[Federal Register Volume 62, Number 92 (Tuesday, May 13, 1997)]
[Notices]
[Pages 26348-26352]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12488]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration
[Docket No. 96-114; Notice 2]


Final Decision That Certain Nonconforming Vehicles are Eligible 
for Importation

AGENCY: National Highway Traffic Safety Administration, DOT.

ACTION: Final decision that certain nonconforming vehicles are eligible 
for importation.

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SUMMARY: This document announces a final decision by the Administrator 
of the National Highway Traffic Safety Administration (NHTSA) that 
certain vehicles that do not comply with all applicable Federal motor 
vehicle safety standards, but that are certified by their original 
manufacturer as complying with all applicable Canadian motor vehicle 
safety standards, are eligible for importation into the United States. 
The vehicles in question either (1) Are substantially similar to 
vehicles that were certified by their manufacturers as complying with 
the U.S. safety standards and are capable of being readily altered to 
conform to those standards, or (2) have safety features

[[Page 26349]]

that comply with, or are capable of being altered to comply with all 
U.S. safety standards. This document also announces NHTSA's decision to 
rescind the vehicle eligibility number that was formerly applicable to 
all vehicles certified by their original manufacturer as complying with 
Canadian safety standards (eligibility number VSA-1), and to assign 
four separate eligibility numbers to Canadian certified vehicles, based 
on those vehicles' classification and weight.

DATES: This decision is effective on May 13, 1997.

FOR FURTHER INFORMATION CONTACT: George Entwistle, Office of Vehicle 
Safety Compliance, NHTSA (202-366-5306).

SUPPLEMENTARY INFORMATION:

