Interpretation ID: 3114yy
Stein Shostak Shostak & O'Hara, P.C.
Suite 807
1620 L Street, N.W.
Washington, D.C. 20036-5605
Re: Escargot Motorcars, Inc. Reimportation of Volkswagens
Dear Mr. Stepp:
This responds to your letter of July 1, l99l, on behalf of your client, Escargot Motorcars of Canada, with respect to its plan to export Volkswagen Beetles to Mexico for refurbishment, with subsequent reentry into the United States. You have asked for an interpretation that such vehicles may be allowed reentry without further certification.
As you have explained it, Escargot Motorcars plans to purchase Beetles that were initially imported into the United States by Volkswagen of America, and certified as complying with all applicable Federal motor vehicle safety standards. After shipment to Mexico, each automobile will be completely stripped of all damaged original parts and the frames will be restored and repainted. The engine will be replaced with a VW engine. The body, sheet metal, interior, bumpers, and lights will be restored or replaced with replacement parts "and will be exactly as those original to the Volkswagen Beetles for their respective years of manufacture." Some of the old Beetles will retain their manufacturer's original certification of compliance located on the door post, while others, if the bodies are worn or damaged, "the entire bodies may be replaced and/or painted and this manufacturer's certification may be damaged or removed." If the bodies are extensively damaged, Escargot may ship only the chassis to Mexico.
You state that "(w)here the manufacturer's certification on the doorpost is preserved after restoration in Mexico, the vehicles clearly should be allowed to enter the United States without further certification." You also state that further certification is also unnecessary for vehicles no longer bearing the certification label, or whose door post condition is such that it must be removed during restoration, because that vehicle's VIN will indicate that it was originally imported into the United States as a certified and complying car. Similarly, those vehicles which are stripped of their bodies prior to shipment should be allowed entry without further certification "since the chassis will be preserved and registered."
The appropriate statute is the National Traffic and Motor Vehicle Safety Act (the Act, l5 U.S.C. 1381 et seq.), which provides the authority for the Federal motor vehicle safety standards (49 CFR Part 571), and the vehicle importation regulation (49 CFR Part 591). You suggest that the refurbished Beetles may be admitted without further certification since they were originally manufactured to conform to the Federal safety standards. Thus, it appears that Escargot would seek entry under section 591.5(b), the declaration that the vehicle conforms to all applicable Federal motor vehicle safety standards "and bears a certification label or tag to that effect permanently attached by the original manufacturer of the vehicle."
The first issue raised by the factual situation described in your letter is whether the "refurbished" vehicles would be considered to be new or "used" vehicles. If the refurbishing involves sufficient manufacturing operations for the vehicles to be considered to be new, the vehicles would be required to meet all applicable safety standards in effect at the time of the new manufacturing operations (refurbishing), including the requirements for automatic restraints. However, if the refurbishing involves more minor operations, the vehicles would be considered to be used. As discussed below, only if the vehicles would be considered to be used could they be reimported into the United States based on the original manufacturer's certification label.
The range of potential manufacturing operations described by your letter is so broad as to include ones where a vehicle would be considered to be used and ones where a vehicle would be considered to be new. As indicated above, you state the following:
After shipment to Mexico, each automobile will be completely stripped of all damaged original parts and the frames will be restored and repainted. The engine will be replaced with a VW engine. The body, sheet metal, interior, bumpers, and lights will be restored or replaced with replacement parts "and will be exactly as those original to the Volkswagen Beetles for their respective years of manufacture." (Emphasis added.)
If the operations only involved replacement of the engine and minor restoration/repair of other parts, the vehicle would be considered to be used. If, however, in addition to replacing the engine, the other operations involved replacement or "re-manufacturing" of the other parts mentioned in your letter, it would be considered a new passenger car and subject to all current safety standards, notwithstanding the fact that the old frame was retained. A new certification would also be required.
I note that information that this agency has on Escargot's operations in Canada suggests that the latter category of operations may be more what that company has in mind. We have seen an advertising circular issued by The Beetles of Toronto, "a registered tradename of Escargot Motorcars, Inc.", that boasts "Every single piece of your Beetle is factory brand new, except one, and that's the frame." The circular states that The Beetles places around the pan, "all new components: engine, suspension, braking, steering, etc. The entire body is also new, as are the bucket seats, dashboard, gauges, dials, everything. Even down to the last nut and bolt." We regard this as the manufacture of a new motor vehicle to which contemporary safety standards apply, and which must be certified by Escargot as conforming to those standards.
To the extent that Escargot performed operations that are sufficiently minor that a vehicle would be considered used, it could be reimported into the United States under section 591.5(b), based on the original manufacturer's certification label. Under that section, an importer declares that the vehicle conforms to all applicable safety standards and "bears a certification label or tag to that effect permanently affixed by the original manufacturer to the vehicle."
In the case of a used vehicle which is being reimported, we interpret the phrase "conforms to all applicable safety standards" to refer to the vehicle at the time of its original manufacture prior to its first sale. We recognize that, because of age and use, a used vehicle typically may not continue to meet some safety standards, and did not intend that phrase to prevent reimportation of used vehicles that originally complied with all safety standards.
While a used vehicle typically may not continue to meet some safety standards, the original certification label ordinarily lasts for the life of the vehicle. The certification label is the primary evidence that the vehicle was originally manufactured to meet applicable safety standards, and, in order for a used vehicle to reimported under section 591.5(b), we would ordinarily expect the certification label to present at the time of the reimportation. We recognize, however, that a certification label may be defaced or destroyed and would not, in such instance, consider absence of the certification label to an absolute bar to reimporting a vehicle under section 591.5(b). However, we would need to very carefully evaluate each factual situation on a case-by-case basis.
If you have any further questions of a legal nature, you may refer them to Taylor Vinson of this Office (202-366-5263), and if they are of a technical nature, to Clive Van Orden of the Office of Enforcement (202-366-2830).
Sincerely,
Paul Jackson Rice Chief Counsel
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