Interpretation ID: nht70-1.29

DATE: 02/04/70

FROM: D.W. TOMS -- DIR., NHTSA

TO: Motorcycle Scooter & Allied Trades Association Inc.

TITLE: FMVSR INTERPRETATION

TEXT: RE: MARKETING OF COMPETITION MOTORCYCLES

This is in response to your letter of November 19, 1969, in which you ask for an advisory opinion "as to the measures which an importer or distributor should take in order to assure compliance with regulations of the Federal Highway Administration in the marketing of motorcycles for competition use".

Specifically, you note:

"[The importation regulations appear] to require that the importer shall declare that motor vehicles imported for competition purposes will not be sold or licensed for use on the public roads. Hence there is some uncertainty whether this declaration connotes an implicit responsibility which survives sale to a purchaser not for resale".

The declaration to which you refer, 19 CFR @ 12.80(b)(2)(vii), is the declaration that the vehicle is being imported for purposes of competition and that it will not be sold or licensed for use on the public roads. If we discover that a vehicle covered by such a declaration has been sold or licensed for use on public roads, we would then have to determine whether the declaration was a false one. In making this determination we would look to those factors which show that, at the time he made the declaration, the importer knew or had reason to know that the vehicle would be put to on-road use. If, for example, prior dealings with the vehicle's purchaser had made the importer aware of the purchaser's intent to divert vehicles to markets for so-called "street legal" motorcycles, it is very likely that we would conclude that a declaration that the vehicle will not be sold or licensed for use on public roads was false at the time it was made. In these circumstances, our conclusion would not be altered by the fact that, at the time he sold the vehicle, the importer supplied the buyer with a document specifying that the vehicle was intended only for purposes of competition. In short, we would look behind the sales agreement to the realities of the transaction as the parties knew them.

Similarly, if relevant facts disclose that the importer seeks to evade his responsibilities by active promotion and sale to competition cycle purchasers of motor vehicle equipment which will make the competition machine "street local", and purchasers of competition machines are in fact buying such equipment for immediate conversion purposes, then a reasonable conclusion could be reached that a non-complying motor vehicle was being imported and offered for sale by the importer regardless of the declaration made at time of entry. In this sense there is "an implicit responsibility which survives sale to a purchaser not for resale".

You also raise the following point: "It is understood that motorcycle manufacturers and importers should not equip competition motorcycles with devices and accessories that would render them lawful for use and registration for use on public highways. It would be normal industry practice, however, to catalog accessory items and parts which could be applied to competition machines by the ultimate purchaser. Since many competition motorcycles have a 'sister' model manufactured for highway use, the sale of such items is necessary. Thus a question of the propriety of this practice is raised."

The mere cataloguing of parts equally applicable to both a competition motorcycle and a similar "sister" non-competition model does not appear to raise a question of propriety so long as other facts do not indicate that a significant number of purchases of these parts are made with the intention of conversion of competition motorcycles to street use.

Finally you note:

"Competition motorcycles are generally marketed through retail dealers in motor vehicles. Hence, the question arises as to whether this practice might continue without opposition by the Federal Highway Administrator."

You have also requested a ruling "that sale of competition motorcycles be permitted through franchised dealerships". You should clearly understand that the National Highway Safety Bureau his no desire to alter existing methods of motor vehicle marketing; it does not intend to "oppose" and it has no power to "permit" the sale of motor vehicles.

It does, however, have the power to classify a competition motorcycle as a "motor vehicle" if these vehicles are, in fact, being operated on the public roads to a significant extent, and if it believes that such a classification would reduce the toll of traffic injuries and deaths. But the mini-bike interpretation (34 F.R. 15416), referenced by you, states that marketing through retail dealers in motor vehicles is only one criterion which will be considered in any question of classification. Therefore importers and distributors of competition motorcycles which are sold through franchised dealerships are best advised in marketing these vehicles to follow the other criteria which the mini-bike interpretation sets forth.