[Federal Register Volume 81, Number 248 (Tuesday, December 27, 2016)]
[Rules and Regulations]
[Pages 94974-94979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31050]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Part 12

[USCBP-2016-0011; CBP Dec. 16-29]
RIN 1515-AE11


Importations of Certain Vehicles and Engines Subject to Federal 
Antipollution Emission Standards

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Final rule.

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SUMMARY: This document amends the U.S. Customs and Border Protection 
(CBP) regulations relating to the importation into the United States of 
certain vehicles and engines under the Clean Air Act (CAA) in order to 
harmonize the documentation requirements applicable to different 
classes of vehicles and engines that are subject to the CAA's emission 
standards. This document further amends the regulations to permit 
importers to file the required U.S. Environmental Protection Agency 
(EPA) Declaration Forms with CBP electronically, and amends non-
substantive provisions to update regulatory citations and delete 
obsolete provisions.

DATES: Effective January 26, 2017.

FOR FURTHER INFORMATION CONTACT: For questions related to the filing of 
EPA forms with CBP, please contact William Scopa, Partner Government 
Agencies Interagency Collaboration Division, Office of Trade, Customs 
and Border Protection, at [email protected]. For questions 
related to EPA's vehicle and engine imports program, please contact 
Holly Pugliese at [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    On August 17, 2016, U.S. Customs and Border Protection (CBP) 
published a Notice of Proposed Rulemaking (NPRM) in the Federal 
Register (81 FR 54763) proposing to amend title 19 of the Code of 
Federal Regulations (19 CFR) in order to harmonize the documentation 
requirements applicable to different classes of vehicles and engines 
that are subject to the Clean Air Act's (CAA's) emission standards.
    Sections 203(a) and (b)(2) of the CAA, 42 U.S.C 7522, deal with the 
importation of new motor vehicles and new motor engines and the 
requirement of a Certificate of Conformity (COC) as prescribed by 
regulation authorized by the CAA. Without a valid COC, the admission of 
new motor vehicles and new motor engines into the United States will be 
denied. Section 208 of the CAA, 42 U.S.C. 7542, provides that the 
Administrator of the U.S. Environmental Protection Agency (EPA) may 
require a manufacturer to produce, among other items, all records, 
files, and papers necessary to demonstrate compliance with applicable 
CAA provisions. Section 213(d) of the CAA, 42 U.S.C. 7547, requires 
that nonroad vehicles and engine standards be enforced in the same 
manner as those applicable to onroad vehicles and engines.
    These statutory provisions are implemented in the CBP regulations 
at Sec. Sec.  12.73 and 12.74 of title 19 of the Code of Federal 
Regulations (19 CFR 12.73 and 12.74). Section 12.73 provides for 
``Motor vehicle and engine compliance with Federal antipollution 
emission requirements,'' and section 12.74 provides for ``Nonroad and 
stationary engine compliance with Federal antipollution emission 
requirements.'' EPA makes available Declaration Forms 3520-1 (for the 
importation of passenger vehicles, highway motorcycles and their 
corresponding engines) and 3520-21 (for the importation of heavy-duty 
engines and nonroad engines, including engines already installed in 
vehicles or equipment) for purposes of compliance with the CAA.
    The final rule conforms the entry filing requirements applicable to 
EPA Declaration Form 3520-21 to those that are currently applicable to 
EPA Declaration Form 3520-1. Sections 12.73(i) and 12.74(b) and (d) are

[[Page 94975]]

amended to require importers of stationary, nonroad or heavy-duty 
highway engines (including engines incorporated into vehicles or 
equipment) to file EPA Declaration Form 3520-21 at the time of entry, 
except when filing a weekly entry from a foreign trade zone (FTZ) in 
accordance with 19 CFR 146.63(c)(1). An importer of engines is exempt 
from the requirement to file an EPA Declaration Form 3520-21 if the 
importer holds a valid EPA COC and the engines are labeled to show 
compliance with applicable emission requirements.
    Further, the final rule permits importers to file the required EPA 
Declaration Forms with CBP electronically. The electronic transmission 
of EPA Declaration Forms 3520-1 and 3520-21 to CBP will automate and 
enhance the interaction between the EPA and CBP by facilitating 
electronic collection, processing, sharing, and review of requisite 
trade data and documents during the cargo import and export process. 
Lastly, this rule updates regulatory citations and deletes obsolete 
provisions.
    The NPRM solicited for public comments on the proposed rulemaking. 
The public comment period closed on September 16, 2016.

