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Importations of Certain Vehicles and Engines Subject to Federal Antipollution Emission Standards

American Government Special Collections Reference Desk

American Government

Importations of Certain Vehicles and Engines Subject to Federal Antipollution Emission Standards

Timothy E. Skud
Department of Homeland Security
R. Gil Kerlikowske
Department of the Treasury
17 August 2016


[Federal Register Volume 81, Number 159 (Wednesday, August 17, 2016)]
[Proposed Rules]
[Pages 54763-54768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18761]



[[Page 54763]]

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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Part 12

[USCBP-2016-0011]
RIN 1515-AE11


Importations of Certain Vehicles and Engines Subject to Federal 
Antipollution Emission Standards

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document proposes amendments to the U.S Customs and 
Border Protection (CBP) regulations relating to the importation into 
the United States of certain vehicles and engines subject to federal 
antipollution emission standards under the Clean Air Act (CAA). 
Compliance with these emission standards must be demonstrated to CBP by 
either filing, or retaining and producing upon request, the appropriate 
U.S. Environmental Protection Agency (EPA) declaration form or by 
establishing that the subject imports are exempt from this requirement. 
CBP is proposing to amend its regulations to harmonize the 
documentation requirements applicable to different classes of vehicles 
and engines that are subject to the CAA's emission standards. This 
document also proposes to permit the required EPA emission compliance 
forms to be filed with CBP electronically. CBP is proposing other non-
substantive amendments to update regulatory citations and delete 
obsolete provisions. The proposed changes set forth in this document 
support consistency in the administration of CBP's vehicle and engine 
imports program. In addition, electronic filing of EPA declaration 
forms will support key modernization initiatives, expedite the entry 
and clearance process, enhance targeting and enforcement objectives, 
and connect CBP with partner government agencies and the trade 
community through a single window access point.

DATES: Comments on the proposed rule must be received on or before 
September 16, 2016.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number USCBP 
2016-0011.
     Mail: Trade and Commercial Regulations Branch, Office of 
Trade, Regulations and Rulings, U.S. Customs and Border Protection, 90 
K Street NE., 10th Floor, Washington, DC 20229-1177.
    Instructions: All submissions received must include the agency name 
and docket number for this proposed rulemaking. All comments received 
will be posted without change to http://www.regulations.gov, including 
any personal information provided. For detailed instructions on 
submitting comments and additional information on the proposed 
rulemaking process, see the ``Public Participation'' heading of the 
SUPPLEMENTARY INFORMATION section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Submitted comments 
may also be inspected during regular business days between the hours of 
9 a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch, 
Office of Trade, Regulations and Rulings, U.S. Customs and Border 
Protection, 90 K Street NE., 10th Floor, Washington, DC. Arrangements 
to inspect submitted comments should be made in advance by calling 
Joseph Clark at (202) 325-0118.

FOR FURTHER INFORMATION CONTACT: For questions related to the filing of 
EPA forms with CBP, please contact William Scopa, Partner Government 
Agencies Interagency Collaboration Division, Office of Trade, Customs 
and Border Protection, at William.R.Scopa@cbp.dhs.gov. For questions 
related to EPA's vehicle and engine imports program, please contact 
Holly Pugliese at pugliese.holly@epa.gov.

SUPPLEMENTARY INFORMATION: 

Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
proposed rule. CBP also invites comments that relate to the economic, 
environmental, or federalism effects that might result from this 
proposed rule. If appropriate to a specific comment, the commenter 
should reference the specific portion of the proposed rule, explain the 
reason for any recommended change, and include data, information, or 
authority that supports such recommended change.

