Releasing the Grays: In Support of Legalizing Parallel Imports

COMMENTS RELEASING THE GRAYS: IN SUPPORT OF LEGALIZING PARALLEL IMPORTS Andrew Rufft I. INTRODUCTION Imagine for a moment, or fantasize if you wish, that you have come upon a large sum of money and have decided to spend it on a new imported luxury car. You tour the lots of various authorized importers-Lexis, BMW, Mercedes, and so on. You compare prices, models, and colors. Perhaps you have even decided on the car which is perfect for you, let's say a BMW seven series. Now a friend tells you that you have not really exhausted your options. You can buy a round-trip ticket to Germany, purchase your BMW there, pay for transport to the United States, customs duties and costs for conversion to U.S. emissions and safety standards and still save money, not to mention the free trip to Europe.l You won't be breaking the law-in fact, President Reagan referred to similar '2 im- ports by members of his administration as standard practice. Your friend has inspired you to do some creative thinking of your own. You recall that your neighbor, Fred, is also contemplat- ing purchasing a luxury import. If you bought two cars while in Europe, you could save Fred the cost of purchasing through an au- t J.D. expected 1994, UCLA School of Law. The initial research for this Com- ment was conducted in Taipei, Taiwan. My sincerest thanks to Robin Winkler, Gene Chao, and Mark Grady for their generous assistance and insightful comments. 1. Estimates range as to how much can be saved by importing cars independently depending on the model of car and the fluctuation of currency rates between markets. By 1985 estimates, consumers could knock $8000 off the price of certain Mercedes mod- els by purchasing them abroad and paying for conversion to U.S. standards. See Ed- ward Boyer, The Assault on the Right to Buy Cheap Imports, FORTUNE, Jan. 7, 1985, at 89. Elsewhere it has been found that foreign car purchasers can knock 25% off the price of some models by purchasing them from abroad and importing them into the United States. See Maks Westerman, The $7 Billion Gray Market: Where It Stops, No- body Knows, Bus. WK., Apr. 15, 1985, at 86. 2. Westerman, supra note 1, at 86.