Date

Dear

As an American car enthusiast, I am writing to ask for your urgent support to request that the
European Commission withdraws a new draft Harmonised Individual Vehicle Approval (IVA)
proposal that will undermine consumer choice and decimate a longstanding micro industry
across Europe. I believe that this draft proposal may contradict the fundamental legal principle
of proportionality.

By failing to recognise or respect the legitimacy of the small independent vehicle import
market for North American vehicles in Europe, the Commission may have been negligent in
its duties. In developing these draft regulations I believe that the Commission, under intense
pressure from the FIA, has been over zealous in its attempt to protect human health and life
and in so doing may have been guilty of maladministration. When the American Import
Agents Association in the UK first contacted the Commission about the proposal for
Harmonised IVA, they were only seeking an amendment to permit left hand drive very low
volume North American imports to stay within the UK’s National IVA scheme. However, as the
scheme has evolved and its potential impact has been revealed, they have been forced to
question the entire scheme and make the following claims.

The AIAA is a group of long-standing family run micro-businesses, typically employing 2-6
people that offer assistance to consumers in the UK, who wish to import an American vehicle
not offered for sale by the manufacturers in Europe. They are typical of similar businesses all
over the UK and Europe. Their members also provide or arrange servicing, parts supply,
warranties and other facilities offered by a car dealer to ensure compliance with the legal
obligations relating to consumer protection. As these vehicles are not imported by the
manufacturers, their members display an extra duty of care to look after the consumer, and
often receive referrals from the manufacturers customer service help-lines in the UK to deal
with customer queries. The AIAA is recognised by the UK Government as a legitimate
stakeholder in the Motor Trade and is an active member of DfT’s Light Vehicle Trade User
Group

Most of the cars imported into Europe are ordered in advance by a consumer who wants to
drive an unusual vehicle. The vehicles do not undermine the Type Approval system, as the
volumes imported are extremely low, and they are mainly bought by enthusiasts. New
American vehicles have been independently imported into Europe for over 50 years. These
vehicles 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, each
vehicle has to be submitted to a National homologation process called Individual vehicle
Approval (IVA). As it says in the Commission’s Interpretative communication on procedures
for the registration of motor vehicles originating in another Member State SEC/2007/0169,

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“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 Paper on "American Vehicles in the UK") Unless the
draft proposal is withdrawn, there are literally hundreds of thousands of European citizens
whose lives will be adversely affected without a compelling justification. The draft regulations
are 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, the AIAA estimates that less than 500 new American vehicles are 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 UK in 2009. In the 27 Member States during 2009, the AIAA estimate that for
M1 and N1 vehicles, 38,000 new vehicles will have used National IVA schemes out of a total
new vehicle registration 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 and Light Commercial vehicles sold in Europe in 2009. In 2010, can the
European consumer not enjoy 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 Chinese
Landwind vehicles were unwisely approved by a rubber-stamp method in Germany. This has
led to an intensive lobbying campaign from the FIA to restrict any vehicles that did not have
European type approval, a process only available to manufacturers. (See attachment -
Statement from the FIA-Loophole in the European Type-Approval?). This inappropriate
method of rubber-stamping approval is not in the spirit of single vehicle approval. This
“customer orientated” approach has certainly never occurred in the UK where every single
vehicle is independently and objectively inspected by the UK authorities.

It is worth noting that contrary to what was said by the FIA in their media statement, the
reason the former German Single Vehicle Approval process was used as a popular method to
gain approval for American vehicles, is not because it was normally lax or the lowest common
denominator. After the Second World War, Germany had many American forces stationed on
its territory, and as a result, it had to find a way to legally accept the American vehicles, even
though they were not built to German standards. The German system of single vehicle
approval (Einzelbetriebserlaubnis) was therefore developed under the scope of the StVZO, in
order to legally exempt a non-compliant, yet safe vehicle, so that it could be registered and
driven 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, which
contained many of the vehicles’ technical characteristics and standards it had been assessed
against. This German system, in many parts of Europe, became the benchmark for single
vehicle 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 protectionist