Background

    The Clean Air Act (CAA), as amended (42 U.S.C. 7401 et. seq.), is 
the comprehensive federal law that regulates air emissions from 
stationary and mobile sources. Section 203(a) of the CAA, 42 U.S.C. 
7522, prohibits, inter alia, importation into the United States of new 
motor vehicles and new motor vehicle engines unless they are covered by 
a certificate of conformity as prescribed by regulation authorized by 
the CAA. Section 203(b)(2) of the CAA provides that a new motor vehicle 
or new motor vehicle engine offered for importation in violation of 
section 203(a) will be refused admission into the United States. In 
this situation, however, the Secretary of the Treasury and the 
Administrator of the U.S. Environmental Protection Agency (EPA) may, by 
joint regulation, provide for a deferred final determination as to 
admission and authorize delivery of the goods to the importer or 
consignee upon such conditions (including the furnishing of a bond) as 
may be deemed appropriate. Section 208 of the CAA, 42 U.S.C. 7542, 
provides that the Administrator of the EPA may require a manufacturer 
to produce, among other items, all records, files, and papers necessary 
to demonstrate compliance with applicable CAA provisions. Section 
213(d) of the CAA, 42 U.S.C. 7547, requires that nonroad vehicle and 
engine standards be enforced in the same manner as those applicable to 
onroad vehicles and engines.
    These statutory provisions are implemented in the CBP regulations 
at Sec. Sec.  12.73 and 12.74 of title 19 of the Code of Federal 
Regulations (19 CFR 12.73 and 12.74). Section 12.73 provides for 
``[M]otor vehicle and engine compliance with Federal antipollution 
emission requirements.'' Corresponding EPA regulations for motor 
vehicles and engines are promulgated at 40 CFR parts 85 and 86. Section 
12.74 provides for ``[N]onroad and stationary engine compliance with 
Federal antipollution emission requirements.'' Corresponding EPA 
regulations for nonroad and stationary engine compliance are 
promulgated at 40 CFR parts 1033 through 1068.
    EPA requires the submission of certain documents for purposes of 
compliance with the CAA. EPA makes available EPA Declaration Form 3520-
1 for the importation of passenger vehicles, highway motorcycles, and 
their corresponding engines into the United States, and EPA Declaration 
Form 3520-21 for the importation of heavy-duty highway engines and 
nonroad engines (gas, diesel, marine,

[[Page 54764]]

stationary) into the United States, including engines already installed 
in vehicles or equipment. Both forms can be found in fillable .pdf 
format on EPA's ``Imports Program'' Web site at http://www.epa.gov/otaq/imports/forms-resources.htm.

Current CBP Filing Requirements for Importations of Certain Vehicles 
and Engines Subject to Federal Antipollution Emission Standards

I. 19 CFR 12.73/EPA Declaration Form 3520-1

    For importations that are covered by EPA Declaration Form 3520-1, 
existing Sec.  12.73(i) of the CBP regulations (19 CFR 12.73(i)) 
requires importers to file the requisite information with CBP at the 
time of entry. An exemption from this requirement exists for motor 
vehicle imports that are covered by an EPA Certificate of Conformity 
(COC) which are labeled accordingly (see 19 CFR 12.73(b)(1)); for these 
vehicles, an importer does not have to file the EPA Declaration Form 
3520-1 with CBP at the time of entry, nor is the importer required to 
prepare and retain the form as part of its recordkeeping obligations. 
Section 12.73(g) also exempts motor vehicles imported by diplomats, 
foreign military personnel, and nonresidents from applicable emission 
requirements on the condition that the vehicles are not to be resold in 
the United States, and provided diplomats and foreign military 
personnel meet applicable documentation requirements set forth in 
paragraph (i)(4) of this section. In all other instances, the form is 
required to be completed and filed with CBP at the time of entry.

II. 19 CFR 12.74/EPA Declaration Form 3520-21

    For importations that are covered by EPA Declaration Form 3520-21, 
existing Sec.  12.74(b) (19 CFR 12.74(b)) requires importers to prepare 
the form and keep it on file for a period of at least five years from 
the date of entry in accordance with Sec.  163.4 (19 CFR 163.4). The 
form must be made available upon request by CBP. Unlike motor vehicle 
manufacturers subject to Sec.  12.73 (19 CFR 12.73), manufacturers that 
import products covered by EPA Declaration Form 3520-21 are not exempt 
from preparing this form even if the subject goods are covered by an 
EPA COC; they are required to prepare EPA Declaration Form 3520-21 and 
keep it on file for a period of at least five years from the date of 
entry.

Explanation of Proposed Amendments to CBP Regulations

III. Harmonization of Filing Requirements Applicable to EPA Declaration 
Forms 3520-1 and 3520-21

    In an effort to provide consistency in the administration of CBP's 
vehicle and engine imports program so that importers of both road 
vehicles and engines, as well as stationary and nonroad engines 
(including engines incorporated into vehicles or equipment), are 
subject to the same filing and recordkeeping requirements, CBP is 
proposing to conform the entry filing requirements applicable to the 
EPA Declaration Form 3520-21 to those that currently exist for EPA 
Declaration Form 3520-1. Specifically, CBP is proposing to amend 19 CFR 
12.74(b) to require that importers of stationary, nonroad or heavy-duty 
highway engines (including engines incorporated into vehicles or 
equipment) file EPA Declaration Form 3520-21 at the time of entry, 
unless exempt. CBP is proposing to exempt an importer that manufactures 
nonroad or stationary engines, including engines incorporated into 
vehicles and equipment, from the requirement to file an EPA Declaration 
Form 3520-21 at the time of entry if that importer holds a valid EPA 
COC for those engines and the engines are labeled to show compliance 
with applicable emission requirements.