Discussion of Comments

    Four commenters responded to the solicitation of comments to the 
proposed rule. A description of the comments received, together with 
CBP's analysis, is set forth below.
    Comment: Two commenters expressed a concern with regard to EPA's 
handling of Type 06 (FTZ) ``weekly estimate'' entry filings. According 
to the proposed rule, EPA is requiring all filers to demonstrate 
compliance with all applicable laws and regulations at the time of 
cargo release, in particular the filing of EPA Declaration Forms 3520-1 
and 3520-21. (19 CFR 12.73(i)(2)). The commenters stated that many 
vehicle and engine importers would not be able to provide accurate 
information, such as VIN or engine serial numbers, at the time of 
entry. When the weekly estimated entry is prepared and filed, the 
identity of the vehicles and/or engines is many times unknown since the 
vehicle/engine has not gone into production or has not been ordered for 
distribution. Both commenters propose to implement the ``dual option'' 
system that is being used by other Partner Government Agencies (PGAs), 
separating the ``regular'' Type 06 entry filers, which are required to 
present PGA data at time of entry/cargo release, from the ``weekly'' 
Type 06 entry filers, which are required to present PGA data at the 
time of entry summary.
    CBP Response: CBP reviewed the concerns raised by the commenters 
and is in agreement with the commenters' proposal. When a Type 06 (FTZ) 
entry is filed, the vehicle and engine data used by EPA is required at 
time of entry/ACE cargo release. When a ``weekly estimate'' Type 06 
entry is filed, the vehicle and engine data used by EPA is required at 
time of entry summary.
    Comment: One of the commenters asked CBP to extend the exemption 
from filing EPA Declaration Form 3520-21 to any engines and equipment 
that are exempt from filing that form under the provisions of 40 CFR 
1068.201 (test engines and equipment) and 40 CFR 1068.230 (engines and 
equipment for export). The commenter stated that 40 CFR part 1068, 
subpart C, provides for the exemption of certain engines and equipment 
from ``some or all of the prohibited acts'' of 40 CFR 1068.101(a)(1). 
The commenter further stated that EPA has deemed such engines and 
equipment as appropriate for entry into the U.S. commerce and as such 
are substantively no different from engines and equipment that are 
covered by a valid COC that is issued under the standard-setting part 
(e.g. 40 CFR part 1033).
    CBP Response: CBP does not agree that the exemption for filing EPA 
Declaration Form 3520-21 should be extended to engines and equipment 
for testing and export covered by 40 CFR 1068, subpart C. CBP also does 
not agree that such engines and equipment are ``substantively no 
different'' from engines produced under a valid COC. If engines and 
equipment are produced under an exemption for testing or export, the 
exemption is needed because these engines and equipment are different 
than the certified engines and equipment. It is therefore not correct 
to consider any exemption under Part 1068 as a basis for determining 
engines and equipment to be ``appropriate for entry into the U.S. 
commerce.'' Exempted engines and equipment are permitted to enter the 
U.S. commerce subject to certain terms and conditions to ensure 
compliance with the regulations. Filing import information such as that 
prescribed by EPA Declaration Form 3520-21 assists with compliance 
oversight.
    Comment: Another commenter expressed a concern with the proposed 
regulatory language at 19 CFR 12.74(c)(3) which references temporary 
exemptions, including the partially complete engine exemption under 40 
CFR 1068.325(g). The commenter stated that the proposed language 
requires a CBP bond, whereas the underlying EPA regulation at 40 CFR 
1068.325 states that EPA ``may ask'' CBP to require a specific bond 
amount. It is the opinion of the commenter that the proposed language 
in 19 CFR 12.74(c)(3) would go beyond the EPA requirements and increase 
the burden on users of the partially complete engine exemption by 
making the bond and associated administrative process an absolute 
requirement. The commenter suggested to use ``may be required'' instead 
of the proposed ``is required'' language. The commenter further noted 
that a similar change would be needed at the beginning of 12.74(c) to 
harmonize the proposed language in the NPRM with the conditional 
language in 40 CFR 1068.325.
    CBP Response: CBP believes that there is a no conflict between the 
EPA regulation and the proposed rule regarding the bond requirements 
and that the proposed rule does not need to be harmonized with the EPA 
regulation. The proposed rule does not change the substantive bond 
requirement for conditional entry for nonconforming nonroad engines 
claiming exemption under the EPA regulations, it only allows for 
conditional release in conjunction with a bond filed in the Automated 
Commercial Environment (ACE).
    The commenter potentially confuses the different contexts of import 
bond requirements. The confusion stems from the use of the term 
``bond'' in EPA regulations and CBP regulations. Under 19 CFR 
127.74(c)(3) and 19 CFR 113.62, CBP requires a single entry or a 
continuous bond, to be applied for the conditional release of imported 
engines as required in all cases (``Basic Import Entry'' bond). In 
contrast, the ``bond'' referenced in 40 CFR 1068.325, which ``may be 
required,'' is addressing situations where EPA ``may'' want to secure 
compliance with relevant EPA regulations and have CBP require 
additional bonding.
    Lastly, the substance of 19 CFR 12.74(c) is unchanged by the 
proposed rule, and has been in place since published in 1998. The only 
change is to provide for the use of Basic Import Entry bonds submitted 
through ACE.
    Comment: The same commenter requested that the proposed language in 
19 CFR 12.74 include permanent exemptions listed in 40 CFR 1068.315(a)-
(h), including the manufacturer-owned exemption in 40 CFR 1068.315(b), 
to make it clear that permanent exemptions also present a valid basis 
for admission. According to the commenter, CBP and EPA

