Gray market vehicles are not smuggled. Otherwise they'd be called black market vehicles. Gray market vehicles are fully tax-paid and legally imported (with documentation to back it up). The LC we just sold was a gray unit (from the Middle East). My brother's daily driver is also a gray unit (from China). My mom's coding car is also a gray unit (ex-USA). You just need to have the proper documentation and pay the proper fees.

During the 80's gray-market vehicles were popular in the U.S. But newer regulations made it too expensive to federalize imported vehicles. One of the last well known importers was Europa International which made the MB G-Wagen available in the U.S. They lost the G-Wagen biz when MB North America finally officially imported the G-Wagen into the U.S. (much to the delight of rappers everywhere).