Letter 21st January 2010

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21st January 2010Mr Giacomo MattinoDeputy Head of Automotive UnitEnterprise and Industry DGRue de la Loi 200B 1049 Brussels

BelgiumFROM THE AMERICAN IMPORT AGENTS ASSOCIATION

57-63 Coburg Road, Wood Green, London N22 6UB, United KingdomRe- Draft Proposal for Harmonised Individual Vehicle Approval

The Small Business Act for Europe is the commissions ambitious plan to address the needs of Europessmall and medium-sized businesses. It takes into account the diversity of Europes entrepreneurial spirit

and includes guidance on how to develop SME policy at EU and national level.

Franoise Le Bail s comments before European SME Week in May 2009

Dear Mr. Mattino,

Thank you for your reply, and for recognising our past and continuing efforts to assist theEuropean legislators and technical experts in the Member States to arrive at a

proportionate solution for micro-sme's and consumers. Our Organisations are alsocommitted to ensure the good functioning of the European Single Market and a high level ofprotection for its citizens. In this regard we are only concerned with vehicles built to NorthAmerican standards with which we respectfully ask you to accept our representations thatwith the very low volume of these vehicles on European roads, there has never been asafety or environmental problem, even though they are not built to European Type Approvalstandards.

We believe that to a large extent, the European legislators, -European Parliament and theEuropean Council, and now the Commission has over-reacted to a problem caused in oneMember State by certain manufacturers abusing the concept of a single vehicle approval

scheme (before the enforcement date of 2007/46/EC). As Mr. Jean has explained in hisletters, the adverse publicity generated by the FIA's press releases following the Landwindand HHR problems, resulted in the Commission having to take action. We fully understandthis, but the Commission has now received sufficient information to react to the problem ina more targeted way, by preventing the manufacturers from undermining the new IVAscheme.

It is not the fault of SME's and individual citizens that abuses could still take place under thescope of Article 24. Real individual vehicle approval is not a loophole-Indeed Article 24 is


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cleverly drafted and strikes completely the right balance for very low volume importers ofvehicles built to North American standards. From our perspective, the only problem thatexists in Article 24 is that it allows Manufacturers to use it and abuse it with high volumes ofvehicles produced in large series. Article 24 already recognises that there is a line beyondwhich exact compliance with Type Approval Standards is disproportionate for individualvehicles so long as there is an equivalent level of safety and environmental protection.However, Article 24 does permit Member States to carefully craft the the nationalrequirements of safety and environmental protection in line with their own historical andcultural considerations.

We know that in order to arrive at the correct regulatory balance, this a complicated issuefor legislators who are normally involved in drafting and negotiating automotive standardsfor the benefit of the worlds largest vehicle manufacturers. You will appreciate that as theAIAA already had to challenge the British Government 3 times between 1997 and 2001,using the Commission's Single Market services in DG15, we have a clear understandingand experience of the issues. Indeed during this period, the AIAA's members (6 micro-businesses) incurred legal costs of nearly 400,000 Euros in order to survive. We alsoundertook a huge lobbying campaign in the UK which culminated in debates in the Houseof Lords and in the House of Commons. There cannot be many examples in the history ofthe Single Market, where such a small group of micro-businesses have had to fight so hardto survive.

With this in mind, we are sure you will appreciate how significant it was for us, when the UKDepartment for Transport invited the American Import Agents Association to be an officialStakeholder in the Industry Working group leading up to the successful implementation ofthe Recast Framework Directive. For nearly three years we were involved in every meetingalongside the SMMT and others, where we tried to make a constructive contribution. Our

engagement with Industry and the officials in DfT was matched 100% by their respect andattention to detail towards our needs as responsible Stakeholders. The UK technicalofficials truly followed the principles of Better Regulation to ensure that the administrativeprovisions and technical requirements applied in the UK s National IVA scheme, ensure alevel of road safety and environmental protection which is equivalent to the greatest extentpracticable to the level provided for by the provisions of the Directives. Indeed at the end ofthe process the UK Government wrote about the success of the AIAA s engagement as anSME stakeholder in the Government s Summary of Simplification Plans 2009.

We believe that it is extremely unfair and disproportionate that after 3 years of consultationand after receiving public recognition of the engagement with the UK Government on the

implementation of 2007/46/EC, the European legislators have sought to change thingsagain. And all of this is happening before the scope of the new regulations even come intoforce for (N1) Light Goods vehicles.

In our view, the key to solving this issue is by applying the principle of proportionality. Theseare very low volume imports and and the benchmark of accepting them as equivalent,

cannot exceed the requirement of greatest extent practicable. However, as Euro-enthusiasts we also want to find a solution that assists the efficient workings of the singlemarket.


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If the legislators believe that the enthusiast/consumer does have the basic right to own anew American vehicle not marketed by the car manufacturers, and that long-standingmicro-sme's have the right to continue to be involved in the importation and sale of such anew vehicle, then this is a good starting point. The next point to establish is that in order toundertake this process, there are commercial, financial and technical constraints beyondwhich the importation of a vehicle is not feasible. We urge the legislators to understandthis. By definition, Type Approval is not available to anyone other than a Manufacturer. Inthis regard we must re-emphasise the point that it only takes one technical standard toban a vehicle.

