[Federal Register Volume 66, Number 197 (Thursday, October 11, 2001)]
[Proposed Rules]
[Pages 51907-51918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25429]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 579

[Docket No. NHTSA 2001-10773; Notice 1]

RIN 2127-AI26


Reporting of Information About Foreign Safety Recalls 
andCampaigns Related to Potential Defects

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

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This document requests comments on a proposal to implement the 
foreign safety recall and safety campaign reporting requirements of the 
Transportation Recall Enhancement, Accountability, and Documentation 
(TREAD) Act. Section 3(a) of the TREAD Act requires a manufacturer of 
motor vehicles or motor vehicle equipment to report to the National 
Highway Traffic Safety Administration (NHTSA) whenever it has decided 
to conduct a safety recall or other safety campaign in a foreign 
country covering vehicles or equipment that are identical or 
substantially similar to vehicles or equipment offered for sale in the 
United States. The manufacturer must also report whenever it has been 
notified by a foreign government that a safety recall or safety 
campaign must be conducted covering such vehicles or equipment.

DATES: Comment closing date: Comments must be received on or before 
December 10, 2001. The effective date of a final rule based on this 
proposal would be 30 days after publication of the final rule.

ADDRESSES: All comments on this notice should refer to the docket and 
notice number set forth above and be submitted to Docket Management, 
Room PL-401, 400 Seventh Street, S.W., Washington, DC 20590. The docket 
room hours are from 9:30 a.m. to 5:00 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: For non-legal issues, contact Jon 
White, Office of Defects Investigation, NHTSA (phone: 202-366-5226). 
For legal issues, contact Taylor Vinson, Office of Chief Counsel, NHTSA 
(phone: 202-366-5263).

SUPPLEMENTARY INFORMATION:

I. Background

A. Ford's Foreign Campaigns Involving Firestone Tires

    On May 2, 2000, NHTSA's Office of Defects Investigation (ODI) 
opened an investigation into an alleged safety defect in ATX and 
Wilderness tires manufactured by Bridgestone/Firestone, Inc. 
(Firestone). Many of these tires had been manufactured for use as 
original equipment on Ford Explorer sport utility vehicles.
    During that investigation, ODI became aware that in August 1999, 
Ford Motor Company (Ford) commenced an ``Owner Notification Program'' 
in which it offered to replace the P255/70R16 Firestone Wilderness AT 
tires installed as original equipment on its model year (MY) 1995 and 
1996 Ford Explorer and Mercury Mountaineer models in use in the Persian 
Gulf region. In its letter to owners, Ford explained that it was 
offering to replace the tires because ``Firestone `Wilderness A/T' 
brand tires may experience interior tire degradation and tread 
separation, due to unique Gulf Coast usage patterns and environmental 
conditions, resulting in a loss of vehicle control.'' Ford did not 
notify NHTSA that it was taking this action, because, as it explained 
later, there was no regulation requiring it to do so.
    Similarly, late in February 2000, Ford launched an ``Owner 
Notification Program'' in Malaysia and Thailand covering ``certain 1997 
Explorers equipped with P235/75R15 Firestone `All Terrain' Brand 
Tires'' (Wilderness AT tires). In its letter to owners, Ford claimed it 
was offering to replace the tires because they ``may experience 
interior degradation and tread separation, due to unique regional usage 
patterns and environmental conditions, potentially resulting in a loss 
of vehicle control.'' As in the case of the Gulf Region vehicles, Ford 
did not notify NHTSA that it had taken this action until after the 
agency had opened its investigation covering these tires.
    Also, on May 20, 2000, Ford began an ``Owner Notification Program'' 
in Venezuela covering MY 1996 through 1999 Explorers equipped with 
P235/75R15 or P255/70R16 Firestone tires. In its letter to owners, Ford 
included the same rationale as in the Malaysia/Thailand action. Again, 
Ford did not notify NHTSA of this action until after it was commenced.

B. Federal Defect Reporting Requirements Before the TREAD Act

    Title 49, United States Code, Chapter 301, ``Motor Vehicle 
Safety,'' is the basic motor vehicle safety statute administered by 
NHTSA (the ``Safety

[[Page 51908]]

Act''). It establishes requirements that manufacturers of motor 
vehicles and motor vehicle equipment built or sold in the United States 
(and other persons) must meet.
    Under 49 U.S.C. 30118(c)(1), a manufacturer of motor vehicle or 
replacement equipment must notify NHTSA if the manufacturer ``learns 
the vehicle or equipment contains a defect and decides in good faith 
that the defect relates to motor vehicle safety.'' This means that when 
a manufacturer learns of a defect, the manufacturer must make a good 
faith decision whether or not the defect is related to motor vehicle 
safety, and, if the decision is affirmative, to report the defect to 
NHTSA. Similarly, under Section 30118(c)(2), when the manufacturer 
decides in good faith that a vehicle or equipment item does not comply 
with an applicable Federal motor safety standard, it must report the 
noncompliance to NHTSA. The precursor to Section 30118(c), which 
contained substantially similar language, has been held to impose upon 
a manufacturer the duty ``to notify and remedy whether it actually 
determined, or it should have determined, that its [products] are 
defective and the defect is safety-related.'' United States v. General 
Motors Corp. (X-Cars), 656 F. Supp. 1555, 1559 n.5 (D.D.C. 1987), 
affirmed, 841 F. 2d. 400 (D.C. Cir. 1988), citing United States v. 
General Motors Corp., 574 F. Supp. 1047, 1050 (D.D.C. 1983).
    Ford has stated that it did not tell us of the campaigns in other 
countries referred to above because it did not believe that it was 
required to. Until the TREAD Act, a manufacturer's self-reporting 
obligations, other than defect and noncompliance notifications, 
generally were established by 49 U.S.C. 30166(f), Providing copies of 
communications about defects and noncompliance, as implemented by 49 
CFR 573.8, Notices, bulletins, and other communications. Section 
30166(f) provides that:

    A manufacturer shall give [NHTSA] a true or representative copy 
of each communication to the manufacturer's dealers or to owners or 
purchasers of a motor vehicle or replacement equipment produced by 
the manufacturer about a defect or noncompliance with a motor 
vehicle safety standard * * * in a vehicle or equipment that is sold 
or serviced.
    To implement Section 30166(f), NHTSA adopted 49 CFR 573.8, which 
specifies that:
    Each manufacturer shall furnish to the NHTSA a copy of all 
notices, bulletins, and other communications (including those 
transmitted by computer, telefax or other electronic means, and 
including warranty and policy extension communiques and product 
improvement bulletins), other than those required to be submitted by 
Sec. 573.5(c)(9), sent to more than one manufacturer, distributor, 
dealer, lessor, lessee, or purchaser, regarding any defect in its 
vehicles or items of equipment (including any failure or malfunction 
beyond normal deterioration in use, or any failure of performance, 
or flaw or unintended deviation from design specifications), whether 
or not such defect is safety related. Copies shall be in readable 
form and shall be submitted monthly, not more than five (5) working 
days after the end of each month.\1\

    \1\ The notices, bulletins, and other communications required to 
be submitted by Sec. 573.5(c)(9), which Sec. 573.8 excludes, are 
those that relate directly to a noncompliance or a safety-related 
defect that a manufacturer has determined to exist and has reported 
to NHTSA.
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    This regulation does not specifically address manufacturer 
communications about defects occurring in vehicles and equipment in use 
outside the United States.

C. The TREAD Act (P.L. 106-414).

    The Transportation Recall Enhancement, Accountability, and 
Documentation (TREAD) Act (Pub. L. 106-414) was enacted on November 1, 
2000. An underlying House Report (H. Rpt. 106-954) observed, at p. 7:

    First, it is clear that the data available to NHTSA regarding 
the problems with the Firestone tires was insufficient. While 
testimony showed that the agency had received some complaints about 
the tires, both from consumers and from an automobile insurance 
company, they did not receive data about Ford's foreign recall 
actions * * * The Committee believes that the provisions of this 
legislation are an initial step toward correcting these problems.

    The remedial provisions of the legislation that the Committee 
referred to became Section 3(a) of the TREAD Act. Section 3(a) amended 
49 U.S.C. 30166 to add a new subsection (l) which reads as follows:
    (l) REPORTING OF DEFECTS IN MOTOR VEHICLES AND PRODUCTS IN 
FOREIGN COUNTRIES--
    (1) REPORTING OF DEFECTS, MANUFACTURER DETERMINATION.--Not later 
than 5 working days after determining to conduct a safety recall or 
other safety campaign in a foreign country on a motor vehicle or 
motor vehicle equipment that is identical or substantially similar 
to a motor vehicle or motor vehicle equipment offered for sale in 
the United States, the manufacturer shall report the determination 
to the Secretary.
    (2) REPORTING OF DEFECTS, FOREIGN GOVERNMENT DETERMINATION--Not 
later than 5 working days after receiving notification that the 
government of a foreign country has determined that a safety recall 
or other safety campaign must be conducted in the foreign country on 
a motor vehicle or motor vehicle equipment that is identical or 
substantially similar to a motor vehicle or motor vehicle equipment 
offered for sale in the United States, the manufacturer shall report 
the determination to the Secretary.
    (3) REPORTING REQUIREMENTS.--The Secretary shall prescribe the 
contents of the notification required by this subsection.

