ZRR0 IX LLC — LICENSING, LEGAL & CUSTOMS PLAYBOOK

Status: Pre-ops. This is the regulatory spine you execute against BEFORE any capital moves or any car is bid on. Last verified: 2026-06-06 (current sources cited inline; all tariff/duty numbers re-verified this date). Scope: US import (25-yr / EPA / DOT / customs broker / bonds), Washington + Minnesota dealer licensing, the Japanese GK / USS question, entity structure, and a strict file-it-in-this-order checklist.

READ THIS FIRST — the three plan-breakers the research contradicted itself on, now resolved against live 2026 facts:

1. The duty rate is NOT a constant. As of June 2026 a 25+yr Japan car lands at ~2.5% — but the regime moved 2.5% → 15% → ~2.5% between Aug 2025 and Feb 2026, and the current stopgap (Section 122) sunsets ~July 24, 2026. Never store duty as a constant; verify per shipment.
2. There is no "WA wholesale license." Washington abolished the wholesale dealer license on July 1, 2019. There is ONE dealer license, and it requires a bonded, signed, zoned, staffed commercial building from day one. The "lean wholesale-first, retail-later" sequencing in earlier drafts does not exist in WA.
3. Engine-swapped JDM cars can be non-importable. A non-original engine voids the EPA 21-yr emissions exemption (Form 3520-1, Code E). The MUTT/HER0 "swap-in-Japan-then-ship" play, as written, describes exactly the config that gets refused at the port. Hard rule: emissions/engine swaps happen only on cars already 25+ and already on US soil.

0. The duty regime — the single most important number, and why you must never hard-code it

This is the load-bearing input to your max-bid engine. Get it wrong by one policy cycle and a thin flip's entire margin (~$4,500 on a $30k car) vaporizes.

0.1 Current stack for a 25+yr Japan-origin car (verified 2026-06-06)

Sources: providecars.co.jp §122/§232/§301 JDM strategy, WilmerHale SCOTUS IEEPA alert, BDO §122 surcharge, WCShipping classic-car HS-code guide.

0.2 Why the briefs disagreed (and which was right when)

The research briefs hard-coded 2.5%, 15%, and 27.5% — all were correct on different dates:

• ~2.5% = pre-Aug-2025 AND post-Feb-2026 (current). Right today.
• ~15% = the Aug 2025 US-Japan reciprocal-tariff window. Now void.
• ~27.5% = a sub-25yr car (25% §232 + 2.5% base). Still true for anything under the 25-yr line.

0.3 The behavioral rule (the single highest-value discipline in this whole document)

• Duty is an FX-style regime variable in the max-bid engine, NOT a stored constant.
• Before every bid, the customs broker confirms the live HTS 9903.94.04 / §232 / §122 / §301 posture for that car's origin and projected entry date.
• Reject any bid whose gross spread is thinner than the duty-volatility band (treat a worst-case ~15% as the buffer until the §122 sunset and any §301 follow-on are resolved).
• Watch the ~July 24, 2026 §122 sunset specifically — and watch for §301 follow-on action, which the administration has signaled.

1. US IMPORT COMPLIANCE — the 25-year rule, EPA, DOT, customs broker, bonds

1.1 The 25-year rule is per-BUILD-MONTH, not model year (seizure trap)

Eligibility is the exact production month on the build/compliance plate. Entry must occur on or after the 25th anniversary of that month.

• A 2001-build car unlocks across 2026 month-by-month. A Feb-2001 R34 imported in Jan-2026 is an illegal entry → CBP detention / seizure / forfeiture, not a recoverable duty bill. You are the importer of record and on the hook.
• The R34/Skyline-heavy basket is the single highest-exposure car for this.
• HARD VETO in the engine: verify the build-plate month on EVERY unit before the bid; reject sub-anniversary months; never let the exporter self-clear.

Sources: projectjdm.org 2026 legal guide, NHTSA importation FAQs.

1.2 The two exemption forms you file at entry (25+yr car, original drivetrain)

1.3 EPA engine-swap killer (this re-scopes MUTT/HER0)

Confirmed on Form 3520-1, Code E: the exemption applies only to a vehicle "in original unmodified configuration." A non-original engine voids Code E unless the replacement is the same model originally installed, OR a certified engine no older than the car being imported (a JDM-market or aftermarket performance engine essentially never qualifies). Source: EPA Form 3520-1 instructions, MotoIQ 25-yr rule.

