ANNOUNCEMENT 18 Sep 2015

In 2015, California enacted legislation affecting "grey market" sales.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 0 neutral
  • 1 liberalising
Inception date: 06 Oct 2015 | Removal date: 01 Jan 2019
Still in force

Export-related non-tariff measure, nes

On September 18, 2015 the California State Legislature approved a bill that further strengthens provisions of law intended to prevent automobile producers from enforcing "grey market" restrictions on the exportation of motor vehicles purchased in the state. The governor signed the bill into law on October 6, 2015.
 
This bill authorizes, until January 1, 2019, the New Motor Vehicle Board to hear protests by an association challenging the legality of an export or sale-for-resale prohibition policy of a manufacturer, manufacturer branch, distributor, or distributor branch, and would establish procedures for hearing those protests.
 
Under existing law, it is unlawful for a manufacturer, manufacturer branch, distributor, or distributor branch to engage in specified practices, including taking or threatening to take any adverse action against a dealer pursuant to an export or sale-for-resale prohibition because the dealer sold or leased a vehicle to a customer who either exported the vehicle to a foreign country or resold the vehicle in violation of the prohibition, unless the export or sale-for-resale prohibition policy was provided to the dealer in writing prior to the sale or lease, and the dealer knew or reasonably should have known of the customer's intent to export or resell the vehicle in violation of the prohibition at the time of sale or lease.
 
This bill provides that it is unlawful to take or threaten to take any adverse action against a dealer pursuant to an export or sale-for-resale prohibition because the dealer sold or leased a vehicle to a customer who either exported the vehicle to a foreign country or resold the vehicle in violation of the prohibition unless the export or sale-for-resale prohibition policy was provided to the dealer in writing at least 48 hours before the sale or lease of the vehicle and the dealer knew or reasonably should have known of the customer's intent to export or resell the vehicle in violation of the prohibition.
 
The bill would provide that a rebuttable presumption is established that the dealer did not have reason to know of the customer's intent to export or resell the vehicle if the dealer causes the vehicle to be registered in this or any other state, and collects or causes to be collected any applicable sales or use tax due to this state.

AFFECTED SECTORS