[[Page 94976]]

regulations will have apparent inconsistences and it will be easy for 
users of those regulations to be confused if no clarifying section is 
added.
    CBP Response: CBP agrees with the inclusion of the permanent 
exemptions listed in 40 CFR 1068.315 with the exemptions listed in 19 
CFR 12.74(c)(3). As such, the regulatory language for 19 CFR 
12.74(c)(3) will be amended accordingly below. In addition, the 
introductory text in section 19 CFR 12.73(h) will be amended by adding 
reference to 40 CFR parts 85, 86 and 1068 to fully cover the current 
list of both permanent and temporary exemptions and exclusions found in 
all applicable EPA regulatory parts.
    Comment: The commenter also requested clarification as to whether 
an imported on-highway motorcycle engine that is separate from, and not 
installed in, an on-highway motorcycle is subject to 19 CFR 12.73. The 
commenter pointed out that the EPA Declaration Form 3520-1, recognized 
by CBP, includes a Code W = ``Non-chassis mounted engine to be used in 
. . . a motorcycle . . . which will be covered by an EPA COC prior to 
the introduction into commerce.'' Unlike other codes on the form, there 
is no listed underlying regulation associated with the use of Code W.
    CBP Response: CBP agrees that a clarification is appropriate as 
suggested by the commenter. The regulatory text in 19 CFR 12.73(a) will 
be amended to include separately-imported on-highway motorcycle 
engines.
    Comment: The same commenter requested clarification of a passage in 
the Preamble in the NPRM which says ``although existing 19 CFR 12.73 
does not expressly require the submission of the EPA Declaration Form 
3520-1, it does require that the same information captured by that form 
be submitted to CBP.'' Specifically, the commenter asked whether the 
EPA exemption policy for certificate-holding manufacturers (OEMs) to 
import new motor vehicles and engines without filing Declaration Forms 
3520-1 or 3520-21 still applied under 19 CFR 12.73. The commenter 
expressed concern that if this exemption did no longer apply, it would 
be inconsistent with both current EPA and CBP requirements, as well as 
guidance issued by EPA that summarizes the filing exemptions for OEMs.
    CBP Response: The statement in the NPRM simply pointed out that the 
current regulations at 19 CFR 12.73 do not specifically refer to EPA 
Declaration Form 3520-1, but require all the data elements listed in 
that form. 19 CFR 12.73(i)(3) (A)-(K) currently provides a list of the 
information that must be included in an importer's declaration. This 
information mirrors the information that is required to be filled in 
the EPA Declaration Form 3520-1 itself. CBP is only updating the 
regulations to specifically reference EPA Declaration Form 3520-1 and 
is not changing the provision that exempts OEMs who import products for 
which they hold a valid EPA COC from filing the form.
    Comment: A commenter stated that it supported CBP's plan to 
harmonize the filing requirements. However, it pointed out that EPA 
must update the existing EPA guidance document titled ``Procedures for 
Importing Vehicles and Engines into the U.S.'' which states the 
following on Page 3, related to importers currently subject to the 
requirements of EPA Declaration Form 3520-21: ``As with vehicles, OEMs 
importing new certified engines do not need to submit EPA Declaration 
Form 3520-21 to U.S. Customs.'' The commenter further noted that EPA 
must also update Declaration Form 3520-21 to reflect the change of the 
filing requirements.
    CBP Response: CBP agrees that certain statements in certain EPA 
guidance documents contradict each other regarding when OEMs currently 
need to file EPA Declaration Form 3520-21. In consultation with CBP, 
EPA will ensure that all of EPA's documentation regarding the amended 
regulations accurately reflects that OEMs importing their own certified 
engines do not need to file EPA Declaration Form 3520-21.
    Comment: The fourth commenter wrote that she had no objection to 
the proposed changes as long as the compliance with anti-pollution 
emission standards was not compromised for the sake of efficiency. The 
commenter further stated that accurate records for vehicle and engine 
imports must be maintained in order to ensure compliance with the CAA.
    CBP Response: CBP believes that electronic filing of EPA 
Declaration Forms will support key modernization initiatives, expedite 
the entry and clearance process, enhance targeting and enforcement 
objectives, and connect CBP with PGAs and the trade community through a 
single-window access point.