Consequence: a Japan-side LS-swapped ECR33 (the stated MUTT example) loses the emissions exemption → held at port, refused entry, or forced into the Registered Importer (RI) + Independent Commercial Importer (ICI) conformance path: a DOT bond at 1.5× dutiable value per car, a 120-day conformance window, and real risk of forced re-export or destruction.

HARD RULE (sharper than the briefs):

• Import the shell in ORIGINAL drivetrain. Do all engine/emissions-relevant work on US soil, post-entry, on cars already 25+.
• Japan-side shop work is limited to non-emissions items only: cosmetic, body/widebody, chassis, suspension, interior.
• This protects ZRR0/HER0/MUTT from the RI/ICI/DOT-bond trap and keeps every build on the clean 2.5% path.

1.4 Sub-25yr cars (avoid early)

Anything <25yr loses the §232 exemption → ~27.5% duty AND requires DOT/EPA conformity via an RI + ICI + DOT bond (1.5× value, 120-day window). Run JDM 25+yr only at launch. The RI/Show-or-Display path is a Stage-5+ topic, not a launch activity.

1.5 Customs broker + the bond stack (under-budgeted in earlier drafts)

Sources: CBP importing a car, linearshipping AES/bond guide, suaidglobal customs broker fees 2026.

1.6 Chassis-number / title document discipline (clearance-freeze trap)

The Japanese Export Certificate (de-registration paper, functions as the title), the Bill of Lading, and the Commercial Invoice must all show matching chassis numbers. Any VIN/chassis discrepancy stalls CBP clearance and accrues demurrage; a dimension mismatch vs the export cert triggers a +¥20,000 re-measure. On a 6–10 week cycle tying up ~$38–40k/car, a stuck title is a working-capital event, not paperwork. Gate document-match as a release condition before the car leaves Japan.

1.7 USDM-EXPORT compliance is felony-grade — treat it as a separate, higher-risk project

This is the most legally dangerous flow in the business (outbound USDM muscle → Japan/Australia). It is NOT "the reverse of importing."

• AES/EEI filing mandatory for every used self-propelled vehicle export, regardless of value, destination, or condition.
• Title must reach the exporting carrier ≥72 HOURS before vessel departure (19 CFR 192.2(b)); the ITN/filing citation must also reach the carrier ≥72 hrs prior.
• You (the USPPI) remain legally liable even when the forwarder files.
• Penalties: up to $10,000 per violation civil; willful breaches carry $250k+ fines and 5–20 years imprisonment.
• Prerequisite: an EIN registered for AES (ACE/AESDirect) and a forwarder who files EEI correctly — before the first car moves.

Sources: CBP exporting used vehicles FAQ, eCFR 19 CFR Part 192, Census FTR FAQs.

2. WASHINGTON DEALER LICENSING — the "wholesale-first" plan is dead

2.1 The abolition (confirmed)

Washington stopped issuing wholesale dealer licenses July 1, 2017, stopped renewing them July 1, 2018, and deleted the category from law July 1, 2019 (HB 1722 / related). There is now ONE motor-vehicle dealer license covering both wholesale and retail. The "cheap wholesale endorsement that defers the staffed storefront" does not exist. Source: suretybonds.com WA wholesale eliminated, WA SB 1722 bill report.

2.2 What the ONE WA dealer license actually requires (day one, to bid at ANY US dealer auction)

Source: WA DOL get-your-license.

Net surprise to budget: the staffed, signed, zoned commercial building is a day-one fixed cost (~$60–160k/yr lease + a lot-staff hire ~$30–45k/yr) and a precondition to auction access, not a deferred phase-2 option. The bond (~$300–900/yr) was never the real cost — the staffed location is.

2.3 The strategic fork (decide BEFORE signing any lease)

You have two legal paths; pick one with CPA + attorney signoff:

• (A) Full WA dealer build-out as day-one cost. Accept the bonded + signed + zoned + staffed building near the Port of Tacoma. Simplest operationally (sourcing, import, sales, warehouse all in one state).
• (B) License the dealer entity in a state that still has a true wholesale tier (verify AZ/OR/others; mechanics differ), keep the WA premises warehouse-only, and confirm AuctionACCESS reciprocity for dealer-only auctions. This keeps the staffed-storefront burden off WA but adds a second-state compliance layer.

