Interpretation ID: 86-6.8

TYPE: INTERPRETATION-NHTSA

DATE: 12/08/86

FROM: AUTHOR UNAVAILABLE; Erika Z. Jones; NHTSA

TO: Roger C. Fairchild

TITLE: FMVSS INTERPRETATION

TEXT:

Roger C. Fairchild, Esq. Shutler and Low 12030 Sunrise Valley Drive Suite 209 Reston, VA 22091

Dear Mr. Fairchild:

This is in reply to your letter of October 7, 1986, asking for an interpretation of the joint DOT-Customs regulations applicable to the importation of motor vehicles and equipment subject to the National Traffic and Motor Vehicle Safety Act. You stated your understanding that under 19 C.F.R. l2.8O(b)(l)(iii), the importer of a nonconforming vehicle must certify that the vehicle will not be sold or offered for sale until the NHTSA Administrator issues an import bond release letter. You asked whether this or any other provision prohibits the lease of a vehicle prior to issuance of the NHTSA bond release letter.

Neither this provision nor any other prohibits the leasing of a vehicle during the period prior to issuance of the bond release letter. A sale is generally understood as a transfer of title and possession, whereas a lease involves transfer only of possession. The purpose for the restrictive language in 12.80(b)(l)(iii) is, as you correctly stated, "to assure that any remedial actions required by NHTSA...could be performed by the importer."

I hope that this answers your question satisfactorily.

Sincerely,

Erika Z. Jones Chief Counsel

Erika Z. Jones, Esquire Chief Counsel National Highway Traffic Safety Administration 400 Seventh Street, S.W.

Washington D.C. 20590

Dear Ms. Jones:

I request an interpretation of the joint DOT-Customs regulations applicable to direct import motor vehicles. Under 19 C.F.R. 12.80(b) (l)(iii), the importer of such a vehicle must certify that the vehicle will not be sold or offered for sale until the NHTSA Administrator issues an Import bond release letter. Does this or any other provision administered by NHTSA prohibit the lease of an imported vehicle prior to issuance of the NHTSA bond release letter? If so, what provision imposes such a restriction?

Under a leasing arrangement, the importer would retain title to the vehicle. By retaining title, the importer would have a degree of control over the vehicle, to assure that any remedial actions required by NHTSA (i.e., further vehicle modifications or submission of additional compliance information) could be performed by the importer. Based on discussions with your staff, it is my understanding that this residual control by the importer should satisfy NHTSA's concerns which form the basis for the sale-before-release prohibition.

Thank you for your assistance in this matter.

Sincerely,

Roger C. Fairchild

RCF:hgc