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Letter to Neelie Kroes-European Commissioner for Competition

Letter to Neelie Kroes-European Commissioner for Competition

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A letter to the Commissioner for Competition at the European Commission that outlines the major concerns felt towards the draft Proposal for Harmonised Individual Approval by the American Import Agents Association
A letter to the Commissioner for Competition at the European Commission that outlines the major concerns felt towards the draft Proposal for Harmonised Individual Approval by the American Import Agents Association

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Published by: American Import Agents Association on Jan 08, 2010
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01/07/2010

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December 2009Ms Neelie KroesCommissioner for CompetitionEuropean CommissionRue de la Loi 200B 1049 BrusselsBelgium
FROM THE AMERICAN IMPORT AGENTS ASSOCIATION57-63 Coburg Road, Wood Green, London N22 6UB, United KingdomRe- Draft Proposal for Harmonised Individual Vehicle Approval
 “I feel that as policy-makers we should be able to get our relationship right and togethertear down remaining barriers, so that businesses on both sides of the Atlantic cancontinue to flourish”. 
Speech by Catherine Ashton at the U.S. Chamber of CommerceWashington D.C., 26 October 2009
Dear Commissioner Kroes,On behalf of the American Import Agents Association (AIAA), who are involved in theimportation of new American vehicles into the UK, we are writing to ask for your urgentsupport to prevent the adoption of a new draft Harmonised Individual Vehicle Approval(IVA) proposal that will undermine consumer choice and decimate a longstanding micro industryacross Europe.By failing to recognise or respect the legitimacy of the small independent vehicle importmarket for North American vehicles in Europe, the Commission may have been negligent inits duties. In developing these draft regulations we believe that the Commission, under intense pressure from the FIA, has been over zealous in its attempt to protect human healthand life and in so doing may have been guilty of maladministration. When the AIAA firstcontacted the Commission about the proposal for Harmonised IVA, we were only seeking anamendment to permit left hand drive very low volume North American imports to stay withinthe UK’s National IVA scheme. However, as the scheme has evolved and its potential impacthas been revealed, we have been forced to question the entire scheme and make thefollowing claims.The AIAA is a group of long-standing family run micro-businesses, typically employing 2-6
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people that offer assistance to consumers in the UK, who wish to import an American vehiclenot offered for sale by the manufacturers in Europe. We are typical of similar businesses allover Europe. Our members also provide or arrange servicing, parts supply, warranties andother facilities offered by a car dealer to ensure compliance with the legal obligations relatingto consumer protection. As the vehicles are not imported by the manufacturers, we display anextra duty of care to look after the consumer, and often receive referrals from themanufacturers customer service help-lines in the UK to deal with customer queries. The AIAAis recognised by the UK Government as a legitimate stakeholder in the Motor Trade and is anactive member of DfT’s Light Vehicle Trade User GroupMost of the cars imported are new vehicles ordered in advance by a consumer who wants todrive an unusual vehicle. The vehicles do not undermine the Type Approval system, as thevolumes imported are extremely low, and they are mainly bought by enthusiasts. NewAmerican vehicles have been independently imported into Europe for over 50 years. Thesevehicles are not built to European standards, but are built to broadly equivalent Federal or Canadian safety and environmental standards. To register a vehicle in a Member State, eachvehicle has to be submitted to a National homologation process called Individual vehicleApproval (IVA). As it says in the Commission’s Interpretative communication on proceduresfor the registration of motor vehicles originating in another Member StateSEC/2007/0169,“National type-approval and individual approval procedures for motor vehicles to be used or registered for the first time in the EU normally fall outside the scope of EC law.”This micro-industry supports a whole infrastructure of specialist businesses and dozens of specialist car clubs. (
See attachment 1-Paper on American Vehicles in the UK)
Unless thedraft proposal is withdrawn, there are literally hundreds of thousands of European citizenswhose lives will be adversely affected without a compelling justification. The draft regulationsare only aimed at
new