This decision sits AHEAD of the warehouse lease and ahead of any auction-agent engagement — it changes the entire cost/timeline base.

2.4 Zoning is a silent kill

A leased port-adjacent industrial parcel that does not permit vehicle SALES + a repair/BUILD shop in the same premises cannot be licensed at all — stranding the whole WA node after the lease is signed. Verify parcel-specific zoning / conditional-use + dealer-site signage rules with the city/county BEFORE signing any lease. The dealer license is contingent on it.

2.5 AuctionACCESS

The shared credential (AuctionACCESS) honored across Manheim / ADESA-OPENLANE / ACV unlocks dealer-only auctions once your license is verified. Apply the day the license issues. Note the ~30-day platform seasoning some auctions impose before full bidding turns on (view-only is immediate) — start that clock immediately.

3. MINNESOTA (Expansion node, Phase 2 — demand/arbitrage, not an import gateway)

Sources: MN DPS dealer background checks, MADA new background-check requirements, MN Motor Vehicle Dealer Guide.

4. THE JAPANESE GK QUESTION — agent first, GK later, never the self-run-visa trap

4.1 The hard wall: USS direct membership = a ~12–15 month project

Confirmed USS requirements: a Japan-registered business, a kobutsusho (used-goods dealer) license held ≥1 FULL YEAR before you may even apply, Japan residence, a real physical premises (a virtual office fails the police check), full-time Japanese-speaking staff, a Qualified-Invoice registration number, and joint guarantors / SS-membership. Source: USS membership info, providecars USS guide.

Foreigners cannot log into Japanese dealer auctions directly. Runs 1–3 go through a licensed export agent who holds the membership and proxy-bids to your max.

4.2 The Business-Manager-visa trap (do NOT self-run the GK early)

Japan tightened the Business Manager visa in October 2025: minimum paid-in capital ¥30,000,000 (~$200k) + a full-time Japanese employee + an N2/B2 Japanese speaker. A GK can be formed for ~$900–2,700, but a foreigner running it on the ground on this visa now trips a ~$200k capital lock-up for zero auction-access benefit. Source: E-Housing new Business-Manager-visa rules.

Stay a non-resident owner. Hire a Japan-RESIDENT executive manager (your logistics coordinator / GK daihyo) — this person is the gating dependency for banking, lease, police, and auctions.

4.3 Single-point-of-failure

A non-resident-owned GK cannot bank/lease/operate without the Japan-resident representative. If that rep leaves, the GK can lose banking/lease/license standing — freezing Japan sourcing. Recruit the resident manager BEFORE incorporating; line up a backup rep.

4.4 Correct Japan sequencing

1. Runs 1–3: licensed export agent only (no GK). Flat-fee model (~¥70k + over-¥1M surcharge) is cheapest; get 2–3 written quotes; confirm the deposit/refund terms and exactly what's bundled (auction fee, JP inland, de-reg, export cert, port forwarding) before wiring anything.
2. When committing to scale: recruit the Japan-resident manager → form the GK + file the kobutsusho the SAME DAY (this starts the mandatory 1-year USS clock) → keep the agent running the full ~12–15 month bridge.
3. Secure a REAL physical Japan premises from GK formation (not a virtual office).
4. Phase 3 (~12–15 months in): activate your own USS membership, lease the Japan warehouse, contract the (non-emissions) mod shop.

5. ENTITY STRUCTURE

Transfer-pricing obligation: every intercompany WA-LLC ↔ Japan-GK car transfer creates an IRS/NTA transfer-pricing exposure that must be designed by CPA + import attorney BEFORE the first intercompany sale, not after.

Trademark: clear ZRR0, HER0, and MUTT (USPTO + common-law) BEFORE any logo/merch spend — "MUTT" especially may collide. Flag to counsel during the legal-structure step.