IV. Electronic Filing of EPA Declaration Forms 3520-1 and 3520-21

    This document proposes to amend Sec. Sec.  12.73 and 12.74 to 
permit the electronic filing of EPA Declaration Forms 3520-1 and 3520-
21 to CBP in the Automated Commercial Environment (ACE) or to any other 
CBP-authorized electronic data interchange system. The EPA declaration 
forms may also still be filed with CBP in paper with a paper entry 
filing at the time of entry.
    The electronic filing of these forms will support key modernization 
and compliance initiatives of the International Trade Data System, as 
established by section 405 of the Security and Accountability for Every 
(SAFE) Port Act of 2006, Public Law 109-347, 120 Stat. 1884, by 
utilizing a single portal system (ACE) for the collection and 
distribution of standard electronic import and export data required by 
participating Federal agencies. The electronic transmission to CBP of 
EPA declaration forms will automate and enhance the interaction between 
the EPA and CBP by facilitating electronic collection, processing, 
sharing, and review of requisite trade data and documents during the 
cargo import and export process. Electronic filing of these EPA 
declaration forms at the time of entry will provide for a quicker and 
more efficient clearance process and enhance CBP's ability to conduct 
targeting and enforcement of importation requirements. Electronic 
filing will also permit CBP to analyze and flag problems immediately, 
whereas paper filings result in an ad-hoc process that requires a 
physical inspection by a CBP or EPA inspector. CBP is of the view that 
requiring EPA Declaration Forms 3520-1 and 3520-21 to be filed with 
every appropriate entry (with the exception of certain importing 
manufacturers, as described above) will expedite the clearing of 
vehicles and engines that are compliant with applicable emissions 
requirements.

V. Other Proposed Changes

    CBP is proposing other changes to Sec. Sec.  12.73 and 12.74 to 
update regulatory citations, delete provisions that are no longer 
relevant, and provide non-substantive re-statements of existing 
regulatory text to enhance readability. CBP is also updating regulatory 
language to ensure that electronic filing can be accommodated. The 
proposed changes are described below:
     CBP is proposing to amend Sec.  12.73(a) to reflect 
updated EPA regulatory citations and to provide a non-substantive re-
statement of the existing regulatory text to enhance readability.
     This document proposes to remove Sec.  12.73(c)(3) from 
the CBP regulations. Paragraph (c)(3) sets forth requirements for 
vehicles participating in EPA-approved catalytic converter or oxygen 
sensor control programs. EPA no longer has such programs.
     This document proposes to remove Sec.  12.73(c)(4) from 
the CBP regulations. Paragraph (c)(4) pertains to vehicles of United 
States or foreign origin manufactured with a catalytic converter or 
oxygen sensor, or any previously imported vehicle subsequently modified 
with a catalytic converter or oxygen sensor. Under this provision, 
these vehicles are not considered to be in compliance with applicable 
emission requirements if used outside of the United States, Canada, 
Mexico, or other countries as EPA may designate, until the catalytic 
converter and/or oxygen sensor is replaced. This provision was intended 
to address vehicles that may have traveled to countries where only 
leaded fuel was available, which could have a detrimental effect on 
catalytic converters and/or oxygen sensors. Since leaded fuel is no 
longer available in

[[Page 54765]]