Conclusion

    After review of the comments, CBP has decided to adopt as final the 
proposed rule published in the Federal Register on August 17, 2016 with 
the changes described above.

Executive Orders 12866 and 13563

    Executive Orders 13563 and 12866 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if a 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule is not a ``significant regulatory action,'' 
under section 3(f) of Executive Order 12866. Accordingly, the Office of 
Management and Budget has not reviewed this regulation.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et. seq.), as amended 
by the Small Business Regulatory Enforcement and Fairness Act of 1996, 
requires agencies to assess the impact of regulations on small 
entities. A small entity may be a small business (defined as any 
independently owned and operated business not dominant in its field 
that qualifies as a small business per the Small Business Act); a small 
not-for-profit organization; or a small governmental jurisdiction 
(locality with fewer than 50,000 people). This final rule would modify 
the requirements for the submission of EPA Declaration Form 3520-21. 
Currently, importers are required to fill out the form, but are only 
required to submit it to CBP upon request. This final rule would 
require importers to file EPA Declaration Form 3520-21 with CBP with 
the filing of entry information, and no later than the filing of entry 
summary, unless the importer is a manufacturer of nonroad or stationary 
engines, including engines incorporated into vehicles and equipment, 
and holds a valid EPA certificate of conformity for those engines and 
the engines are labeled to show compliance with applicable emission 
requirements. As this form has already been completed by the filer by 
the time the filing is required under this rule, the cost of actually 
submitting it to CBP is negligible. This rule would also explicitly add 
electronic filing as an accepted method of form submission. Importers 
will still be able to file the form by paper if they so choose. This 
change will affect all importers who are covered by EPA Declaration 
Form 3520-21, including small importers. Therefore, it is likely to 
have an impact on a substantial number of small entities. However, the 
only costs

[[Page 94977]]

incurred are the negligible costs of submitting the already completed 
form to CBP along with other required entry documents. These costs do 
not rise to the level of significance. Therefore, CBP certifies that 
this final rule will not have a significant economic impact on a 
substantial number of small entities.

Paperwork Reduction Act

    The collection of information contained in this final rule was 
previously reviewed and approved by OMB in accordance with the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) 
under control numbers OMB 2060-0104 (EPA Declaration Form 3520-1, 
``Importation of Motor Vehicles and Motor Vehicle Engines Subject to 
Federal Air Pollution Standards''), OMB 2060-0320 (EPA Declaration Form 
3520-21, ``Importation of Engines, Vehicles and Equipment Subject to 
Federal Air Pollution Standards''), and OMB 1405-0105 (Department of 
State form DS-11504, ``Request for Customs Clearance of Merchandise''). 
As importers are already required under existing regulations to 
complete the EPA Declaration Forms and either submit them to CBP or 
retain them in their records, and the burden estimates in the above-
identified OMB approved information collection requests presume the 
forms are submitted to CBP, there are no new collections of information 
stated in this document. In this regard, it is noted that although 
existing 19 CFR 12.73 does not expressly require the submission of EPA 
Declaration Form 3520-1 by name, it does require that the same 
information captured by that form be submitted to CBP. Similarly, 
shipments sent from abroad to foreign diplomatic or consular missions 
in the U.S., or their personnel, currently must be cleared by 
respondents submitting to CBP a Department of State-approved form DS-
1504; therefore, this document does not impose any new collections of 
information by requiring the DS-1504 to be presented to CBP for 
purposes of claiming an exemption from emission documentation 
requirements.