    The obligation to report under the first two paragraphs above was 
effective on the day that the TREAD Act was signed into law, November 
1, 2000. Since that date, NHTSA has, in fact, received some 
notifications of foreign safety campaigns being conducted by vehicle 
and equipment manufacturers. The content, format, and scope of these 
reports have varied, which supports the need for a regulation that 
defines and standardizes the information provided, as required by the 
third subparagraph. For example, Ford is conducting a ``field action'' 
in Thailand, Malaysia, and Fiji to replace faulty brake caliper bodies 
on certain Mazda Fighter and Ford Ranger J97 vehicles. Ford advises 
that ``This model is not marketed in the United States.'' This leaves 
unanswered the question whether the model is substantially similar to 
one marketed in the United States, or whether the brake caliper bodies 
are identical or substantially similar to brake caliper bodies on Ford/
Mazda vehicles that are sold in the United States. Firestone is 
conducting a ``Customer Satisfaction Program'' in the Middle East 
covering certain tires manufactured in its Wilson, North Carolina plant 
that were original equipment on 589 vehicles manufactured by Ford, 
specifically model year 1998 and 1999 Ford Taurus and Mercury Sable 
sedans and station wagons. Its letter to us does not state whether 
similar tires were used on vehicles in the United States.
    Because manufacturers have been required to report determinations 
of foreign campaigns to us since November 1, 2000, regardless whether 
NHTSA has prescribed the contents of the notification, we are proposing 
that manufacturers provide us with reports of all relevant 
determinations between November 1, 2000, and the effective date of the 
final rule. This would assure that we receive information on recalls 
and campaigns that include the information specified in the final rule, 
pertaining to substantially similar vehicles and equipment within the 
meaning specified in the final rule. Reports would be due within 30 
days of the effective date of the final rule. However, the requirement 
would not require resubmission of information pertaining to foreign 
campaigns that a manufacturer had reported to NHTSA between November 1, 
2000, and the effective date of the final rule.
    We note that in Section 3(b) of the TREAD Act, Congress adopted

[[Page 51909]]

provisions requiring manufacturers of vehicles and equipment to submit 
a wide variety of information to NHTSA that could provide an ``early 
warning'' of defects or noncompliances in their products (49 U.S.C. 
30166(m)). NHTSA issued an Advance Notice of Proposed Rulemaking 
(ANPRM) on January 22, 2001 (66 FR 6532) regarding these ``early 
warning'' provisions. Because some of the terms and elements of those 
requirements are applicable or relevant to Section 30166(l), we have 
considered the comments submitted in response to that ANPRM in 
developing this notice.

II. Scope and Terms

A. Manufacturer

    As defined before the enactment of the TREAD Act, a manufacturer is 
``a person manufacturing or assembling motor vehicles or motor vehicle 
equipment, or importing motor vehicles or motor vehicle equipment for 
resale.'' 49 U.S.C. 30102(a)(5). The Safety Act requires foreign 
manufacturers offering vehicles or vehicle equipment for import to 
designate an agent on whom service may be made (49 U.S.C. 30164).
    In its defect and noncompliance reporting regulations, the agency 
has addressed the question of who may file a defect or noncompliance 
report related to an imported item. Under 49 CFR 573.3(b), in the case 
of vehicles or equipment imported into the United States, a defect or 
noncompliance report may be filed by either the fabricating 
manufacturer or the importer of the vehicle or equipment. Defect and 
noncompliance reports covering vehicles manufactured outside of the 
United States have generally been submitted by the importer of the 
vehicles, which is usually a subsidiary of a foreign parent corporation 
(e.g., defects in vehicles made in Japan by Honda Motor Co. Ltd. were 
reported by American Honda Motor Co., Inc., even if the vehicle was 
certified by Honda Motor Co. Ltd).
    At the time that the TREAD Act was under consideration in the 
Congress, the Alliance of Automobile Manufacturers (the Alliance), 
whose members are BMW, DaimlerChrysler, Fiat, Ford, General Motors, 
Isuzu, Mazda, Mitsubishi, Nissan, Porsche, Toyota, Volvo and 
Volkswagen, noted that information about safety recalls that are 
conducted in foreign countries on automobiles or items of automotive 
equipment that are also offered for sale in the United States would be 
useful to NHTSA. The Alliance stated on behalf of its members that they 
will voluntarily report to NHTSA their safety recalls and other safety 
campaigns that are conducted in a foreign country on a vehicle or 
component part that is also offered for sale in the United States. See 
letter from Josephine Cooper to NHTSA Administrator Sue Bailey, dated 
September 15, 2000, which has been placed in the docket. 
Notwithstanding this voluntary action, Congress imposed mandatory 
reporting requirements in Section 30166(l).
    It is clear on its face that Section 30166(l) has extraterritorial 
effect. In its comments on the early warning ANPRM, the Alliance 
recognized that the TREAD Act was clearly written by Congress to apply 
to persons and activities outside of the United States, and it is 
therefore a clear assertion of extraterritorial jurisdiction by the 
United States (Alliance comment, Attachment 10, p. 9). The Alliance 
went on to state that the early warning rule could reasonably require 
reports from foreign companies manufacturing vehicles for sale in the 
United States as long as the required reports relate to issues that 
could arise in those vehicles (p. 11).
    This leaves the question of who must and who may report. In view of 
the definition of manufacturer and in further view of the specific 
provisions of Section 30166(l), we believe that the agency has 
authority to require a report (1) from the foreign entity that has 
received notice from or provided notice to a foreign government; (2) 
from the fabricating manufacturer; and (3) from the importer of the 
identical or substantially similar vehicle or equipment. However, we 
are proposing to apply the reporting requirements for foreign campaigns 
in the same manner as we currently utilize for reporting noncompliance 
and defect determinations to NHTSA under Part 573. Thus, under today's 
proposal, the report may be filed by either the fabricating 
manufacturer or by the importer of the vehicle (see section 573.3(b)).
    A multinational corporation must ensure that all relevant campaign 
information throughout the world is made available to whatever entity 
makes those reports so that its designated entity timely provides the 
information to NHTSA. Thus, it would be a violation of law for a 
foreign fabricating manufacturer to designate its U.S. importer as its 
reporting entity, and then fail to assure that it is provided with 
information about relevant foreign recalls and campaigns. All 
manufacturers will have to adopt and implement practices to assure the 
proper flow of information regarding relevant foreign recalls and 
campaigns.

B. Safety Recall or Other Safety Campaign

1. Determination by a Manufacturer (Section 30166(l)(1))
    This paragraph requires that a manufacturer of motor vehicles or 
motor vehicle equipment report to us when it has decided to conduct ``a 
safety recall or other safety campaign'' outside the United States that 
involves vehicles or equipment that are identical or substantially 
similar to products sold in the United States. Neither 49 U.S.C. 30102 
nor the TREAD Act defines ``safety recall or other safety campaign.'' 
Further, NHTSA does not have comprehensive information about the laws 
of jurisdictions outside the United States relating to recalls of motor 
vehicles and motor vehicle equipment, and thus does not have detailed 
knowledge of the terminology or specific practices used in foreign 
countries to address potential safety problems. For example, some 
countries may not differentiate defects from noncompliances with safety 
standards or with safety guidelines. Accordingly, we cannot presume 
that a procedure abroad will follow that specified in 49 U.S.C. 30118-
30120, e.g., a notification to a government agency within 5 days after 
the manufacturer determines that its product contains a safety-related 
defect or noncompliance, followed by notification to owners, 
purchasers, and dealers containing an offer to remedy through repair, 
repurchase, or replacement.
    In the United States, the elements of a ``safety recall'' are 
established by 49 U.S.C. 30118-30120. In general, these elements are 
(1) a determination by a manufacturer of motor vehicles or motor 
vehicle equipment, or by NHTSA, that a safety-related defect or 
noncompliance exists, (2) notification by the manufacturer to NHTSA 
within a reasonable time (defined in 49 CFR 573.5(b) to be within 5 
business days of its determination), and (3) notification by the 
manufacturer to owners, purchasers, and dealers advising of the 
determination and potential safety consequences, and offering a free 
remedy.
    We propose to characterize a ``safety recall'' abroad as involving 
a determination by a manufacturer or one of its affiliates or 
subsidiaries (or a foreign government) that there is a problem with 
specific motor vehicles or motor vehicle equipment that relates to 
motor vehicle safety (e.g., a defect or noncompliance with a local 
safety standard or governmental guideline), followed by an offer by the 
manufacturer to provide remedial

