Q&a: How To Import, Legality.

[Matvei27]

OK, so I think we need a thread in this sub forum regarding what is and isn't legal in the United States, since I've noticed some misconceptions and misinformation already on this site. I think the best way to start so that we can get some content would be a Q&A format...you ask a question and I provide the answer. Once we have enough content we can organize it into a FAQ. Sound good?

I have a business importing arcade machines from Japan but I also import cars and car parts. Legally, of course.

Edited April 11, 2015 by Matvei27

[PranK]

Nice idea, I think HarrisRacing has some info.

[Matvei27]

Nice idea, I think HarrisRacing has some info.

Unfortunately I don't think his car is actually here legally. The advice I gave before that thread was cleaned up was to export the car and bring it back to the United States next year. Even when it does turn 25 years old it will not be legal without doing this because of the way it was purchased/imported.

So for example if you somehow snuck a 1998 R34 into the US and hid it in a barn until 2023, it wouldn't actually become legal even then.

Because since you didn't import it legally in the first place it never would have received a valid and approved HS-7 and 3520-1 form (customs documentation).

Some states, such as Florida, would still register it, but a state title/license plate does not actually make a car legal. It's still contraband according to CBP, ICE, and the FBI. The DMV doesn't decide which cars are legal and which are not.

Other states won't even give you a plate without those two forms (the vast majority of them).

The best advice I can give you when buying an imported car in the US (assuming you aren't doing it yourself) is to ask to see the processed HS-7 and 3520-1, or in the case of a Motorex car, the bond release.

These documents would prove that a car is federally legal.

Edited April 12, 2015 by Matvei27

[slowridn73]

I wonder what the restrictions are for Canada. If you could take a grey market car up and have it registered, then turn around and de register, complete the import forms that way? Might be something to think about.

[luke gtr]

Will be keeping an eye on this.

I've never left Australia, but the import process into the US seems interesting.

Would like to know more.

[Matvei27]

I wonder what the restrictions are for Canada. If you could take a grey market car up and have it registered, then turn around and de register, complete the import forms that way? Might be something to think about.

That's basically what I suggested before my comment was removed from that thread (in Forced Induction).

[Matvei27]

Will be keeping an eye on this.

I've never left Australia, but the import process into the US seems interesting.

Would like to know more.

If by interesting you mean completely stupid, then yes.

[HarrisRacing]

Hi.

I'll go ahead and put this out there...taking a risk per se, but I was sure that I had done all of my previous research for the car that I bought. I did NOT import my car, nor did the car dealer that I bought it from.

My car had a FEDERAL BONDED title. I think this is a different scenario than just "someone snuck this car into the US and hid it in a barn for 25 years". It was apparently sold at federal auction by a company that handles the sales of federally owned (maybe even confiscated) property. The car was sold at auction in 2007. I purchased the car late in 2014, but before I did I took copies of all documentation to my DMV and was told directly that a FEDERAL BONDED title trumps everything in the USA. This title was issued by the corporation that sold this car at auction initially. How to get one, however, I can't help you with as I wasn't involved in that. Like I said, the government at one point owned this car and then sold it to a car dealer at auction, so I HIGHLY doubt there is a legal standpoint for the government to confiscate my car and to pursue criminal charges as it would technically be considered ENTRAPMENT.

I got insurance, applied for title, and received my plate. It is currently still under the knife since I got the car with a rod knock and it has never been driven on a public road yet. I start a build thread here, ask a few questions...then get attacked for owning the car which IS by technical definition 25 years old now.

My car is a December of 1990 car...and in the USA the build MONTH has nothing to do with car's age as it is not on any title or registration that I'm aware of. They are all universally year of manufacture with a birth date of Jan 1. I don't import cars, but SURELY this is a case for argument in the court of law with car dating/model/year etc. So I have car that was here prior to the 25 year importation rule...but it's not a BARN HIDE car...it has a solid paper trail.

So, the recommendation came to EXPORT, then REIMPORT my car since it was suggested to be government-issued 'contraband' (which I do not agree with). You tell me what's going to draw more red flags...exporting contraband, or driving it fully registered, insured and licensed car that has a crystal clear federal paper trail?

Really the problem is that there is no grandfather clause to the 25-year rule. If they add that, it will clear up a LOT of issues with my situation although it doesn't change anything with the standard importation process.

Edited April 15, 2015 by HarrisRacing

[Matvei27]

Right...so you just confirmed exactly what I said before. I hate to break it to you, but your car isn't legal at all. I'm not trying to start an argument with you, I'm just telling you the truth and how you SHOULD resolve the situation if you want the car to be legal. Ignore it at your own peril.

The DMV doesn't decide if a car is legal or not. They don't care. The people who decide if a car is legal or not are the NHTSA via the FMVSS and the EPA. The job of enforcing these laws when it comes to imported vehicles is CBP at the port of entry, and ICE/FBI after the port.