most countries, it is proposed to delete this provision.
     CBP is proposing amendments to Sec.  12.73(d) that further 
clarify the role of an Independent Commercial Importer, re-designate 
``working'' days as ``business'' days, and provide a re-statement of 
existing regulatory text for enhanced readability.
     CBP is proposing amendments to Sec.  12.73(e), in the 
introductory paragraph and paragraph (e)(4), that enhance readability 
and clarify that motorcycles are ``highway'' vehicles.
     CBP is proposing to amend Sec.  12.73(f) by requiring that 
the designated motor vehicles be ``new'' in order to conform to the EPA 
regulatory requirements set forth in 40 CFR 85.1709. CBP also proposes 
editorial changes to enhance readability.
     In Sec.  12.73(g)(2), CBP is proposing to change the 
existing reference to paragraph ``(i)(4)'' to ``(i)(6)'' to reflect 
that provision's proposed redesignation.
     The proposed amendments to Sec.  12.73(h) enhance 
readability, reflect updated regulatory citations, and remove the word 
``motor'' from the introductory text and from the regulatory text in 
paragraph (h)(5) pertaining to racing cars.
     CBP is proposing to amend Sec.  12.73(i) by adding new 
paragraphs that prescribe methods of filing the EPA declaration forms 
and set forth applicable recordkeeping requirements, and by 
redesignating existing paragraph (i)(4) as new paragraph (i)(6).
     CBP is proposing to amend existing Sec.  12.73(i)(4), 
redesignated in this proposed rule as paragraph (i)(6), by removing the 
requirement that diplomats and foreign military personnel must submit 
the emission declarations specified in existing 19 CFR 12.73(i)(2) 
(redesignated as 19 CFR 12.73(i)(3) in this proposed rule) with their 
entry, a copy of the motor vehicle importer's official orders or the 
name of the embassy to which the importer is accredited, if applicable. 
Pursuant to 19 CFR 148.82, the baggage and effects of diplomatic, 
consular, and other privileged personnel representing foreign 
governments are admitted free of duty without the filing of an entry 
upon the request of the Department of State. As State Department policy 
is to require that importation occur through the DS-1504 (``Request for 
Customs Clearance of Merchandise'') process and not through the entry 
process, it is proposed to amend existing Sec.  12.73(i)(4)--
redesignated as proposed 19 CFR 12.73(i)(6)--to no longer require the 
submission of emission documentation, official orders, or embassy 
information. Instead, it is proposed that a claim by diplomats and 
foreign military personnel for exemption from Sec.  12.73(g)(2) 
emission requirements must be supported by a Department of State-
approved form DS-1504 or its electronic equivalent.
     Section 12.73(m) is proposed to be amended to reflect 
updated EPA regulatory citations.
     CBP is proposing to amend Sec. Sec.  12.73(j) and 
12.74(c)(1) by adding language stating that bonds may be submitted to 
CBP electronically and may be filed by a surety.
     This document proposes to remove Sec.  12.74(a)(1)-(3) 
from the CBP regulations as these paragraphs refer to obsolete EPA 
regulatory sections, and to add language clarifying the scope of the 
applicable EPA emission regulations.
     This document proposes to remove Sec.  12.74(c)(3)(iv) 
from the CBP regulations. Paragraph (c)(3)(iv) prescribes 
precertification for vehicles, engines and equipment. This provision 
refers to obsolete requirements found in EPA regulation 40 CFR 
89.611(b)(3) regarding Independent Commercial Importers. EPA will make 
conforming amendments to its regulations to delete this provision.
     CBP is proposing to amend Sec.  12.74(c)(3) to add 
exemptions that conditionally allow for the importation of 
nonconforming vehicles, engines, and equipment. Exemptions for 
diplomatic and military personnel (40 CFR 1068.325(e)), partially 
complete engines (40 CFR 1068.325(f)), and delegated assembly (40 CFR 
1068.325(g)) were codified in EPA regulations since changes were last 
made to 19 CFR 12.74(c)(3) and are being proposed to be added to 19 CFR 
12.74(c)(3) to ensure consistency with EPA regulations.
     CBP is proposing editorial amendments to Sec.  12.74(d) to 
enhance readability.

VI. Conforming Changes to EPA Regulations

    EPA regulations at 40 CFR parts 85 and 1068 also contain provisions 
related to the importation of vehicles, engines, and equipment. To the 
extent necessary to reflect the changes to the CBP regulations proposed 
in this document, EPA will make conforming amendments to its 
regulations in a separate action.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule is not a ``significant regulatory action,'' 
under section 3(f) of Executive Order 12866. Accordingly, the Office of 
Management and Budget (OMB) has not reviewed this regulation.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et. seq.), as amended 
by the Small Business Regulatory Enforcement and Fairness Act of 1996, 
requires agencies to assess the impact of regulations on small 
entities. A small entity may be a small business (defined as any 
independently owned and operated business not dominant in its field 
that qualifies as a small business per the Small Business Act); a small 
not-for-profit organization; or a small governmental jurisdiction 
(locality with fewer than 50,000 people).
    This rule proposes modifications to the requirements for the 
submission of EPA Declaration Form 3520-21. Currently, importers are 
required to fill out the form, but are only required to submit it to 
CBP upon request. This proposed rule, if finalized, would require 
importers to file EPA Declaration Form 3520-21 with CBP at the time of 
entry, unless the importer is a manufacturer of nonroad or stationary 
engines, including engines incorporated into vehicles and equipment, 
and holds a valid EPA certificate of conformity for those engines and 
the engines are labeled to show compliance with applicable emission 
requirements. As this form is already complete at the time of entry, 
the cost of submitting it to CBP is negligible. This rule would also 
explicitly add electronic filing as an accepted method of form 
submission. Importers will still be able to file the form by paper if 
they so choose. This change will affect all importers who are covered 
by EPA Declaration Form 3520-21, including small importers. Therefore, 
it is likely to have an impact on a substantial number of small 
entities. However, the only costs to the public are the negligible 
costs of submitting the already completed form to CBP along with other 
required entry documents. These costs do not rise to the level of 
significance. Therefore, CBP certifies that this proposed rule will not 
have a significant economic impact on a substantial number of small 
entities.

