NHTSA to look into financial risks of imported product safety recalls

July 19, 2007

"Importers are financially liable under the law to recall a defective or noncompliant product they import," National Highway Traffic Safety Administration (NHTSA) Administrator Nicole Nason said in a hearing before the U.S. Senate Committee on Commerce, Science and Transportation yesterday (July 18).

"This is the risk importers assume in exchange for profiting on the sale of imported motor vehicle equimpent. There is no 'hardship exemption' in the law."

Two weeks ago, Foreign Tire Sales Inc. (FTS) submitted a plan to recall up to 450,000 allegedly defective light truck radials manufactured by Hangzhou Zhongce Rubber Co. Ltd. (Hangzhou says the tires in question met or exceeded existing U.S. standards.) FTS initially told NHTSA that the company would not be providing a recall plan because it lacked the financial resources to conduct one.

It was "the first time NHTSA is aware of any importer who has declared its financial inability to conduct a recall," Nason said.

"With the growing tide of imported motor vehicle equipment, the prospect of an importer actually being financially unable to conduct a safety recall may some day pose a risk to American consumers," Nason said. "Accordingly, we are studying means of addressing this problem...."

An FTS spokesman told moderntiredealer.com that the Union, N.J.-based importer "will follow all the regulations and rules" governing recalls, even though the recall could bankrupt the company.