Those federal auctions have a stipulation for cars like this. The stipulation is that it MUST be exported. Not only that, but it has to be exported OUTSIDE of North America. Not Canada, not Mexico.

It's not entrapment at all, the dealer who purchased the car failed to comply with the terms of the federal auction. Likely he did this knowingly as they make it very clear that these vehicles are for EXPORT ONLY.

By the way, in the USA it DOES go by the month of manufacture for import. Your car will NOT be eligible for importation into the US until December 2015. Last I checked it's still April. The only information that the de-reg certificate or FAST will not tell you is the actual day of manufacture. Therefore for the purposes of importation a December 1990 car is eligible for import on 1 December 2015, even though it may have been made another day in December.

A bonded title isn't sufficient proof of legal importation. Hell, a bonded title isn't even sufficient proof of ownership. Think of it as a temporary title. They are usually issued when the original title is lost. Does that mean you don't have the de-registration certificate from Japan? If so, since Japan will not re-issue them for any reason, it will never technically be possible to legal register the car ANYWHERE.

If you do have the de-registration certificate, the next problem is that you don't have a valid HS-7 and 3520-1 certifying legal entry into the United States. Although some states don't ask for them, many states will as there is no way to have a legally imported car without a processed HS-7 and 3520-1 (you need both, one for NHTSA and one for EPA).

The only way for you to obtain these documents is to export the car and reimport it. Simple as that.

So, in short:

1. No, your car is not 25 years old

2. No, your car is not legal

3. If you want it to be legal, you need to export and reimport it to receive the proper documentation, but you will not be able to do this unless you have the ORIGINAL de-registration certificate from Japan.

Them be the facts.

Edited April 15, 2015 by Matvei27

[HarrisRacing]

Since you are clearly knowledgable of the laws...what are the repurcussions of such against me or the original seller/purchaser?

Furthermore, how would ANYONE know how a car is/was legally imported in the chain after me? Is EVERYONE involved in violation? This simple fact could seemingly crush the entire importation of vehicles altogether.

You just stated that this car (to our limited knowledge of it's existence here) is in a state of total limbo as far as being able to register it legally (seemingly forever), and that I am in some way in violation of federal laws, but how was I supposed to know all of this? Furthermore, should I decide to SELL the car, how would anyone else be liable for it?

So now I could either file suit against the line of people before me who bought/sold the car (which will surely get this car removed forever), or I can keep driving it and take my chances that one day I will have to explain that I bought it at a dealership. What are the statute of limitations on illegally importing a vehicle and on ownership?

This is still all assuming that some guy on the internet (no offense, you seem very knowledgeable) is actually correct in his facts about stateside ownership of these vehicles.

Thanks.

Edited April 15, 2015 by HarrisRacing

[slowridn73]

So I remember looking into this. If it's under 20 years (epa exemption) then you can be fined 10000$ per day the car was in operation illegally. I think highway safety administration will only seize and destroy the vehicle. You really need to go to the websites and look up the guidelines to be 100%.

As far as if anything can come back on you legally... Technically yes, it's everyone's responsibility to know the law. However in a case were you didn't knowingly violate a law intentionally most of the blame I imagine would fall to the party who purchased the car and failed to comply with the original exportation guidelines, I doubt they would hammer you for any of this. The car would probably get seized if the Feds found out and cared enough to do so, and then you would have to take legal action against the dealer that purchased it then sold it to you.

[HarrisRacing]

Also I'm still standing by my claim that my car is legal. Honestly it may have been legally imported.

I did some more research on my car:

Looks like it could have been seized. Maybe even judgement against it (my car's VIN would be 1 digit off on an EPA judgement - and an easy typo if so - HOW STUPID!?) and labelled for exportation or destruction in early 2007. They had 30 days to destroy or export the the lot of cars and it would be witnessed by the EPA.

Then I see that it came up for dealer auction in 5-2007?! Perfectly fine condition and NOT destroyed?!

Then I see that the government released the car in 10-2007 on a FORM 97 "United States Government Certificate to Obtain Title to a Vehicle" from a (I assume government-funded?) corporation that clearly had possession of the vehicle. This form (according to CFR-1998-title41-vol2 sec101-38.701 - attached) is used when the government owns a vehicle and is selling to the public FOR HIGHWAY USE. Excerpt below:

§ 101–38.701 Transfer of title for Government-owned motor vehicles.
(a) When disposing of a Government owned vehicle, all executive agencies shall comply with the provisions listed below for transfer of ownership:
(1) All Government-owned motor vehicles to be titled by State motor vehicle activities shall be transferred by executing Standard Form (SF) 97, The United States Government Certificate to Obtain Title to a Vehicle. The use of this form in foreign countries is optional.

