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Enforcement

American Lifan Industry, Inc. Settlement

(Washington, DC - March 27, 2014) - An Ontario, California-based vehicle and engine importer has agreed to ensure that future imports meet environmental standards after illegally importing and selling nearly 28,000 highway motorcycles, recreational vehicles, and engines manufactured in China that did not comply with emission limits for harmful pollution required by the Clean Air Act (CAA). 

Overview

The settlement agreement in this matter resolves an administrative enforcement action in which the EPA alleged American Lifan Industry, Inc. violated the Clean Air Act (Act) by importing and selling over 6,700 highway motorcycles, recreational vehicles, and engines manufactured in China that do not comply with environmental requirements. This settlement also resolves widespread recordkeeping violations and violations related to EPA’s October 25, 2013 voiding of 45 certificates of conformity held by American Lifan, which affected over 21,000 additional model year 2006-2011 highway motorcycles and recreational vehicles.

American Lifan Industry, Inc. (“Respondent”) is a corporation doing business in Texas and California that holds certificates of conformity and that imports highway motorcycles, recreational vehicles, gasoline engines, and gasoline-powered generators manufactured by Lifan Industry (Group) Co., Ltd., Chongqing Lifan Industry (Group) Imp. & Exp. Co., Ltd., China Lifan Industry (Group) Co., Ltd., and Chongqing Lifan Power Co., Ltd.

The nearly 28,000 vehicles and engines imported and sold by Respondent between January 2007 and August 2011 were not certified by the Environmental Protection Agency (“EPA”), as required by the Act, to meet applicable federal emission standards. In addition, Respondent failed to provide purchasers with the full emissions warranty required by the Act; imported and sold vehicles without proper emission-compliance labels; and failed to adhere to recordkeeping requirements.

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Violations

The EPA alleged that Respondent sold, offered for sale, introduced or delivered for introduction into commerce, or imported (or caused the foregoing acts with respect to):

  • 5,400 uncertified highway motorcycles. Each motorcycle was not covered by the certificate of conformity (COC) that purportedly covered it for one or more of the following reasons: it was manufactured after the expiration date of the COC; it had a model name that was not identified on the COC; it was manufactured by a different company than was identified in the COC application; it was imported prior to the effective date of the COC; its carburetor has adjustable parameters that that do not conform to the design specifications submitted in the application for the COC; its crankcase emits directly into the ambient atmosphere; and it was incorrectly certified as a nonroad vehicle.
  • 1,005 uncertified recreational vehicles. Each recreational vehicle was not covered by the COC that purportedly covered it for one or more of the following reasons: it had a model name that was not identified on the COC; it was imported prior to the effective date of the COC; and its carburetor has adjustable parameters that that do not conform to the design specifications submitted in the application for the COC.
  • 371 uncertified small gasoline engines: Each engine was not covered by the COC that purportedly covered it for one or more of the following reasons: it was imported without reference to any applicable COC and are not covered by any applicable COC; its carburetor has adjustable parameters that that do not conform to the design specifications submitted in the application for the COC; and its advertised power that is greater than the power listed on the COC.
  • approximately 18,488 uncertified highway motorcycles and approximately 8,831 uncertified recreational vehicles. These vehicles were uncertified because the COC that purportedly covered them was subsequently voided by the EPA.
  • 204 improperly labeled highway motorcycles. Each motorcycle’s emission control information labels could be peeled off and removed without being defaced or destroyed.
  • 252 improperly warranted recreational vehicles. Each recreational vehicle’s owner’s manual failed to state the mandatory emission related warranty.

Additionally, the EPA alleged that Respondent failed to adequately keep, maintain, and make available to the EPA certain mandatory records. Specifically, this information includes emission test or test vehicle records for 15 engine families and owner’s manuals for 44 engine families.

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Non-Penalty Conditions

The agreement requires American Lifan to post a $300,000-$500,000 bond to satisfy any Clean Air Act penalty related to the importation of model year 2014, 2015, and 2016 vehicles manufactured by American Lifan Industry, Inc., Chongqing Lifan Industry (Group) Co., Ltd., China Lifan Industry (Group) Co., Ltd., Lifan Industry (Group) Co., Ltd, or any company that applies for or holds an EPA certificate for products manufactured by any of the foregoing companies.

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Health and Environmental Effects

Highway motorcycles and recreational vehicles emit carbon monoxide, as well as hydrocarbons and nitrogen oxides that contribute to the formation of ground-level ozone.

  • Nitrogen Oxides – Nitrogen oxides can cause or contribute to a variety of health problems and adverse environmental impacts, such as ground-level ozone, acid rain, global warming, water quality deterioration, and visual impairment.  Affected populations include children and people with lung diseases such as asthma. Exposure to these conditions can cause damage to lung tissue for people who work or exercise outside.
  • Ground-level ozone – Ground-level ozone is formed by reactions involving HC and NOx in the presence of sunlight.  Breathing ozone can trigger a variety of health problems, including chest pain, coughing, throat irritation, and congestion.  It also can worsen bronchitis, emphysema, and asthma. Ground-level ozone damages vegetation and ecosystems as well.  In the United States, ozone is responsible for an estimated $500 million in reduced crop production each year.
  • Carbon Monoxide – Carbon monoxide is a colorless, odorless gas that is formed when carbon in fuel is not burned completely. It is a component of motor vehicle exhaust, which contributes about 56 percent of all carbon monoxide emissions nationwide. Carbon monoxide can cause harmful health effects by reducing oxygen delivery to the body's organs (like the heart and brain) and tissues.

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Civil Penalty

Respondent will pay a civil penalty of $630,000. 

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For more information, contact:

Evan M. Belser, Attorney Adviser
Air Enforcement Division
Office of Civil Enforcement
Office of Enforcement and Compliance Assurance
United States Environmental Protection Agency
1200 Pennsylvania Avenue
Washington, D.C. 20460
(202) 564-6850
belser.evan@epa.gov

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