Background

    Under 49 U.S.C. Sec. 30141(a)(1)(A), a motor vehicle that was not 
originally manufactured to conform to all applicable Federal motor 
vehicle safety standards (FMVSS) shall be refused admission into the 
United States unless NHTSA has decided that the vehicle is 
substantially similar to a motor vehicle of the same model and model 
year that was originally manufactured for import into and sale in the 
United States and was certified as complying with all applicable FMVSS, 
and also finds that the noncompliant vehicle is capable of being 
readily altered to comply with all applicable FMVSS. Where there is no 
substantially similar U.S.-certified motor vehicle, 49 U.S.C. 
Sec. 30141(a)(1)(B) permits a nonconforming motor vehicle to be 
admitted into the United States if NHTSA decides that its safety 
features comply with, or are capable of being altered to comply with, 
all applicable FMVSS.
    On March 7, 1997, NHTSA published a notice in the Federal Register 
at 62 FR 10614 announcing that it had made a tentative decision that 
certain motor vehicles that do not comply with all applicable FMVSS, 
but that are certified by their original manufacturer as complying with 
all applicable Canadian Motor Vehicle Safety Standards, are eligible 
for importation into the United States. The notice identified these 
vehicles as:
    (a) All passenger cars manufactured on or after September 1, 1996 
and before September 1, 2002, that, as originally manufactured, are 
equipped with an automatic restraint system that complies with Federal 
Motor Vehicle Safety Standard (FMVSS) No. 208, and that comply with 
FMVSS No. 214;
    (b) All multipurpose passenger vehicles, trucks and buses 
manufactured on or after September 1, 1993, and before September 1, 
1998, that, as originally manufactured, comply with FMVSS Nos. 202, 
208, and 216; and
    (c) All multipurpose passenger vehicles, trucks and buses 
manufactured on or after September 1, 1998, and before September 1, 
2002, that, as originally manufactured, comply with FMVSS Nos. 202, 
208, 214, and 216.
    The reader is referred to the March 7 notice for a full discussion 
of the factors leading to the tentative decision.
    The notice also proposed to rescind Vehicle Eligibility Number VSA-
1, which NHTSA had established as the designator for importers to use 
on the HS-7 Declaration Form accompanying entry to indicate the import 
eligibility of all vehicles certified by their original manufacturer as 
complying with all applicable Canadian motor vehicle safety standards 
(CMVSS). In place of this designator, the notice proposed to assign 
four separate eligibility numbers (VSA-80 through VSA-83) to Canadian-
certified vehicles, based on vehicle classification (i.e., passenger 
car, multipurpose passenger vehicle, truck, bus, trailer, motorcycle) 
and, in the case of multipurpose passenger vehicles, buses and trucks, 
based also on vehicle weight. The reader is also referred to the March 
7 notice for a full discussion of this proposal.
    In accordance with 49 U.S.C. Sec. 30141(b), the notice solicited 
public comments on the tentative decision that NHTSA had made and on 
the agency's proposal to assign new import eligibility numbers to 
Canadian-certified vehicles. Four comments were submitted in response 
to the notice. The first of these was submitted by members of the North 
American Automotive Trade Association (NAATA). In their comment, the 
NAATA members requested NHTSA to be as expedient as possible in making 
a final decision regarding the import eligibility of Canadian-certified 
passenger cars manufactured on or after September 1, 1996 that comply 
with FMVSS Nos. 208 and 214. The NAATA members also requested the 
agency to preserve for Canadian market vehicles a waiver from the fee 
established at 49 CFR 594.8 for importing a vehicle pursuant to an 
eligibility decision by the NHTSA Administrator. In support of this 
request, the NAATA members contended that NHTSA incurs no additional 
administrative overhead or burden in processing these vehicles, in 
comparison to the agency's processing of Canadian market vehicles that 
have previously been determined eligible for importation. Additionally, 
the NAATA members characterized the proposed change in eligibility 
numbers for Canadian-certified vehicles as being merely clerical in 
nature, and not resulting in any actual change to ``the entry or 
compliance package approval process.''
    The second comment was submitted by Philip Trupiano of Auto 
Enterprises, Inc. of Clawson, Michigan, a Registered Importer of 
nonconforming vehicles. In his comment, Mr. Trupiano also requested the 
agency to expedite its eligibility decision with respect to Canadian-
certified passenger cars manufactured on or after September 1, 1996. 
Mr. Trupiano further expressed the opinion that NHTSA should not 
establish September 1, 2002, or any other date for the expiration of 
import eligibility on Canadian market vehicles. Mr. Trupiano observed 
that the notice reflected the agency's intent ``to issue new decisions 
covering vehicles manufactured on or after September 1, 2002 within a 
sufficient period before that date is reached.'' In Mr. Trupiano's 
opinion, NHTSA's ability to honor this intent is undermined by the fact 
that it has taken the agency more than seven months from September 1, 
1996 to issue a final decision of import eligibility with respect to 
Canadian-certified passenger cars manufactured on or after that date.
    Mr. Trupiano noted that NHTSA proposed September 1, 2002 as the 
next cutoff because that is the date on which revised interior impact 
protection requirements that are to be phased in under FMVSS No. 201, 
Occupant Protection in Interior, and that are not found in the 
corresponding CMVSS, will become effective for all passenger cars and 
for multi-purpose passenger vehicles, trucks, and buses with a gross 
vehicle weight rating of 10,000 pounds or less. To eliminate the need 
for NHTSA to issue a new eligibility decision following the proposed 
September 1, 2002 cutoff, Mr. Trupiano suggested that the agency could 
make compliance with FMVSS No. 201 a condition for the import 
eligibility of all affected vehicles manufactured on or after September 
1, 1996.
    Although Mr. Trupiano stated that he has no objection to the 
proposed assignment of new eligibility numbers to Canadian-certified 
vehicles, he expressed the opinion that such a change is unnecessary in 
view of the fact that Registered Importers provide information on 
vehicle classification in the certificates of conformity that they 
submit to NHTSA to obtain the release of bonds posted for noncomplying 
vehicle.
    Additionally, Mr. Trupiano requested the agency to clarify in 
writing that