[[Page 51910]]

action. The offer could be made either by notifying the owner directly 
or through notifying dealers, who would then contact owners. Such 
safety recalls would have to be reported, whether or not the problem at 
issue would constitute a safety-related defect or noncompliance under 
U.S. law.
    The TREAD Act also does not define ``other safety campaign.'' We 
would distinguish an ``other safety campaign'' from a ``safety recall'' 
in two ways. First, a manufacturer would not necessarily make any 
acknowledgement, express or otherwise, that a safety problem existed. 
Second, the ``campaign'' would not necessarily involve the provision of 
a remedy. It could include such actions as an extended warranty or 
simply a warning to owners or dealers about a possible problem that 
could relate to safety. It would not include ad hoc good will repairs 
or replacements by local dealers for individual owners. Thus, a 
``safety campaign'' would be defined as an action in which a 
manufacturer communicates with owners and/or dealers with respect to 
conditions under which a vehicle or equipment item should be operated, 
repaired, or replaced, that relate to safety. As used above, the words 
``relate to'' would have the same broad meaning they do in 49 U.S.C. 
30118(b) and (c). See, e.g., Morales v. Trans World Airlines, Inc., 504 
U.S.C. 374, 383 (1992).
2. Determination by a Foreign Government (Section 30166(l)(2))
    We are proposing that a manufacturer be required to report to NHTSA 
whenever it has been notified that the government of a foreign country 
(which includes a political subdivision of such a country), has 
determined that it should or must conduct a safety recall or other 
safety campaign involving covered vehicles or equipment, whether or not 
the subject of the campaign would be a safety-related defect or 
noncompliance under U.S. law. For example, if the foreign government 
moves to prohibit further sales of a vehicle for reasons relating to 
motor vehicle safety, we would consider that action to be the 
equivalent of a ``safety recall.''
    There may be occasions when the manufacturer will contest the 
foreign government's action. In the United States, NHTSA may make an 
initial decision that a defect or noncompliance exists, affording the 
manufacturer and public an opportunity to present data, views and 
arguments. Then NHTSA may make a final decision that a defect or 
noncompliance exists and order a recall (49 U.S.C. 30118). NHTSA may 
also order a manufacturer to provide a provisional notification if a 
civil action has been brought by NHTSA under 49 U.S.C. 30163 if the 
manufacturer fails to follow NHTSA's order to recall (49 U.S.C. 30121). 
We are not fully conversant with the administrative practices of 
countries other than the United States, but we include in 
``determination'' any determination by a foreign government that a 
safety recall or other safety campaign should be conducted, regardless 
of whether the determination is final, initial, or conditional.
    We are interested in receiving comments on the vehicle and 
equipment safety recall laws and practices of countries other than the 
United States as they relate to implementation of Section 30166(l)(2).
3. Exceptions for Identical Recalls or Campaigns Conducted in the 
United States
    We recognize that manufacturers may conduct identical recalls in 
the U.S. and abroad. If a manufacturer is conducting a safety recall 
abroad, or has been ordered by a foreign government to conduct a safety 
recall, it would not be required to report such a recall to NHTSA if it 
has filed a Part 573 report covering the same safety defect in 
substantially similar products offered for sale or in use in the United 
States, provided that the manufacturer's remedy in the foreign recall 
is identical to that provided in the U.S. recall, and the scope of the 
foreign recall is not broader than the U.S. recall.

C. Identical or Substantially Similar Motor Vehicles or Motor Vehicle 
Equipment

    The obligation to report foreign campaigns to NHTSA applies to 
recalls and campaigns involving vehicles or equipment items that are 
``identical or substantially similar to a motor vehicle or motor 
vehicle equipment offered for sale in the United States.'' A parallel 
reporting obligation also exists under the early warning reporting 
provisions (Section 30166(m)(3)(C)), under which manufacturers of 
vehicles or equipment must report:

all incidents of which the manufacturer receives actual notice which 
involve fatalities or serious injuries which are alleged or proven 
to have been caused by a possible defect in such manufacturer's 
motor vehicle or motor vehicle equipment * * * in a foreign country 
when the possible defect is in a motor vehicle or motor vehicle 
equipment that is identical or substantially similar to a motor 
vehicle or motor vehicle equipment offered for sale in the United 
States.

    In response to the ANPRM on the early warning reporting 
requirements, we received comments on the meaning and scope of this 
phrase. These include comments from the Automotive Occupant Restraint 
Council (the Council), TRW Automotive (TRW), Truck Manufacturers 
Association (TMA), Volvo of North America, Inc. (Volvo), ArvinMeritor 
USA, International Truck and Engine Corporation (International Truck), 
Mack Truck, Breed Technologies (Breed), DaimlerChrysler Corporation, 
Harley-Davidson Motor Corporation, Nissan North America (Nissan), the 
Truck Trailer Manufacturers Association, the law firm of Arent Fox on 
behalf of the Motor and Equipment Manufacturers Association and the 
Original Equipment Suppliers Association (the Associations), Delphi 
Automotive Systems (Delphi), Ford, Osram Sylvania, AmSafe, and the 
Alliance.
1. The Meaning of Identical
    The TREAD Act early warning ANPRM asked:
    ``1. Is the word `identical' understood internationally, or do we 
need to define it? If so, how?''
    There was a wide range of comments, some of which took a narrow 
view. In TRW's opinion, the word ``identical'' is probably not 
understood internationally, ``or even nationally.'' A possible 
definition could be ``the exact same design or part number used in 
different applications.'' ArvinMeritor finds the word ``identical'' to 
be ambiguous when applied to foreign products. A part may appear to be 
identical but differ in significant ways. For example, manufacturers 
may make subtle design variations to meet regional specifications, 
applications, or exposure requirements. Constituent components are 
frequently sourced from local suppliers and while they may appear 
identical, they may vary ``somewhat in certain characteristics.'' This 
commenter prefers to describe ``near-like components as `substantially 
similar' and leave the distinction of defining which components are 
`substantially similar' to the judgment of the manufacturer.'' 
International Truck cautions that ``to the extent the term `identical' 
may be of use, it should not be applied to vehicles, but should be 
limited to specific components manufactured by the same entity.'' Breed 
argues that the focus should not be on ``identical or substantially 
similar vehicles or equipment, but rather on identical or substantially 
similar defects'' (emphasis in original). Alliance submits that 
``identical'' is understood and does not have to be defined for

[[Page 51911]]

