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Civil Penalty, Limited Sale Ban for Imports of Non-Conforming Motorcycles, ATVs

Friday, January 02, 2015
Sandler, Travis & Rosenberg Trade Report

The Environmental Protection Agency reports that two Texas-based companies and four manufacturers in China are responsible for a $1.26 million civil penalty for violating the Clean Air Act by importing and selling thousands of motorcycles and all-terrain vehicles that did not conform to the specifications the companies had certified or that lacked EPA certification.

The EPA has also denied applications from the two Texas companies and a third company not part of the case for certificates of conformity for certain model year 2015 highway motorcycles and recreational vehicles. The EPA states that without these certificates, which are like permits, these companies may not lawfully sell their model year 2015 vehicles in the U.S. The agency adds that in determining whether to approve future certificate applications for these four Chinese manufacturers it will carefully consider all available information, including any outstanding or unresolved enforcement penalties or actions.

The Clean Air Act requires vehicle manufacturers to certify to the EPA that their products will meet applicable federal emission standards to control air pollution, an EPA press release states, and every vehicle sold in the U.S. must be covered by an EPA-issued certificate of conformity. To obtain such certificates manufacturers or importers must submit an application that describes the engine or vehicle, including its emission control system, and provides emissions data demonstrating that the engines and vehicles will meet applicable federal emission standards.

The EPA states that through inspections of imported vehicles it discovered that the two Texas companies imported 11,043 noncompliant highway motorcycles and 226 ATVs beginning in model year 2009. These vehicles were not covered by certificates of conformity because they had undersized catalysts and adjustable carburetors that were not described in the corresponding application for certification, were manufactured by an entity different from the one specified in the corresponding application for certification, or were manufactured after the applicable certificate expired. The two companies also imported ATVs that lacked proper warranties and labels. Further, the EPA uncovered evidence that the two companies had failed to (a) maintain complete emissions test records for several of the engine families for which they were the certificate holders, (b) maintain records on all of the vehicles covered by their certificates that were imported into the U.S., and (c) timely and completely respond to the EPA’s request for information to assess their compliance.

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