6. THE EXACT FILE-IT-IN-THIS-ORDER CHECKLIST

Phase 0 — Pre-ops decisions & professional retainers (do these FIRST, before any lease or bid)

• Retain a US customs/import attorney + an international CPA NOW. They must, before any car moves: (a) confirm WA zoning + dealer-site requirements for the chosen parcel, (b) design the WA-LLC ↔ Japan-GK transfer pricing, (c) confirm WA B&O + sales-tax nexus and MN nexus for the second node, (d) verify the build-month / EPA / DOT-bond posture for the first basket.
• Make the WA-vs-other-state dealer-license decision (§2.3) — before the warehouse lease and before any auction-agent engagement.
• Retain a 25-yr-savvy US customs broker as a standing vendor (Tacoma-experienced). Never let the exporter self-clear.
• Trademark clearance on ZRR0 / HER0 / MUTT.
• Form ZRR0 IX LLC; obtain EIN; register the EIN for AES (ACE/AESDirect) ahead of any USDM-export.

Phase 1 — WA dealer license + import spine

• Verify parcel-specific zoning (vehicle sales + build shop in same premises) BEFORE signing the lease.
• Sign the bonded + signed + zoned commercial lease near the Port of Tacoma (or the chosen wholesale-tier state, per §2.3).
• Obtain the $30,000 dealer bond (get 2–3 surety quotes); complete the 8-hr WSIADA course; file Personal Criminal History Statements for all owners/officers; affix permanent signage; list the phone.
• Submit the WA dealer license application; on issuance, apply for AuctionACCESS the same day and start the ~30-day platform-seasoning clock.
• Set up the continuous customs bond ($50k face, ~$500–1,000/yr).

Phase 2 — Japan side (agent only)

• Get 2–3 written quotes from licensed export agents (USS vs TAA vs JU access; flat-fee preferred). Confirm bundle + deposit/refund terms.
• Do NOT form the GK. Do NOT touch the Business-Manager visa.

Phase 3 — Engine v0 + first basket (pre-bid)

• Stand up the valuation/max-bid engine v0 with duty modeled as a volatile band (~15% worst-case buffer), not a constant.
• Per-car hard vetoes wired in: (a) reject sub-anniversary build months; (b) reject R/RA grades for resale stock; (c) reject engine-swapped / exemption-voiding configs; (d) require a verified auction sheet + arrival QA.
• For every bid: broker confirms live duty posture for that car's origin + projected entry date; reject any spread thinner than the duty-volatility band.
• Run 1 = small (3–4 cars), decorrelated, vendor-only, all 25+yr, all original drivetrain. Prove one full auction-to-sale cycle before scaling.

Phase 4 — USDM-export spine (before the first outbound car)

• Confirm AES/EEI workflow: ITN + title to carrier ≥72 hrs pre-departure; forwarder who files EEI correctly; you (USPPI) verify each filing. ($10k/violation; criminal exposure for willful breaches.)

Phase 5 — Scale (only after run 1 proves out)

• Recruit the Japan-resident manager → form GK + file kobutsusho the SAME DAY (starts the 1-year USS clock) → keep the agent running the ~12–15 month bridge → secure a real physical Japan premises.
• CPA + attorney finalize transfer pricing before the first intercompany sale.
• MN node: screen ALL owners/officers for the Jan-2026 background/fingerprint rule; post the $50k MN bond; second lease.

7. RISK REGISTER (the regulatory kill-shots, condensed)

8. ONE-LINE BOTTOM LINE

The cross-market arbitrage thesis is real and the chimera framing is sound — but the regulatory layer is currently mis-sequenced and rests on one unstable number (duty). Re-sequence the six fixes to the FRONT (decide-license-state-before-lease, verify-duty-per-shipment, swap-only-on-US-soil, export-spine-before-first-car, agent-before-GK, attorney+CPA-in-pre-ops) and the single most capital-protective habit is behavioral: stop treating duty as a stored constant — confirm it with the broker per shipment.

Sources (verified 2026-06-06)

• SCOTUS IEEPA: WilmerHale, Ropes & Gray, BDO
• §122/§232/§301 + JDM duty: providecars.co.jp, Avalara tariff explainer, WCShipping HS-code guide
• 25-yr rule + forms: projectjdm.org, NHTSA FAQs, EPA Form 3520-1, MotoIQ
• WA license: WA DOL, suretybonds.com wholesale eliminated, WA bill report SB 1722
• MN license: MN DPS background checks, MADA, MN dealer guide PDF
• Japan GK/USS/visa: USS membership, providecars USS guide, E-Housing Business-Manager visa
• Export/AES + bonds: CBP exporting used vehicles, eCFR 19 CFR Part 192, linearshipping AES guide, CBP importing a car