TREAD Act rulemaking purposes. Delphi believes that the word must be 
understood in the context in which it is used. It noted that two bolts 
could have the identical part number but be used in different 
applications of lesser and greater safety consequence.
    After reviewing these comments, NHTSA has decided to propose a rule 
that does not contain a separate definition of ``identical,'' because 
we believe that one is not needed. If there were good faith doubts 
whether a vehicle or equipment item is exactly ``identical'' to one 
that is sold in the United States, it is likely that the vehicle or 
equipment would be ``substantially similar'' to the U.S. vehicle or 
equipment, and therefore be covered by the reporting requirement in any 
case.
2. Substantially Similar Motor Vehicles
    The phrase ``substantially similar'' also appears in 49 U.S.C. 
30141(a)(1)(A), which was added to the Safety Act by the Imported 
Vehicle Safety Compliance Act of 1988. This section provides that a 
Registered Importer (RI) may import a motor vehicle not originally 
manufactured to comply with the Federal motor vehicle safety standards 
(FMVSS) if NHTSA decides that the vehicle is ``substantially similar to 
a motor vehicle of the same model year that was certified for sale in 
the United States.'' \2\ Except for vehicles of Canadian origin, which 
the agency decided were substantially similar to American counterparts, 
virtually all these decisions have been made pursuant to petitions by 
RIs. A list of non-U.S.-certified vehicles that are eligible for 
importation under this program is published as an appendix following 49 
CFR part 593, and is updated each fiscal year to reflect additional 
eligibility decisions. We have not found it necessary to define 
``substantially similar'' under Section 30141 because an eligible 
foreign vehicle must have as an analogue ``a motor vehicle of the same 
model year that was certified for sale in the United States.'' Thus, 
the ``substantially similar'' foreign vehicles on the Part 593 list are 
easily identifiable without the need for a definition.
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    \2\ The agency must also decide that the vehicle is capable of 
being readily altered to comply with all applicable FMVSS. This 
authority extends only to motor vehicles and not to motor vehicle 
equipment.
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    We have tentatively decided that any vehicle model that appears in 
the Part 593 list would be ``substantially similar'' to a U.S. vehicle 
for purposes of Sections 30166(l) and (m). However, there are 
limitations to the usefulness of this list with reference to 
implementation of the foreign defect and early warning reporting 
requirements. The list does not constitute the entire universe of 
``substantially similar'' motor vehicles subject to these requirements 
because it includes only vehicles for which eligibility petitions have 
been filed and granted. Thus, we need to develop a definition of the 
term ``substantially similar'' that is not wholly dependent on whether 
a RI has sought to import a particular vehicle.
    From an operational perspective, we believe that the TREAD Act 
requirements warrant the development of a definition of ``substantially 
similar'' that would apply to the foreign recall and campaign 
requirements as well as the foreign early warning reporting 
requirements.
    In the early warning ANPRM, we asked:
    ``2. How should a manufacturer determine if a vehicle sold in a 
foreign country is `substantially similar' to vehicles sold in the 
United States? Is it enough that the vehicles share the same platform 
and/or engine family? If not, why not?''
    Some manufacturers producing vehicles for sale domestically 
indicated that that there was little or no difference in the vehicles 
that they produce for sale abroad. Harley-Davidson said that it ``sells 
substantially the same product lines in every nation in which it does 
business,'' leaving unsaid what, if any, features are changed to comply 
with local laws or customer tastes. DaimlerChrysler said that most of 
its vehicles sold abroad ``are substantially similar to vehicles sold 
in the United States (with some exceptions).'' No other vehicle 
manufacturer asserted that the vehicles it produces in the United 
States for sale abroad are not substantially similar to models it 
produces and sells in the United States. These comments indicate that, 
in general, vehicles manufactured in the United States for sale abroad 
are likely to be substantially similar to vehicles manufactured and 
sold domestically.
    We asked if it would be appropriate to consider vehicles 
``substantially similar'' if they shared the same platform and/or 
engine family. Nissan thought it more accurate to say that a 
substantially similar motor vehicle is ``a motor vehicle in substantial 
compliance with the federal safety standards that has the same platform 
and body shell, same engine displacement, and an engine within the same 
engine family.'' It believes that this definition is consistent with 
the agency's determinations in the admission of gray market vehicles 
where ``decisions turn on whether the petitioner can demonstrate that 
the foreign vehicle is substantially similar to its U.S. counterpart in 
the way that the two vehicles comply with the federal safety 
standards.'' However, this is not an accurate statement of the Part 593 
determination process. The issue before NHTSA in that context is 
whether a candidate vehicle ``is capable of being readily altered to 
comply'' with the FMVSS (Section 30141(a)(1)(A)(iv)). Precisely because 
the candidate vehicle does not comply with the FMVSS, we cannot say 
that it is ``substantially similar to its U.S. counterpart in the way 
that [it complies].'' Further, we believe that the phrase ``in 
substantial compliance with the federal safety standards'' is too vague 
to be used for definitional purposes. Finally, the agency considers 
``same engine displacement'' to be too restrictive, in that some 
foreign models are essentially identical to their U.S. counterparts in 
all relevant respects other than engine family and displacement.
    The Alliance stated that the Part 593 list provides a ``useful 
starting point.'' The Alliance further suggested that important 
criteria for a ``substantially similar'' determination would be ``same 
platform and body shell, same engine family, same engine displacement, 
compliance'' or ``substantial compliance'' with ``specified FMVSS 
requirements such as S105/135, 203/204, 208 (except the automatic 
protection provisions), 209, 214, and 301.'' We note again our view 
that the phrase ``substantial compliance'' with the FMVSS is too vague 
and too subjective to serve as a definitional criterion, and that 
requiring the same engine family and displacement would be too 
restrictive.
    The Alliance also recommended that each vehicle manufacturer submit 
to NHTSA annually, at the beginning of each model year, a list of the 
vehicles that the manufacturer intends to sell abroad that the 
manufacturer has determined are ``substantially similar'' to a vehicle 
certified for sale in the United States. Ford concurred with this 
recommendation. We have reviewed this suggestion and believe that it 
has merit, in that it could help both manufacturers and NHTSA in 
determining whether foreign recalls and other campaigns need to be 
reported. We note, however, that to the extent that such a list is 
based on whether vehicles use a common platform, as advanced by the 
Alliance, such a list would not be determinative, since our proposed 
criteria would go beyond common platforms. However, we are proposing

[[Page 51912]]

that manufacturers identify not later than each November 1 of each year 
any vehicles they sell abroad, or plan to sell abroad, in the next year 
that they believe to be substantially similar to vehicles sold or 
offered for sale in the United States or planned for sale in the U.S. 
during the next year.
    Several commenters believe that NHTSA should take a different 
approach with respect to medium and heavy duty trucks from that applied 
to lighter vehicles.\3\ TMA stated that medium and heavy duty truck 
manufacturers produce highly customized products for which buyers ``can 
specify nearly every major component on the vehicle.'' These 
manufacturers are ``assemblers and systems integrators,'' employing the 
components specified by the end user, whether the end user is in the 
United States or a foreign country. Under this view, unless they are 
part of a fleet order, medium and heavy duty trucks sold in the U.S. 
and in foreign countries might rarely be identical or substantially 
similar to each other. While the TMA was of the view that generally 
trucks would not be substantially similar, it expected reporting of 
foreign recalls involving components substantially similar to those in 
the U.S. Volvo said that ``rarely will there be a large group of heavy 
trucks that are substantially similar in every way.'' We believe that 
these comments miss the point, since the statute is designed to provide 
a broad range of relevant information to NHTSA not just information 
about vehicles that are ``substantially similar in every way.''
---------------------------------------------------------------------------

    \3\ These commenters did not explain what they mean by ``heavy 
truck.'' The truck industry has adopted terminology of Classes 
numbered 1 through 8 that distinguish vehicles of different gross 
vehicle weight ratings (GVWRs). NHTSA has never adopted this 
terminology for regulatory purposes but does use GVWR (expressed in 
either kg or lbs, depending on the FMVSS) to establish differing 
requirements within some of the FMVSS. For example, Standard No. 105 
does not apply to vehicles with a GVWR of 3,500 kg or more. Standard 
No. 121 does not apply to trailers with a GVWR of more than 120,000 
lbs. Standard No. 201 does not apply to buses with a GVWR or more 
than 3,860 kg. Standard No. 208 establishes different requirements 
for vehicles with a GVWR between 8,500 and 10,000 lbs.
---------------------------------------------------------------------------

    Volvo and others also made similarly restrictive arguments about 
regulatory environment and parts application. Volvo argued that, 
``while the heavy trucks in each country may have similar parts, the 
application of the parts in the differing regulatory environments make 
comparison particularly complex and potentially misleading.'' In 
Europe, according to Volvo, the regulatory scheme for brakes on heavy 
trucks ``focuses on the balance across the vehicle when braking,'' 
while NHTSA focuses on stopping distance. ArvinMeritor noted that ``a 
certain type and model of brake may be used through a variety of 
vehicle models,'' and, for heavy trucks, the ``component may be used 
through a range of vehicle ratings and chassis models.'' However, 
ArvinMeritor warned that ``a component may share some attributes that 
make it ``substantially similar to a [sic] one family of parts but have 
other attributes that would make it `substantially dissimilar' from 
that same family.'' It used as an example a heavy duty foundation brake 
used with a standard brake drum up to a prescribed axle weight rating 
or application severity, `at which a heavier brake drum may be 
recommended.' In this instance, `the foundation brake would remain 
`substantially similar' throughout the range of use whereas the 
associated brake drums would be `substantially dissimilar' though they 
could be installed on similarly-appearing vehicles.' Mack Truck pointed 
out that ``vehicles sold in foreign countries often incorporate systems 
or components of local origin which are not comparable to components or 
systems incorporated in the manufacturer's vehicles sold in the United 
States and Canada.''
    After our review of the comments in response to the ANPRM and our 
own assessment, we are proposing that a vehicle sold or operated in a 
foreign country would be viewed as ``substantially similar'' to one 
offered for sale in the United States if it meets one or more of a 
number of tests. To begin, we are proposing to consider all motor 
vehicles manufactured to comply with the Canadian Motor Vehicle Safety 
Standards, and all motor vehicles determined to be eligible for 
importation pursuant to 49 CFR part 593, as ``substantially similar'' 
(if not identical) to motor vehicles sold in the United States. As for 
vehicles not so identified, we are further proposing that all vehicles 
manufactured in the United States for sale in other countries be 
considered as substantially similar (if not identical). This 
presupposes that some modifications are made to comply with foreign 
standards or for other purposes. The Ford Explorers manufactured in the 
U.S. and sold in Saudi Arabia would be an example. In addition, we 
would include vehicles assembled in foreign countries that are 
counterparts of United States models. An example would be Ford 
Explorers assembled outside the United States, such as those assembled 
in Venezuela. We would appreciate comments on whether this latter class 
of vehicles needs to be defined with greater specificity. We caution 
commenters that in our view the term ``substantially similar'' sweeps 
with a broad brush and is not to be defeated by persons bent on finding 
or inventing distinctions to evade reporting.
    As a practical matter, the vehicles remaining are those that have 
been manufactured outside the United States but which do not appear on 
the part 593 eligibility list. These remaining vehicles sold outside 
the U.S. may or may not be substantially similar to those sold in the 
U.S. With respect to recalls or campaigns covering these vehicles, we 
begin with the premise that, although the vehicle is usually the 
subject of a recall or safety campaign, the vehicle in its entirety is 
not defective; instead, a vehicle will be recalled because of a defect 
or problem in one or more of its components or systems that may or may 
not be used in other vehicles built by the manufacturer.
    This raises two related questions: (1) Whether we should require a 
manufacturer to report a foreign campaign involving a vehicle generally 
substantially similar to one offered for sale in the United States if 
the defective component or system is different (e.g., substantially 
dissimilar in design or manufacture) from the component or system used 
on or installed in the vehicles sold in the U.S.; and (2) whether we 
should require a manufacturer to report a foreign campaign in which the 
defective component or system is substantially similar to the component 
or system the manufacturer used on a vehicle sold in the U.S., but the 
vehicle itself is on a different platform or would not otherwise be 
considered similar.