(2) SF 97 will be used only when motor vehicles owned by the Government are sold to parties who intend to title the vehicle for operation on highways.
Vehicles that are either not designed to operate on highways or are deemed as not legal for operation on highways will be conveyed using an appropriate bill of sale or award document, such as Optional Form 16, Sales Slip-Sale of Government Personal Property, or SF 114, Sale of Government Property-Bid and Award. Vehicles commonly included in this category include construction equipment, farm machinery, and certain military design vehicles.

So according to your logic the government issues this Form 97 upon release from their possession post government seizure? But that doesn't make sense to me because the Form 97 transfers vehicles from government ownership specifically for highway use...

Is it possible that the government kept the car and used it for something? Perhaps they found that they could make more money certifying them for public use and issuing them for sale at auction?

Again, I can't see them selling something at auction with a certificate to obtain title (specifically to operate on highways) and not allowing someone to do so. ALSO form 97 says NOTHING about "for export or destruction only".

So I think my chain is:

Car imported late 2006

Car intercepted and seized January 2007 - settlement issued to destroy all cars or export within 30 days.

Car auctioned 5-2007?? Not sure if this happened but I read it online

Car is transferred from a government-ish corpopration on Form 97 in 10-2007

My local dealer gets car and registers to them

I get car from dealership and it HAS a title in my state

I register car in my state (which they would ONLY do with the certificate to issue title).

Perhaps there are exceptions?

Perhaps someone exported and RE-IMPORTED the car in that year time frame?!

Why would the gov't be involved with the Form 97? (I highly doubt this is part of the typical "smuggling" process.)

Also I researched and I totally agree about the date...month being extremely important. So no...my car isn't 25 years old yet...but it definitely wasn't in 2007 when the form 97 was issued. And yes it was likely seized at some time...but doesn't appear to have been "for exportation or destruction".

Patrick

CFR-1998-title41-vol2-sec101-38-701.pdf

Edited April 15, 2015 by HarrisRacing

[Matvei27]

So, it appears to me based on the information you have provided that the car was seized, auctioned, and supposed to be exported or destroyed in 2007.

Then, someone involved did something illegal (either intentionally or unintentionally but I am going to bet on the former).

The reason I bet it was intentional is because of what you said regarding the EPA judgement. It seems like a deliberate attempt to forge just enough documents to get a bonded title.

That being said, I can't say for sure who did it or why since I don't know them.

In terms of legal liability, you won't be charged with any crime. The person they go after is usually the original importer, i.e. the guy who filed a false customs declaration (a felony) in order to get the car into the country in the first place. But in this case, the car was already seized. What happened to the guy who originally imported it aside from that is hard to say, they could have charged him or they could have just taken it. Usually they only charge them if they are trying to sell it.

Anyway, someone else (either related to him or completely unrelated, who knows) forged documents relating to the government seizure in order to "launder" the car and get a bonded title. In this case, since asshole A has already been dealt with (well, he had his car seized) the guy who would be in trouble if anyone was caught is likely this guy, we'll call him asshole B.

You wouldn't be charged with anything since you didn't forge the paperwork. Your car would still be seized though. Just like what happened to Kaizo.

Anyway I think it would be difficult to find out who exactly these people were and sue them, but the issue at hand is until you get an approved HS-7 and 3520-1 the car isn't actually federally legal.

So really the only question is...do you have the Japanese de-registration certificate? Everything will hinge on that. If you don't have it I'm sorry to say you are royally f**ked because there is no way to get another one. If you do have it the solution is simple to legalize your car...export and reimport in December.

There are a couple other things you can try if you don't have the de-registration. They aren't how you are supposed to do it, but they might work. You could try exporting using the federal bonded title. Technically this isn't generally considered sufficient proof of ownership, so they may give you a hard time in the target country (i.e. Canada). The other, better option is to convert the federal bonded title to a real title and use that to try and export the car. Unless I am misunderstanding and you already converted to a real title. If you did, then you don't need to do this step.

So, yeah, find a way to get your paperwork in line (either finding the de-registration certificate or getting a real title (not a bonded title) or preferably both, export the car, and reimport in December.. Then you'll have a valid customs clearance with associated paperwork and your car will be 100% federally legal.

PS EPA exemption is 21 years, not 20.

Edited April 15, 2015 by Matvei27

[Matvei27]

By the way, I highly doubt anyone will figure this out and try to seize your car between now and December, so really all you need to do is export and reimport and you will be fine. I promise. You'll have the correct paperwork and then when you do go to sell the car it won't cause any red flags, and it will be permanently legal in the US.

Edited April 15, 2015 by Matvei27

[HarrisRacing]

Doesn't it need to appear "relatively stock?"

You need to read my build thread

Also does it need the original block?