[[Page 26350]]

vehicles entered under the proposed eligibility numbers would be exempt 
from the fee prescribed under 49 CFR 594.8. Mr. Trupiano contended, 
without providing any supporting analysis, that the imposition of such 
a fee on Canadian-certified vehicles would be in violation of the North 
American Free Trade Agreement (NAFTA). Mr. Trupiano further expressed 
the understanding that Canadian-certified vehicles are not subject to 
the fee prescribed under 49 CFR 594.8 because of an agreement between 
NHTSA and the Canadian government reflected in a letter dated March 16, 
1990 from Canadian Ambassador D.H. Burney to Jerry R. Curry, who was 
then NHTSA Administrator, and a response from Administrator Curry to 
Ambassador Burney dated April 24, 1990. Copies of these letters, which 
were attached to Mr. Trupiano's comments, have been placed in the 
public docket for this eligibility decision. Mr. Trupiano interprets 
this correspondence as containing an agreement on NHTSA's behalf to 
waive importation fees on Canadian market vehicles which ``cannot be 
unilaterally changed.''
    The third comment was submitted by Brian Osler, Executive Director 
and Counsel to NAATA. In his comment, Mr. Osler expressed agreement 
with the agency's tentative decision to extend import eligibility to 
Canadian market vehicles manufactured on or after September 1, 1996 
that are in compliance with FMVSS Nos. 208 and 214. Mr. Osler took 
exception, however, to the proposed eligibility cutoff date of 
September 1, 2002, contending, as did Mr. Trupiano, that this will 
result in future delays that will cause economic hardship. Mr. Osler 
predicted that NHTSA's ``administrative requirements'' will prevent the 
agency from honoring its commitment to issue a new eligibility decision 
within a reasonable period before the September 1, 2002 cutoff date is 
reached. To eliminate the need for a future decision, Mr. Osler 
recommended that the tentative decision be revised along the lines 
suggested by Mr. Trupiano. Mr. Osler also shared Mr. Trupiano's opinion 
that NHTSA has an obligation to adopt this approach under Article 908 
of NAFTA, which he characterized as requiring the agency to conduct 
FMVSS conformity assessments as expeditiously as possible. Mr. Osler 
additionally urged NHTSA to state in writing that vehicles imported 
under the proposed eligibility numbers are exempt from the fees 
prescribed under 49 CFR 594.8, and contended that this is ``necessary 
to ensure that NHTSA does not unduly restrict trade as contemplated by 
the Free Trade Agreement.'' Mr. Osler also characterized the 
correspondence between Administrator Curry and Ambassador Burney as 
reflecting the agency's agreement not to ``impose fees that would 
unduly restrict trade between Canada and the United States.''
    The fourth comment was submitted by Lawrence A. Beyer, an attorney 
who represents several Registered Importers. In his comment, Mr. Beyer 
also expressed general agreement with the tentative decision, but 
voiced concern that the assignment of new eligibility numbers for 
Canadian-certified vehicles could be a ploy for eliminating the fee 
waiver that has applied to these vehicles when imported under 
eligibility number VSA-1. Mr. Beyer contended that if the agency is so 
motivated, its actions would contradict a requirement in 49 CFR Part 
594 for fees to be set at the beginning of the fiscal year. Mr. Beyer 
further suggested that if NHTSA intends to change the fee structure for 
Canadian imports, the agency should publish a separate notice in the 
Federal Register concerning the matter, so that those who stand to be 
impacted will have a fair opportunity to comment.
    NHTSA has considered each of the issues that these comments have 
raised. The agency has taken note of the concerns the commenters have 