This is where we believe that legislators have the greatest difficulty in accepting the positionof an individual vehicle importer. For very low volume imports, It means that the technicalexperts need to acknowledge different ways of regulating, and in so doing achieve afairness that is proportionate. It is conceivable that an American vehicle may in somerespects offer a marginally higher level of safety, and in other respects offer a marginallylower level of safety. Broadly speaking though, for such low volume imports, the safety andenvironmental standards of North American vehicles are functionally equivalent with theEuropean standards. The 65 year history of more than 250,000 of these vehicles operatingsafely on European roads proves this is true. However, some Member Stares may acceptthese equivalencies more than others.

For our micro-enterprises to continue, we need to know if the vehicles are either acceptedor not in a proportionate way. There is no middle ground. Consumers and micro-sme's needtransparency and certainty before they import a vehicle. If individuals cannot meet a typeapproval standard, with vehicles built to North American standards they will be able todemonstrate a broadly equivalent standard affording an equivalent level of safety andenvironmental protection. Individual vehicle importers/micro-SME's cannot be expected toredesign or remanufacture a vehicle that has already been produced by a mass-marketmanufacturer.

Our concrete proposals are as follows

1) Amend the 2007/46/EC Directive to disallow a Manufacturer from using National IVAfor a vehicle produced in large series. Manufacturers may already use National SmallSeries, EC Small Series and ECWVTA. This amendment would prevent a future Landwind,Suzuki or HHR problem from occurring.

2) Continue to permit Member States, for genuine low volume imports, to offer anapproval on a National basis under the current regime of Article 24. This will continue toallow the differing views held by Member States in their treatment of Individual vehicles toprevail. As these approvals are National and would not automatically gain acceptance in asecond Member State, Mutual Recognition would need to be relied upon, as explainedclearly in Articles 23 and 24 of the Directive.

3) To facilitate the Mutual Recognition procedure of re-registering a vehicle in a secondMember State that has only received a National approval, the Member States shouldpublish the wording in the Directive on request, the applicant can be provided with a


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statement of the technical provisions against which the vehicle was approved on theirNational IVA Certificate. This will help the applicant that is seeking to re-register the vehiclein a second Member State by increasing his/her awareness that detailed information isrequired for Mutual Recognition to work in practice. We believe that this may help to reducethe number of cases referred to SOLVIT.

4) If the Commission wants to introduce a Harmonised IVA, we believe that this shouldbe for vehicles produced in Large series, distributed by a Manufacturer or their OfficialImporter. Otherwise manufacturers may benefit from the amendment to Article 22 that weoutlined in our presentation. From a single market perspective, a large manufacturer mayderive a benefit from a Certificate of Conformity, as part of their European distribution plans.For the reasons we have already explained, we believe that for micro-sme s in MemberStates involved with low volumes of North American vehicles imported for local enthusiasts,a COC is of no great benefit. And even more importantly, HIVA has not satisfied the test ofproportionality to warrant the removal of Subsidiarity from Member States. The problem ofmass individual vehicle approvals was not a widespread problem and only occurred in oneMember State. Furthermore, since 2007/46/EC came into force on 29 th April 2009, we arenot aware of any abuse or loophole, a point that Mr.Delneufcourt proudly echoed in ourmeeting on Monday.

It is important to re-emphasise that the vehicles we are concerned with do not directlycompete with the OEM s as they are generally models sold to enthusiasts that themanufacturers do not offer. Hence we pose no threat to them (previously in the UK, theSMMT has acknowledged this fact). Instead, individuals/micro-sme s can choose from awider selection of vehicles and can sometimes introduce more environmentally friendlytechnologies such as Hybrid or Electric vehcles onto European roads quicker than theOEM's. This can make an impact for consumers in the marketplace and can put pressureon the manufacturers to react quicker, providing the manufacturer with useful marketintelligence.

We remain committed to work hard in tandem with the Commission s services to resolvethis issue. Even though we represent only the smallest category of business designation inthe European marketplace, we are fully supportive of the many principles of law that theEuropean Commission stands for. We are also optimistic that after due consideration of ourrepresentations, the technical experts in the 27 Member States will find it possible tolegislate in a conciliatory and proportionate manner. As business people that care aboutenvironmental protection and consumer safety, and believe in the efficient workings of the

Single Market, we hope that a successful outcome will be forthcoming soon without theneed for additional lobbying.

Yours truly,

Anthony Cohen

Chairman-American Import Agents AssociationTel: +44 20 8889-4545


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[email protected]. Philippe Jean-Head of Unit Automotive Enterprise and Industry-Mr. Jean-Paul Delneufcourt-Chairman Technical Committee for Motor Vehicles-Ms. Neelie Kroes-Commissioner for Competition-Mme Franoise Le Bail-SME Envoy and Deputy Director-General Enterprise and Industry

-Malcolm Harbour-MEP--Sylvia Mohr-Automotive Commercial Attach-US Mission to the European Union-Rosalind Travers-Assistant Director-Transatlantic Business Dialogue-Tina Sommer, President European Small Business Alliance-Mark Spelman-Chairman American Chamber of Commerce to the European Union-Ian Yarnold-Deputy Head of Vehicle Technology and Standards Dft UK-Mike Lowe-Senior Policy Advisor, Transport Technology and Standards DfT-UK-Harry Sanne-President European Association of Independent Vehicle Traders-Denise Lagercrantz-Consultant to BIRF-Swedish Association of Vehicle Importers-Brian Osler-President North American Automobile Trade Association

Documents

Letter 21st January 2010