Ok this is what I gathered thus far:

1) EPA exemption is 21 years...and a required 3520-1. But that form is only required FOR legal importation. Can the EPA even do anything now (assuming this wasn't filed)? How would I (or any other buyer down the line) know this?

2) NHTSA is 25 years from DATE of manufacture with associated HS-7 form. Again how do I know this was done? Can they even enforce after the 25 years?

3) If items 1 and 2 above are done in order to receive a title and registration, then after 25 years is up and you have a title...what's the worry? Are you sure I still have to import export just because I don't know the history. Keep in mind EVERYTHING we are talking about is about legal importation. I didn't have ANYTHING to do with the importation and I'm pretty sure someone paid this penalty (asshole A) previously. I have no clue who or how asshole B did what he did. Again the judgement I found online didn't have my exact VIN...so this is literally purely speculation.

So...in all, what do you "get" when you LEGALLY import a car? I've never been involved in this.

Again thanks for the fair conversation.

Edited April 16, 2015 by HarrisRacing

[Matvei27]

It's still the original engine so I imagine you will be fine on that end. The legal wording is "in original configuration" which mainly applies to emissions related equipment. Are you running with no cat and screamer outlets? No? Good. You'll probably be fine.

Regarding the EPA/NHTSA paperwork: Yes, they can enforce it even in 100 years from now. The car isn't legally in the country. Even when it turns 25 nothing will change. You need a HS-7 and 3520-1 that have been approved by CBP. You would know it was done because you would have a copy of them. An importer will give you these when you buy the car.

They are not done to receive a title/registration. They are submitted in order to legally allow the car to enter the country. You cannot clear customs (legally) without them. The only reason some states ask to see them is because if you can't produce them they know the car is not legally in the United States.

In theory in the situation you are in at the moment ICE/FBI could seize the car at any time. That situation will continue even after the car is 25 years old. A title does not make a car legal. Florida will issue a title to anything that moves...that doesn't make it federally legal.

You may also have difficulty selling the car or registering it in another state without the proper paperwork. Some won't ask to see it. Some will. It will be difficult to sell the car without it, too.

I don't think you are likely to get caught or get your car seized until you try and sell it. That's when this kind of stuff comes back to haunt people.

But, in your situation it can be easily resolved by exporting and reimporting in December. It's not like a R34 where it won't be legal until at minimum 2023.

Do you have the original de-registration certificate? Did you convert the bonded title to a regular title? If you have either or both sorted you should be able to export and reimport in order to obtain a valid HS-7 and 3520-1. Then your car will be 100% federally legal and you won't ever have to worry about anything and you will be able to sell it in the future.

Edited April 16, 2015 by Matvei27

[slowridn73]

It's all about the correct paper trail. You need the forms mentioned above to satisfy the requirements, otherwise it remains a grey market car. I'm still preparing my car for export in July and I can tell you if you are missing anything your cat isn't making it through importation.

The stock car question reads "unmodified" on my paperwork. I believe this is referring to parts that are legal, mostly exhaust and engine upgrades are what I was asked about. I'll let you know how my inspection goes when it ships. I have aftermarket exhaust and I have deleted the hicas.

[Matvei27]

Technically it would remain a black market car. A grey market car is one that was legally imported.

Regarding the modification thing...no one really knows what it means. In my opinion it mainly has to do with removing emissions related equipment.

The 25 year thing is of much more importance than that. To be honest most shipments aren't even inspected with anything more than an x-ray.

They aren't going around popping hoods looking for modifications and then deciding whether they are okay or not. They're looking at whether the paperwork you submitted establishes that the car is 25 years old and legal for import.

Edited April 16, 2015 by Matvei27

[slowridn73]

I am hoping the same thing. Like I said I'll let everyone know when mine goes through.

I thought a car imported illegally but with shady registration was grey market?

[Matvei27]

I am hoping the same thing. Like I said I'll let everyone know when mine goes through.

I thought a car imported illegally but with shady registration was grey market?

No. A gray market vehicle is a legally imported vehicle that was not originally intended for sale in the United States.

Here is the actual EPA regulation:

A vehicle is exempted if it has been 21 years or more since its original production year and it is in its original unmodified condition. Vehicles in any condition may be excluded if they were manufactured prior to the year in which EPA's regulations for the class of vehicle took effect. Vehicles at least 21 years old with replacement engines are not eligible for this exemption unless they contain equivalent or newer EPA certified engines and emission control systems. Upon entry, the importer must file an EPA Form 3520-1 with Customs and declare code "E" on the form.

If the car has the original engine and you have not removed emissions related equipment you have nothing to worry about.

It is more tricky if the engine has been replaced with a different model. (i.e. SR20DET swap into a CA18 car).

Edited April 16, 2015 by Matvei27