expressed regarding the timing of this final decision. That timing was 
influenced, in part, by information that NHTSA obtained from Registered 
Importers indicating that Model Year 1997 vehicles would begin to be 
retired from Canadian rental fleets in March and April of this year, 
reducing the need for an earlier decision regarding the import 
eligibility of those vehicles. Contrary to the assumptions expressed by 
certain of the commenters, the timing of this decision has no bearing 
on any future such actions that NHTSA may take. As stated in the notice 
of tentative decision, the agency intends to issue new eligibility 
decisions covering vehicles for which the September 1, 2002 cutoff date 
was proposed within a sufficient period before that date is reached. 
The alternative suggested by certain of the commenters of specifying 
compliance with FMVSS No. 201 as a condition for the import eligibility 
of vehicles manufactured on or after September 1, 1996 is less 
acceptable to the agency. Should Canada adopt the revised interior 
impact protection requirements that are to be phased in under FMVSS No. 
201 by September 1, 2002, there will be no need for compliance with 
this standard to be made a specific condition for import eligibility. 
Since those requirements have yet to be phased in, FMVSS No. 201 is at 
present substantially similar to its Canadian counterpart, precluding 
the need for compliance with the standard to be made a specific 
condition for the import eligibility of vehicles manufactured on or 
after September 1, 1996.
    Contrary to the assumption expressed by one of the commenters, 
NHTSA did not propose to assign new vehicle eligibility numbers to 
Canadian-certified vehicles as a means to circumvent any purported fee 
exemption for those vehicles. As stated in the notice of tentative 
determination, the agency instead proposed separate eligibility numbers 
based on vehicle classification, and, in the case of multipurpose 
passenger vehicles, trucks, and buses, by weight, so that the 
eligibility decisions that pertain to Canadian-certified vehicles can 
be more readily modified in the event that any future discrepancies 
arise between Canadian and U.S. standards that affect only certain 
classes of vehicles. The use of a single eligibility number to cover 
all vehicle classes made it difficult to keep track of past 
modifications to these eligibility decisions. Contrary to the opinion 
of one commenter, the need for separate eligibility numbers is not 
undermined by the existence of vehicle classification information in 
the certificates of conformity that Registered Importers submit to 
NHTSA. The agency is not proposing separate eligibility numbers so that 
it can monitor the volume of Canadian imports by vehicle class, but 
instead to facilitate any future modifications to the eligibility 
determinations that may become necessary.
    As the commenters recognized, the notice of tentative decision was 
entirely silent with respect to the issue of fees for Canadian imports. 
NHTSA did not introduce the subject because its intent was to have an 
eligibility decision in place as soon as possible to cover vehicles 
manufactured on or after September 1, 1996, without the delays that a 
controversy over fees could engender. In point of fact, there is no 
existing ``waiver'' of fees for Canadian vehicles. The importers of 
these vehicles must pay the fee for reimbursement of the U.S. Customs 
Service's bond processing costs established under 49 CFR 594.9.
    The fee for importing a vehicle pursuant to a determination by the 
Administrator found at 49 CFR 594.8 is imposed, as that section states, 
to cover the direct and indirect costs incurred by NHTSA in making the 
eligibility determination. This fee is now set at