Signing Authority

    This document is being issued in accordance with 19 CFR 0.1(a)(1) 
pertaining to the Secretary of the Treasury's authority (or that of his 
delegate) to approve regulations related to certain customs revenue 
functions.

List of Subjects in 19 CFR Part 12

    Customs duties and inspection, Reporting and recordkeeping 
requirements.

Amendments to the CBP Regulations

    For the reasons set forth above, part 12 of title 19 of the Code of 
Federal Regulations (19 CFR part 12) is amended as set forth below.

PART 12--SPECIAL CLASSES OF MERCHANDISE

0
1. The general authority citation for part 12, and the specific 
authority citation for sections 12.73 and 12.74, continue to read as 
follows:

    Authority:  5 U.S.C. 301, 19 U.S.C. 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States), 1624.
* * * * *

    Sections 12.73 and 12.74 also issued under 19 U.S.C. 1484, 42 
U.S.C. 7522, 7601;

* * * * *

0
2. The undesignated center heading preceding Sec.  12.73 is revised to 
read as follows:
    Entry of Motor Vehicles, Engines, and Equipment Containing Engines 
Under the Clean Air Act, as Amended

0
3. In Sec.  12.73:
0
a. The section heading is revised;
0
b. Paragraph (a) is revised;
0
c. Paragraph (b)(1) is amended by removing the word ``shall'' and 
adding in its place the word ``will''; removing the word ``Customs'' 
and adding in its place the term ``CBP'', and; removing the term 
``ICI's'' and adding in its place the language, ``Independent 
Commercial Importers'';
0
d. Paragraph (b)(2) is amended by removing the word ``Customs'' and 
adding in its place the term ``CBP'';
0
e. Paragraphs (c)(3) and (4) are removed;
0
f. Paragraphs (d), (e) introductory text, (e)(4), and (f) are revised;
0
g. Paragraph (g)(2) is amended by removing the reference to ``(i)(4)'' 
and adding in its place a reference to ``(i)(6)'';
0
h. Paragraph (h) introductory text is revised;
0
i. Paragraph (h)(1) is amended, in the first sentence, by removing the 
word ``Any'' and adding in its place the following language, ``A motor 
vehicle imported for repairs is any'';
0
j. Paragraph (h)(2) is amended, in the first sentence, by removing the 
word ``Any'' and adding in its place the following language, ``A test 
vehicle is any'';
0
k. Paragraph (h)(3) is amended, in the first sentence, by removing the 
word ``Any'' and adding in its place the following language, ``A 
prototype vehicle is any'', and in the second sentence, by removing the 
word ``shall'' and adding in its place the word ``will'', and by 
removing the parenthetical reference ``(1)'' and adding in its place 
the parenthetical reference ``(l)'';
0
l. Paragraph (h)(4) is amended, in the first sentence, by removing the 
word ``Any'' and adding in its place the following language, ``A 
display vehicle is any'';
0
m. Paragraphs (h)(5) through (7) are revised;
0
n. Paragraphs (i) through (k) are revised;
0
o. Paragraph (l) is amended by removing the word ``shall'' and adding 
in its place the word ``will'' and removing the word ``Customs'' and 
adding in its place the term ``CBP''; and
0
p. Paragraph (m) is revised.
    The revisions read as follows:


Sec.  12.73   Importation of motor vehicles and motor vehicle engines.

    (a) Applicability of EPA requirements. This section is ancillary to 
the regulations of the U.S. Environmental Protection Agency (EPA) 
issued under the Clean Air Act, as amended (42 U.S.C. 7401 et seq.), 
and found in 40 CFR parts 85, 86, 1036, 1037, and 1068. The EPA 
regulations should be consulted for more detailed information 
concerning EPA emission requirements. This section applies to imported 
motor vehicles; this section also applies to separately imported 
engines only if they will be installed in highway motorcycles or heavy-
duty motor vehicles. All references in this section to ``motor 
vehicles'' include these highway motorcycles and heavy-duty engines. 
Nothing in this section should be construed as limiting or changing in 
any way the applicability of the EPA regulations.
* * * * *
    (d) Importation of vehicles by an Independent Commercial Importer 
(ICI). An ICI is generally an importer that does not have a contract 
with a foreign or domestic motor vehicle manufacturer for distributing 
products into the United States market (see 40 CFR 85.1502). ICIs act 
independently of motor vehicle manufacturers, but are required to bring 
motor vehicles into compliance with all applicable emissions 
requirements found in 40 CFR part 86 and any other applicable 
requirements of the Clean Air Act. Before the vehicle is deemed to be 
in compliance with applicable emission requirements and finally 
admitted into the United States, the ICI must keep the vehicle in 
storage for a 15-business day period. This period follows notice to EPA 
of completion of the compliance work to give EPA the opportunity to 
conduct confirmatory testing and inspect the vehicle and records. The 
15-business day period is part of the 120-

