IMPORTING CARS - CAR IMPORTING
Car Importing Basics - Importing Cars Into The USA
Importing cars for personal use or starting a car importing business requires that you understand United States standards for importing cars or any type of motor vehicle that you want to import.
A good example of this is the fact that most motor vehicles manufactured outside the United States conform to USA bumper, emission and safety standards, because these motor vehicles are going to be exported to and sold within the United States. This means that it is very unlikely that you will find a vehicle outside the United State that meets all relevant car importing standards.
Importing Japanese Cars or importing cars into the USA from any country requires that they meet safety standards as outlined in the Motor Vehicle Safety Act of 1966 as revised in 1988 in the Imported Vehicle Safety Compliance Act; to air pollution control standards as outline in the Clean Air Act of 1968 and amended in 1977 and again in 1990; and to the bumper standards of the 1972 Motor Vehicle Information and Cost Savings Act that were effective in 1978.
Importing Cars Requires A Skeptical Mind
Whether you are starting a car importing business or simply considering the possibility of importing cars for personal use, you need to be very skeptical of what your foreign car dealer or private seller when you are trying to determine if vehicle meets USA standards or whether their claims that it can easily be brought into compliance are based on fact or their eagerness to sell you their vehicle.
A key fact to remember when importing cars
into the USA
The car importing information provided here is just the basics. Other essential requirements and information about importing cars into the U.S. may be obtained through the U.S. Customs Bureau and their associated agencies. Also, because Department of Transportation (DOT) and Environmental Protection Agency (EPA) requirements often change, you should consult with these agencies before buying a motor vehicle outside the USA.
Here To Get Free
If you are starting a car importing business or are only interested in importing cars for your personal use, here are two government leaflets you should get: Customs Hints for Visitors Visiting the United States (Contains Nonresidents Customs Regulations) and Know Before You Go (Contains Hints For Returning U.S.A. Residents Regarding Customs). Copies of these leaflets are available from American embassies and consulates or your nearest Customs office or you may write to: U.S. Customs, P. O. Box 7407, Washington, DC 20044.
You should also get a copy of the car importing manual titled the Automotive Imports Facts Manual which is the EPA's automotive manual which describes the emission requirements for importing cars and other motor vehicles. Call EPA Imports Hotline at (202) 564-9240 for your copy or visit the EPA Importing Cars web site.
You may also wish to contact DOT’s vehicle hotline at 800-424-9393 and/or write to the NHTSA (NSA-32), 400 7th Street, S.W. Washington, D.C. 20590.
NOTE: Importing Cars from Iraq, Libya, Afghanistan, North Korea, Cuba, Sudan, Iran, Yugoslavia or Serbia/Montenegro/Kosovo are generally prohibited by Treasury Department’s Office of Foreign Assets Control regulations. Before attempting any car importing activities within these countries you obtain all information about the licensing policy and prohibitions by contacting the Director, Office of Foreign Assets Control, U.S. Department of the Treasury at (202) 622-2480 or (202) 622-2500 or visit their web site at http://www.treas.gov/ofac.
INTERNATIONAL VEHICLE SHIPPING ARRANGEMENTS
Owner's of vehicles must make international vehicle shipping arrangements. In order for you to make arrangements for processing a vehicle through Customs, you must have your international shipper or carrier provide you with the vehicle’s arrival date. Vehicles sent in bond to a Customs port more convenient to you can be arranged for you via your freight forwarder otherwise all shipments clear at the first port of entry.
Customs officers are prohibited by law from making entries for an importer or acting as agents. However, commercial customs brokers may be employed to handle your entry.
IMPORTING CARS - THE DOCUMENTATION REQUIREMENTS
You will need the carrier’s original bill of lading for Customs clearance in addition to the foreign registration, bill of sale and all other documentation about the vehicle. You will also need to complete DOT form HS-7 and EPA form 3520-1 declaring the safety and emissions provisions under which the motor vehicle is being imported. To meet all U.S.A. emission requirements, a motor vehicles engine compartment must bear a manufacturer’s label, in English, that attests to this fact. The port of entry Customs inspector may require proof of eligibility if the vehicle does not have this label.