[[Page 26351]]

$134, and, as stated at 49 CFR 594.8(a), is payable by each importer of 
a vehicle covered by an import eligibility determination made under 49 
CFR Part 593.
    At the time that it was first established, the fee for importing a 
motor vehicle pursuant to an eligibility determination on the 
Administrator's initiative based on the existence of a substantially 
similar U.S.-certified vehicle was $1,560, to be paid only by the 
importer of the first vehicle covered by the determination. See 54 FR 
40100, 40108 (September 29, 1989). Consistent with this provision, in 
the notice announcing its first final determination of import 
eligibility for Canadian-certified vehicles, published on August 13, 
1990 at 55 FR 32988, NHTSA stated that the $1,560 fee then required 
under 49 CFR 593.8 would ``be payable only once, and by the first 
importer of any Canadian vehicle covered by this determination.'' 55 FR 
32990.
    In his correspondence with the Canadian Ambassador that is cited by 
several of the commenters, former NHTSA Administrator Curry stated that 
``the fee of $1,560 would cover the blanket determination of all 
passenger cars, and would not be applied to each individual make and 
model year of passenger car,'' thereby ``effectively moot[ing] Canada's 
. . . request that Canadian market passenger cars be exempted from the 
determination fee.'' It is worth noting that this letter neither stated 
nor otherwise acknowledged the existence of any exemption from 
importation fees for Canadian vehicles. The letter in fact stated that 
the Ambassador's request for such an exemption could not be granted in 
that the fees established by the agency were specifically required by 
the Imported Vehicle Safety Compliance Act of 1988, Pub. L. 100-562.
    Although NHTSA has continued to collect the other fees established 
under 49 CFR Part 594 from the importers of Canadian-certified 
vehicles, the agency has not been collecting the fee prescribed under 
section 594.8 from those importers because that fee has already been 
paid by the first person to import a Canadian-certified vehicle under 
an eligibility decision made by the agency. That payment in theory 
reimbursed NHTSA for its costs in making the import eligibility 
decision. As a consequence, NHTSA has stated at various junctures that 
the fee for importing a vehicle pursuant to an Administrator's 
determination would not apply to Canadian vehicles covered by 
eligibility number VSA-1. See, e.g., 58 FR 41681, 41682 (August 5, 
1993) and 61 FR 51043, 51044 (September 30, 1996).
    Even though NHTSA is now rescinding eligibility number VSA-1, and 
replacing it with four separate eligibility numbers based on vehicle 
classification and weight, the agency does not intend to collect the 
importation fee established under 49 CFR 594.8 from the importers of 
vehicles covered by those eligibility numbers. First, the agency 
recognizes that the assignment of new eligibility numbers for Canadian-
certified vehicles does not constitute a new import eligibility 
determination with respect to those vehicles that would justify 
imposition of the fee required under 49 CFR 594.8. However, even if 
payment of that fee could be justified, given the volume of 
nonconforming Canadian imports (which exceeded 15,000 vehicles in 
calendar year 1995 alone), the only fee that could be assessed on a 
``per-vehicle'' basis to reimburse the agency for its costs in making 
eligibility decisions regarding those vehicles would be too minuscule 
to justify its imposition.
    NHTSA is currently considering, however, proposing fees pursuant to 
49 U.S.C. Sec. 30141(a)(3) to reimburse the agency's costs associated 
with making decisions as to whether particular vehicles may be released 
by registered importers, i.e, the costs for the review and processing 
of certificates of conformity submitted by registered importers to 
document that vehicles that were not originally manufactured to conform 
to all applicable FMVSS have been brought into conformity with those 
standards. Such fees would apply to all vehicles for which conformity 
certificates are submitted to NHTSA, including vehicles imported from 
Canada.

Final Decision

    Accordingly, the Administrator of NHTSA hereby decides that:

(a) All passenger cars manufactured on or after September 1, 1996 and 
before September 1, 2002, that, as originally manufactured, are 
equipped with an automatic restraint system that complies with Federal 
Motor Vehicle Safety Standard (FMVSS) No. 208, and that comply with 
FMVSS No. 214;
(b) All multipurpose passenger vehicles, trucks and buses manufactured 
on or after September 1, 1993, and before September 1, 1998, that, as 
originally manufactured, comply with FMVSS Nos. 202, 208, and 216; and
(c) All multipurpose passenger vehicles, trucks and buses manufactured 
on or after September 1, 1998, and before September 1, 2002, that, as 
originally manufactured, comply with FMVSS Nos. 202, 208, 214, and 216;

that are certified by their original manufacturer as complying with all 
applicable Canadian motor vehicle safety standards, are eligible for 
importation into the United States on the basis that either:

    1. they are substantially similar to vehicles of the same make, 
model, and model year originally manufactured for importation into and 
sale in the United States, or originally manufactured in the United 
States for sale there, and certified as complying with all applicable 
FMVSS, and are capable of being readily altered to conform to all 
applicable FMVSS; or
    2. They have safety features that comply with, or are capable of 
being altered to comply with, all applicable FMVSS.