Paperwork Reduction Act

    The collection of information contained in this proposed rule was

[[Page 54766]]

previously reviewed and approved by OMB in accordance with the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) 
under control numbers OMB 2060-0104 (EPA Declaration Form 3520-1, 
``Importation of Motor Vehicles and Motor Vehicle Engines Subject to 
Federal Air Pollution Standards''), OMB 2060-0320 (EPA Declaration Form 
3520-21, ``Importation of Engines, Vehicles and Equipment Subject to 
Federal Air Pollution Standards''), and OMB 1405-0105 (Department of 
State form DS-1504, ``Request for Customs Clearance of Merchandise''). 
As importers are already required under existing regulations to 
complete the EPA declaration forms and either submit them to CBP or 
retain them in their records, and the burden estimates in the above-
identified OMB approved information collection requests presume the 
forms are submitted to CBP, there are no new collections of information 
proposed in this document. In this regard, it is noted that although 
existing 19 CFR 12.73 does not expressly require the submission of the 
EPA Declaration Form 3520-1, it does require that the same information 
captured by that form be submitted to CBP. Similarly, shipments sent 
from abroad to foreign diplomatic or consular missions in the U.S., or 
their personnel, currently must be cleared by respondents submitting to 
CBP a Department of State-approved form DS-1504; therefore, this 
document does not impose any new collections of information by 
requiring the DS-1504 to be presented to CBP for purposes of claiming 
an exemption from emission documentation requirements.

Signing Authority

    This proposed regulation is being issued in accordance with 19 CFR 
0.1(a)(1) pertaining to the Secretary of the Treasury's authority (or 
that of his delegate) to approve regulations related to certain customs 
revenue functions.

List of Subjects in 19 CFR Part 12

    Air pollution control, Customs duties and inspection, Entry of 
merchandise, Imports, Labeling, Reporting and recordkeeping 
requirements, Restricted merchandise, Vehicles.

Proposed Amendments to Part 12 of the CBP Regulations

    For the reasons set forth in the preamble, CBP proposes to amend 19 
CFR part 12 as set forth below:

PART 12--SPECIAL CLASSES OF MERCHANDISE

0
1. The general authority citation for part 12, and the specific 
authority citation for sections 12.73 and 12.74, continue to read as 
follows:

    Authority:  5 U.S.C. 301, 19 U.S.C. 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States), 1624.
* * * * *

Sections 12.73 and 12.74 also issued under 19 U.S.C. 1484, 42 U.S.C. 
7522, 7601;

* * * * *
0
2. Revise the undesignated center heading preceding Sec.  12.73 to read 
as follows:

Entry of Motor Vehicles, Engines, and Equipment Containing Engines 
Under the Clean Air Act, as Amended

0
3. Section 12.73 is amended by:
0
a. Revising the section heading;
0
b. Revising paragraph (a);
0
c. Removing in paragraph (b)(1) the word ``shall'' and adding in its 
place the word ``will''; removing the word ``Customs'' and adding in 
its place the term ``CBP'', and; removing the term ``ICI's'' and adding 
in its place the words, ``Independent Commercial Importers'';
0
d. Removing in paragraph (b)(2) the word ``Customs'' and adding in its 
place the term ``CBP'';
0
e. Removing paragraphs (c)(3) and (4);
0
f. Revising paragraphs (d), (e) introductory text, (e)(4), and (f);
0
g. Removing in paragraph (g)(2) the reference ``(i)(4)'' and adding in 
its place the reference ``(i)(6)'';
0
h. Removing in paragraph (h) introductory text the word ``motor'';
0
i. Removing in the first sentence of paragraph (h)(1) the word ``Any'' 
and adding in its place the words ``A motor vehicle imported for 
repairs is any'';
0
j. Removing in the first sentence of paragraph (h)(2) the word ``Any'' 
and adding in its place the words, ``A test vehicle is any'';
0
k. Removing in the first sentence of paragraph (h)(3) the word ``Any'' 
and adding in its place the words, ``A prototype vehicle is any'', in 
the second sentence, removing the word ``shall'' and adding in its 
place the word ``will'', and removing the words ``paragraph (1)'' and 
adding in its place the words ``paragraph (l)'';
0
l. Removing in the first sentence of paragraph (h)(4) the word ``Any'' 
and adding in its place the following words, ``A display vehicle is 
any'';
0
m. Revising paragraphs (h)(5) through (7);
0
n. Revising paragraphs (i) through (k);
0
o. Removing in paragraph (l) the word ``shall'' and adding in its place 
the word ``will'', and; removing the word ``Customs'' and adding in its 
place the word ``CBP''; and
0
p. Revising paragraph (m).
    The revisions read as follows:


Sec.  12.73  Importation of motor vehicles and motor vehicle engines.

