Texas-based ATV importers, Chinese manufacturer pay $560K in civil penalties for EPA import violations

News Release

The U.S. Environmental Protection Agency (EPA) today announced a settlement with four Texas-based recreational vehicle importers and an affiliated Chinese vehicle manufacturer, for the illegal import and sale of more than 4,000 uncertified off-road recreational vehicles sold under the brand name Hammerhead between 2007 and 2011. The settlement, approved by EPA’s Environmental Appeals Board, alleges that the companies violated numerous Clean Air Act provisions governing how vehicles must be manufactured, tested and certified before they can be sold in the United States. The companies will pay a total of $560,000 in civil penalties.

The four Texas companies party to this settlement—Geason Enterprises, L.L.C. (which does business as Geason Powersports and Hammerhead), GE Ventures, L.P. (which does business as Hammerhead Off-Road), Hammerhead Off-Road, Inc., and TJ Power Sports L.L.C.—all hold certificates of conformity from EPA and import and sell vehicles under the brand name Hammerhead. The Chinese company party to this settlement, Shanghai Howhit Machinery Manufacture Co., Ltd., manufactures recreational vehicles. A second Chinese company, Shanghai Tong Jian Sports Equipment Co., Ltd., manufactured some of the uncertified vehicles and was also sued by EPA in July 2013, but is no longer in business and is not party to this settlement.

The Clean Air Act requires all vehicles imported into and sold in the United States to meet federal emission standards to control air pollution. Companies that manufacture and sell vehicles must obtain an EPA-issued certificate of conformity to show their vehicles will meet emissions standards. Vehicle manufacturers must submit an application to the EPA that describes the engine or vehicle, its emission control system, and emissions data demonstrating compliance with emission standards.

The Hammerhead brand recreational vehicles addressed in the settlement were imported without the required certification.  Some of the vehicles were missing emission control systems, were equipped with non-conforming catalysts and carburetors, and/or had been manufactured by a company different than the one listed in the certificate application. The companies also failed to maintain certain types of required information and incurred penalties for failure to timely respond to EPA’s information requests, all of which are violations of the Clean Air Act.

EPA discovered the violations during inspections of imported vehicles at the Los Angeles/Long Beach Seaport, the Port of Dallas, the Port of Chicago, and Hammerhead’s warehouse in Dallas.

Vehicles and engines that do not have proper emissions controls may emit excess pollution such as carbon monoxide, hydrocarbons, and nitrogen oxides. These emissions can cause harmful health effects like respiratory illnesses from the reduction of oxygen delivery to tissues and organs, visual impairment, chest pain, coughing, throat irritation, and congestion, and can exacerbate bronchitis, emphysema, and asthma. Excess emissions can have adverse environmental consequences like ground-level ozone or smog, acid rain and water quality deterioration.

The Environmental Appeals Board’s default order and final decision in the case is available by clicking here.