[[Page 51913]]

    We have tentatively decided not to require reporting under the 
first situation because the vehicles are not substantially similar in a 
material respect that is relevant to section 30166(l); i.e., the defect 
is unlikely to exist or occur in a vehicle manufactured for or sold in 
the U.S. market if it does not have the problematic component or system 
used in vehicles covered by a foreign campaign. We have tentatively 
decided to require reporting under the second situation because the 
defect may exist or occur in a vehicle manufactured for or sold in the 
U.S. market, even if such a vehicle were built on a different platform.
    For example, assume that a seat belt buckle assembly, used in many 
models of vehicles, cracks and will not hold under force. Assume that a 
manufacturer recalls a small vehicle on a platform not sold in the 
United States that contains the buckle. Under today's proposal, if an 
identical or substantially similar buckle assembly is used on a vehicle 
built by that manufacturer that was or is offered for sale in the 
United States, the manufacturer of the vehicle would have to report the 
campaign to NHTSA.
    We are aware that some manufacturers have argued that, in view of 
vehicle integration issues, a defective component or system on a 
foreign vehicle may not be defective if installed on a different 
vehicle platform sold in the United States. For example, it has been 
argued that a system on a United States model would encounter a less 
demanding operating environment than in some foreign countries. This is 
not dispositive. A report of a foreign recall or campaign is not 
equivalent to an admission that a safety defect exists in the U.S. or 
that a recall is needed in this country. Rather, the purpose of the 
report is to allow NHTSA to consider it, often along with other 
information, in deciding whether to open a defect investigation. The 
manufacturer could indicate in a communication to the agency the 
reasons why it believes that the problem covered by the foreign 
campaign is unlikely to occur in the United States.
    In view of the above concerns, we are proposing an additional 
alternative test of whether a vehicle is substantially similar for 
reporting purposes. We would deem foreign and U.S. motor vehicles as 
``substantially similar'' for reporting purposes if they both contain 
the component or system that gave rise or contributed to a safety 
recall or other safety campaign in a foreign country, without regard to 
the vehicle platform on which the components or systems are installed. 
Moreover, the fact that part numbers may be different in the U.S. and 
in foreign countries or on different models would not be dispositive of 
whether parts are identical. In addition, we specifically request 
comment on a formulation based on the concept that the foreign and U.S. 
vehicles would be substantially similar for reporting under section 
30166(l) if they shared a platform and/or a body shell.
    We request comments on the appropriate formulation of test(s) for 
substantially similar motor vehicles and, depending on the comments, 
may make adjustments to the criteria for characterizing a vehicle as 
substantially similar.
3. Substantially Similar Motor Vehicle Equipment
    Section 30166(l) also requires reports of foreign recalls and 
safety campaigns pertaining to motor vehicle equipment. Motor vehicle 
equipment comprises two categories: original equipment and replacement 
equipment. ``Motor vehicle equipment'' is defined by 49 U.S.C. 
30102(a)(7). For purposes of the defect and noncompliance provisions of 
the Safety Act, the terms ``original equipment'' and ``replacement 
equipment'' are defined in 49 U.S.C. 30102(b)(1)(C) and (D). Pursuant 
to 49 U.S.C. 30102(b)(2), NHTSA has the authority to prescribe 
regulations changing the relevant definitions in section 30102(b)(1). 
The agency has implemented this authority in 49 CFR 579.4(a) and (b).
    Sec. 579.4(a) defines ``original equipment'' as ``an item of motor 
vehicle equipment (other than a tire) which was installed in or on a 
motor vehicle at the time of its delivery to the first purchaser if--
    (1) The item of equipment was installed on or in the motor vehicle 
at the time of its delivery to a dealer or distributor for 
distribution; or
    (2) The item of equipment was installed by the dealer or 
distributor with the express authorization of the motor vehicle 
manufacturer.''
    Sec. 579.4(b) defines replacement equipment as:
    ``(1) Motor vehicle equipment other than original equipment as 
defined in [Sec. 579.4(a)]; and
    (2) Tires.''
    Recalls and other safety campaigns involving problems with original 
equipment (OE) components or systems abroad, as here in the U.S., are 
likely to be conducted by the manufacturer of the vehicle in which they 
were installed (although under certain circumstances an OE manufacturer 
is required to notify NHTSA of the defect. See 49 CFR 573.5(e) and 
(f)). Nevertheless, in those instances in which an OE manufacturer 
decides to conduct a recall or safety campaign, it would have the duty 
to report that campaign to us. Similarly, if a foreign government 
notified an OE manufacturer that it was required to conduct a safety 
recall or other campaign, the OE manufacturer would be obligated to 
provide notice to us under section 30166(l)(2). However, under today's 
proposal, if all of the vehicle manufacturers using the item in 
question timely provide us with a report of a foreign safety recall or 
other safety campaign under section 30166(l)(1), the OE component 
manufacturer would not be obligated to provide notice under this 
provision.
    Recalls and other safety campaigns involving problems with 
replacement equipment, abroad or in the United States, ordinarily would 
be conducted by the replacement equipment manufacturer. Examples of 
replacement equipment recalls conducted in the United States are those 
involving defects and noncompliances in tires, child restraints, 
lighting equipment, brake hoses and brake fluids.
    The early warning ANPRM asked ``how should `substantially similar' 
motor vehicle equipment be defined? * * * Other than tires and off-
vehicle equipment (such as child seats), should the definition be 
restricted to replacement equipment for substantially similar motor 
vehicles?'' A related question is what replacement equipment would be 
covered. We received only a limited amount of information in response, 
which provided some insights into concerns of manufacturers of some 
specific types of equipment.
    One common item of replacement equipment is light sources. Many of 
these items, if not identical, are substantially similar, regardless of 
where in the world they are sold. Osram Sylvania, in fact, commented in 
response to the early warning ANPRM that ``[m]ost of the Automotive 
Lighting Products sold worldwide are similar to the products sold in 
the United States.''
    With regard to restraints, the Automotive Occupants Restraint 
Council (Council) and Breed observed that there are two situations when 
it would be reasonable to impose a reporting requirement on suppliers. 
The first situation would address instances where a vehicle is recalled 
overseas that is not sold in the U.S. Assuming that the vehicle 
manufacturer would not have a reporting obligation, the Council 
recognized that the recall could involve restraint systems that are 
substantially similar to those sold in the U.S., but

[[Page 51914]]

cautioned that the supplier could report only after it learns that a 
recall has been initiated. The second situation would be if a supplier 
discovers a potential safety defect in a production run of parts. These 
comments recognize that restraint systems such as seat belts and air 
bags could be substantially similar in a variety of different vehicles. 
We request comments on the matters raised by the Council and Breed (See 
Docket Entries Nos. 6 and 21), particularly where the vehicle 
manufacturer would not have a reporting obligation.
    As with motor vehicles, we are proposing to deem motor vehicle 
equipment sold or in use outside the United States to be identical or 
substantially similar to equipment sold or offered for sale in the 
United States if such equipment and the equipment sold or offered for 
sale in the United States are the same component or system, or both 
contain the component or system that gave rise or contributed to a 
safety recall or other safety campaign in a foreign country, without 
regard to part number.
    We would regard foreign child restraint systems as substantially 
similar (if not identical) to U.S. counterparts if they incorporate one 
or more parts that are used in models of child restraints offered for 
sale in the U.S., regardless of whether the restraints are designed for 
children of different sizes than those sold in the U.S. and regardless 
of whether they share the same model number or name. For example, if 
buckles, tether hooks, anchorages, or straps are common throughout a 
manufacturer's range of models, the child restraints would be 
substantially similar even though the buckles, hooks, anchorages, or 
straps might be used on a variety of add-on, backless, belt 
positioning, rear-facing or booster seats produced by the manufacturer. 
However, a manufacturer would not have to report a foreign campaign on 
its child seats if the problem that led to the foreign campaign 
involved a component or part that was not used on any child restraint 
sold or offered for sale in the U.S.
    With regard to tires, under today's proposal, foreign recalls and 
campaigns involving tires of the same model name and size designation 
would have to be reported to us regardless of brand name, manufacturing 
plant, or mold. We recognize that many tire manufacturers use the same 
model name for tires that may be substantially different from one 
another, such as Goodyear Wrangler tires. However, the agency needs to 
receive information about recalls of tires with common model names so 
that we can assure ourselves whether tires covered are truly similar or 
different from those sold in the U.S. Of course, the manufacturer can 
accompany the submission with a discussion of the reasons why it 
believes the tires are not substantially similar to U.S. tires.
    It is also possible that a manufacturer could use a different model 
name or names in foreign countries for tires identical to those sold in 
the U.S. Recalls and other campaigns involving tires that would also 
have to be reported to us under this rule. We request comments on 
whether we have proposed an appropriate basis for identifying similar 
foreign tires.
    In the early warning ANPRM, we asked whether the definition of 
substantially similar equipment should be restricted to replacement 
equipment to be used on substantially similar vehicles. International 
Truck stated that ``the definition should not be restricted.'' Others 
focused on application. In an example given by Delphi, a bolt with a 
given part number may perform in substantially dissimilar ways 
depending on how and where it is used, and use of the bolt in a seat 
belt anchorage requires a higher standard than its use in a less 
critical safety application. Equipment suppliers noted that often 
conditions under which the part operates are beyond the suppliers' 
control and can only be judged by the vehicle manufacturer. Delphi 
added, on the other hand, that ``dissimilar components can be 
substantially similar'' because they ``may be susceptible to similar 
failure modes if one of the components that may be common to all were 
to have a defect.''
    We expect that the scope of reporting under section 30166(l) will 
be broader than the ultimate scope of defect determinations in the U.S. 
It would vitiate the purpose of the reporting requirements of the TREAD 
Act to allow manufacturers to avoid reporting requirements based on a 
claimed difference in the operating environment for vehicles or 
equipment.
    We request comments on the appropriate formulation of test(s) for 
determining whether foreign motor vehicle equipment is substantially 
similar to U.S. equipment.