    (a) Applicability of EPA requirements. This section is ancillary to 
the regulations of the U.S. Environmental Protection Agency (EPA) 
issued under the Clean Air Act, as amended (42 U.S.C. 7401 et seq.), 
and found in 40 CFR parts 85, 86, 1036, 1037, and 1068. The EPA 
regulations should be consulted for more detailed information 
concerning EPA emission requirements. This section applies to imported 
motor vehicles; this section also applies to separately imported 
engines only if they will be installed in heavy-duty motor vehicles. 
All references in this section to ``motor vehicles'' include these 
heavy-duty engines. Nothing in this section should be construed as 
limiting or changing in any way the applicability of the EPA 
regulations.
* * * * *
    (d) Importation of vehicles by an Independent Commercial Importer 
(ICI). An ICI is generally an importer that does not have a contract 
with a foreign or domestic motor vehicle manufacturer for distributing 
products into the United States market (see 40 CFR 85.1502). ICIs act 
independently of motor vehicle manufacturers, but are required to bring 
motor vehicles into compliance with all applicable emissions 
requirements found in 40 CFR part 86 and any other applicable 
requirements of the Clean Air Act. Before the vehicle is deemed to be 
in compliance with applicable emission requirements and finally 
admitted into the United States, the ICI must keep the vehicle in 
storage for a 15-business day period. This period follows notice to EPA 
of completion of the compliance work to give EPA the opportunity to 
conduct confirmatory testing and inspect the vehicle and records. The 
15-business day period is part of the 120-day period in which an ICI 
must bring the vehicle into compliance with applicable emission 
requirements. A motor vehicle may also be conditionally admitted by an 
ICI if it meets the requirements in 40 CFR 85.1505 or 85.1509. 
Individuals and businesses not entitled to enter nonconforming motor 
vehicles may arrange for their importation through an ICI certificate 
holder. In these circumstances, the ICI will not act as an agent or 
broker for CBP transaction purposes unless it is otherwise licensed or 
authorized to do so.

[[Page 54767]]