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line. Far from it, this German system helped to ensure that the single market rules actually
worked, in the absence of harmonisation. The system of Mutual Recognition is explained fully
for vehicles approved on an individual basis in the Commission’s Interpretative
communication on procedures for the registration of motor vehicles originating in another
Member State (SEC/2007/0169). Consequently, the FIA media statement was not just
attacking the right to import an individual vehicle through a well-established and legitimate
National 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. The
regulations on this new scheme are found in Article 24 of the Framework Directive
2007/46/EC. This article relies on Member States to provide administrative provisions and
technical requirements which, aim to 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 European Type Approval standards. Under the scope of these
regulations, the principles of subsidiarity and proportionality apply, and the rights of
businesses and consumers are protected. For reasons of proportionality, the UK has a right
hand drive - high volume IVA test and a left hand drive - low volume IVA test. (See
attachment Regulatory Impact Assessment from the UK Better Regulation Executive) The left
hand drive low volume approval process is one that the Commission insisted that the UK
authorities 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 European
roads. Unsurprisingly, neither the FIA nor the European Commission has documented
one single issue with an American vehicle. Indeed the FIA, in another press release
recently admitted that Europe is falling behind the USA in the use of life saving ‘esafety’
technology.

The new National IVA regulations only became mandatory in April 2009, having been notified
and accepted under the 98/34 Directive. Why has the European Commission decided to
regulate further, when there is no new vital safety or environmental problem? (See
attachment -Statement from the FIA-“Sub-standard cars loophole in EU legislation still wide
open 31st March 2008.) If the Commission is only interested in safety, why is it discriminating
against brand new mass-produced cars built to the latest Federal or Canadian standards.
There is no issue with the homologation and registration of Kit cars or the importation and
registration of older cars. The Commission officials, however, seem to have lost touch with
their sense of proportionality and reasonableness by allowing the FIA leadership through their
membership of the Cars 21 High level group, to appear to dictate European competition
policy in respect of new single imports. The draft scheme is riddled with technical racism and
protectionism, and represents the Commission’s implementation of the FIA’s pressure. Why is
there no independent SME representation in the Cars 21 group so that there is a fair balance
of opinion?

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This is a case of where the imposition of administrative procedures and technical regulations
designed for major vehicle manufacturers, are being applied inappropriately to individual
citizens and SME’s, in the full knowledge by the Commission that they are impossible to
comply with. Furthermore, to apply more stringent technical standards to newer products,
constitutes an arbitrary discrimination not justified under either International or European law.
The Commission is effectively telling consumers that they have no right to drive a new car in
Europe, unless it has been bought from a European car manufacturer. In other words, one
cannot import a new car that is not marketed officially in Europe !

To protect the rights of SME’s and the consumer, any possible desire to harmonise
regulations, should not take precedence over the fundamental legal principles of
proportionality and subsidiarity enshrined in European Law. The Commission states that the
“Directive that has been repealed by Directive 2007/46/EC has proven to create distortion of
the functioning of the internal market.” However, this comment is a protectionist smokescreen
as the Commission has failed to fulfil its obligation to provide quantitative or qualitative
evidence or justifications of why the fundamental principle of subsidiarity has been withdrawn
for vehicles constructed to the latest Federal and Canadian safety and environmental
technologies.

The Commission has acted inappropriately and has appeared to succumb to unyielding
pressure that discriminates against small business and is inherently anti-consumer,
eliminating any competition with European Car manufacturers, however small. Furthermore,
in the development of the Draft Proposal for Harmonised IVA, no account has been taken of
the Better Regulation Guidelines and there has been no Stakeholder Involvement,
Consultation or Regulatory Impact Assessment. For passenger cars (M1), the National IVA
regulations in force , only came into affect on April 29th 2009. The existing regulations already
ensure that fundamental safety and environmental issues are complied with to the “greatest
extent practicable” with the European Type Approval Directives. For light goods vehicles
(N1), the new regulations have not yet even come into effect.

The Draft Harmonised IVA proposals are impossible for private individuals and small
businesses to comply with, as the proposals contain technical standards and administrative
procedures designed for manufacturers that are well in excess of the “greatest extent
practicable” benchmark in Article 24 of the Directive.

