Interpretation ID: nht91-4.36

DATE: July 1, 1991

FROM: David R. Stepp -- Stein Shostak Shostak & O'Hara

TO: Paul Jackson Rice -- General Counsel, NHTSA

COPYEE: Greg Long -- Escargot Motor Cars, Inc.

TITLE: Escargot Motorcars, Inc. - Reimportation of Previously Imported Automobiles

ATTACHMT: Attached to letter dated 8-12-91 from Paul Jackson Rice to David R. Stepp (A38; Part 591; VSA 108(a)(2)(A))

TEXT:

On behalf of our client, Escargot Motorcars, Inc. (Escargot) of Toronto, Canada, we hereby request written approval for the reimportation into the United States of Volkswagen Beetles previously imported into the United States in their respective years of manufacture which have been sent to Mexico for refurbishment. This processing operation is prospective in nature and Escargot will not proceed until written assurances are received from the National Highway Traffic Safety Administration (NHTSA).

FACTS:

In the United States, Escargot intends to purchase titled Volkswagen Beetles, last available in 1979, which were previously imported into the United States by Volkswagen of America. At the time of original purchase, each automobile complied with all laws and regulations applicable to that year of manufacture.

The automobiles will be shipped to Mexico for refurbishment after having been registered by Vehicle Identification Number (VIN) at the border with the United States Customs Service by a licensed customhouse broker. In 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 an original Volkswagen replacement engine of 1,600 cc displacement. The body, all 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. A catalytic converter will be installed to meet or surpass U.S. emission standards in effect for the particular vehicle's year of manufacture.

Upon reimportation into the United States, all applicable customs duties will be paid. During the refurbishment in Mexico, the original frame/chassis is preserved on each automobile. The original VIN, which is physically stamped onto the frame/chassis, is also preserved and is easily readable for Customs inspection. Some of the original Volkswagen as exported to Mexico will possess the manufacturer's certification disk on the door post which shows the year of manufacture and confirms the satisfaction of all requirements of that date. In other automobiles whose bodies are worn or damaged, the entire bodies may be replaced and/or painted and this manufacturer's certification may be damaged or removed.

For certain vehicles with extensively damaged bodies, Escargot is contemplating stripping the bodies from the chassis in the United States prior to exportation to Mexico.

Escargot will keep detailed records of all restoration processes and will take photographs to confirm the processing performed in Mexico.

LAW & DISCUSSION:

The Federal Motor Vehicle Safety Standards (FMVSS) for passenger cars and equipment are applicable to automobiles manufactured on or after the dates of the various provisions (49 C.F.R. Part 571). Thus, any previously imported Volkswagen Beetle will be required to meet all FMVSS for its respective model year, i.e., a 1968 Volkswagen Beetle must satisfy FMVSS 101-107, 109-11, 116, 201, 203-11, and 301.

For automobiles where the FMVSS apply, a manufacturer's certification must be permanently affixed to the motor vehicle. Under 49 C.F.R. Sec. 567, this certification must contain the name of the manufacturer, month and year of manufacture, "Gross Vehicle Weight Rating," "Gross Axle Weight Rating," the VIN, the type classification of the vehicle, and a statement that the vehicle conforms to all applicable FMVSS in effect on the date of manufacture.

In addition, an importer must file a declaration in accordance with 49 C.F.R. 591.5. In particular, Sec. 591.5(b) provides that the declaration must state that the imported vehicle conforms with all applicable safety standards, bumper, and theft prevention standards. A certification label or tag to that effect must be permanently affixed by the original manufacturer to the vehicle. See also 19 C.F.R. Sec. 12.80(b)(1), where Customs states its procedures for implementing the NHTSA declaration requirements.

Against this background, the Volkswagen Beetles which Escargot proposes to refurbish in Mexico and reimport into the United States should be allowed reentry by NHTSA. The automobiles will be restored to a point which actually exceeds the standards necessary for the model years of the motor vehicles. For example, a Volkswagen Beetle imported in 1968 will be fitted with a catalytic convertor, a device originally not required for that model year. Where 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.

In addition, we maintain that further certification is also not necessary for motor vehicles which may require body restoration so extensive that the doorpost which contains the manufacturer's certification may be damaged or removed. Since the original frame and VIN is retained throughout the restoration process, the refurbished Volkswagen Beetle will be recognized as a motor vehicle by its title which was previously imported and which complied with all applicable laws and regulations. The fact that a doorpost containing the certification is replaced or repainted should not nullify the manufacturer's certification. NHTSA, through the U.S. Customs recordation of the VIN at the border, has sufficient means to insure that a vehicle which is sent from the United States to Mexico will

be the same one returned to the United States after restoration. Similarly, vehicles which are stripped of their bodies prior to shipment to Mexico should be allowed entry without further certification since the chassis will be preserved and registered.

Although not controlling in the United States, Transport Canada's enforcement position with respect to the importation of restored Volkswagen Beetles into Canada is relevant. Under the Canadian Motor Vehicle Act, vehicles manufactured or rehabilitated on used chassis or floor pans are not subject to its provisions. This position is based on the concept that the chassis is the integral part of the vehicle and is thus the only component which must be retained.

In conclusion, NHTSA should determine that Volkswagen Beetles previously imported into the United States and restored in Mexico should be allowed entry into the United States without further certification. The proposed restoration performed in mexico is no different than that which is currently done in the United States with original Volkswagen Beetles. The original chassis of each Volkswagen is retained and the VIN is preserved throughout the refurbishment operations. The registration of the vehicles by VIN at the Mexican border provides a sufficient method to insure the integrity of the automobiles upon reimportation. Accordingly, we respectfully request NHTSA's approval for the reimportation of Escargot's refurbished vehicles.

We look forward to your earliest possible response to this inquiry. Should you need any additional information or have any questions, please do not hesitate to contact me.