III. Contents of Notification to NHTSA

    When a manufacturer of motor vehicles or motor vehicle equipment 
decides to conduct a notification and remedy campaign in the United 
States to address a safety-related defect or a noncompliance with a 
FMVSS, or is ordered to do so by NHTSA, it must furnish information to 
the agency as specified in 49 CFR part 573, Defect and noncompliance 
reports. The contents of the required notification are set out in 
section 573.5(c). These include the manufacturer's name (paragraph 
(c)(1)), identification of the vehicles or items of motor vehicle 
equipment potentially containing the defect or noncompliance, including 
a description of the manufacturer's basis for its determination of the 
recall population and a description of how the vehicles or items of 
equipment to be recalled differ from similar vehicles or items of 
equipment that the manufacturer has not included in the recall 
(paragraph (c)(2)), the total number of vehicles or items of equipment 
potentially containing the defect or noncompliance (paragraph (c)(3)), 
the percentage of vehicles that actually contain the defect or 
noncompliance (paragraph (c)(4)), a description of the defect or 
noncompliance (paragraph (c)(5)), in the case of a defect, a chronology 
of principal events that were the basis for the determination including 
summaries of field or service reports, warranty claims, and the like 
(paragraph (c)(6)), in the case of a noncompliance, the test results or 
other basis upon which the manufacturer made its determination 
(paragraph (c)(7)), and the supplier of the defective or noncomplying 
equipment, if known.
    We are proposing that this same information be provided in the 
manufacturer's notification to NHTSA of a safety recall or other safety 
campaign in a foreign country. In addition, we are proposing that the 
manufacturer identify the foreign country, state whether the 
determination was made by the manufacturer or a foreign government, 
state the date thereof, state whether the foreign decision was a safety 
recall or other safety campaign, and identify with specificity the 
motor vehicles or motor vehicle equipment sold or offered for sale in 
the United States that are identical or substantially similar to those 
being recalled abroad. Manufacturers who are reporting campaigns 
ordered by a foreign government would also be required to furnish 
copies of the determination by the foreign government in the original 
language and translated into English.
    As indicated above, we are proposing to require that all the 
information that currently must be submitted in connection with 
domestic recalls be submitted for all foreign safety campaigns covered 
by section 30166(l). We recognize that this is more information than is 
currently required in connection with campaigns in the United States 
that do not constitute safety recalls; under 49 CFR 573.8, 
manufacturers must merely submit the

[[Page 51915]]

documents that they send to owners and dealers, regarding vehicle and 
equipment malfunctions, and they need not provide all the information 
set out in 49 CFR 573.5(c). We have proposed to require more complete 
information, in part, because of the difficulty in distinguishing 
between ``safety recalls'' and ``other safety campaigns'' in foreign 
countries. However, we welcome comments on whether and how the level of 
detail can be reduced for certain type of foreign safety campaigns.
    Consistent with 49 CFR 573.5(b), which applies to defect and 
noncompliance reports, any information required to be submitted to 
NHTSA under this rule that is not available at the time the initial 
report is due must be submitted as it becomes available.

IV. Timing

    Section 30166(l) requires that manufacturers notify NHTSA ``not 
later than 5 working days after determining to conduct a safety recall 
or other safety campaign in a foreign country'' on substantially 
similar vehicles and equipment, or after receiving notification from a 
foreign government that such a campaign must be conducted. This 5-day 
period appears to have been adopted based upon the time period in 
regulations adopted to implement the notification provisions of the 
Vehicle Safety Act. Section 30119(c)(2) of the Vehicle Safety Act 
states in pertinent part that notification to the Secretary under 
Section 30118 ``shall be given within a reasonable time after the 
manufacturer first decides that a safety related defect or 
noncompliance exists.'' After notice and comment, we adopted a 
regulation specifying that ``not more than 5 working days'' is a 
``reasonable time'' for notifying NHTSA of decisions that will lead to 
domestic remedy campaigns (49 CFR 573.5(b)).
    Consistent with the statute, we are proposing that the time period 
for reporting foreign safety recalls or other safety campaigns is 5 
working days from the date that the manufacturer, including one of its 
subsidiaries or affiliates, decides to conduct, or is notified by a 
foreign government (including by a foreign governmental unit) that it 
must conduct, the recall or other campaign. The 5-day period in Section 
30166(l) is very achievable in those cases in which the decision to 
conduct the recall or other campaign is made by, or with the 
concurrence of, the manufacturer's headquarters and there is little 
doubt that the foreign vehicles or equipment in question are identical 
or substantially similar to vehicles offered for sale in the U.S. It is 
reasonable to assume that, in most cases, local subsidiaries or 
affiliates of multinational manufacturers are not authorized to decide 
to conduct safety recalls or other safety campaigns without the 
concurrence of the corporate headquarters, or at least without 
contemporaneously advising such headquarters of the action. Thus, the 
headquarters will have at least basic information on the recall or 
campaign. As a practical matter, we would expect few difficulties when 
a foreign government provides notification of its determination that a 
recall or other campaign must be conducted. There have been very few 
recalls ordered by foreign governments. We would expect that there 
would be communications between the foreign government and foreign 
affiliate of a manufacturer before a government directed recall, so 
that any formal notification would not be a surprise to the 
manufacturer. In any event the notification would be in the form of a 
written communication to the manufacturer or its local entity. The 
addressee would be deemed to ``receive'' the notification when it is 
delivered by mail, facsimile or other mechanism to the addressee. This 
document could readily be forwarded to a manufacturer's headquarters.
    To the extent that manufacturers do not have such processes in 
place today, they would be required to implement procedures to assure 
that the relevant information is provided promptly to the reporting 
entity (presumably through a corporate headquarters) so that the 
required notifications can be made to NHTSA in a timely manner. 
Similarly, manufacturers would be required to implement procedures to 
assure that notifications from foreign governments about safety recalls 
or other safety campaigns are transmitted to NHTSA in a timely manner.
    We recognize that it may be difficult for a local subsidiary or 
affiliate to know, whether the vehicles or equipment covered by the 
recall or other campaign in its country are substantially similar to 
products offered for sale in the U.S. However, this lack of awareness 
cannot justify a manufacturer's failure to provide relevant information 
to NHTSA. Thus, manufacturers would need to assure that all recalls and 
campaigns in foreign countries be brought to the attention of 
appropriate persons at the company's headquarters, who will be able to 
make the determination as to whether they must be reported to NHTSA. We 
request comments on any issues posed by this approach to timing and 
how, in the view of the commenter, they should be addressed.

V. Revision of Part 579 To Accommodate Section 3 of the TREAD Act

    At present, 49 CFR Part 579 is titled ``Defect and Noncompliance 
Responsibility.'' As part of a reorganization of its regulations to 
respond to the TREAD Act, we are planning to amend Part 579 to transfer 
its subject matter to a revised Part 573, and rename Part 579 as 
``Reporting of Information and Communications About Potential 
Defects.'' The revised regulation would include both the foreign defect 
and early warning reporting requirements of Sections 3(a) and (b) 
respectively of the TREAD Act. The current specifications for notice, 
bulletins, and other communications specified in section 573.8 would be 
transferred to section 579.6. While today's proposal restates section 
573.8 in its proposed new location, we are not reproposing it and do 
not request comment on it.