[[Page 94978]]

day period in which an ICI must bring the vehicle into compliance with 
applicable emission requirements. A motor vehicle may also be 
conditionally admitted by an ICI if it meets the requirements in 40 CFR 
85.1505 or 85.1509. Individuals and businesses not entitled to enter 
nonconforming motor vehicles may arrange for their importation through 
an ICI certificate holder. In these circumstances, the ICI will not act 
as an agent or broker for CBP transaction purposes unless it is 
otherwise licensed or authorized to do so.
    (e) Exemptions and exclusions from emission requirements based on 
age of vehicle. The following motor vehicles may be imported by any 
person and do not have to be shown to be in compliance with emission 
requirements before they are entitled to admissibility:
* * * * *
    (4) Highway motorcycles manufactured before January 1, 1978;
* * * * *
    (f) Exemption for exports. A new motor vehicle intended solely for 
export to a country not having the same emission standards applicable 
in the United States is not required to be covered by an EPA 
certificate of conformity if both the vehicle and its container bear a 
label or tag indicating that it is intended solely for export. 40 CFR 
85.1709.
* * * * *
    (h) Other exemptions and exclusions. EPA regulations in 40 CFR 
parts 85, 86 and 1068 allow for exempting or excluding vehicles from 
certification requirements. The following scenarios illustrate several 
examples of exemptions or exclusions that apply only if prior approval 
has been obtained in writing from EPA:
* * * * *
    (5) Racing cars. A racing car is any vehicle that meets one or more 
of the criteria found at 40 CFR 85.1703(a), and that will not be 
registered or licensed for use on or operated on public roads or 
highways in the United States. See also 40 CFR 85.1511(e).
    (6) National security importations. A national security importation 
includes any motor vehicle imported for purposes of national security 
by a manufacturer. 40 CFR 85.1511(c)(1), 85.1702(a)(2) and 85.1708; and
    (7) Hardship exemption. A hardship exemption includes any motor 
vehicle imported by anyone qualifying for a hardship exemption. 40 CFR 
85.1511(c)(2).
    (i) Documentation requirements--(1) Exception for certain companies 
that manufacture and import motor vehicles. The special documentation 
requirements of this paragraph do not apply to the importation of motor 
vehicles by the company that manufactures the motor vehicles if the 
motor vehicles are covered by a valid EPA Certificate of Conformity 
(COC) held by the manufacturer and the motor vehicles are labeled to 
show compliance with applicable emission requirements pursuant to 
paragraph (b)(1) of this section.
    (2) Release. CBP will not release a motor vehicle from custody 
unless the importer has submitted all documents necessary to 
demonstrate compliance with all applicable laws and regulations.
    (3) Required EPA documentation. Unless otherwise exempt, importers 
of motor vehicles must submit one of the following EPA declaration 
forms to CBP at the time of entry, or when filing a weekly entry from 
an FTZ in accordance with Sec.  146.63(c)(1) of this chapter at the 
time of entry summary:
    (i) For heavy-duty motor vehicle engines, whether they are 
installed in a vehicle or separately imported as loose engines, submit 
EPA Declaration Form 3520-21, ``Importation of Engines, Vehicles, and 
Equipment Subject to Federal Air Pollution Regulations;''
    (ii) For all other motor vehicles, submit EPA Declaration Form 
3520-1, ``Importation of Motor Vehicles and Motor Vehicle Engines 
Subject to Federal Air Pollution Regulations.''