Unless a vehicle is eligible for exclusion or exemption, all vehicles that do not meet USA emission requirements must be imported using an independent commercial importer (ICI). Until all ICI work is completed, the EPA will not allow release a vehicle to it's owner. The ICI is responsible for meeting all EPA requirements and performing all required EPA modifications. ICI's costs can be very high and it should be understood that ICI's cannot import and/or modify some vehicles cannot be successfully imported or modified.
Tag and driver's license requirement are another matter you should inquire about when making your arrangements.
THE UNDERCARRIAGE NEEDS CLEANED
The U.S. Dept. of Agriculture requires that imported cars have their undercarriage cleaned so they do not have any foreign soil to help guard against the possible importation of dangerous pests. You should contract to have your car thoroughly cleaned and/or steam-sprayed before it ships.
MOTOR VEHICLES ARE NOT SHIPPING CONTAINERS
For your own convenience, security and safety, you SHOULD NOT use the vehicle as a shipping container for personal belongings. While in transit, on the loading or unloading docks, your possessions are highly at risk to theft
DUTIES MUST BE PAID UPON ENTRY
Used or new and either for resale or personal use, a foreign manufactured vehicle imported into the U.S.A. generally requires duties be paid at the following rates (subject to change):
Auto - 2.5%
Trucks - 25%
Motorcycles - either free or 2.4%
Duties are based on the vehicle price you paid or which is payable. Most Canadian manufactured vehicles may enter free of duties. Returning USA residents may apply their $400 Customs exemption along with any accompanying family members exemption toward the value of their vehicle if:
For Customs requirement, a returning USA resident is one who is returning from study, work or travel abroad. After the initial exemption is applied, a flat duty of 10% is given toward the vehicles next $1,000 of value. The regular duty rate is then applied to the remaining value.
- GOVERNMENT EMPLOYEES AND U.S. CITIZENS employed abroad and who are returning on voluntary leave or TDY may import a foreign manufactured vehicle free of duties provided they claim nonresident status, enter the U.S. for a short visit and export the vehicle upon leaving.
-MILITARY AND U.S. GOVERNMENT CIVILIAN EMPLOYEES returning from extended duty outside the Customs territory may include a vehicle that conforms to all requirements among their household and personal effects duty free. The vehicle must have been purchased outside the USA and must be in the owner’s possession before departure. Extended duty generally means 140 days or more. Personnel aboard a U.S. naval vessel or who support a naval vessel on its departure from the USA to its return with an intended 120 day or more overseas deployment are entitled to this extended-duty exemption. If you sell the conforming vehicle within one year of importation you will be required to pay duties on it. You must pay duties at the Customs office most convenient to you before you complete the sale. Once formal entry is made for the EPA, a conforming vehicle so imported may indefinitely stay in the U.S..
-NONRESIDENTS may import a duty-free vehicle for personal use for up to (1) one year if it is imported in concurrence with the owner’s arrival. Under this provision, a vehicle that is imported and which does not conform to U.S. emission and safety standards may not be sold in the USA and must be exported within one year. These export requirement have no extension or exemption.
OTHER REASONS FOR IMPORTING CARS
You may import an auto or motorcycle duty free along with its usual equipment for a temporary stay to take part in a race or other specific contest. The EPA must issue prior written approval that grants only racing vehicles the EPA deems non-capable of practical highway or safe use.
If the contest is not for a money prize, a vehicle may be granted a 90 day entry without formal bond if the Customs officer is confident about the importer’s good faith and identity. The vehicle may be forfeited if a bond is a bond is not given or it is not exported within 90 days of its importation. DOT must issue prior written approval.
Vehicles may be temporarily imported for racing, demonstration or testing purposes. Vehicles may also be permanently imported for display or show. DOT written approval must be obtained prior to the vehicle being exported from a foreign country to the United States.
