21st January 2010 Mr Giacomo Mattino Deputy Head of Automotive Unit Enterprise and Industry DG Rue de la Loi 200

B 1049 Brussels Belgium
FROM THE AMERICAN IMPORT AGENTS ASSOCIATION 57-63 Coburg Road, Wood Green, London N22 6UB, United Kingdom Re- Draft Proposal for Harmonised Individual Vehicle Approval

“The Small Business Act for Europe is the commission’s ambitious plan to address the needs of Europe’s small and medium-sized businesses. It takes into account the diversity of Europe’s entrepreneurial spirit and includes guidance on how to develop SME policy at EU and national level.”

Françoise 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 the European legislators and technical experts in the Member States to arrive at a proportionate solution for micro-sme's and consumers. Our Organisations are also committed to ensure the good functioning of the European Single Market and a high level of protection for its citizens. In this regard we are only concerned with vehicles built to North American standards with which we respectfully ask you to accept our representations that with the very low volume of these vehicles on European roads, there has never been a safety or environmental problem, even though they are not built to European Type Approval standards. We believe that to a large extent, the European legislators, -European Parliament and the European Council, and now the Commission has over-reacted to a problem caused in one Member 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 his letters,  the adverse publicity generated by the FIA's press releases following  the Landwind and HHR problems, resulted in the Commission having to take action. We fully understand this, but the Commission has now received sufficient information to react to the problem in a more targeted way, by preventing the manufacturers from undermining the new IVA scheme. It is not the fault of SME's and individual citizens that abuses could still take place under the scope of Article 24. Real individual vehicle approval is not a loophole-Indeed Article 24 is

cleverly drafted and strikes completely the right balance for very low volume importers of vehicles built to North American standards.  From our perspective, the only problem that exists in Article 24 is that it allows Manufacturers to use it and abuse it with high volumes of vehicles produced in large series.  Article 24 already recognises that there is a line beyond which exact compliance with Type Approval Standards is disproportionate for individual vehicles 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 national requirements of safety and environmental protection in line with their own historical and cultural  considerations. We know that in order to arrive at the correct regulatory balance,  this a complicated issue for legislators who are normally involved in drafting and negotiating automotive standards for the benefit of the worlds largest vehicle manufacturers. You will appreciate that as the AIAA 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 understanding and experience of the issues. Indeed during this period, the AIAA's members (6 microbusinesses) incurred legal costs of nearly 400,000 Euros in order to survive.   We also undertook a huge lobbying campaign in the UK which culminated in debates in the House of Lords and in the House of Commons. There cannot be many examples in the history of the Single Market, where such a small group of micro-businesses have had to fight so hard to survive.  With this in mind, we are sure you will appreciate how significant it was for us, when the UK Department for Transport invited the American Import Agents Association to be an official Stakeholder in the Industry Working group leading up to the successful implementation of the Recast Framework Directive. For nearly three years we were involved in every meeting alongside 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 and attention to detail towards our needs as responsible Stakeholders. The UK technical officials truly followed the principles of Better Regulation to ensure that  the administrative provisions and technical requirements applied in the UKʼs National IVA scheme, ensure a level of road safety and environmental protection which is equivalent to the greatest extent practicable to the level provided for by the provisions of the Directives. Indeed at the end of the process the UK Government wrote about the success of the AIAAʼs engagement as an SME stakeholder in the Governmentʼs Summary of Simplification Plans 2009. We believe that it is extremely unfair and disproportionate that after 3 years of consultation and 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 things again. And all of this is happening before the scope of the new regulations even come into force for (N1) Light Goods vehicles. In our view, the key to solving this issue is by applying the principle of proportionality. These are very low volume imports and  and the benchmark of accepting them as equivalent,  cannot exceed the requirement  of “greatest extent practicable.” However, as Euroenthusiasts we also want to find a solution that assists the efficient workings of the single market.