    (4) Filing method. The EPA declaration forms required to be 
submitted to CBP pursuant to paragraph (i)(3) of this section must be 
filed with CBP electronically in the Automated Commercial Environment 
(ACE) or via any other CBP-authorized electronic data interchange 
system, or as a paper filing, at the time of entry, or when filing a 
weekly entry from an FTZ in accordance with Sec.  146.63(c)(1) of this 
chapter at the time of entry summary.
    (5) Recordkeeping. Documents supporting the information required in 
EPA Declaration Form 3520-1 must be retained by the importer for a 
period of at least five (5) years in accordance with Sec.  163.4 of 
this chapter and must be provided to CBP upon request.
    (6) Documentation for diplomatic or foreign military personnel 
exemption. In order for a diplomat or foreign military personnel to 
claim an exemption pursuant to paragraph (g)(2) of this section, CBP 
must receive a Department of State-approved form DS-1504 (``Request for 
Customs Clearance of Merchandise'') or its electronic equivalent.
    (j) Release under bond. If an EPA declaration form filed in 
accordance with paragraph (i)(3) of this section states that the entry 
is being filed under one or more of the exemptions and exclusions 
identified in paragraph (h)(1), (2), (3), or (4) of this section, the 
entry will be accepted only if the importer, consignee, or surety, as 
appropriate, files a basic importation and entry bond containing the 
bond conditions set forth in Sec.  113.62 of this chapter, or files 
electronically in ACE or via any other CBP-authorized electronic data 
interchange system. The importer or consignee must deliver to CBP, 
either at the port of entry or electronically, documentation of EPA 
approval before the exemption or exclusion indicated on the EPA 
declaration form expires, or before some later deadline specified by 
the Center director based on good cause. If the EPA approval is not 
delivered to the port director within the specified period, the 
importer or consignee must deliver or cause to be delivered to the port 
director those vehicles which were released under a bond required by 
this paragraph. In the event that the vehicle or engine is not 
redelivered within five (5) days following the date the exemption or 
exclusion indicated on the EPA declaration form expires, or any later 
deadline specified by the port director, whichever is later, liquidated 
damages will be assessed in the full amount of the bond, if it is a 
single entry bond, or if a continuous bond is used, in the amount that 
would have been assessed under a single entry bond.
    (k) Notices of inadmissibility or detention. If a motor vehicle is 
determined to be inadmissible before or after release from CBP custody, 
the importer or consignee will be notified in writing of the 
inadmissibility determination and/or redelivery requirement. However, 
if a motor vehicle cannot be released from CBP custody merely because 
the importer has failed to attach to the entry the documentation 
required by paragraph (i) of this section, the vehicle will be held in 
detention by the port director for a period not to exceed 30-calendar 
days after filing of the entry at the risk and expense of the importer 
pending submission of the missing documentation. An additional 30-
calendar day extension may be granted by the port director upon 
application for good cause shown. If the requisite EPA declaration form 
required pursuant to paragraph (i)(3) of this section has not been 
filed within this deadline, which must not exceed 60 days from the date 
of entry, CBP will issue a notice of inadmissibility.
* * * * *
    (m) Prohibited importations. The importation of motor vehicles 
other than