    (e) Exemptions and exclusions from emission requirements based on 
age of vehicle. The following motor vehicles may be imported by any 
person and do not have to be shown to be in compliance with emission 
requirements before they are entitled to admissibility:
* * * * *
    (4) Highway motorcycles manufactured before January 1, 1978;
* * * * *
    (f) Exemption for exports. A new motor vehicle intended solely for 
export to a country not having the same emission standards applicable 
in the United States is not required to be covered by an EPA 
certificate of conformity if both the vehicle and its container bear a 
label or tag indicating that it is intended solely for export. 40 CFR 
85.1709.
* * * * *
    (h) * * *
    (5) Racing cars. A racing car is any vehicle that meets one or more 
of the criteria found at 40 CFR 85.1703(a), and that will not be 
registered or licensed for use on or operated on public roads or 
highways in the United States. See also 40 CFR 85.1511(e).
    (6) National security importations. A national security importation 
includes any motor vehicle imported for purposes of national security 
by a manufacturer. 40 CFR 85.1511(c)(1), 85.1702(a)(2) and 85.1708; and
    (7) Hardship exemption. A hardship exemption includes any motor 
vehicle imported by anyone qualifying for a hardship exemption. 40 CFR 
85.1511(c)(2).
    (i) Documentation requirements--(1) Exception for certain companies 
that manufacture and import motor vehicles. The special documentation 
requirements of this paragraph (i) do not apply to the importation of 
motor vehicles by the company that manufactures the motor vehicles if 
the motor vehicles are covered by a valid EPA Certificate of Conformity 
(COC) held by the manufacturer and the motor vehicles are labeled to 
show compliance with applicable emission requirements pursuant to 
paragraph (b)(1) of this section.
    (2) Release. CBP will not release a motor vehicle from custody 
unless the importer has submitted all documents necessary to 
demonstrate compliance with all applicable laws and regulations.
    (3) Required EPA documentation. Unless otherwise exempt, importers 
of motor vehicles must submit one of the following EPA declaration 
forms to CBP at the time of entry:
    (i) For heavy-duty motor vehicle engines, whether they are 
installed in a vehicle or separately imported as loose engines, submit 
EPA Declaration Form 3520-21, ``Importation of Engines, Vehicles, and 
Equipment Subject to Federal Air Pollution Regulations;''
    (ii) For all other motor vehicles, submit EPA Declaration Form 
3520-1, ``Importation of Motor Vehicles and Motor Vehicle Engines 
Subject to Federal Air Pollution Regulations.''
    (4) Filing method. The EPA declaration forms required to be 
submitted to CBP pursuant to paragraph (i)(3) of this section may be 
filed with CBP electronically in the Automated Commercial Environment 
(ACE) or via any other CBP-authorized electronic data interchange 
system, or as a paper filing at the time of entry.
    (5) Recordkeeping. Documents supporting the information required in 
EPA Declaration Form 3520-1 must be retained by the importer for a 
period of at least five (5) years in accordance with Sec.  163.4 of 
this chapter and must be provided to CBP upon request.
    (6) Documentation for diplomatic or foreign military personnel 
exemption. In order for a diplomat or foreign military personnel to 
claim an exemption pursuant to paragraph (g)(2) of this section, CBP 
must receive a Department of State-approved form DS-1504 (``Request for 
Customs Clearance of Merchandise'') or its electronic equivalent.
    (j) Release under bond. If an EPA declaration form filed in 
accordance with paragraph (i)(3) of this section states that the entry 
is being filed under circumstances described in either paragraphs 
(h)(1), (2), (3) or (4) of this section, the entry will be accepted 
only if the importer, consignee, or surety, as appropriate, files a 
bond containing the bond conditions set forth in Sec.  113.62 of this 
chapter, or files a bond electronically in ACE or via any other CBP-
authorized electronic data interchange system, for the production of an 
EPA document stating that the vehicle or engine is in conformity with 
Federal emission requirements. The importer or consignee must deliver 
to the port director documentation of EPA approval before the exemption 
expires, or before some later deadline specified by the port director 
based on good cause. If the EPA statement is not delivered to the port 
director within the specified period, the importer or consignee must 
deliver or cause to be delivered to the port director those vehicles 
which were released under a bond required by this paragraph. In the 
event that the vehicle or engine is not redelivered within five (5) 
days following the date the exemption expires or any later deadline 
specified by the port director, whichever is later, liquidated damages 
will be assessed in the full amount of the bond, if it is a single 
entry bond, or if a continuous bond is used, in the amount that would 
have been assessed under a single entry bond.
    (k) Notices of inadmissibility or detention. If a motor vehicle is 
determined to be inadmissible before or after release from CBP custody, 
the importer or consignee will be notified in writing of the 
inadmissibility determination and/or redelivery requirement. However, 
if a motor vehicle cannot be released from CBP custody merely because 
the importer has failed to attach to the entry the documentation 
required by paragraph (i) of this section, the vehicle will be held in 
detention by the port director for a period not to exceed 30-calendar 
days after filing of the entry at the risk and expense of the importer 
pending submission of the missing documentation. An additional 30-
calendar day extension may be granted by the port director upon 
application for good cause shown. If the requisite EPA declaration form 
required pursuant to paragraph (i)(3) of this section has not been 
filed within this deadline, which must not exceed 60 days from the date 
of entry, CBP will issue a notice of inadmissibility.
* * * * *
    (m) Prohibited importations. The importation of motor vehicles 
other than in accordance with this section and the EPA regulations in 
40 CFR parts 85, 86, 600, 1036, 1037, and 1068 is prohibited.
0
4. Section 12.74 amended by:
0
a. Revising the section heading and paragraphs (a) through (d); and
0
b. In paragraph (e) removing the word ``shall' and adding in its place 
the word ``must''.
    The revisions read as follows:


Sec.  12.74  Importation of nonroad and stationary engines, vehicles, 
and equipment.

