Interpretation ID: 21886

Mr. Lawrence A. Beyer
674 Lake Road
Webster, NY 14580

Dear Mr. Beyer:

This is in reply to your letter of July 7, 2000, to Taylor Vinson of this Office.

You asked: "Is it a violation of the Act or the Regulations for the owner of a vehicle to obtain US Title for the vehicle prior to the vehicle's importation?"

We informed Philip Trupiano of Auto Enterprises on April 17, 2000, that it was permissible for a Registered Importer (RI) to obtain title to a vehicle in its own name before the conformance bond was released, but we did not address the question of titling a vehicle before its importation. A copy of that letter is enclosed.

Under our statute, a RI must not license or register an imported vehicle for use on the public roads, or release custody of the vehicle to a person for license or registration for such use, unless the conditions of Section 30146(a) of Title 49 United States Code have been satisfied. Also, if a RI fails to conform a vehicle, it must be exported or abandoned to the Government according to the terms of the entry bond covering it (Section 30141(d)(1); Sec. 591.8; Sec. 592.6(j)).

Under the statute, for permanent importations of vehicles, if a nonconforming vehicle is imported for personal use and not for resale under Section 30142, the statute does not prohibit its owner from obtaining a title before importation. Titling the vehicle in the name of its importer-owner does not affect either the obligation of the RI conforming the vehicle not to release it to the owner for registration until the conditions of Section 30146(a) have been satisfied, or the obligation of the owner to deliver the vehicle to Customs in the event that the vehicle has not been fully conformed.

If a nonconforming vehicle is imported for resale, it must be imported by a RI. If a RI obtains a title in its own name before importation, this would not affect the other obligations of the RI, including but not limited to those to retain custody until the conditions of Section 30146(a) have been satisfied, and to deliver the vehicle to Customs upon demand if the RI fails to conform it. In light of the statute and given that these other obligations remain applicable, we do not believe that it is a violation of our laws and regulations for a RI to obtain title to a vehicle in its own name before the vehicle is imported.

However, as we explained to Mr. Trupiano, a RI cannot obtain title in the name of its customer before the bond is released:

One of the conditions of the bond is that the vehicle it covers be exported or abandoned to the United States in the event that an insufficient showing of conformity is made and the bond and the vehicle are not released. If the RI has transferred or reassigned title to the vehicle to "the customer on whose behalf the vehicle is imported" before the bond has been released, the RI cannot fulfill its duty to export or abandon the nonconforming vehicle because it would no longer own the vehicle. In that instance, NHTSA's sole remedy would be to foreclose on the bond. This is insufficient to fulfill the safety purpose of the statute and the bond which is to ensure that imported noncomplying vehicles be brought into compliance before being licensed for use, and used, on the public roads.

This necessarily means that a RI cannot obtain title to a vehicle in the name of its customer before the RI imports the vehicle.

Sincerely,

Frank Seales, Jr.
Chief Counsel

Enclosure

ref:591
d.11/8/00