[[Page 94979]]

in accordance with this section and the EPA regulations in 40 CFR parts 
85, 86, 600, 1036, 1037, and 1068 is prohibited.

0
4. In 12.74:
0
a. The section heading and paragraphs (a) through (d) are revised; and
0
b. Paragraph (e) is amended by removing the word ``shall'' and adding 
in its place the word ``must''.
    The revisions read as follows:


Sec.  12.74   Importation of nonroad and stationary engines, vehicles, 
and equipment.

    (a) Applicability of EPA regulations. The requirements governing 
the importation of nonroad and stationary engines subject to 
conformance with applicable emission standards of the U.S. 
Environmental Protection Agency (EPA) are contained in 40 CFR parts 
1033 through 1068. These EPA regulations should be consulted for 
detailed information as to the admission requirements for subject 
nonroad and stationary engines. EPA emission regulations also apply to 
vehicles and equipment with installed engines and all references in 
this section to nonroad or stationary engines include the vehicles and 
equipment in which the engines are installed. Nothing in this section 
may be construed as limiting or changing in any way the applicability 
of the EPA regulations.
    (b) Documentation requirements--(1) Exception for certain companies 
that manufacture and import nonroad or stationary engines, including 
engines incorporated into vehicles and equipment. The special 
documentation requirements of this paragraph (b) do not apply to the 
importation of nonroad or stationary engines, including engines 
incorporated into vehicles or equipment, by the company that 
manufactures the engines, provided that the engines are covered by a 
valid EPA Certificate of Conformity (COC) held by the importing 
manufacturer and bear the manufacturer's label showing such conformity 
and other EPA-required information.
    (2) Release. CBP will not release engines, vehicles, or equipment 
from custody unless the importer has submitted all required documents 
to demonstrate that the engines, vehicles, or equipment meet all 
applicable requirements.
    (3) Required EPA documentation. Importers of nonroad or stationary 
engines, including engines incorporated into vehicles and equipment, 
must submit EPA Declaration Form 3520-21, ``Importation of Engines, 
Vehicles, and Equipment Subject to Federal Air Pollution Regulations,'' 
to CBP at the time of entry, or when filing a weekly entry from an FTZ 
in accordance with Sec.  146.63(c)(1) of this chapter at the time of 
entry summary.
    (4) Filing method. EPA Declaration Form 3520-21 may be filed with 
CBP electronically in the Automated Commercial Environment (ACE) or via 
any other CBP-authorized electronic data interchange system, or as a 
paper filing, at the time of entry, or when filing a weekly entry from 
an FTZ in accordance with Sec.  146.63(c)(1) of this chapter at the 
time of entry summary.
    (5) Recordkeeping. Documents supporting the information required in 
EPA Declaration Form 3520-21 must be retained by the importer for a 
period of at least five (5) years in accordance with Sec.  163.4 of 
this chapter and must be provided to CBP upon request.
    (c) Release under bond--(1) Conditional admission. If the EPA 
declaration form states that the entry for a nonconforming nonroad 
engine is being filed under one of the exemptions described in 
paragraph (c)(3) of this section, under which the engine may be 
conditionally admitted under bond, the entry will be accepted only if 
the importer, consignee, or surety, as appropriate, files a basic 
importation and entry bond containing the bond conditions set forth in 
Sec.  113.62(c) of this chapter, or files electronically in ACE or via 
any other CBP-authorized electronic data interchange system.
    (2) Final admission. Should final admission be sought and granted 
pursuant to EPA regulations for an engine conditionally admitted 
initially under one of the exemptions described in paragraph (c)(3) of 
this section, the importer or consignee must deliver to the port 
director the prescribed statement. The statement must be delivered 
within the period authorized by EPA for the specific exemption, or such 
additional period as the port director of CBP may allow for good cause 
shown. Otherwise, the importer or consignee must deliver or cause to be 
delivered to the port director the subject engine, either for export or 
other disposition under applicable CBP laws and regulations (see 
paragraph (e) of this section). If such engine is not redelivered 
within five (5) days following the allotted period, liquidated damages 
will be assessed in the full amount of the bond, if a single entry 
bond, or if a continuous bond, the amount that would have been assessed 
under a single entry bond (see 40 CFR 1068.335).
    (3) Exemptions. EPA regulations in 40 CFR parts 60 and 1033 through 
1068 allow for exempting or excluding imported engines from 
certification requirements (see especially 40 CFR part 1068, subpart 
D). The specific exemptions under which a nonconforming nonroad engine 
may be conditionally admitted, and for which a CBP bond is required, 
are as follows:

    (i) Repairs or alterations (see 40 CFR 1068.325(a)).
    (ii) Testing (see 40 CFR 1068.325(b)).
    (iii) Display (see 40 CFR 1068.325(c)).
    (iv) Export (see 40 CFR 1068.325(d)).
    (v) Diplomatic or military (see 40 CFR 1068.325(e)).
    (vi) Delegated assembly (see 40 CFR 1068.325(f)).
    (vii) Partially complete engines, vehicles, or equipment (see 40 
CFR 1068.325(g)).

    (d) Notice of inadmissibility or detention. If an engine is found 
to be inadmissible either before or after release from CBP custody, the 
importer or consignee will be notified in writing of the 
inadmissibility determination and/or redelivery requirement. If the 
inadmissibility is due to the fact that the importer or consignee did 
not file the EPA Declaration Form 3520-21 at the time of entry, or when 
filing a weekly entry from an FTZ in accordance with Sec.  146.63(c)(1) 
of this chapter at the time of entry summary, the port director may 
hold the subject engine in detention at the importer's risk and expense 
for up to 30 days from the entry filing date. The port director may 
grant the importer's request for a 30-day extension for good cause. The 
port director will issue a notice of inadmissibility if documentation 
is still incomplete after this deadline, which must not exceed 60 days 
from the filing date for importation.
* * * * *

R. Gil Kerlikowske,
Commissioner, U.S. Customs and Border Protection.
    Approved: December 20, 2016.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2016-31050 Filed 12-23-16; 8:45 am]
 BILLING CODE 9111-14-P