vehicles (defined as mass produced vehicles under 6 months old),indicating the discriminatory and anti-competitive nature of the draft proposal.In the UK, there are currently less than 500 new American vehicles imported each year,comprising dozens of different models. This compares to circa 2.25 million new passenger cars(M1) and light commercial vehicles (N1) that the SMMT’s members will register in the UKin 2009. In the 27 Member States during 2009, we estimate that for M1 and N1 vehicles,38,000 new vehicles will have used National IVA schemes out of a total new vehicleregistration figure of 16.1 million vehicles-i.e. 0.24 percent. (Source ACEA website) In other words, the ACEA’s members will have accounted for 99.76% of all new Passenger Car andLight Commercial vehicles sold in Europe in 2009. In 2010, can the European consumer notenjoy any choice beyond what the manufacturers have planned for him/her to purchase?With these draft Harmonised regulations, the Commission seems to have grossly over-reacted to a case from a few years ago where 300 allegedly unsafe identical ChineseLandwind vehicles were unwisely approved by a rubber-stamp method in Germany. This hasled to an intensive lobbying campaign from the FIA to restrict any vehicles that did not haveEuropean type approval, a process only available to manufacturers. (
See attachment  -Statement from the FIA-Loophole in the European Type Approval? 
). This inappropriatemethod of rubber-stamping approval is not in the spirit of single vehicle approval and is not
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condoned by the AIAA. This “customer orientated” approach has certainly never occurred inthe UK where every single vehicle is independently and objectively inspected by the UKauthorities.It is worth noting that contrary to what was said by the FIA in their media statement, thereason the former German Single Vehicle Approval process was used as a popular method togain approval for American vehicles, is not because it was normally lax or the lowest commondenominator. After the Second World War, Germany had many American forces stationed onits territory, and as a result, it had to find a way to legally accept the American vehicles, eventhough they were not built to German standards. The German system of single vehicleapproval (Einzelbetriebserlaubnis) was therefore developed under the scope of the StVZO, inorder to legally exempt a non-compliant, yet safe vehicle, so that it could be registered anddriven on the road. The German system naturally became favoured by citizens in other Member States as it provided the applicant with a legal document, the Fahrzeugbrief, whichcontained many of the vehicles’ technical characteristics and standards it had been assessedagainst. This German system, in many parts of Europe, became the benchmark for singlevehicle approval and could often be relied upon in gaining mutual recognition.It is only seen as a loophole by the FIA who are taking a disproportionate and protectionistline. Far from it, this German system helped to ensure that the single market rules actuallyworked, in the absence of harmonisation. The system of Mutual Recognition is explained fullyfor vehicles approved on an individual basis in the Commission’s Interpretativecommunication on procedures for the registration of motor vehicles originating in another Member State(SEC/2007/0169).Consequently, the FIA media statement was not justattacking the right to import an individual vehicle through a well-established and legitimateNational approval process. It was also attacking the whole concept of Mutual Recognition -one of the most fundamental legal concepts of the Single Market in the absence of harmonised standards.To respond to the Chinese Landwind problem, the
Commission made it mandatory for each Member State to operate a National Individual Vehicle Approval scheme
. Theregulations on this new scheme are found in Article 24 of the Framework Directive2007/46/EC. This article relies on Member States to provide administrative provisions andtechnical requirements which, aim to ensure a level of road safety and environmentalprotection,
which is equivalent to the greatest extent practicable
to the level provided for by the provisions of the European Type Approval standards. Under the scope of theseregulations, the principles of subsidiarity and proportionality apply, and the rights of businesses and consumers are protected. For reasons of proportionality, the UK has a righthand drive - high volume IVA test and a left hand drive - low volume IVA test. (
Seeattachment 3- Regulatory Impact Assessment from the UK Better Regulation Executive
) Theleft hand drive low volume approval process is one that the Commission insisted that the UKauthorities adopt in 2000 and was also endorsed by the SMMT.Even though American vehicles are built to slightly different standards to those in Europe,there has never been a fundamental safety problem with American vehicles on Europeanroads.
Unsurprisingly,
 
neither the FIA nor the European Commission has documented
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