VI. Rulemaking Analyses

Executive Order 12866 and DOT Regulatory Policies and Procedures

    This document was not reviewed under Executive Order 12866. It has 
been determined that the rulemaking action is not significant under 
Department of Transportation regulatory policies and procedures. We 
estimate that fewer than 500 reports of foreign recalls and other 
safety campaigns will be submitted annually; some of these would 
involve parallel campaigns in multiple countries. There would be costs 
in determining whether vehicles or equipment that are covered by a 
foreign recall or campaign are identical or substantially similar to 
vehicles and equipment sold in the United States. There will be costs 
to manufacturers to prepare and submit reports of these recalls and 
campaigns to the agency. Where a determination has been made in a 
language other than English, a manufacturer will also have the cost of 
translating the determination before supplying it to us, unless a 
notice had been filed in the United States. Another cost would be 
involved with preparing and submitting any annual list of similar 
vehicles and equipment. Finally, there may be costs involved in 
searching out and filing reports with NHTSA that are related to foreign 
determinations made between November 1, 2000 and the effective date of 
the final rule. The costs would appear to be principally those of man-
hours. We estimate that the costs will be less than one million dollars 
per year. We seek comments from manufacturers on the estimated

[[Page 51916]]

costs of meeting a final rule based on this proposal.

Regulatory Flexibility Act

    We have also considered the impacts of this rulemaking action in 
relation to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). I 
certify that this rulemaking action does not have a significant 
economic impact upon a substantial number of small entities. The basis 
for this certification is that manufacturers of motor vehicles and 
motor vehicle equipment that operate internationally are not small 
entities. Accordingly, no regulatory flexibility analysis has been 
prepared.

Executive Order 13132 (Federalism)

    Executive Order 13132 on ``Federalism'' requires us to develop an 
accountable process to ensure ``meaningful and timely input by State 
and local officials in the development of regulatory policies that have 
federalism implications.'' The E.O. defines this phrase to include 
regulations ``that have substantial direct effects on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government.'' A final rule based upon this NPRM, would regulate the 
manufacturers of motor vehicles and motor vehicle equipment, would not 
have substantial direct effect on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in E.O. 13132.

Civil Justice Reform

    A rule based on this NPRM would not have a retroactive or 
preemptive effect, and judicial review of it may be obtained pursuant 
to 5 U.S.C. 702. That section does not require that a petition for 
reconsideration be filed prior to seeking judicial review.

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires 
agencies to prepare a written assessment of the cost, benefits and 
other effects of proposed or final rules that include a Federal mandate 
likely to result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, of more than 
$100 million annually. A final rule based on this proposal would not 
result in any expenditure by State, local, or tribal governments. The 
final rule would be based upon and implement P.L. 106-414. It would 
impact the private sector, specifically manufacturers of motor vehicles 
and motor vehicle equipment. Under the proposal, these manufacturers 
would have to report to NHTSA (presumably by letter) if they are 
conducting, or have been ordered to conduct, a campaign outside the 
United States on vehicles and equipment substantially similar to those 
sold in the United States. The reporting manufacturer would be obliged 
to have a communications system in place in order to provide this 
information to NHTSA in a timely manner, which could be the same system 
that reports domestic campaigns to NHTSA. If a manufacturer conducts no 
foreign campaigns, the final rule will not require any expenditures 
associated with reporting. If a manufacturer conducts a foreign 
campaign, the cost to the manufacturer to report the campaign should be 
minimal. NHTSA has therefore concluded that a rule based on this NPRM 
would not have a $100 million effect, and it has not prepared an 
Unfunded Mandates assessment.

Paperwork Reduction Act

    The final rule will require a manufacturer of motor vehicles and 
motor vehicle equipment to report information and data to NHTSA if it 
decides to conduct, or if it is informed by a foreign government that 
it must conduct, a safety recall or other safety campaign in a country 
outside the United States. These provisions are considered to be 
information collection requirements, as that term is defined by the 
Office of Management and Budget (OMB) in 5 CFR part 1329. Accordingly, 
if not already encompassed by Part 573 they will be submitted to OMB 
for its approval, pursuant to the requirements of the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.).

Request for Comments

How Do I Prepare and Submit Comments?

    Your comments must be written and in English. To ensure that your 
comments are correctly filed in the Docket, please include the docket 
number of this document in your comments.
    Your comments must not be more than 15 pages long (49 CFR 553.21). 
We established this limit to encourage you to write your primary 
comments in a concise fashion. However, you may attach necessary 
additional documents to your comments. There is no limit on the length 
of the attachments.
    Please submit two copies of your comments, including the 
attachments, to Docket Management at the beginning of this document, 
under ADDRESSES.

How Can I Be Sure That My Comments Were Received?

    If you wish Docket Management to notify you upon its receipt of 
your comments, enclose a self-addressed, stamped postcard in the 
envelope containing your comments. Upon receiving your comments, Docket 
Management will return the postcard by mail.

How Do I Submit Confidential Business Information?

    If you wish to submit any information under a claim of 
confidentiality, you should submit three copies of your complete 
submission, including the information you claim to be confidential 
business information, to the Chief Counsel, NHTSA, at the address given 
at the beginning of this document under FOR FURTHER INFORMATION 
CONTACT. In addition, you should submit two copies from which you have 
deleted the claimed confidential business information, to Docket 
Management at the address given at the beginning of this document under 
ADDRESSES. When you send a comment containing information claimed to be 
confidential business information, you should include a cover letter 
setting forth the information specified in our confidential business 
information regulation, 49 CFR Part 512.

Will the Agency Consider Late Comments?

    We will consider all comments that Docket Management receives 
before the close of business on the comment closing date indicated at 
the beginning of this notice under DATES. To the extent possible, we 
will also consider comments that Docket Management receives after that 
date. If Docket Management receives a comment too late for us to 
consider in developing a proposed rule (assuming that one is issued), 
we will consider that comment as an informal suggestion for future 
rulemaking action.

How Can I Read the Comments Submitted By Other People?

    You may read the comments received by Docket Management at the 
address and times given near the beginning of this document under 
ADDRESSES.
    You may also see the comments on the internet. To read the comments 
on the internet, take the following steps:
    (1) Go to the Docket Management System (DMS) Web page of the 
Department of Transportation (http://dms.dot.gov/).

[[Page 51917]]

    (2) On that page, click on ``search.''
    (3) On the next page (http://dms.dot.gov/search/), type in the 
four-digit docket number shown at the heading of this document. 
Example: if the docket number were ``NHTSA-2001-1234,'' you would type 
``1234.''
    (4) After typing the docket number, click on ``search.''
    (5) The next page contains docket summary information for the 
docket you selected. Click on the comments you wish to see.
    You may download the comments. Although the comments are imaged 
documents, instead of the word processing documents, the ``pdf'' 
versions of the documents are word searchable. Please note that even 
after the comment closing date, we will continue to file relevant 
information in the Docket as it becomes available. Further, some people 
may submit late comments. Accordingly, we recommend that you 
periodically search the Docket for new material.

List of Subjects in 49 CFR Part 579

    Imports, Motor vehicle safety, Motor vehicles, Reporting and 
recordkeeping requirements.

    In consideration of the foregoing, 49 CFR part 579 is proposed to 
be revised to read as follows:

PART 579--REPORTING OF INFORMATION AND COMMUNICATIONS ABOUT 
POTENTIAL DEFECTS

Subpart A--General

Sec.
579.1   Scope.
579.2   Purpose
579.3   Application.
579.4   Definitions.
579.5   Address and manner for submitting reports and other 
information.
579.6   Notices, bulletins, and other communications
579.7-10   [Reserved].

Subpart B--Reporting of Safety Recalls and Other Safety Campaigns 
in Countries Other Than the United States

579.11  Additional definitions for subpart B.
579.12  Identical or substantially similar vehicles and equipment.
579.13  Reporting responsibilities.
579.14  Contents of reports.
579.15  Who may submit reports.
579.16-20  [Reserved]

Subpart C--Early Warning Reports

579.21-30  [Reserved]

    Authority: Sec. 3(a), Pub. L. 106-414; 49 U.S.C. 30102-103, 
30112, 30117-121, 30166-167; delegation of authority at 49 CFR 1.50.


Sec. 579.1  Scope.

    This part sets forth the responsibilities of manufacturers of motor 
vehicles and motor vehicle equipment for reporting of information, 
including data, that may indicate the existence of safety-related 
defects or noncompliances with Federal motor vehicle safety standards, 
and for reporting foreign recalls and other safety-related campaigns 
conducted outside the United States.


Sec. 579.2  Purpose.

    The purpose of this part is to enhance motor vehicle safety by 
specifying information, including data, that manufacturers of motor 
vehicles and motor vehicle equipment must report to NHTSA that may 
indicate the existence of a potential safety-related defect or a 
noncompliance with a Federal motor vehicle safety standard in their 
products before the manufacturer or NHTSA has decided that a defect or 
noncompliance exists, including the reporting of safety recalls and 
other safety campaigns that the manufacturer conducts outside the 
United States.