The concept of ”greatest extent practicable” represents for all intents and purposes, the limit
of what is reasonable or necessary, from a proportionality perspective. However, for the UK
market and for very low volume imports elsewhere in Europe, the Commission’s statements in
the preamble to the Draft Harmonised Regulations have no validity and have ignored many
different legal principles and policies that they are obliged to comply with. To make reference
to Working Party 29 and UNECE regulations, for individual vehicles imported by citizens, their
agents or SME’s, this language is an attempt to appear reasonable, under what is in reality a
regulatory smokescreen. The Commission knows that these technical committees are only for
International experts to work towards a more globalised approach to developing vehicle
standards for the benefit of vehicle manufacturers. There are dozens of type approval
standards and whilst a number of international standards have been incorporated into the

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Draft proposal as a ploy to appear reasonable, the Commission knows that the administrative
requirements and technical standards that remain, make the import procedure totally
uneconomic for SME’s and private European citizens to undertake. Furthermore, the AIAA
has evidence from the UK that the number of IVA applications is well below estimate,
countering the justification from the Commission that the new regulations are fostering bigger
volumes.

To protect the rights of the consumer and individual importer, individual vehicles can only gain
an approval by complying with reasonable standards that are equivalent to the “greatest
extent practicable to European Type Approval Standards.” Otherwise, by definition, the
vehicles are banned. What evidence is there under the scope of Article 24 of the Framework
Directive 2007/46/EC that each of the Member States are incapable of setting and monitoring
safety and environmental standards? Incidentally, is the Commission aware that even though
the FIA’s leadership wants to ban the imports, the FIA’s European member clubs sell after-
market warranties for these new cars?

The Commission has therefore chosen to ignore the principles of subsidiarity and
proportionality; both crucial and over-riding tenets of European Law, and is trying to enforce
constraints that are illogical, superfluous and excessive through the use of harmonised
standards. There is no huge trade issue here, as most new American vehicles are generally
imported by private individuals and independent SME’s all over Europe, predominantly in
response to an order for an end-user.

Unless the Draft Harmonised IVA regulations are withdrawn, the

Commission officials may be guilty of Maladministration, in breach of
several articles in The European Code of Good Administrative
Behaviour, by failing to act correctly in the following areas.

1) The Commission has failed to follow the principle of proportionality as clearly

laid down in primary law under Article 5 of the Treaty establishing the European Community
and subsequently endorsed in the Lisbon Treaty. There have never been any safety or
environmental problems with American vehicles built to Federal or Canadian standards to
warrant a change in the way these cars are homologated in Europe.

2) The Commission has failed to provide quantitative or qualitative evidence why

the fundamental principle of subsidiarity has been withdrawn from Member States only for
newer and safer vehicles. On what legal basis have Member States given up their shared
competence to regulate individual approvals under Article 24 of 2007/46/EC as confirmed by
SEC/2007/0169, and as supported by Article 3b of the Treaty of Lisbon. For this reason I
believe that the proposal should be withdrawn.

3) The Commission has ignored the warnings from the AIAA that there could be a
serious risk to road safety and the environment when American car drivers are unable to have
access to specialist American vehicle maintenance facilities and parts supply after the
businesses in this sector fail, due to the impact of these new Draft proposals. The AIAA
estimates that there are in excess of 250,000 vehicles built to FMVSS and CMVSS standards

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on European roads.

4) The Commission has discriminated against private citizens and SME’s, by

introducing excessive standards and administrative arrangements for new vehicles that it
knows can only be conformed to by vehicle manufacturers. This is anti-competitive behavior,
not sufficiently justified. The American car scene is a tiny fraction of one percent of new
vehicle registrations in Europe. In the UK it is even smaller as the vehicles imported are left
hand drive, entering a right hand drive market.