Car importing information for a display or show vehicle is available at the DOT NHTSA Importing Cars web site. A display or show vehicle that is permanently imported must still comply with all USA emission requirements and be imported through an ICI authorized by the EPA. ICI work must be finished before the EPA will allow a vehicle's release to its owner.
THEFT PREVENTION, BUMPER AND SAFETY STANDARDS
Form HS-7 must be filed by motor vehicle importers when the vehicle is imported to declare if the vehicle is in compliance with requirements of the DOT. Generally, if a motor vehicle is less than 25 years old and it is being imported permanently to the USA, it must comply with all Federal Motor Vehicle Safety Standards (FMVSS). Bumper standards apply to motor vehicles manufactured after September 1, 1978 and theft-prevention standards apply to vehicles manufactured in the 1987 and later model years.
Driver side door certification labels by the original manufacture must be affixed to motor vehicles mad to meet these standards. If you buy a vehicle outside the USA that is certified to USA standards, make sure your buying sales contract clearly identifies this fact because it will help you expedite the importation process if you present the contract to U.S. Customs officer at the time of importation.
If a vehicle does not bear the manufacturer’s US standards certifying label, the vehicle will only be allowed to be imported as a nonconforming vehicle. Importers of nonconforming vehicles, must contract a DOT-registered importer (RI) to certify conformity to all applicable FMVSS and provide modifications to the vehicle. A DOT bond for one and a half times the dutiable value of the vehicle must also be posted by the importer. This DOT bond is added to the Customs entry bond. The HS-7 form must have a copy of contract and the DOT bond attached to it.
Before modifications can be started on your vehicle by an RI, a determination must first be made if it is capable of being modified for compliance with the FMVSS. A vehicle must undergo petition process for determination of it’s capability for being modified if it has not previously been determined eligible for importation. This petition process can become very costly and complex if the petitioned vehicle is not similar to one already being sold in the USA. A list of vehicles already determined to be capable of modification for compliance with the FMVSS is available from the NHTSA web site or an RI.
When making your foreign vehicle purchase decision, you should consider both the time necessary to bring it into compliance and the modification costs to bring it to that level.
Internal Revenue Code section 4064 imposes a "gas-guzzler" tax on certain imported automobiles. Anyone importing cars, whether a commercial importer, or for personal use, may be liable for payment of this tax because for purposes of this tax they are considered an importer.
The tax amount is based on a combined highway/urban fuel-economy (miles per gallon) rating that is provided by the EPA. The manufacturer's fuel-economy ratings may differ from the rating assigned by the EPA. No tax is levied on vehicle having a 22.5 miles per gallon or higher combined fuel-economy rating.
The gas-guzzler tax is reported on form 6197, Gas-Guzzler Tax and on the Quarterly federal Excise Tax Return, Form 720. Local Internal Revenue Service district offices may also provide you with additional information.
STANDARDS FOR EMISSION
The following motorcycles, heavy-duty engines, light-duty trucks and passenger cars are subject to federal emission standards:
Manufacturers must certify their vehicles to U.S. federal emission standards and if they are not, the vehicle is considered nonconforming and may not be sold in the U.S.. You must have a currently certified ICI import a nonconforming vehicle for you. The EPA maintains a list of current ICI's which is available upon request. EPA-authorized ICIs are located only in the U.S.. Before making your decision to import a nonconforming vehicle, it is highly recommended that you contact an ICI to discuss testing and modification costs. Making sure the car you want to import complies with "all" USA emission standards is the responsibility of the ICI. (Effective July 1, 1998, vehicles five model-years old or older were no longer eligible for the one-time exemption). Also important to note is that if an ICI will not be responsible for the vehicle(s) in question, the EPA will deny entry for certain model years, models and makers.
Federal government emission requirement often differ from Individual state requirements. Therefore, you should contact the appropriate state offices before you begin importing cars to learn the correct registration requirements for your vehicle. Understand, however, that meeting state’s emission requirements does not mean you are meeting EPA's requirements which means your vehicle would still be nonconforming according to the EPA.
