Relates to counterfeit and non-functional airbags

Summary of provisions

This bill adds a new § 349-e to the General Business Law (GBL) to address the increasing proliferation of counterfeit and substandard airbags making their way into the New York marketplace.

Section One is the short title.

Section Two establishes the applicable definitions, including definitions of counterfeit and non-functional airbags. This section provides that it shall be a class A misdemeanor to knowingly: (a) make, distribute or sell a counterfeit or non-functional airbag; (b) install or reinstall a counterfeit airbag or non-functional airbag; (c) sell, install or reinstall an airbag so that the diagnostic system falsely displays the airbag in proper working order; or (d) represent that a counterfeit or non-functional airbag in a vehicle is not counterfeit or non-functional. A civil penalty is established in the amount of $1,000. Judicial discretion is given in the event that a violation is proven to be unintentional and resulting from a bona fide error.

Section Three is the effective date.

Justification

Since 2010, when U.S. customs intercepted 334 counterfeit airbags manufactured at Guangzhou Global Auto parts, and bearing the logos of Honda, BMW, Lexus, and Audi, the US has become aware of a growing proliferation of counterfeit automobile parts arriving in the United States. An analysis by an independent think tank (Frost and Sullivan) showed, in 2011, automobile suppliers lost $45 billion worldwide to counterfeiting. While most of the counterfeit parts can be traced to China, U.S. officials have identified several other Asian nations as the source of these parts. The one constant: uniformly, these airbags do not perform to the standard of the original manufacturer's replacement equipment.

Of particular concern to Federal and state officials are the distribution and installation of counterfeit airbags. Airbag systems axe highly-sophisticated mechanisms, intricately coordinated to provide a life-saving function. Indeed, with so many components required to work in concert, manufacturers code each airbag mechanism in order to make certain that a replacement airbag will deploy to the exact same specifications as the original. 7/1000s of a second can mean the difference between life and death. The National Highway Traffic Administration (NHTSA) has found that, while the counterfeit airbags are packaged to look like manufacturer's equipment, including the use of insignia and branding of the original manufacturer, NHTSA testing showed "consistent malfunctioning ranging from non-deployment of the air bag to the expulsion of metal shrapnel during deployment.

Before we start experiencing injuries and deaths in our state as a result of this new issue, we should take action proactively.

While Federal officials have ramped up their efforts to prevent counterfeit airbags from entering the United States (another 1,600 bags were seized from a Charlotte man in August 2012), the practice has become so ubiquitous that counterfeit airbags can be purchased wholesale through websites such as Alibaba.com (recently offering "Honda airbags" from 12 suppliers with a minimum order of 100), and retail through Amazon and e3ay. Any legitimate body or repair shop that accesses airbags through theses sources clearly understand that this is not original factory equipment. And in the most abusive cases, unscrupulous shop owners will purchase these cheap airbags, but charge the customer (or insurance company) the full cost of a manufacturer's airbag, and pocket the difference, while callously ignoring the safety of their customers.

This legislation addresses the full scope of this problem by making unlawful to knowingly traffic in or install a counterfeit or nonfunctional airbag and by providing the Attorney General with the necessary powers to address any large scheme to bring this dangerous and deficient equipment into Mew York.

Legislative history

New bill

Fiscal implications

No cost to the state.

Effective date

This act shall take effect on November 1st after becoming law; provided however, the violation of the Penal Law provisions can only be invoked when the death or serious physical injury has resulted from the installation of a counterfeit or non-functional airbag on or after such date.