BIS Issues Two General Authorizations and More FAQs on the Connected Vehicles Rule

We have covered the Rule in greater depth in our previous alerts: Taking Stock – Summary of BIS Actions From Fall 2024, and Peek at What Is Next Under the Trump Administration, and BIS Issues Long-Awaited FAQs on the Connected Vehicles Rule — But Questions About the Scope of the Rule Still Remain.

Scope of General Authorizations

The Connected Vehicles’ Rule’s General Authorizations enable connected vehicle manufacturers and vehicle connectivity systems (VCS) hardware importers to conduct certain transactions otherwise prohibited under the Rule.

General Authorization No. 1 provides authorizations for “Limited Use Cases,” while General Authorization No. 2 permits the “Temporary Importation,” of certain covered software and VCS hardware that are subsequently exported to non-US markets for sale.

Both General Authorizations are subject to a 10-year record-keeping requirement, verification by BIS, and restrictions, such as not being available if the importer or connected vehicles manufacturer is owned by, controlled by or subject to the jurisdiction or direction of the People’s Republic of China or Russia.

The specifics of both General Authorizations are summarized below.

General Authorization No. 1

A connected vehicle manufacturer is authorized to engage in otherwise prohibited transactions in the following circumstances:

• Limited Use on Public Roadways: The connected vehicle, incorporating covered software or VCS hardware, is used on public roads for fewer than 30 days within any 12-month period from its first use on a public roadway. Compliance records must be maintained to demonstrate first use.

• Display, Testing, or Research: The connected vehicle is used solely for display, testing, or research purposes and not on public roadways.

• Temporary Import for Repair, Alteration, or Sporting Competition: The connected vehicle is temporarily imported for repair, alteration, or sporting competition off public roads and is subsequently exported within one year from the time of import. Records of import and export must be retained.

General Authorization No. 2

• Connected Vehicle Manufacturers: Permitted to temporarily import completed connected vehicles containing covered software into the US customs territory, provided these vehicles are subsequently exported to non-US markets for sale.

• VCS Hardware Importers: Authorized to temporarily import VCS hardware into the US customs territory, as long as the hardware is integrated into a connected vehicle and then exported to a non-US market for sale.

FAQs

Further, BIS provided several FAQs that expand on the General Authorizations issued as well as the Rule generally. Importantly, the FAQs clarified:

• Persons who rely on a General Authorization must retain records demonstrating compliance, which must be made available to BIS upon request, for 10 years.

• Where there is a subsequent change to a General Authorization, importers or manufacturers must assess within 30 days if the transactions still qualify for the authorization.

• If an importer or manufacturer determines that they have acted outside the scope of the General Authorization, they must, within 30 days, cease any prohibited conduct, conduct an internal inquiry and submit a report to OICTS via email identifying prohibited transactions, the number of connected vehicles or VCS hardware units implicated, and proposed remedial measures.

• The Office of Information and Communications Technology and Services will no longer be issuing the anticipated General Authorization for small businesses importing under 1,000 units per model year. Instead, BIS has encouraged such importers to seek a specific authorization, which BIS will consider on a case-by-case basis.

We will continue to monitor any updates to the Rule and FAQs. In the meantime, if you have any questions, please contact Sylvia Costelloe or Maya S. Cohen.