Vehicle Eligibility Number

    The importer of a vehicle admissible under any final decision must 
indicate on the Form HS-7 accompanying entry the appropriate vehicle 
eligibility number indicating that the vehicle is eligible for entry. 
Vehicle Eligibility Number VSA-1 has previously covered all eligible 
vehicles certified by their original manufacturer as complying with all 
applicable CMVSS. NHTSA hereby rescinds that eligibility number and 
assigns the following eligibility numbers to the vehicles it covered, 
and to those admissible under this notice of final decision:

Vehicles Certified by Their Original Manufacturer as Complying with all 
Applicable Canadian Motor Vehicle Safety Standards

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             Number                              Vehicles               
------------------------------------------------------------------------
VSA-80.........................  (a) All passenger cars less than 25    
                                  years old that were manufactured      
                                  before September 1, 1989;             
                                 (b) All passenger cars manufactured on 
                                  or after September 1, 1989, and before
                                  September 1, 1996, that, as originally
                                  manufactured, are equipped with an    
                                  automatic restraint system that       
                                  complies with Federal Motor Vehicle   
                                  Safety Standard (FMVSS) No. 208;      

[[Page 26352]]

                                                                        
                                 (c) All passenger cars manufactured on 
                                  or after September 1, 1996 and before 
                                  September 1, 2002, that, as originally
                                  manufactured, are equipped with an    
                                  automatic restraint system that       
                                  complies with FMVSS Nos. 208, and that
                                  comply with FMVSS No. 214.            
VSA-81.........................  (a) All multipurpose passenger         
                                  vehicles, trucks, and buses with a    
                                  GVWR of 4536 kg. (10,000 lbs.) or less
                                  that are less than 25 years old and   
                                  that were manufactured before         
                                  September 1, 1991;                    
                                 (b) All multipurpose passenger         
                                  vehicles, trucks, and buses with a    
                                  GVWR of 4536 kg. (10,000 lbs.) or less
                                  that were manufactured on and after   
                                  September 1, 1991, and before         
                                  September 1, 1993, and that, as       
                                  originally manufactured, comply with  
                                  FMVSS Nos. 202 and 208;               
                                 (c) All multipurpose passenger         
                                  vehicles, trucks and buses with a GVWR
                                  of 4536 kg. (10,000 lbs.) or less that
                                  were manufactured on or after         
                                  September 1, 1993, and before         
                                  September 1, 1998, and that, as       
                                  originally manufactured, comply with  
                                  FMVSS Nos. 202, 208, and 216;         
                                 (d) All multipurpose passenger         
                                  vehicles, trucks and buses with a GVWR
                                  of 4536 kg. (10,000 lbs.) or less,    
                                  that were manufactured on or after    
                                  September 1, 1998, and before         
                                  September 1, 2002, and that, as       
                                  originally manufactured, comply with  
                                  the requirements of FMVSS Nos. 202,   
                                  208, 214, and 216.                    
VSA-82.........................  All multipurpose passenger vehicles,   
                                  trucks and buses with a GVWR greater  
                                  than 4536 kg. (10,000 lbs.) that are  
                                  less than 25 years old.               
VSA-83.........................  All trailers, and all motorcycles that 
                                  are less than 25 years old.           
------------------------------------------------------------------------

    Authority: 49 U.S.C. 30141 (a)(1)(A) and (b)(1); 49 CFR 593.8; 
delegation of authority at 49 CFR 1.50.

    Issued on: May 7, 1997.
Ricardo Martinez,
Administrator.
[FR Doc. 97-12488 Filed 5-12-97; 8:45 am]
BILLING CODE 4910-59-P