Additional information on ICI's and/or emission control requirements is available from the US EPA Vehicle Programs and Compliance Division/Imports at tel. (202) 564-9660.
CAR IMPORTING WORDS OF CAUTION
Both the EPA and the DOT want you to know that just because nonconforming vehicle may be conditionally admitted, the modifications necessary to bring it into compliance could be so costly and extensive that you may find it impractical or even impossible to reach compliance. As noted earlier, it is highly recommended that all modifications and prohibitions be fully scrutinized prior to your purchase of a vehicle for importation.
-Bringing A Previously Exported Vehicle Back Into The Country
A non-commercial, private use vehicle exported from the US may be returned duty free by verifying to U.S. Customs that it was previously registered and owned in the USA. A bill of sale for the vehicle or a state issued registration card may be used for verification. You must declare any accessories or repairs to your vehicle that were accomplished while out of country upon your return because they may be subject to duty.
Some countries only have leaded fuel available for vehicles. If leaded gasoline was used in your vehicle, you will need to replace the oxygen sensor and catalyst upon its return to the USA. You may get EPA authorization remove the oxygen sensor and catalyst prior to the vehicle shipping overseas and avoid replacing these parts upon your vehicle's return. The EPA authorizations number is (202) 564-2418. Upon return to the USA, the original oxygen sensor and catalyst will need to be reinstalled. However, if you provide assurance upon your return that the reinstallation will be performed, you will be able to reenter your US version vehicle without bond.
The following vehicles may require DOT and EPA declarations but do not need to conform to safety or emission requirements but may NOT be sold in the USA:
- Personal use vehicles imported by nonresidents - not to exceed one year. The vehicle are required to be exported at the end of the one year period – there are no extensions or exceptions.
-Vehicles of foreign diplomatic personnel, foreign armed forces or other persons who are granted free entry as authorized by international law through the US Department of State.
-Vehicles that are imported temporarily for competition, testing or demonstration with the understanding they are not authorized to be licensed for use or driven on public highways. However, if an integral part of the test requires these vehicles to be operated on public highways, authorization may be granted. Forms DOT HS-7 and EPA 3520-1 must be submitted to customs when entry is made by the persons responsible for these vehicles. Also, along with these forms, written approvals must be obtained in advance from these agencies for presentation to customs. Remember, if a vehicle is refused prior approval, the vehicle owner(s) are responsible for the cost to return it and this is often very expensive.
DRIVER’S PERMITS AND PLATES
An International Registration Marker should be on all imported vehicles. Another valuable resource to have is an International Driving Permit. The driving permits are available in five languages. Contact your local automobile club or an international automobile federation about how to get these documents.
-UNITED STATES RESIDENTS - in addition to the federal requirement outlined above, if you are bringing a used or new car into the USA, you should contact the Department of Motor Vehicles (DMV) of your state of residence about what documentation their DMV would require from Customs and about temporary license plates.
-CENTRAL AMERICAN AND SOUTH AMERICAN NATIONALS from countries that ratified the Inter-American Convention of 1943 are authorized to drive their vehicles for one year in the USA for touring purposes or for the period the documents are valid, whichever is less, without US driver’s permits or US license plates, provided the driver has an International Driving Permit and the vehicle has the International Registration Marker.
-MOTORIST TOURISTS WHO VISIT THE UNITED STATES from countries that ratified the Convention on International Road Traffic of 1949 are authorized to drive within the USA for one year with their own personal drivers license and with their own national registration tags (license plates) on their vehicles.
-MEXICAN AND CANADIAN MOTORISTS are authorized under agreements between the US and these countries to tour in the United States without US driver’s permits or US license plates.
-MOTORISTS FROM COUNTRIES that have not ratified the above mentioned agreements must take an examination before they may acquire a driving permit in the United States.
-FOREIGN NATIONALS who are employed in the United States are authorized use of their foreign license registration tags to get to their destination in the United States from their port of entry.
The Car Importing Information Is Presented As A Public Service to Our Web Site Visitors and Is "Not" Meant To Be Used As a Substitute For Legal Advice.
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By Ron Coble
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