§20171 Requirements for Railroad Freight Cars Placed Into Service in the United States

Summary

New freight rail cars can only run on U.S. rail lines if they meet several rules. Cars finished one year after the Department of Transportation issues its rules must be built and mostly processed by a maker in a facility that is not controlled by a state-owned enterprise. Any sensitive technology on the car — like onboard computers, GPS, sensors, firmware, remote monitoring, or analytics — must not come from a “country of concern” or from a state-owned enterprise. The rest of the car’s parts (not counting sensitive technology) also must not come from a country of concern or from a state-owned enterprise found to have violated U.S. intellectual property rights. For the first year after the rules start, no more than 20% of a car’s non-sensitive content (measured by net cost) can come from countries of concern or state-owned enterprises; three years after the rules start, that limit drops to 15%. The Secretary of Transportation must write the rules within two years. Manufacturers must certify every year that their cars follow the rules and must have a current certification when a car begins service. Penalties are $100,000 to $250,000 per violating car, and a maker with more than three violations can be barred from supplying more cars until it is compliant and pays the fines. Key terms (one line each): component — a part or subassembly of a freight car; control — the power to direct or make decisions for an entity; cost of sensitive technology — total cost of the sensitive tech on a car; country of concern — a country identified by U.S. trade agencies under certain trade and monitoring rules; net cost — the meaning given in the USMCA; qualified facility/manufacturer — a facility or maker not owned or controlled by a state-owned enterprise; railroad freight car — cargo or crew cars (includes types such as box, tank, hopper, flat, intermodal, auto rack, gondola, refrigerator, special, caboose, and yard cars); sensitive technology — connected electronics, software, sensors, and similar systems; state-owned enterprise — an entity owned or controlled by a government of a country of concern or a person acting under that government’s direction; substantially transformed — a change in tariff classification under the USMCA; USMCA — the United States-Mexico-Canada Agreement.