notice of proposed rulemaking will be available for public inspection

in accordance with the Freedom of Information Act (5 U.S.C 552),

Sec. 1.4, Treasury Department Regulations (31 CFR 1.4), and

Sec. 103.11(b), Customs Regulations (19 CFR 103.11(b)), on regular

business days between the hours of 9:00 a.m. and 4:30 p.m., at the

Regulations Branch, U.S. Customs Service, 1300 Pennsylvania Avenue,

NW., 3rd Floor Washington, D.C.

Regulatory Flexibility Act

In so far as the proposed amendment is intended to assist Customs

exercise its law enforcement responsibilities with a minimum burden on

legitimate exporters of used vehicles, pursuant to the provisions of

the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), it is certified

that the amendment, if adopted, will not have a significant economic

impact on a substantial number of small entities. Accordingly, it is

not subject to the regulatory analysis or other requirements of 5

U.S.C. 603 and 604.

Executive Order 12866

The proposed amendment does not meet the criteria for a

``significant regulatory action'' under E.O. 12866.

Paperwork Reduction Act

The collection of information contained in this rulemaking has been

submitted to the Office of Management and Budget (OMB) in accordance

with the Paperwork Reduction Act of 1995. (44 U.S.C. 3507).

An agency may not conduct or sponsor, and a person is not required

to respond to a collection of information unless the collection of

information displays a valid control number.

The clarification of the collection of information in these

regulations is in Sec. 192.2. All information required by this proposed

amendment is contained or identified in the above-cited section. This

information is to be maintained and provided in the form of documents

which are necessary to ensure that the Customs Service will be able to

effectively administer the laws it is charged with enforcing while, at

the same time, imposing a minimum burden on the public it is serving.

Respondents or recordkeepers are already required by state statute or

regulation to maintain or have most of the information covered in

[[Page 55766]]

this proposed regulation. The likely respondents or recordkeepers are

business organizations and individuals, including exporters.

Estimated total annual reporting and/or recordkeeping burden:

83,330 hours.

Estimated average annual burden per respondent/recordkeeper: 10

minutes.

Estimated number of respondents and/or recordkeepers: 500,000.

Estimated annual frequency of responses: 1.

Comments concerning the collections of information should be sent

to the Office of Management and Budget, Attention: Desk Officer of the

Department of the Treasury, Office of Information and Regulatory

Affairs, Washington, D.C. 20503. A copy should also be sent to the

Regulations Branch, Office of Regulations and Rulings, U.S. Customs

Service, 1300 Pennsylvania Avenue, N.W., Washington, D.C. 20229.

Comments should be submitted within the time frame that comments are

due regarding the substance of the proposal.

Comments are invited on: (a) whether the collection of information

is necessary for the proper performance of the functions of the agency,

including whether the information shall have practical utility; (b) the

accuracy of the agency's estimate of the burden of the collection of

information; (c) ways to enhance the quality, utility, and clarity of

the information to be collected; (d) ways to minimize the burden of the

collection of information on respondents, including through the use of

automated collection techniques or other forms of information

technology; and (e) estimates of capital or startup costs and costs of

operations, maintenance, and purchase of services to provide

information.

Drafting Information

The principal author of this document was Peter T. Lynch,

Regulations Branch, Office of Regulations and Rulings, U.S. Customs

Service. However, personnel from other offices participated in its

development.

List of Subjects in 19 CFR Part 192

Customs duties and inspection, Exports, Motor vehicles, Penalties.

Proposed Amendments

It is proposed to amend Part 192, Customs Regulations (19 CFR Part

192), as set forth below:

PART 192--EXPORT CONTROL

1. The authority citation for Part 192, Customs Regulations (19 CFR

Part 192), is proposed to be revised to read as follows:

Authority: 19 U.S.C. 66, 1624, 1627a, 1646a, 1646c.

2. It is proposed to amend Sec. 192.2 by revising paragraphs (b),

(c) and (d) and adding a new paragraph (e) to read as follows:

Sec. 192.2 Requirements for exportation.

* * * * *

(b) Documentation required. (1) For certain registered vehicles

owned by the exporter. In the case of automobiles, trucks, vans,

minivans, motorcycles and buses owned by the exporter and registered in

any state of the United States, the following documentation is required

to be presented at the port of exit:

(i) An original or certified copy of the Certificate of Title from

a state issuing authority. A notarized copy of the Certificate of Title

is not acceptable; and

(ii) Two copies of the original or certified copy of the

Certificate of Title.

(2) For certain vehicles purchased with the intention of

exportation. In the case of automobiles, trucks, vans, minivans,

motorcycles and buses purchased from a dealer and not registered in any

state of the United States because of plans to immediately export, an

original manufacturer's statement of origin and two copies of the

manufacturer's statement of origin are required to be presented at the

port of exit.

(3) For certain vehicles where a Certificate of Title is not

required as a result of state or foreign country requirements. In the

case of automobiles, trucks, vans, minivans, motorcycles and buses

owned by a foreign national and registered in a foreign country or

instances in which a state does not require a Certificate of Title, an

original document that provides satisfactory proof of ownership by the

exporter and two copies of that document are required to be presented

at the port of exit.

(4) For certain leased or liened vehicles. In the case of

automobiles, trucks, vans, minivans, motorcycles and buses that are

leased or on which there is a lien, a letter from the lienholder or, if

leased, the owner stating that the lienholder or owner agrees that the

vehicle may be exported is required to be presented at the port of

exit. The letter must include the name, address and telephone number of

the lienholder or owner and must include the Vehicle Identification

Number of the vehicle.

(5) For other self-propelled vehicles. In the case of self-

propelled motorized vehicles other than automobiles, trucks, vans,

minivans, motorcycles, and buses, an original or certified Certificate

of Title, memorandum of ownership, or right of possession, or any other

document sufficient to prove lawful ownership, such as an original bill

of sale or an original sales invoice, as well as 2 copies of the

document, shall be presented.

(c) When presented. (1) Exportation by vessel or aircraft. If the

vehicle is to be transported by vessel or aircraft, all documentation

and the vehicle must be presented to Customs at the port of exit at

least 72 hours, to include not less than 2 full business days, prior to

lading in accordance with such directives as may be issued by the Port

Director pursuant to paragraph (e) of this part.

(2) Exportation at land border port. If the vehicle is to be

transported by rail, highway, or under its own power, copies of the

required documentation may be sent or transmitted to the port of exit

in a manner so that they will arrive at least 72 hours prior to the

intended time of exportation. The original documents need to be

presented at time of exit along with the vehicle. The vehicle and

original documentation shall be presented at the port of exportation in

accordance with such directives as may be issued by the Port Director

pursuant to paragraph (e) of this part.

(d) Authentication of documentation. Customs shall authenticate

both copies of the documents submitted, one of which shall remain in

the possession of the exporter and one of which shall be collected by

Customs. Authentication will include the stamping of the copies of the

documents with the date and time of presentation of the documents. The

authenticated copy of the document will be the only acceptable evidence

from the exporter of compliance with the requirements of this section.

(e) Time and place of document presentation. Each Port Director

shall establish and publicize the hours and location at which original

documentation required by this section will be received and the hours

and place for presentation of the vehicle.

George J. Weise,

Commissioner of Customs.

Approved: September 24, 1997.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 97-28490 Filed 10-27-97; 8:45 am]

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