Sec. 579.3   Application.

    This part applies to all manufacturers of motor vehicles and motor 
vehicle equipment.


Sec. 579.4   Definitions.

    For purposes of this part:
    Equipment comprises original equipment and replacement equipment: 
Original equipment means motor vehicle equipment (other than a tire) 
which was installed in or on a motor vehicle at the time of its 
delivery to the first purchaser if the item of equipment was installed 
on or in the motor vehicle at the time of its delivery to a dealer or 
distributor for distribution, or installed by the dealer or distributor 
with the express authorization of the motor vehicle manufacturer. 
Replacement equipment means motor vehicle equipment other than original 
equipment and a tire.


Sec. 579.5   Address and manner for submitting reports and other 
information.

    Reports required to be submitted to NHTSA pursuant to this part 
must be submitted to the Associate Administrator for Safety Assurance, 
National Highway Traffic Safety Administration (NHTSA), 400 7th Street, 
S.W., Washington, DC 20590. Submissions must be made by a means that 
permits the sender to verify that the report was in fact received by 
NHTSA and the day it was received by NHTSA.


Sec. 579.6   Notices, bulletins, and other communications.

    Each manufacturer shall furnish to NHTSA a copy of all notices, 
bulletins, and other communications (including those transmitted by 
computer, telefax, or other electronic means and including warranty and 
policy extension communiques and product improvement bulletins) other 
than those required to be submitted pursuant to Sec. 573.5(c)(9) of 
this chapter, sent to more than one manufacturer, distributor, dealer, 
lessor, lessee, or purchaser, regarding any defect in its vehicles or 
items of equipment (including any failure or malfunction beyond normal 
deterioration in use, or any failure of performance, or any flaw or 
unintended deviation from design specifications), whether or not such 
defect is safety-related. Copies shall be in readable form and shall be 
submitted monthly, not more than five (5) working days after the end of 
each month.


Secs. 579.7-10   [Reserved]

Subpart B--Reporting of Safety Recalls and Other Safety Campaigns 
in Countries Other Than the United States.


Sec. 579.11  Additional definitions for subpart B.

    For purposes of this subpart:
    Other safety campaign means an action in which a manufacturer, 
including but not limited to a foreign subsidiary or affiliate or agent 
of a manufacturer, communicates with owners and/or dealers in a foreign 
country with respect to conditions under which vehicles or equipment 
should be operated, repaired, or replaced, that relate to safety.
    Safety recall means an offer by a manufacturer, including but not 
limited to a foreign subsidiary or affiliate or agent of a 
manufacturer, to owners of vehicles or equipment in a foreign country 
to provide remedial action to address a defect that relates to motor 
vehicle safety or a failure to comply with an applicable safety 
standard or guideline.


Sec. 579.12  Identical or substantially similar vehicles and equipment.

    For purposes of this subpart:
    (a) A motor vehicle sold or in use outside the United States is 
identical or substantially similar to a motor vehicle sold or offered 
for sale in the United States if:
    (1) Such a vehicle has been sold in Canada or has been certified as 
complying with the Canadian Motor Vehicle Safety Standards;

[[Page 51918]]

    (2) Such a vehicle is listed in Appendix A to part 593 of this 
chapter or determined to be eligible for importation into the United 
States in any agency decision issued between amendments to Appendix A 
to part 593;
    (3) Such a vehicle is manufactured in the United States for sale in 
a foreign country,
    (4) Such a vehicle is a counterpart of a vehicle sold or offered 
for sale in the United States or
    (5) Such a vehicle and a vehicle sold or offered for sale in the 
United States both contain the component or system that gave rise or 
contributed to a safety recall or other safety campaign in a foreign 
country, without regard to the vehicle platform on which the components 
or systems is installed and regardless of whether the part numbers are 
identical.
    (b) Motor vehicle equipment sold or in use outside the United 
States is identical or substantially similar to equipment sold or 
offered for sale in the United States if such equipment and the 
equipment sold or offered for sale in the United States are the same 
component or system, or both contain the component or system that gave 
rise or contributed to a safety recall or other safety campaign in a 
foreign country, regardless of whether the part numbers are identical.
    (c) Tires sold or in use outside the United States are 
substantially similar to tires sold or offered for sale in the United 
States if they have the same model name and size designation, or if 
they are identical except for the model name.


Sec. 579.13   Reporting responsibilities.

    (a) Not later than 5 working days after a manufacturer, including 
any of its subsidiaries and affiliates, determines to conduct a safety 
recall or other safety campaign in a country other than the United 
States covering a motor vehicle or motor vehicle equipment that is 
identical or substantially similar to a vehicle or equipment sold or 
offered for sale in the United States, the manufacturer of the vehicle 
or equipment covered by the recall or other campaign shall report the 
determination to NHTSA.
    (b) Not later than 5 working days after a manufacturer, including 
any of its subsidiaries and affiliates, receives notification that the 
government of a country other than the United States, including a 
political subdivision of such country, has determined that a safety 
recall or other safety campaign must be conducted in that country with 
respect to a motor vehicle or motor vehicle equipment that is identical 
or substantially similar to a vehicle or equipment sold or offered for 
sale in the United States, the manufacturer of the vehicle or equipment 
covered by the campaign shall report the determination to NHTSA.
    (c) Not later than 30 days after [the effective date of the final 
rule], a manufacturer, including its subsidiaries and affiliates, that 
has made a determination to conduct a recall or other safety campaign 
in a country other than the United States, or who has received 
notification that the government of a country other than the United 
States, including a political subdivision of such country, has 
determined that a safety recall or other safety campaign must be 
conducted in that country, in the period between November 1, 2000 and 
[the date of the effective date of the final rule], and who has not 
reported such determination or notification of determination to NHTSA 
as of [the effective date of the final rule], shall report such 
determination or notification of determination to NHTSA if the safety 
recall or other safety campaign covers a motor vehicle or equipment 
that is identical or substantially similar to a vehicle or equipment 
sold or offered for sale in the United States.
    (d) Notwithstanding paragraphs (a), (b) and (c), of this section, 
the manufacturer need not report the safety recall or other safety 
campaign to NHTSA if the manufacturer:
    (1) Has determined that for the same or substantially similar 
reasons that it is conducting a safety recall or other safety campaign 
in a country other than the United States, a safety-related defect or 
noncompliance with a Federal motor vehicle safety standard exists in 
identical or substantially similar motor vehicles or motor vehicle 
equipment sold or offered for sale in the United States, and
    (2) Has filed a defect or noncompliance information report pursuant 
to part 573 of this chapter, provided that the remedy of the foreign 
safety recall or other safety campaign is identical to the remedy of 
the campaign in the United States and the scope of the foreign recall 
or campaign is not broader than the scope of the recall campaign in the 
United States.
    (e) Each manufacturer of motor vehicles that sells or offers a 
motor vehicle for sale in the United States shall identify each model 
of vehicle that the manufacturer sells or plans to sell in the 
following year in a foreign country that the manufacturer believes is 
identical or substantially similar to a motor vehicle sold, offered for 
sale, of planned for sale in the following year in the United States. 
The manufacturer shall inform NHTSA in writing no later than November 1 
of each year of any such models that it plans to sell in any foreign 
country during any part of the following year.


Sec. 579.14   Contents of reports.

    (a) Reports made pursuant to Sec. 579.13 shall include the 
information specified in Sec. 573.5(c)(1) through (7) of this chapter. 
Each such report shall also identify each foreign country in which the 
recall or other safety campaign is being conducted, state whether the 
determination was made by the manufacturer or by a foreign government, 
specify the date of the determination and the date the recall or other 
campaign was commenced or will commence in each foreign country, state 
whether the foreign action was a safety recall or other safety 
campaign, and identify all motor vehicles and/or equipment that the 
manufacturer sold or offered for sale in the United States that are 
identical or substantially similar to the motor vehicles or equipment 
covered by the foreign recall or campaign. If a determination has been 
made by the government of a foreign country, the report shall also 
include copies of the determination by the foreign government in the 
original language and translated into English.
    (b) Information required by paragraph (a) of this section that is 
not available within the 5-day period specified in Sec. 579.13 shall be 
submitted as it becomes available.


Sec. 579.15   Who may submit reports.

    Reports under this part may be filed by either the fabricating 
manufacturer or by the importer of the vehicle or equipment that is 
identical or substantially similar to that covered by the foreign 
recall or other safety campaign.


Secs. 579.16-20  [Reserved]

Subpart C--Early Warning Reports


Secs. 579.21-30   [Reserved]

    Issued on: October 4, 2001.
Kenneth N. Weinstein,
Associate Administrator for Safety Assurance.
[FR Doc. 01-25429 Filed 10-10-01; 8:45 am]
BILLING CODE 4910-59-P