Interpretation ID: nht93-4.22
DATE: June 4, 1993
FROM: John Womack -- Acting Chief Counsel, U.S. Department of Transportation, NHTSA
TO: Daniel L. Kokal -- Champagne Imports
TITLE: None
ATTACHMT: Attached to letter dated 5-8-93 from Daniel L. Kokal to Johnathan Womack (OCC 8624)
TEXT: This is in reply to your letter of May 8, 1993, requesting use of continuous surety bonding for importation of nonconforming vehicles under the Registered Importer program.
As you have informed us, (c)urrently, single entry bonds are filed with each (nonconforming) vehicle at 150% of the vehicle's value . . . .", and that this is expensive for the importer of Canadian vehicles which "rarely, if ever, require safety modifications to meet U.S. standards." You propose a continuous bond which would cover more than one vehicle, with the same level of value. The example you give is that of a continuous bond of $150,000 which would cover 10 vehicles imported together, each with a value of $10,000 as determined by the U.S. Customs Service, rather than individual bonds for 10 vehicles of $10,000 value, each bond at $15,000. Your specific suggestion is for "the ability to import no more than 15 vehicles under a given continuous bond at 150% total vehicle value."
We are unable to implement your suggestion at present. Under 49 CFR 591.8 (a), the safety compliance bond's coverage is restricted to "only one motor vehicle." Thus, rulemaking is required to amend paragraph 591.8 (a) to permit a bond that covers more than one vehicle. In addition, Appendix A to Part 591 will have to be modified; this sets forth the terms of the bond, presently expressed in single-entry terms. As NHTSA is required to reimburse Customs for its costs in processing safety compliance bonds, that agency must necessarily be consulted to determine the impact of such a change on its operations, with a possible change in the bond processing fee imposed under Part 594. However, the Office of Vehicle Safety Compliance will consider the feasibility of rulemaking on this subject.