5) The Commission may have failed to act objectively and impartially by allowing itself to
be unduly influenced by the FIA, even after the Commission acted correctly, proportionately
and legally with the introduction of the new National IVA regulations in Article 24 of the
Framework Directive 2007/46/EC

6) The Commission has failed to undertake any Consultation with European

consumers or SME stakeholders. Even though the AIAA has been the lead stakeholder in
respect of American cars with the UK Government for the last 13 years and has been in
contact with the Commission several times since 1996, the Commission has not made any
attempt to contact the established stakeholders in the industry. When the AIAA approached
the Commission last year, its recommendations about applying the principles of Better
Regulation to the proposal were not adopted. Furthermore, the minutes of many of the
meetings held by the Technical Committee for Motor Vehicles (TCMV) have never been made
public, as they are password protected on the Commission’s website.

7) The Commission has failed to undertake any Regulatory Impact Assessment and
has not followed the guidelines on Regulatory Impact Assessments in the Cars 21 report. By
failing to recognise or respect the legitimacy of the independent vehicle import market in
Europe, the Commission may have been grossly negligent in its obligations.

8) The Commission has failed to apply any Better Regulation Guidelines or the
specific Better Regulation Guidelines as outlined in the Cars 21 Final Report for the
Automotive Industry. The AIAA worked as an active Stakeholder with the UK Authorities for 3
years in the run up to the new National IVA. The UK government does respect the legitimacy
of the small independent vehicle import market for North American vehicles not sold in
Europe by the manufacturers and did follow the Better Regulation Guidelines in arriving at the
new National IVA regulations. See page 36 of the attachment “Summary of Simplification
Plans 2009”)
9) The Commission has ignored the core principles of recognising the central role
of SME’s in the EU economy, as outlined in its own Small Business Act for Europe entitled
“Think Small First”. The current economic recession further substantiates this criticism. If
these regulations come into effect, the reality is that dozens of small businesses may fail and
hundreds of jobs may be lost in the UK and thousands more across Europe.

10) The Commission has ignored its own obligations of Transatlantic Economic
Integration. The Commission should be aware that American cars are of one of the best
icons and symbols of North American culture and technology in Europe today. What possible

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reason or benefit is there for Europe in 2010 to suddenly erect such a trade barrier with our
transatlantic partners to undermine this relationship when so many jobs are at stake? All over
Europe these vehicles are only mostly sold to enthusiasts many of whom belong to American
car clubs. The AIAA estimates that more than 50,000 Europeans belong to American car
clubs.

11) The Commission has created a discriminatory technical barrier to trade, which
prevents the importation of new vehicles built to the latest safety and environmental
standards. This protectionist activity can only be seen as an arbitrary discrimination, not
justified by the protection of human health and life, contravening the principles of the GATT
treaty and the Single Market rules. The banning of new vehicles will distort import markets to
foster the importation of vehicles with older safety and environmental technologies.

As my MEP, I am appealing to you for help. As the American car scene is so fragmented all
over Europe, we do not have the same influence and resources as the FIA with the
Commission. However, I am writing on behalf of the individual consumer and many hundreds
of automotive jobs in the UK and thousands more across Europe. Most of the businesses
concerned are small family businesses. My voice must be listened to.

Unless these Draft Harmonised IVA regulations are withdrawn, the Commission will have
acted in a disproportionate way that is anti-consumer, anti small business, and failing to
comply with so many of the legal principles and regulatory good practices that it is obliged to
follow. Indeed the Commission officials may be guilty of Maladministration, in breach of
several articles in The European Code of Good Administrative Behaviour. What makes
matters even worse is that the senior officials responsible for drafting these regulations deny
they are trying to stop imported vehicles. Why are we being treated as 2nd class Europeans
and not afforded full rights under the Treaty?

The policies of the Commission should not undermine transatlantic cooperation or bring
Europe into disrepute with its citizens. There is no need for new regulations at all. The new
existing National IVA schemes which require equivalence to the “greatest extent practicable”
with the many European Type Approval directives, are a thoroughly proportionate way for
Member States to administer a tiny fraction of a percent of vehicles that European consumers
want to buy, and the manufacturers do not sell.

In the name of Competition and Free Trade, I urge you to contact the Commission and
request that this proposal withdrawn. Otherwise the European Commission will have imposed
a huge injustice for its citizens, not sufficiently mandated by the protection of human health
and life.

Yours sincerely