    (a) Applicability of EPA regulations. The requirements governing 
the importation of nonroad and stationary engines subject to 
conformance with applicable emission standards of the U.S. 
Environmental Protection Agency (EPA) are contained in 40 CFR parts 
1033 through 1068. These EPA regulations should be consulted for 
detailed information as to the admission requirements for subject 
nonroad and stationary engines. EPA emission regulations also apply to 
vehicles and equipment with installed engines and all references in 
this section to nonroad or stationary engines include the vehicles and 
equipment in which the

[[Page 54768]]

engines are installed. Nothing in this section may be construed as 
limiting or changing in any way the applicability of the EPA 
regulations.
    (b) Documentation requirements--(1) Exception for certain companies 
that manufacture and import nonroad or stationary engines, including 
engines incorporated into vehicles and equipment. The special 
documentation requirements of this paragraph (b) do not apply to the 
importation of nonroad or stationary engines, including engines 
incorporated into vehicles or equipment, by the company that 
manufactures the engines, provided that the engines are covered by a 
valid EPA Certificate of Conformity (COC) held by the importing 
manufacturer and bear the manufacturer's label showing such conformity 
and other EPA-required information.
    (2) Release. CBP will not release engines, vehicles, or equipment 
from custody unless the importer has submitted all required documents 
to demonstrate that the engines, vehicles, or equipment meet all 
applicable requirements.
    (3) Required EPA documentation. Importers of nonroad or stationary 
engines, including engines incorporated into vehicles and equipment, 
must submit EPA Declaration Form 3520-21, ``Importation of Engines, 
Vehicles, and Equipment Subject to Federal Air Pollution Regulations,'' 
to CBP at the time of entry.
    (4) Filing method. EPA Declaration Form 3520-21 may be filed with 
CBP electronically in the Automated Commercial Environment (ACE) or via 
any other CBP-authorized electronic data interchange system, or as a 
paper filing at the time of entry.
    (5) Recordkeeping. Documents supporting the information required in 
EPA Declaration Form 3520-21 must be retained by the importer for a 
period of at least five (5) years in accordance with Sec.  163.4 of 
this chapter and must be provided to CBP upon request.
    (c) Release under bond--(1) Conditional admission. If the EPA 
declaration form states that the entry for a nonconforming nonroad 
engine is being filed under one of the exemptions described in 
paragraph (c)(3) of this section, under which the engine may be 
conditionally admitted under bond, the entry will be accepted only if 
the importer, consignee, or surety, as appropriate, files a bond 
containing the bond conditions set forth in Sec.  113.62(c) of this 
chapter, or files a bond electronically in ACE or via any other CBP-
authorized electronic data interchange system, for the production of an 
EPA statement that the vehicle or engine is in conformity with Federal 
emission requirements.
    (2) Final admission. Should final admission be sought and granted 
pursuant to EPA regulations for an engine conditionally admitted 
initially under one of the exemptions described in paragraph (c)(3) of 
this section, the importer or consignee must deliver to the port 
director the prescribed statement. The statement must be delivered 
within the period authorized by EPA for the specific exemption, or such 
additional period as the port director of CBP may allow for good cause 
shown. Otherwise, the importer or consignee must deliver or cause to be 
delivered to the port director the subject engine, either for export or 
other disposition under applicable CBP laws and regulations (see 
paragraph (e) of this section). If such engine is not redelivered 
within five (5) days following the allotted period, liquidated damages 
will be assessed in the full amount of the bond, if a single entry 
bond, or if a continuous bond, the amount that would have been assessed 
under a single entry bond (see 40 CFR 1068.335).
    (3) Exemptions. The specific exemptions under which a nonconforming 
nonroad engine may be conditionally admitted, and for which a CBP bond 
is required, are as follows:
    (i) Repairs or alterations (see 40 CFR 1068.325(a)).
    (ii) Testing (see 40 CFR 1068.325(b)).
    (iii) Display (see 40 CFR 1068.325(c)).
    (iv) Export (see 40 CFR 1068.325(d)).
    (v) Diplomatic or military (see 40 CFR 1068.325(e)).
    (vi) Delegated assembly (see 40 CFR 1068.325(f)).
    (vii) Partially complete engines, vehicles, or equipment (see 40 
CFR 1068.325(g).
    (d) Notice of inadmissibility or detention. If an engine is found 
to be inadmissible either before or after release from CBP custody, the 
importer or consignee will be notified in writing of the 
inadmissibility determination and/or redelivery requirement. If the 
inadmissibility is due to the fact that the importer or consignee did 
not file the EPA Declaration Form 3520-21 at the time of entry, the 
port director may hold the subject engine in detention at the 
importer's risk and expense for up to 30 days from the entry filing 
date. The port director may grant the importer's request for a 30-day 
extension for good cause. The port director will issue a notice of 
inadmissibility if documentation is still incomplete after this 
deadline, which must not exceed 60 days from the filing date for 
importation.
* * * * *

R. Gil Kerlikowske,
Commissioner.

    Approved: August 3, 2016.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2016-18761 Filed 8-16-16; 8:45 am]
 BILLING CODE 9111-14-P

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