Interpretation ID: 2659y
Dow, Lohnes & Albertson
1255 23rd Street, N.W.
Washington, D.C. 20037-1194
Dear Mr. Fink:
This responds to your letter of May 25, l990, to Robert F. Hellmuth, Director, Office of Vehicle Safety Compliance, on behalf of your client, John A. Rosatti. Mr. Rosatti would like to import a nonconforming Porsche 959 into the United States as a "demonstration" car. He intends to promote business by displaying it in his automobile dealerships and does not intend to drive it on the roads. Specifically, he would like to display it in his Acura dealership to build showroom traffic. He has offered to remove the engine, and to declare that, if the car is transferred by sale or inheritance, "the new owner will be bound to keep the engine and body of the car separate."
In support of your request, you argue that entry into the United States is permissible pursuant to 49 CFR 591.5(j), which implements l5 U.S.C. 1397(j). This section provides that the agency may exempt any person from the prohibitions in sections 1397(a)(1)(A) and (c)(1) "upon such terms and conditions as [NHTSA] may find necessary solely for the purpose of research, investigations, studies, demonstrations or training, or competitive racing events."
We are unable to agree with your interpretation and arguments. The Imported Vehicle Safety Compliance Act of l988, which added l5 U.S.C. 1397(c) through (j), responded to a report of the General Accounting Office which indicated that a large number of nonconforming vehicles were being imported into the United States without sufficient assurances or evidence that they were being brought into compliance with all applicable Federal safety standards. The provisions that were enacted by Congress represent a significant, and, we believe, restrictive change from the regulations previously in force, and a clear directive to the agency to proceed in accordance with the new statutory language.
The agency's previous position is represented by language that you cite in the preamble of the final rule (which you term Supplemental Information) adopting Part 591:
"Importation for this class of noncomplying motor vehicles [i.e., demonstration vehicles] has been permitted pursuant to the assumption that motor vehicle safety would not be affected by the temporary importation of noncomplying motor vehicles not generally used on the public roads, and whose appearance on them would be limited." (54 FR 40076).
Under the previous regulation, vehicles could be imported for purposes of "show, test, experiment, competition, repair, or alterations" (19 CFR 12.80(b)(l)(vii)). You will note that, contrary to your parenthetical statement, the demonstration exception did not exist in the old regulation. The most appropriate exception in the old regulation for what your client contemplates was the one for "show." Under 591.5(j) of the new regulation, which follows the language of the statute, a vehicle may be imported for the purposes outlined in the second paragraph of this letter, none of which include "show." We interpreted "show" to mean "to cause to be seen," such as in a static display. We do not interpret the word "demonstrations" as encompassing static display; a vehicle is "demonstrated" to a prospective purchaser, for example, by allowing him or her to drive it on the public roads. However, with respect to the new regulation, we have interpreted the word "demonstration" only in the context of allowing importation of nonconforming vehicles by registered importers who wish to prove, or demonstrate, that the vehicle is capable of conformance modification under one of the provisions of 1397(c)(3)(A)(i). This, of course, is not the situation with your client, and we decline to provide the interpretation you suggest, as we do not believe that an importation under that circumstance accords with the intent of Congress.
Sincerely,
Paul Jackson Rice Chief Counsel ref:59l d:9/20/90