If the legislators believe that the enthusiast/consumer does have the basic right to own a new American vehicle not marketed by the car manufacturers, and that long-standing micro-sme's have the right to continue to be involved in the importation and sale of such a new vehicle, then this is a good starting point. The next point to establish is that in order to undertake this process, there are commercial, financial and technical constraints beyond which the importation of a vehicle is not feasible.  We urge the legislators to understand this. By definition, Type Approval is not available to anyone other than a Manufacturer. In this regard we must re-emphasise the point that it only takes one technical standard to ban a vehicle. This is where we believe that legislators have the greatest difficulty in accepting the position of an individual vehicle importer. For very low volume imports,  It means that the technical experts need to acknowledge different ways of regulating, and in so doing achieve a fairness that is proportionate. It is conceivable that an American vehicle may in some respects offer a marginally higher level of safety, and in other respects offer a marginally lower level of safety. Broadly speaking though, for such low volume imports, the safety and environmental standards of North American vehicles are functionally equivalent with the European standards. The 65 year history of more than 250,000 of these vehicles operating safely on European roads proves this is true. However, some Member Stares may accept these equivalencies more than others. For our micro-enterprises to continue, we need to know if the vehicles are either accepted or not in a proportionate way. There is no middle ground. Consumers and micro-sme's need transparency and certainty before they import a vehicle. If individuals cannot meet a type approval standard, with vehicles built to North American standards they will be able to demonstrate a broadly equivalent standard affording an equivalent level of safety and environmental protection. Individual vehicle importers/micro-SME's cannot be expected to redesign or remanufacture a vehicle that has already been produced by a mass-market manufacturer. Our concrete proposals are as follows 1)    Amend the 2007/46/EC Directive to disallow a Manufacturer from using National IVA for a vehicle produced in large series.  Manufacturers may already use National Small Series, 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 an approval on a National basis under the current regime of Article 24. This will continue to allow the differing views held by Member States in their treatment of Individual vehicles to prevail. As these approvals are National and would not automatically gain acceptance in a second Member State, Mutual Recognition would need to be relied upon, as explained clearly in Articles 23 and 24 of the Directive. 3)    To facilitate the Mutual Recognition procedure of re-registering a vehicle in a second Member State that has only received a National approval, the Member States should publish the wording in the Directive “on request, the applicant can be provided with a

statement of the technical provisions against which the vehicle was approved” on their National IVA Certificate.  This will help the applicant that is seeking to re-register the vehicle in a second Member State by increasing his/her awareness that detailed information is required for Mutual Recognition to work in practice. We believe that this may help to reduce the number of cases referred to SOLVIT.  4)     If the Commission wants to introduce a Harmonised IVA, we believe that this should be for vehicles produced in Large series, distributed by a Manufacturer or their Official Importer. Otherwise manufacturers may benefit from the amendment to Article 22 that we outlined in our presentation. From a single market perspective, a large manufacturer may derive 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-smeʼs in Member States 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 of proportionality to warrant the removal of Subsidiarity from Member States.  The problem of mass individual vehicle approvals was not a widespread problem and only occurred in one Member State. Furthermore, since 2007/46/EC came into force on 29th April 2009, we are not aware of any abuse or loophole, a point that Mr.Delneufcourt proudly echoed in our meeting on Monday. It is important to re-emphasise that the vehicles we are concerned with do not directly compete with the OEMʼs as they are generally models sold to enthusiasts that the manufacturers do not offer. Hence we pose no threat to them (previously in the UK, the SMMT has acknowledged this fact). Instead, individuals/micro-smeʼs can choose from a wider selection of vehicles and can sometimes introduce more environmentally friendly technologies such as Hybrid or Electric vehcles onto European roads quicker than the OEM's. This can make an impact for consumers in the marketplace and can put pressure on the manufacturers to react quicker, providing the manufacturer with useful market intelligence. We remain committed to work hard in tandem with the Commissionʼs services to resolve this issue. Even though we represent only the smallest category of business designation in the European marketplace,  we are fully supportive of the many principles of law that the European Commission stands for. We are also optimistic that after due consideration of our representations, the technical experts in the 27 Member States will find it possible to legislate in a conciliatory and proportionate manner. As business people that care about environmental 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 the need for additional lobbying.  Yours truly, Anthony Cohen Chairman-American Import Agents Association Tel: +44 20 8889-4545

aiaa_eu@me.com cc -Mr. 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 Françoise Le Bail-SME Envoy and Deputy Director-General Enterprise and Industry -Malcolm Harbour-MEP-Sylvia Mohr-Automotive Commercial Attaché-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

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